The 2018 midterms have seen a huge number of Democrats pledge not to take money from corporate PACs. It’s a sign of the times: The Bernie Sanders-style rejection of money in politics is taking root among Democrats in a year when insurgent candidates from all walks of life are running, including a record number of women.
But publicly swearing off corporate PAC money is also a bit of a stunt. As the Atlantic pointed out in August, corporate PAC donations “don’t constitute a significant amount of any Democratic candidate’s funding, and nothing precludes candidates from accepting individual donations from corporate executives.” Meanwhile, corporations still have wide latitude to influence politics by giving to super PACs.
Since the Supreme Court’s 2010 Citizens United decision, outside groups have come to dominate election spending; in 2016, their total spending topped a billion dollars. Super PACs, which are sometimes funded by single donations in the tens of millions, are one of the most important vehicles for this. Other innovative methods for getting rich people to spend a lot have been created since Citizens United, like joint fundraising committees, which allow mega-donors to give almost $500,000 to a political party with one check.
Rick Hasen, a professor of law and political science at the University of California Irvine and the author of Plutocrats United: Campaign Money, the Supreme Court, and the Distortion of American Elections, told Splinter that he sees the trend as “marketing gimmick.” Corporate money is “not that important these days,” he said, but “what would be meaningful is if Democrats said that they don’t want any support from super PACs that might take corporate money or undisclosed money.”
So it’s worthwhile to ask whether the Democrats who swore off money from corporate PACs are also rejecting the help of super PACs and other outside groups. A Splinter review of campaign finance records shows that’s not the case. Several candidates on the ballot this Tuesday have benefitted from millions of dollars spent on their behalf by super PACs—some funded by small donors, some by wealthy donors, and some by a mix of both.
A quick primer on terms: A corporate PAC is a political action committee run by a corporation that raises its money, in up to $5,000 increments, from its employees (usually its board of directors, since they tend to have that kind of spare cash). There are also PACs that represent entire industries, like the National Association of Realtors, which take money from employees across the field. Corporate PACs can donate a maximum of $5,000 to a candidate per election (for a combined maximum of $10,000 in the primary and general).
A super PAC is a special kind of political action committee that can accept unlimited contributions from corporations and unions and spend unlimited sums on ads and anything else election-related, provided it doesn’t coordinate with a campaign.
A 501(c)(4) is a “social welfare” organization, according to its IRS designation, which can raise and spend unlimited amounts of money and doesn’t have to disclose its donors.
“Outside spending” means spending on the election from groups other than the candidates’ campaigns.
We used OpenSecrets to check how much individual super PACs have spent in races where Democrats had sworn off corporate PAC money, and FEC filings to find how much donors had given to those super PACs.
Even if they rejected money from corporate PACs, there are still candidates benefitting from millions of dollars in super PAC spending. California’s 25th Congressional District, where Democrat Katie Hill is running to defeat incumbent Rep. Steve Knight, has seen the most outside spending benefitting a Democrat among candidates who swore off corporate PAC money, with $11.8 million flooding in to support her bid—far more than the $5.7 million benefiting Knight.
According to OpenSecrets, major super PACs supporting Hill’s candidacy include Independence USA, a super PAC funded almost entirely by Michael Bloomberg; they’ve spent more than $5 million on the race. Independence USA previously supported moderate Democrats and Republicans, but it’s solely backing Democrats this year. (Bloomberg also recently re-registered as a Democrat and is considering a run for the presidency as a Democrat in 2020; God help us all.) Independence USA has also spent $4.4 million on California’s 48th District, where Harley Rouda is trying to unseat batshit Congressman Dana Rohrabacher, and $2.9 million in Washington’s 8th District to support Democrat Kim Schrier.
Another big player in Schrier’s race is Women Vote!, a super PAC run by EMILY’s List, which spent more than $36 million in 2016. Women Vote! has spent $1.1 million on electing Schrier, $531,994 supporting Elissa Slotkin in Michigan’s 8th District, and $291,048 in Josh Harder’s bid for the California 10th.
Among Women Vote!’s major donations this cycle: $2 million from Michael Bloomberg; $2 million from Donald Sussman, a hedge fund guy who bought a $27 million home in 2016; $2.5 million from Irwin Jacobs, the founder of Qualcomm and billionaire “philanthropist,” which is rich person speak for someone who isn’t taxed enough; and $5 million from Karla Jurvetson, a doctor, who donated the money as stock.
