Speaker 1: Hi.
Speaker 2: I'm Sarah Holder, a host of The Big Take. Today
Speaker 2: we're sharing the newest episode from our collaborators over at
Speaker 2: the Big Take DC. They look at why Wall Street
Speaker 2: donors are waiting to weigh in on the GOP primary.
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Speaker 2: and while you're there, check out the reporting from the
Speaker 2: Iowa caucuses earlier this week. With that, enjoy the show.
Speaker 2: I'll talk to you Monday.
Speaker 3: If you look at a list of the top individual
Speaker 3: contributors to any US election, you're going to notice the pattern.
Speaker 3: The biggest donors mostly work in finance.
Speaker 1: So these are people who run hedge funds, who are
Speaker 1: big investors and are well known within the finance world.
Speaker 3: That's my Bloomberg News colleague, Laura Davison. If you follow
Speaker 3: Wall Street, you might even recognize some of these names.
Speaker 1: Ken Griffin, Jeff Yass Paul Singer.
Speaker 3: During the twenty twenty to midterms, those three billionaires gave
Speaker 3: over one hundred and fifty million dollars in federal political donations.
Speaker 3: That money went to campaigns, organizations, and political parties. That's
Speaker 3: enough to fund an entire Senate race. And about a
Speaker 3: year ago, Laura started calling up some major donors heading
Speaker 3: into what could be one of the most consequential elections
Speaker 3: in decades. She wanted to know which candidate they liked best.
Speaker 1: And I was making a bunch of calls to different donors.
Speaker 1: They said, look, none of us like Trump. What we
Speaker 1: need to do is get behind one candidate and all
Speaker 1: donate to that candidate.
Speaker 3: That's what Laura thought would happen, especially because major donors
Speaker 3: could be the key to another Republican candidate beating former
Speaker 3: President Donald Trump for the party's nomination. But now here
Speaker 3: we are in January twenty twenty four, less than a
Speaker 3: year away from that very election, and.
Speaker 1: Things really haven't changed. Basically, they didn't get behind anyone.
Speaker 3: From Bloomberg's Washington bureau. This is the Big Take DC Podcast.
Speaker 3: I'm your host Salia Mosen. Today on the show, we'll
Speaker 3: hear from Laura and also I'll introduce a source of
Speaker 3: mind who's pretty close to this story, investor Kyle Bass.
Speaker 3: He's plugged into the world of political money and is
Speaker 3: close with some major donors. Kyle and I dig into
Speaker 3: what folks in that world want out of this election
Speaker 3: cycle and what it all means for the twenty twenty
Speaker 3: four race. By this point in a presidential campaign cycle,
Speaker 3: we typically be seeing a lot of wealthy investors opening
Speaker 3: up their wallets. They'd be hosting fundraisers, funneling money towards
Speaker 3: the candidates they support, But not this year.
Speaker 1: Just to kind of give you like a size and
Speaker 1: scope here, back in twenty sixteen, which was the last
Speaker 1: time we had a Republican primary crowded field. By the
Speaker 1: end of the third quarter, which is the latest data
Speaker 1: that we have to compare to the top ten Republican
Speaker 1: donors had given five million dollars to all the Republican
Speaker 1: presidential candidates. Right now, we only have about one point
Speaker 1: three million in donations that have so far been reported,
Speaker 1: so you know, almost a fifth compared to twenty sixteen.
Speaker 3: Part of that comes down to the Republican front runner,
Speaker 3: former President Donald Trump. I talked about this with one
Speaker 3: big investor, Kyle Bass. He runs a hedge fund called
Speaker 3: Hayman Capital Management out of Dallas, Texas.
Speaker 4: I mean, look, I know Trump's second largest donor. He's
Speaker 4: a very good friend of mine, someone that donated nine
Speaker 4: figures Okay, we're talking one hundred million dollars or more,
Speaker 4: someone that really gave the Donald real money in twenty sixteen,
Speaker 4: and so far he's not given Trump any money this year.
