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Speaker 1: Hi.

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Speaker 2: I'm Sarah Holder, a host of The Big Take. Today

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Speaker 2: we're sharing the newest episode from our collaborators over at

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Speaker 2: the Big Take DC. They look at why Wall Street

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Speaker 2: donors are waiting to weigh in on the GOP primary.

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Speaker 2: Make sure you subscribe to the Big Take DC feed

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Speaker 2: so you can get episodes like these every Thursday. Just

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Speaker 2: look up Big Take DC available wherever you listen to podcasts,

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Speaker 2: and while you're there, check out the reporting from the

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Speaker 2: Iowa caucuses earlier this week. With that, enjoy the show.

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Speaker 2: I'll talk to you Monday.

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Speaker 3: If you look at a list of the top individual

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Speaker 3: contributors to any US election, you're going to notice the pattern.

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Speaker 3: The biggest donors mostly work in finance.

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Speaker 1: So these are people who run hedge funds, who are

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Speaker 1: big investors and are well known within the finance world.

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Speaker 3: That's my Bloomberg News colleague, Laura Davison. If you follow

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Speaker 3: Wall Street, you might even recognize some of these names.

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Speaker 1: Ken Griffin, Jeff Yass Paul Singer.

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Speaker 3: During the twenty twenty to midterms, those three billionaires gave

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Speaker 3: over one hundred and fifty million dollars in federal political donations.

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Speaker 3: That money went to campaigns, organizations, and political parties. That's

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Speaker 3: enough to fund an entire Senate race. And about a

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Speaker 3: year ago, Laura started calling up some major donors heading

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Speaker 3: into what could be one of the most consequential elections

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Speaker 3: in decades. She wanted to know which candidate they liked best.

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Speaker 1: And I was making a bunch of calls to different donors.

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Speaker 1: They said, look, none of us like Trump. What we

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Speaker 1: need to do is get behind one candidate and all

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Speaker 1: donate to that candidate.

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Speaker 3: That's what Laura thought would happen, especially because major donors

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Speaker 3: could be the key to another Republican candidate beating former

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Speaker 3: President Donald Trump for the party's nomination. But now here

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Speaker 3: we are in January twenty twenty four, less than a

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Speaker 3: year away from that very election, and.

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Speaker 1: Things really haven't changed. Basically, they didn't get behind anyone.

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Speaker 3: From Bloomberg's Washington bureau. This is the Big Take DC Podcast.

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Speaker 3: I'm your host Salia Mosen. Today on the show, we'll

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Speaker 3: hear from Laura and also I'll introduce a source of

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Speaker 3: mind who's pretty close to this story, investor Kyle Bass.

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Speaker 3: He's plugged into the world of political money and is

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Speaker 3: close with some major donors. Kyle and I dig into

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Speaker 3: what folks in that world want out of this election

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Speaker 3: cycle and what it all means for the twenty twenty

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Speaker 3: four race. By this point in a presidential campaign cycle,

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Speaker 3: we typically be seeing a lot of wealthy investors opening

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Speaker 3: up their wallets. They'd be hosting fundraisers, funneling money towards

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Speaker 3: the candidates they support, But not this year.

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Speaker 1: Just to kind of give you like a size and

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Speaker 1: scope here, back in twenty sixteen, which was the last

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Speaker 1: time we had a Republican primary crowded field. By the

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Speaker 1: end of the third quarter, which is the latest data

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Speaker 1: that we have to compare to the top ten Republican

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Speaker 1: donors had given five million dollars to all the Republican

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Speaker 1: presidential candidates. Right now, we only have about one point

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Speaker 1: three million in donations that have so far been reported,

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Speaker 1: so you know, almost a fifth compared to twenty sixteen.

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Speaker 3: Part of that comes down to the Republican front runner,

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Speaker 3: former President Donald Trump. I talked about this with one

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Speaker 3: big investor, Kyle Bass. He runs a hedge fund called

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Speaker 3: Hayman Capital Management out of Dallas, Texas.