The biggest super PAC supporting Democrats running for Congress this year is the House Majority PAC, which has raised over $75 million this cycle. Its donors include Sussman again, with $4.75 million; media billionaire Fred Eychaner, with $4 million; Seth Klarman, a billionaire who was “once the biggest donor to the Republican Party in New England,” with $2 million; and George M. Marcus, a San Francisco-based real estate billionaire, with $3.5 million. Marcus’ firm, Marcus Millichap, issued an advisory recently about how California’s Proposition 10, which would allow cities to expand rent control and was endorsed by the California Democratic Party, is very bad. Is that the sort of person we want funding, and potentially influencing, the Democrats?
In California’s 45th District, Democrat Katie Porter is running to unseat Rep. Mimi Walters. The National Association of Realtors’ PAC has spent $1.1 million to support Porter; the California Association of Realtors has spent just over $1 million. Both are regular PACs, meaning they can’t take donations bigger than $5,000, but they exist to represent the interests of the real estate industry. In fact, they’re exactly the kinds of corporate PACs whose help Democrats like Katie Porter are supposed to be rejecting. According to FEC filings, the association spent that money on things like direct mail and a TV ad buy, but also $33,500 on polling services.
VoteVets, a liberal super PAC that grew out of opposition to the Iraq War, is also spending on some 2018 races. It’s shelled out $705,769 helping Democratic candidate Jason Crow, a veteran and lawyer, in Colorado’s 6th, one of the most expensive House races this year, and $805,815 supporting Slotkin, who spent 14 years as a Middle East analyst at the CIA. Its funding comes form a mix of small donors and wealthy supporters: It got $1.3 million from Bloomberg, $200,000 from billionaire Amos Hostetter, and $500,000 from Patriot Majority USA, a dark money 501(c)(4), although the nonpartisan advocacy group Issue One reported many of its biggest donors were unions. VoteVets also has an allied 501(c)(4) that doesn’t disclose its donors.
These super PACs also regularly transfer money between themselves. House Majority PAC has donated to Independence USA, WomenVote!, and VoteVets. Independence USA has donated to House Majority PAC, with an in-kind donation of polling services. The money pool sloshes around behind the scenes, where it’s divvied up and doled out by the big players, who all know each other and who spend most of their time talking to rich donors.
Some of the incumbents who publicly pledged not to accept corporate PAC donations did accept these donations before they made that pledge, without later returning the money. (We only checked incumbents because they’re much more likely to receive corporate PAC dollars.) And some of those candidates made the pledge late enough in the cycle that you might argue it was little more than a last-ditch marketing stunt. None of these donations to the following campaigns were reported to the FEC as refunded to the donors. Splinter asked each lawmaker’s campaign for comment on whether they would give back the corporate dollars they’ve accepted, despite their public disavowals. So far, none have responded.
Sen. Sheldon Whitehouse (D-RI) pledged on July 25 not to take any corporate PAC money. But FEC records reveal that less than a month earlier, on June 29, Whitehouse’s campaign received $1,000 from Viacom, $1,000 from Lockheed Martin, and $2,500 from Microsoft. King & Spalding, a lobbying firm that represented pharmaceutical companies and Amazon this year, donated $1,000; several of their registered lobbyists were also among the donors to the PAC. The day before, Greenberg Traurig, a company that has reported $6 million in lobbying income so far this year, donated $1,500.
Rhode Island Congressman David Cicilline, who made that same pledge around the same time as Whitehouse, took money from corporate PACs just a few days before he made that pledge. Cox Enterprises, a cable company that supported the FCC’s repeal of net neutrality rules, gave Cicilline $8,000—$5,000 for the general and $3,000 for the primary, which he won easily—on July 10. CVS, General Dynamics, AT&T, and others also donated. The Motion Picture Association of America, a trade association that represents Hollywood studios, donated $1,500 on Aug. 3. After this story went live, a spokesperson for Rep. Cicilline emailed that his campaign has not and will not return the corporate PAC donations.