Speaker 3: That's not a one off. Only two of the top
Speaker 3: ten Republican donors in the last presidential cycle have committed
Speaker 3: to Trump's twenty twenty four campaign, and at this point
Speaker 3: in the last cycle, over half of them had already donated.
Speaker 3: Bass isn't a major political donor himself, but he has
Speaker 3: thrown his money into some races in the past, and
Speaker 3: when he looks at the options in front of him
Speaker 3: this year, like many Americans, he's not that excited. You know.
Speaker 4: Look, I don't have a friend that believes Trump or
Speaker 4: Biden should be our president. Two octogenarians that each have
Speaker 4: a litany of their own problems as the best that
Speaker 4: the United States can serve up right now, and I
Speaker 4: just don't think that's the case.
Speaker 3: The possibility of that rematch feels especially real this week.
Speaker 3: On Monday, Trump ran away with the Republican nomination in
Speaker 3: the Iowa caucuses by a landslide. But Trump is a
Speaker 3: tricky candidate. For fiscal conservatives. These donors tend to favor
Speaker 3: the Republican Party because it supports lower taxes and less
Speaker 3: regulation of the businesses that they run. But while Trump
Speaker 3: is a Republican, he isn't consistent his policies and his
Speaker 3: actions are unpredictable. That makes him feel risky for investors
Speaker 3: who need stability from their government. Here's Bloomberg's Laura Davison.
Speaker 1: Again, at its core, they're running a business, and so
Speaker 1: they want to know what the policy is going to be.
Speaker 1: Is there going to be a ten percent tariff on
Speaker 1: all imports? Is he going to get in fights with
Speaker 1: trading partners or allies or things that could disrupt how
Speaker 1: they go about doing business. Having consistency and trust in
Speaker 1: what Washington is doing and that it's not going to
Speaker 1: disrupt the broader economic outlook is really important to business
Speaker 1: leaders first and foremost.
Speaker 3: And there's another reason these executives may be staying away
Speaker 3: from Trump. They might not want the liability that comes
Speaker 3: with being associated with them.
Speaker 1: If you run a big business, you have a lot
Speaker 1: of employees. Trump has been a very divisive figure.
Speaker 3: That doesn't necessarily mean they won't support Trump with their
Speaker 3: dollars and their votes if he takes the Republican nomination.
Speaker 3: But going into New Hampshire next week in South Carolina
Speaker 3: a few weeks later, these candidates aren't just vying for
Speaker 3: state delegates. They're also in a less visible contest, the
Speaker 3: one to win over GOP donors, who tend to watch
Speaker 3: these early state level races as they decide which candidates
Speaker 3: to give money to. Big investors have told Laura they're
Speaker 3: still holding out hope for a viable Trump challenger. Just
Speaker 3: this week, even after the IOWER results, Blackstone CEO Steve
Speaker 3: Schwartzman refused to tell CNBC what he'd do if Trump
Speaker 3: was the Republican nominee.
Speaker 4: I'm in thee.
Speaker 3: Let's wait and see and see how this works.
Speaker 4: I'm not into the hypothetical world yet, as much as
Speaker 4: you'd like me to be.
Speaker 3: These donors are craving an alternative, a new standard bearer
Speaker 3: for traditional Republican Party principles like fiscal conservatism, who also
Speaker 3: offers the stability that their businesses and the markets rely on.
Speaker 3: The trouble is they've had a tough time committing to one.
Speaker 1: Basically, everyone sat around and couldn't decide whether it was
Speaker 1: going to be Desantists, whether it was Tim Scott, Nikki Haley.
Speaker 3: So what did these investors do?
Speaker 1: They scattered a little bit of money to several different candidates.
Speaker 3: Some of them backed Florida Governor Ron DeSantis early on,
Speaker 3: but he supported some social policies that aren't so popular
Speaker 3: with investors, and he doesn't always give donors the kind
Speaker 3: of attention they expect their money to buy. John Katzimatitis,
Speaker 3: a billionaire who was donated to the Republican Party, talked
Speaker 3: about this on CNN and he sounded bewildered.