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Speaker 4: I mean, look, I know Trump's second largest donor. He's

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Speaker 4: a very good friend of mine, someone that donated nine

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Speaker 4: figures Okay, we're talking one hundred million dollars or more,

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Speaker 4: someone that really gave the Donald real money in twenty sixteen,

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Speaker 4: and so far he's not given Trump any money this year.

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Speaker 3: That's not a one off. Only two of the top

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Speaker 3: ten Republican donors in the last presidential cycle have committed

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Speaker 3: to Trump's twenty twenty four campaign, and at this point

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Speaker 3: in the last cycle, over half of them had already donated.

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Speaker 3: Bass isn't a major political donor himself, but he has

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Speaker 3: thrown his money into some races in the past, and

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Speaker 3: when he looks at the options in front of him

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Speaker 3: this year, like many Americans, he's not that excited. You know.

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Speaker 4: Look, I don't have a friend that believes Trump or

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Speaker 4: Biden should be our president. Two octogenarians that each have

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Speaker 4: a litany of their own problems as the best that

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Speaker 4: the United States can serve up right now, and I

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Speaker 4: just don't think that's the case.

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Speaker 3: The possibility of that rematch feels especially real this week.

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Speaker 3: On Monday, Trump ran away with the Republican nomination in

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Speaker 3: the Iowa caucuses by a landslide. But Trump is a

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Speaker 3: tricky candidate. For fiscal conservatives. These donors tend to favor

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Speaker 3: the Republican Party because it supports lower taxes and less

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Speaker 3: regulation of the businesses that they run. But while Trump

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Speaker 3: is a Republican, he isn't consistent his policies and his

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Speaker 3: actions are unpredictable. That makes him feel risky for investors

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Speaker 3: who need stability from their government. Here's Bloomberg's Laura Davison.

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Speaker 1: Again, at its core, they're running a business, and so

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Speaker 1: they want to know what the policy is going to be.

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Speaker 1: Is there going to be a ten percent tariff on

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Speaker 1: all imports? Is he going to get in fights with

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Speaker 1: trading partners or allies or things that could disrupt how

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Speaker 1: they go about doing business. Having consistency and trust in

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Speaker 1: what Washington is doing and that it's not going to

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Speaker 1: disrupt the broader economic outlook is really important to business

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Speaker 1: leaders first and foremost.

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Speaker 3: And there's another reason these executives may be staying away

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Speaker 3: from Trump. They might not want the liability that comes

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Speaker 3: with being associated with them.

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Speaker 1: If you run a big business, you have a lot

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Speaker 1: of employees. Trump has been a very divisive figure.

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Speaker 3: That doesn't necessarily mean they won't support Trump with their

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Speaker 3: dollars and their votes if he takes the Republican nomination.

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Speaker 3: But going into New Hampshire next week in South Carolina

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Speaker 3: a few weeks later, these candidates aren't just vying for

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Speaker 3: state delegates. They're also in a less visible contest, the

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Speaker 3: one to win over GOP donors, who tend to watch

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Speaker 3: these early state level races as they decide which candidates

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Speaker 3: to give money to. Big investors have told Laura they're

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Speaker 3: still holding out hope for a viable Trump challenger. Just

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Speaker 3: this week, even after the IOWER results, Blackstone CEO Steve

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Speaker 3: Schwartzman refused to tell CNBC what he'd do if Trump

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Speaker 3: was the Republican nominee.

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Speaker 4: I'm in thee.

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Speaker 3: Let's wait and see and see how this works.

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Speaker 4: I'm not into the hypothetical world yet, as much as

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Speaker 4: you'd like me to be.

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Speaker 3: These donors are craving an alternative, a new standard bearer

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Speaker 3: for traditional Republican Party principles like fiscal conservatism, who also

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Speaker 3: offers the stability that their businesses and the markets rely on.

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Speaker 3: The trouble is they've had a tough time committing to one.

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Speaker 1: Basically, everyone sat around and couldn't decide whether it was

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Speaker 1: going to be Desantists, whether it was Tim Scott, Nikki Haley.

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Speaker 3: So what did these investors do?

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Speaker 1: They scattered a little bit of money to several different candidates.

