Very wealthy donors are likely to play a greater role in this election cycle in the wake of recent court decisions that have loosened rules for campaign contributions. That will only heighten one of the dominant narratives of the 2012 campaign: the nation’s rising income inequality and the outsize political influence of the super-wealthy.
This year is shaping up to be a reprise of the 2004 cycle, which saw big donations flow in for Sen. John F. Kerry (D-Mass.) an President George W. Bush.
Although donors are limited to giving no more than $5,000 directly to a campaign, new rules allow them to give to “super PACs” that run independent ads supporting the candidates. Donations to super PACs are not limited, so billionaires can donate as much as they want. And, given the changes in campaign laws, it is likely that one of those donors will top the record $24 million that hedge-fund founder George Soros spent in 2004 to support Kerry.
“The only limit on the resources is the willingness of the donors to give,” said Anthony Corrado, a professor of government at Colby College and a former Democratic official. “It doesn’t take long to transfer $500,000 from one account to another.”
Romney’s richest donor so far is hedge-fund titan John Paulson, who is worth an estimated $16 billion, according to Forbes. Paulson has given $1 million to the Restore Our Future super PAC, which former Romney aides set up to support his candidacy. The PAC and a spokesman for Paulson declined to comment. The Romney campaign did not respond to a request for comment.
Obama had a large head start, having amassed $157 million by the end of September for his campaign and the Democratic Party, more than the GOP candidates combined. But the Republicans could tip the balance going forward, given widespread disenchantment with the president’s policies — especially among the wealthy.
This campaign will represent a marked difference from the 2008 cycle, which had a rare drop in big donations and spending by interest groups, largely because Obama and Republican nominee John McCain eschewed their support.
But this time, the Obama campaign no longer objects to help from interest groups. That was broadly interpreted as a tacit admission that, after major GOP gains in the 2010 midterm elections, the outside help was critical.
Romney has attracted the support of Redskins owner Dan Snyder and other billionaires, including California real estate developer Donald Bren, who is worth $12 billion, and developer and publisher Sam Zell, who is worth $5 billion. A spokesman for Snyder declined to comment and those for Bren and Zell did not return requests for comment.
Obama’s richest donor is Len Blavatnik, a Russian American industrialist worth $10.1 billion. He also donated to Romney. A spokesman for Blavatnik declined to comment.
Other billionaires supporting the president include longtime Democratic Party backer Peter Lewis, chairman of insurance company Progressive; former Google chief executive Eric Schmidt, who is worth $7 billion; and John Doerr, a venture capitalist worth $2.2 billion who serves on Obama’s jobs council. Messages requesting comment from the donors were not returned.
“Our campaign is fueled by donations from more than 1 million Americans, 98 percent of which were in amounts of $250 or less,” Obama campaign spokesman Ben LaBolt said.
The Obama campaign is receiving a higher percentage of its money from small donors than it did in 2008, something that has encouraged supporters. But his fundraising strategy also relies on drawing big donors.
Five of Obama’s billionaire donors have signed up to help raise money for the campaign, including hedge-fund managers Marc Lasry and David Shaw, Chicago real estate developer Neil Bluhm and hotel heiress Penny Pritzker. Marc Benioff, the founder of Salesforce.com and a pioneer in cloud computing for businesses, has raised at least $500,000 for the campaign, the largest figure among the billionaire bundlers.
But Obama’s biggest backer so far isn’t a billionaire: Hollywood mogul Jeffrey Katzenberg, who is worth approximately $800 million, has raised $500,000 for the campaign and contributed $2 million of his own money to Priorities USA Action, a super PAC backing Obama.
Donor records show that four billionaires had supported Republican candidate Newt Gingrich by the end of September, before his rise in polls. Several of those supporters, including casino owner Sheldon Adelson and Amway founder Richard DeVos, have in the past shown a willingness to use their deep pockets to advance their political goals. Adelson has donated at least $7 million to one of Gingrich’s political groups.
Super PACs are turning out to be the vehicle of choice for wealthy donors. Created as an indirect result of last year’s landmark Supreme Court decision in Citizens United, the groups can accept unlimited donations from individuals and corporations and spend the money on hard-hitting campaign ads.
In 2004, corporations were banned from bankrolling ads in the final two months of a campaign, and ads sponsored by most interest groups were not allowed to directly attack or support candidates.
The ability to run those ads in 2012 could attract more spending by wealthy donors, Corrado said.
“One of the things about large investors in campaigns is that they’re very interested in getting results,” Corrado said. “And it is much easier to get a large effect in a race if you can give to directly advocate for and against a candidate.”
Steve Rosenthal, who ran one of the largest independent groups helping Democrats in 2004, said that people who write large checks to independent groups are generally motivated more by ideology than by access to political figures.
“They’re not people who are trying to stay a night in the Lincoln bedroom,” Rosenthal said. “These are mostly people who believe strongly in a set of values and ideals.”