How billionaires control US elections
Millions have already been raised for the 2024 presidential race between Kamala Harris and Donald Trump. But where does that money come from? Here's how the ultra-rich can sway an election.
Transcript
00:00We've never seen this much money flow into U.S. elections, and in recent years, big donors
00:05like Ken Griffin, George Soros, and Reid Hoffman have contributed to swing election outcomes.
00:10So how much is being raised?
00:12Where does that money go?
00:13And can that make or break an election?
00:15I'm John Dorman, and I'm a senior politics reporter at Business Insider.
00:19Seeing billions upon billions upon billions of dollars raised is a relatively recent phenomenon
00:24in American politics.
00:25The first time that both presidential campaigns raised over a billion dollars was in 2012
00:30in the race between President Barack Obama and Republican Mitt Romney.
00:33It was a historic achievement.
00:34Those numbers have only gone up.
00:36In the 2020 cycle, there was $14.4 billion that was raised between congressional races
00:42and a presidential race, which is a huge amount of money.
00:46Here are the consequences of so much money flowing into elections.
00:49Usually, candidates who spend more money win their races.
00:52In 2022, nearly 94% of House candidates who raised the most money won their races.
00:57And for the Senate races that year, roughly 82% of Senate candidates who raised the most
01:02money won their races.
01:03But for presidential campaigns, things are a bit different.
01:07For example, in 2016, Hillary Clinton raised more money than Donald Trump, but she lost
01:12the election.
01:13So there's not always a clear correlation between how much is raised and who actually
01:18wins the election.
01:20The campaign money goes towards everything, including hosting rallies, to opening offices
01:25and hiring staff in swing states, and to consulting fees.
01:28But the biggest thing would be advertising, whether it's direct mail, whether it's television,
01:34radio advertisements, and also social media ads.
01:39Candidates are trying to figure out a way to reach voters, and they'll use whatever
01:42methods that they can in order to do that.
01:46Fundraising is a critical part of any presidential campaign.
01:50The most prominent example of this is after Biden's disastrous debate in June, which
01:55left many Democrats fretting and nervous.
01:57You raise a deficit larger than any president has in any one term.
02:01You had the actor George Clooney, who asked Biden to step aside.
02:03You had major Democratic donors, such as Abigail Disney, who said that she wouldn't donate
02:09money to the campaign any longer if Biden was the nominee.
02:12For them not to contribute money meant that the campaign was going to struggle.
02:16Once people saw that basically the faucet was turning off, that really influenced the
02:21campaign, and it likely contributed to Biden exiting the race.
02:25An immense amount of money has already been raised for the 2024 presidential race, and
02:29right now Democrats have the momentum in terms of how much has been raised.
02:33Vice President Kamala Harris raised $310 million in July alone.
02:38Part of that money was inherited from the Biden campaign and rolled over to her campaign.
02:43We thank Joe Biden each and every day.
02:47So now she has $377 million cash on hand.
02:50Former President Donald Trump has $327 million cash on hand.
02:54So the Democrats are about $15 million ahead.
02:57They have momentum at the moment on the day that Minnesota Governor Tim Walz was announced
03:02as Kamala Harris's running mate.
03:04Listen, I want you to do this with me.
03:07Let's do this together.
03:08Would you be my running mate?
03:10ActBlue took in about $20 million on that day alone, a really big sum, and it shows
03:15that Democrats are really motivated, whereas they didn't have that about a month ago.
03:20There are three ways that money can be donated, whether it's individual contributions, or
03:24through PACs or through super PACs.
03:27Individual contributions are subject to strict limits under federal law.
03:30Individuals can only contribute up to $6,600 for an election cycle.
03:34And then you have PACs, political action committees.
03:37They contribute money to campaigns, and they can be formed for businesses or organizations.
03:42There's a $5,000 limit for an individual candidate committee.
03:46And then you have super PACs, which can accept unlimited contributions from individuals and
03:50corporations.
03:51They can have a huge impact on American elections.
03:54Wealthy donors are increasingly playing a huge role in shaping American politics.
03:59In the 2022 midterm election cycle, billionaires contributed about $880 million.
04:05But small-dollar donations are also an important part of elections, and we're seeing that play
04:10out in the presidential race.
04:11The influx of money to campaigns is often uneven, and big events can influence how people
04:17donate to campaigns.
04:19For example, when Vice President Kamala Harris announced her candidacy for president after
04:23President Joe Biden stepped aside, she raised about $81 million within 24 hours from 880,000
04:29people.
04:30That's a huge figure, and that's unprecedented.
04:33Stand to my face.
04:38Trump's legal issues have also caused an influx of money to his GOP presidential campaign.
04:42Mr. Trump, how long has it been since you've been convicted of violence?
04:45In May 2024, Trump and his allies super PAC raised $140 million, and much of that money
04:51came after he was convicted of 34 felony counts.
04:54This was a disgrace.
04:56There's money coming into these campaigns from all across the country, but a few players
05:00could have a huge impact on the upcoming election.
05:02For example, George Soros gave $60 million through a nonprofit that he founded to the
05:07Democracy PAC in April 2024.
05:10That money is going to go to aid House and Senate Democratic candidates.
05:13And this isn't the first time that George Soros has done this.
05:15He's been a prolific donor for a long time.
05:18In the 2022 midterm cycle alone, Soros gave $170 million.
05:24Another major 2024 figure is Tesla CEO Elon Musk.
05:28Musk has been very supportive of former President Donald Trump.
05:32And the Wall Street Journal recently reported that Musk would be donating $45 million a
05:36month to help Republican campaign efforts through the end of the election.
05:41But when contacted, Musk denied it and said that he wouldn't be doing that.
05:45Another example is Reed Hastings.
05:46The Netflix co-founder contributed $7 million to a super PAC affiliated with Kamala Harris
05:52in late July.
05:53And then there are people that we've never heard of.
05:55For example, there's Timothy Mellon.
05:57He contributed $50 million to a pro-Trump super PAC the day after Trump was convicted
06:02in a Manhattan court.
06:03It's one of the largest single contributions ever.
06:05And then you have Linda McMahon.
06:08She served in Trump's cabinet and she's already donated $10 million to a pro-Trump super PAC
06:12in this cycle.
06:14But it's also the policies of elected officials that can be influenced depending on who donates
06:18money.
06:19For example, politicians may have to prioritize the interests of donors who've contributed
06:23to their campaigns.
06:25If you look at Trump, oil and gas interests are lining up behind his campaign because
06:29of his strong support of the fossil fuel industry.
06:31And they're expecting to have his ear in the White House should he win again.
06:36Americans continue to want money out of politics.
06:3872% of Americans indicated that they would like to see limits on how much individuals
06:43or organizations can contribute to political campaigns.
06:46But right now, money has become an increasingly larger part of how our political system functions.
06:55For more stories, visit nyseagrant.org