Kirsten Gillibrand, the New York senator on most lists of potential 2020 Democratic candidates, said back in February that she was swearing off corporate PAC money; her campaign website prominently features that promise. Before that pledge, Gillibrand’s campaign took $1,000 from Lockheed Martin, $5,000 from PricewaterhouseCoopers, $2,500 from law firm Ernst & Young, and $1,000 from RiteAid, among others.
Yet one incumbent did return this money. Rep. Tulsi Gabbard, who also pledged not to accept corporate PAC money, returned several corporate PAC donations this year, according to campaign finance filings.
These donations make up a very small percentage of their overall fundraising. What’s $1,000 from RiteAid out of Gillibrand’s $17 million haul this cycle? This all begs the question: Does it really mean all that much if she swore it off in the first place?
The super PACs funding these races don’t directly take money from corporations, but they do take money from billionaires whose interests are very closely tied with those of corporations: more money for rich guys, please. George M. Marcus does better if real estate developers and landlords are protected. Donald Sussman can only buy a $27 million home if billionaires continue to, you know, exist. They might be supporting Democrats because they’re a better bet this year, because they believe in the existential threat posed by climate change, or because they oppose Donald Trump’s general fascism, but they have class interests, too—strong class interests, like “don’t tax the rich.” They might not support the GOP tax cuts—at least, not with their dollars—but that doesn’t mean they’d support a Democrat who took office on a platform of taxing billionaires out of existence and introducing single payer.
It’s important to note that whatever these Democrats are doing pales in comparison to what Republicans are up to. The Congressional Leadership Fund, the biggest super PAC on the Republican side, hides some of its donors by taking money from an allied 5o1(c)(4), has raised twice as much as the Democrats’ House Majority PAC, and has received tens of millions from single big donors like Sheldon Adelson. It takes money directly from corporations like Koch Industries and Chevron. It’s plutocracy on speed. But the Republicans have no shame, and the party is committed to expanding this vision of corporate-funded politics as far as possible.
So how can Democrats compete? There are a few paths. They can lean in, and take money from whoever will give it to them, even as they say they support policies that might hurt their donors’ bottom line. (See: Hillary Clinton.) But then voters have no reason to expect they’ll actually follow through on that second bit, and the candidates who take big money tend not to be the ones who might ever have done that anyway.
Or, you can run a campaign that inspires a lot of regular people to donate $20 or $30 each. I asked Karthik Ganapathy, a former spokesperson for Bernie Sanders in New Hampshire who currently works at MoveOn, whether he sees a future where a campaign can be successful on small dollars alone. He argued that candidates who put themselves “on the side of working people” will find it’s very possible indeed. “If you take away one lesson from Bernie’s campaign, or those of Alexandria Ocasio-Cortez and Beto O’Rourke, it’s that progressives don’t need to hold blue plate fundraisers, or angle for corporate PAC money, to raise enough to build successful campaigns,” he told Splinter.
Not every candidate has the magnetism of Ocasio-Cortez, the hot face and skateboard skills of Beto O’Rourke, or Bernie’s authenticity. And you might reasonably argue that the Democratic Party will never rid itself of candidates who’d rather cozy up to billionaires than run a campaign genuinely directed at real people, because their interests—political and class-based—are more closely aligned with the rich than the poor. That is what needs changing. The party needs to cast out candidates who are more comfortable in a room full of suits than a room full of nurses and teachers. It’s hard to imagine how we do this without tearing everything down and starting again.
Yes, it is an undeniably good thing that so many Democrats feel they have to reject corporate PAC money, and it’s certainly good that many are actually doing so; I do not want my Democratic representatives taking any money from Lockheed Martin. But if you take a longer view, the Democratic Party will never represent the interests of poor people if they are beholden to rich people. It’s as simple as that. If you rely on billionaires to get elected, you will be a party for billionaires.
Rejecting corporate PAC money is the first small step, but the next step is rejecting the money of the rich who grow fat off those very corporations, and whose interest is in preserving the system of profit-extracting oppression that the vast majority of Americans live under. Without doing that, what sounds like a meaningful pledge can quickly become an empty slogan, and moreover, a cruel joke at the expense of those who desperately want to believe it. Because right now, we have nothing else.
This story has been updated to add comment from Rep. Cicilline’s spokesperson.