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Speaker 3: Some of them backed Florida Governor Ron DeSantis early on,

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Speaker 3: but he supported some social policies that aren't so popular

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Speaker 3: with investors, and he doesn't always give donors the kind

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Speaker 3: of attention they expect their money to buy. John Katzimatitis,

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Speaker 3: a billionaire who was donated to the Republican Party, talked

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Speaker 3: about this on CNN and he sounded bewildered.

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Speaker 2: I have a lot of Florida friends that helped him

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Speaker 2: get elected, and he hasn't returned to any of their clause.

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Speaker 3: Even DeSantis's biggest donor, a Florida real estate magnet named

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Speaker 3: Robert Bigelow, said he'd made a mistake in offering his support.

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Speaker 3: Other investors have gotten behind Nicki Haley, the former South

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Speaker 3: Carolina governor. That includes major Democratic donor and LinkedIn founder

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Speaker 3: Reid Hoffman and JP Morgan's CEO. Jamie Diamond called on

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Speaker 3: the audience of the New York Times Deal Book conference

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Speaker 3: directly when he said.

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Speaker 2: He have a very little Democrat I urge, you know,

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Speaker 2: help Nicki Halley too.

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Speaker 3: Haley's also gotten four million dollars from a group backed

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Speaker 3: by Charles Koch, a billionaire Republican donor. You may have

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Speaker 3: seen headlines that essentially say Wall Street's going for Haley.

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Speaker 3: Her competitors have certainly leaned into that narrative. We heard

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Speaker 3: it this week at Trump and DeSantis rallies leading up

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Speaker 3: to the Iowa caucuses.

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Speaker 2: Nibi and Krikigo are both backed by war monitors and

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Speaker 2: left wing glocalist Wall Street millionnaires andonaires.

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Speaker 4: Trump is running for his issues, Hailey's running for the donors' issues.

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Speaker 4: I'm running for your issues, your family issues.

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Speaker 3: But my colleague Laura told me that the Haley narrative

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Speaker 3: is not so simple.

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Speaker 1: She did get some big donors, but still not even

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Speaker 1: close to touching Trump as well. As some of these

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Speaker 1: people have been saying, hey, we shoul Supportniki Haley, but

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Speaker 1: haven't necessarily followed up with financial support.

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Speaker 3: Just listen to some of these investors waiver when they're

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Speaker 3: asked about it. Here's Ken Griffin, the CEO of Citadel,

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Speaker 3: on Bloomberg TV.

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Speaker 1: Are you supporting her financially yet?

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Speaker 4: That's a decision that we're actively contemplating.

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Speaker 3: I mean, we're at the finish line on that choice,

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Speaker 3: yes or no. And here's billionaire investor Ken Langone on

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Speaker 3: Fox Business.

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Speaker 4: I'm almost there.

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Speaker 2: I got a couple of things I want to do,

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Speaker 2: but I'm pretty certain.

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Speaker 3: It's almost comical. The anchors on MSNBC have had a

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Speaker 3: field day with it. Here's Joe Scarborough.

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Speaker 4: I will say if a donor said they were actively

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Speaker 4: contemplating supporting me, and I was sitting across the table,

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Speaker 4: I do this.

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Speaker 3: He leans back, crosses his arms and glares. You keep

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Speaker 3: actively content the chet. Kyle Bass isn't planning to donate

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Speaker 3: to any candidate, but from where he sits, the problem

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Speaker 3: is simple. Donors want to return on their investment and

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Speaker 3: at this point it's not clear who can deliver that

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Speaker 3: for them.

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Speaker 4: No one wants to burn money. They're trying to figure

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Speaker 4: out who the front runner is going to be, and

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Speaker 4: so they're just holding off.

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Speaker 3: Ken Langone said as much just this week when he

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Speaker 3: was asked about Hayley. He said he was waiting to

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Speaker 3: see what happens in New Hampshire because, as he put it,

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Speaker 3: you don't throw money down a rat hole. But Republican

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Speaker 3: donors are in sort of a chicken and egg situation.

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Speaker 3: They're waiting to see who Trump's top challenger is before

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Speaker 3: throwing money into the race. But no one candidate can

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Speaker 3: become the top challenger without more of their support, and

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Speaker 3: they're running out of time. While these donors are waffling,

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Speaker 3: Trump's core voter base has remained steadfast, as proven in Iowa,

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Speaker 3: and the bulk of Trump's campaign fundraising comes from small

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Speaker 3: dollar donors, not C suite investor types.

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Speaker 1: I think that's the conclusion that a lot of donors

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Speaker 1: have come to that Trump has such a loyal following,

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Speaker 1: you know, between thirty and forty percent of the Republican base,

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Speaker 1: and there's almost nothing that I a wealthy donor, can

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Speaker 1: do to sway that population.

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Speaker 3: So while they wait it out and hope another frontrunner emerges,

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Speaker 3: these big donors are taking another approach to tip the

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Speaker 3: scale of politics by targeting down ballot races. We'll get

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Speaker 3: to that after the break. We're back. Just like many

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Speaker 3: of US, investors can't figure out who they want in

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Speaker 3: the White House, so instead they're using their money to

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Speaker 3: advance what they want from their government. Part of that

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Speaker 3: strategy is to hedge their bets by getting involved in

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Speaker 3: smaller races. Here's Bloomberg's Laura Davison.

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Speaker 1: Again, they're looking at how can I provide a counterweight

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Speaker 1: either to Trump or to Biden if he's in the

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Speaker 1: White House. That's why you see all this money going

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Speaker 1: into house races, congressional races. They're looking at, how can

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Speaker 1: we get Republicans that align with our sort of pro business,

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Speaker 1: anti regulation worldview into office.

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Speaker 3: Let's take a moment to talk about how donating money

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Speaker 3: to downballot races can influence policy in a different way

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Speaker 3: than donating to a presidential campaign. First, we have to

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Speaker 3: understand campaign finance.

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Speaker 1: Campaign finance laws are really complicated. So if the donor

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Speaker 1: wants to give to a specific campaign, are only allowed

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Speaker 1: to give a couple thousand dollars. This limit changes every year.

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Speaker 1: For this year it's thirty three hundred dollars. But when

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Speaker 1: you look at kind of how they're giving in totality,

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Speaker 1: some of the biggest donors are giving, you know, more

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Speaker 1: than one hundred million dollars annually or tens of millions

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Speaker 1: of dollars. But that's spread across dozens of not hundreds

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Speaker 1: of candidates and other entities, super packs, regular packs, leadership.

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Speaker 3: Packs, pack stands for political action committee, and the essentially

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Speaker 3: funnel money to campaigns to get around those donation caps.

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Speaker 3: So when push comes to shove, big money donors can

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Speaker 3: dole out millions of dollars however they please, and support

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Speaker 3: from one key investor has the power to trickle down

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Speaker 3: because while you or I might not change your votes

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Speaker 3: based on, say, who Ken Griffin decides to back some

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Speaker 3: of the employees or clients at Citadel his investment firm, might.

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Speaker 1: The way that political fundraising works a lot of these

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Speaker 1: times is a certain person who is a big advocate

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Speaker 1: for a candidate will host a fundraiser at their home

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Speaker 1: or you know, with our country club or some their

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Speaker 1: site and invite all their friends to come, and that's

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Speaker 1: how they reel people in. So if you have a

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Speaker 1: really big name who's very trusted supporting and endorsing a

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Speaker 1: certain candidate, you can get a lot of other donors

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Speaker 1: who are maybe not, you know, going to give tens

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Speaker 1: of millions of dollars, but might give hundreds of thousands

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Speaker 1: of dollars. People who aren't necessarily a hedge fund founder,

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Speaker 1: but that person is their boss or their boss's boss's boss,

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Speaker 1: and they see, ah, okay, Ken Griffin is backing this candidate.

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Speaker 1: That might be a person that I want to back.

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Speaker 1: I trust his judgment as an investor. I probably also

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Speaker 1: will trust his judgment as a donor.

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Speaker 3: And what kind of impact can that money have on

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Speaker 3: an election cycle?

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Speaker 1: So it can have a lot of impact, particularly when

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Speaker 1: you're looking at House and Senate races, when the total

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Speaker 1: budget for a specific candidate for that race might be

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Speaker 1: about a million dollars. If a really wealthy investor comes

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Speaker 1: in and gives, you know, one hundred thousand dollars, that

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Speaker 1: can really sway the race. And of course that investor is,

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Speaker 1: you know, as it's such a big donor, is definitely

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Speaker 1: going to get FaceTime with the candidate. So that person

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Speaker 1: can really have a lot of sway in the kind

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Speaker 1: of issues they're talking about, where they're campaigning, how they're campaigning.

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Speaker 3: It's a bit of a different picture when it comes

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Speaker 3: to a presidential campaign. According to Open Secrets, the twenty

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Speaker 3: twenty election cycle brought in a record five point seven

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Speaker 3: billion dollars.

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Speaker 1: The numbers we're talking about are just so much bigger

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Speaker 1: on the presidential side. So in that case, it's a

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Speaker 1: little bit more about influence of Okay, can I get

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Speaker 1: a meeting at the Treasury Department if this candidate wins?

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Speaker 1: Can I have a meeting at the White House?

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Speaker 4: Well?

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Speaker 1: I invited to a state dinner? That kind of thing

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Speaker 1: of a little bit more soft power.

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Speaker 3: Laura has poured over Federal Election Commission filings and she's

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Speaker 3: found that the same donors who have given a fraction

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Speaker 3: of what they did in the past to the presidential

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Speaker 3: candidates themselves, they've actually given more to Republicans overall, to

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Speaker 3: House and Senate races, the party in general, and super packs.

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Speaker 1: At this time in twenty sixteen, they've given eleven million

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Speaker 1: in total. When you look at that number for twenty

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Speaker 1: twenty three, this group has given almost fifty three million.

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Speaker 1: So they're giving a lot more. They're just giving a

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Speaker 1: lot less to presidential candidates.

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Speaker 3: And because these donors are putting more money into smaller,

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Speaker 3: more local races, there's now an entire ecosystem helping them

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Speaker 3: choose where to spend it.

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Speaker 1: This is really interesting. There's almost a little cottage industry

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Speaker 1: that has sprung up of people who advise some of

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Speaker 1: these top donors about how to pick candidates. So they

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Speaker 1: are going out, they're doing research, and they're picking maybe

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Speaker 1: twenty thirty congressional districts that they think will be important.

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Speaker 1: They're looking at the Senate map saying you are going

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Speaker 1: to be the competitive races, and then they're going to

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Speaker 1: these places and interviewing all the candidates. It's a very

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Speaker 1: meticulous process, a very data driven process.

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Speaker 3: These donors get a platform to talk to candidates and

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Speaker 3: express exactly which policies they want advanced.

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Speaker 1: Ken Griffin has been very clear, I'm interested in education,

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Speaker 1: I'm interested in deregulation and how do we make it

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Speaker 1: possible for innovators and businesses to thrive.

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Speaker 3: And these down ballot races can sometimes hinge on one

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Speaker 3: major donor, unlike the president race, where money can only

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Speaker 3: go so far. Sure it might get you a dinner party, inviter,

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Speaker 3: a phone call, but it won't decide the race or

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Speaker 3: necessarily shape policy. Sometimes these investors are influencing races from

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Speaker 3: thousands of miles away. An investor based in Florida might

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Speaker 3: donate to congressional campaigns in North Dakota or Nebraska. And

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Speaker 3: Kyle Bass, he lives in Texas, but he told me

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Speaker 3: he's given to California Governor Gavin Newsom in the past,

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Speaker 3: Boy gave.

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Speaker 4: To Gavin because I wanted to get to know him,

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Speaker 4: you know, under the nod eyed Enemy statute in San Francisco.

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Speaker 3: All this raises a question do billionaires think about everyday people,

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Speaker 3: the voters and families in a particular district, for example,

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Speaker 3: when they get involved in these races. Bass told me

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Speaker 3: he does think about what everyday American voters want because

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Speaker 3: they make up the economy that he invests in.

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Speaker 4: I was at a meeting of ex fed governors where

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Speaker 4: one of the masked a question. They said, you know,

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Speaker 4: do you think that service workers' wage demands are related

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Speaker 4: to their future expectations of inflation?

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Speaker 3: In non academic terms.

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Speaker 4: The question was, do you think bartenders and waitresses are

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Speaker 4: demanding higher wages because they think inflation's going to accelerate

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Speaker 4: in the future or stay high in the future. And

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Speaker 4: I listened to them for forty five minutes. Tobate the

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Speaker 4: Phillips curve.

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Speaker 3: You don't have to know what the Phillips curve is

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Speaker 3: to know these guys were lost in their academic modeling.

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Speaker 3: They were far from the realities of paying bills and

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Speaker 3: making ends.

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Speaker 1: Meet.

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Speaker 4: After forty five minutes, I raised my hand and I said,

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Speaker 4: have any of you spoken with a service worker in

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Speaker 4: the last six months? And they all looked at each

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Speaker 4: other and not one hand one up And I said, well,

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Speaker 4: I have investments in a few restaurants. So I sit

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Speaker 4: down with the bartender, and I sit down with the

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Speaker 4: waitress who now has three jobs, and they only care

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Speaker 4: about one thing. All they care about is paying their rent,

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Speaker 4: their car payment, and their food bill and their insurance.

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Speaker 3: Be a bit of an exception. Not all big investors, economists,

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Speaker 3: or others with influence over the economy are sitting down

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Speaker 3: to talk with bartenders and waitresses, but they are potentially

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Speaker 3: looking to take cues from everyday people. Who voters pick

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Speaker 3: in the early primaries like New Hampshire next week could

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Speaker 3: determine which Trump alternative Wall Street may rally behind, or

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Speaker 3: whether they end up backing Trump.

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Speaker 4: I think if you see Nikki Haley have some traction

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Speaker 4: in the first few primaries, you're going to see money

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Speaker 4: come in to Nicki Haley's campaign from the GOP and

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Speaker 4: it's going to be big money. This is all going

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Speaker 4: to come down to the wire, There's no doubt. So

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Speaker 4: I actually think. I do think that big money can

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Speaker 4: sway opinions.

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Speaker 3: Hearing Bass say that made me think of a moment

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Speaker 3: for my conversation with Laura Davison. Let's think a really

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Speaker 3: big picture here for a second. Trump has a pretty

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Speaker 3: big lead in the polls right now. If a bunch

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Speaker 3: of investors, just every investor with all the money got

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Speaker 3: behind one of his opponents DeSantis or Haley right now,

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Speaker 3: it would make a difference.

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Speaker 1: At this point, it's too late. Money takes time. You

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Speaker 1: have to hire staff, you have to run advertisements, you

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Speaker 1: to create those advertisements. It's not like you can put

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Speaker 1: it in a campaign and have it give you a

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Speaker 1: bump in your poll numbers immediately. And so at this point,

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Speaker 1: voters are going to the polls. A lot of people

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Speaker 1: have already made up their mind. The kind of leads

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Speaker 1: that Trump has in the polls suggests that he could

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Speaker 1: potentially have this nomination sewed up, you know, March April time.

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Speaker 1: Money really won't make a difference. It's the candids themselves

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Speaker 1: that have to win it for themselves.

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Speaker 3: Thanks for listening to The Big Take DC podcast from

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Speaker 3: Bloomberg News. I'm Sleiah Mosen. This episode was produced by

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Speaker 3: Julia Press and Naomi Shaven. It was fact checked by

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Speaker 3: Molly Nugent. A special thanks to Bill Allison and Laura Davison.

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Speaker 3: Alex Sugia and Blake Maples are mixed engineers. Our story

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Speaker 3: editors are Caitlin Kenny, Wendy Benjaminson, and Michael Shepherd. Sage

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Speaker 3: Bauman is our executive producer and head of Podcasts. If

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Speaker 3: you like what you have, please be sure to subscribe, rate,

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Speaker 3: and review the show. It'll help other listeners find us.

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Speaker 3: Thanks for tuning in. I'll be back next week.