Speaker 2: I have a lot of Florida friends that helped him
Speaker 2: get elected, and he hasn't returned to any of their clause.
Speaker 3: Even DeSantis's biggest donor, a Florida real estate magnet named
Speaker 3: Robert Bigelow, said he'd made a mistake in offering his support.
Speaker 3: Other investors have gotten behind Nicki Haley, the former South
Speaker 3: Carolina governor. That includes major Democratic donor and LinkedIn founder
Speaker 3: Reid Hoffman and JP Morgan's CEO. Jamie Diamond called on
Speaker 3: the audience of the New York Times Deal Book conference
Speaker 3: directly when he said.
Speaker 2: He have a very little Democrat I urge, you know,
Speaker 2: help Nicki Halley too.
Speaker 3: Haley's also gotten four million dollars from a group backed
Speaker 3: by Charles Koch, a billionaire Republican donor. You may have
Speaker 3: seen headlines that essentially say Wall Street's going for Haley.
Speaker 3: Her competitors have certainly leaned into that narrative. We heard
Speaker 3: it this week at Trump and DeSantis rallies leading up
Speaker 3: to the Iowa caucuses.
Speaker 2: Nibi and Krikigo are both backed by war monitors and
Speaker 2: left wing glocalist Wall Street millionnaires andonaires.
Speaker 4: Trump is running for his issues, Hailey's running for the donors' issues.
Speaker 4: I'm running for your issues, your family issues.
Speaker 3: But my colleague Laura told me that the Haley narrative
Speaker 3: is not so simple.
Speaker 1: She did get some big donors, but still not even
Speaker 1: close to touching Trump as well. As some of these
Speaker 1: people have been saying, hey, we shoul Supportniki Haley, but
Speaker 1: haven't necessarily followed up with financial support.
Speaker 3: Just listen to some of these investors waiver when they're
Speaker 3: asked about it. Here's Ken Griffin, the CEO of Citadel,
Speaker 3: on Bloomberg TV.
Speaker 1: Are you supporting her financially yet?
Speaker 4: That's a decision that we're actively contemplating.
Speaker 3: I mean, we're at the finish line on that choice,
Speaker 3: yes or no. And here's billionaire investor Ken Langone on
Speaker 3: Fox Business.
Speaker 4: I'm almost there.
Speaker 2: I got a couple of things I want to do,
Speaker 2: but I'm pretty certain.
Speaker 3: It's almost comical. The anchors on MSNBC have had a
Speaker 3: field day with it. Here's Joe Scarborough.
Speaker 4: I will say if a donor said they were actively
Speaker 4: contemplating supporting me, and I was sitting across the table,
Speaker 4: I do this.
Speaker 3: He leans back, crosses his arms and glares. You keep
Speaker 3: actively content the chet. Kyle Bass isn't planning to donate
Speaker 3: to any candidate, but from where he sits, the problem
Speaker 3: is simple. Donors want to return on their investment and
Speaker 3: at this point it's not clear who can deliver that
Speaker 3: for them.
Speaker 4: No one wants to burn money. They're trying to figure
Speaker 4: out who the front runner is going to be, and
Speaker 4: so they're just holding off.
Speaker 3: Ken Langone said as much just this week when he
Speaker 3: was asked about Hayley. He said he was waiting to
Speaker 3: see what happens in New Hampshire because, as he put it,
Speaker 3: you don't throw money down a rat hole. But Republican
Speaker 3: donors are in sort of a chicken and egg situation.
Speaker 3: They're waiting to see who Trump's top challenger is before
Speaker 3: throwing money into the race. But no one candidate can
Speaker 3: become the top challenger without more of their support, and
Speaker 3: they're running out of time. While these donors are waffling,
Speaker 3: Trump's core voter base has remained steadfast, as proven in Iowa,
Speaker 3: and the bulk of Trump's campaign fundraising comes from small
Speaker 3: dollar donors, not C suite investor types.
Speaker 1: I think that's the conclusion that a lot of donors
Speaker 1: have come to that Trump has such a loyal following,
Speaker 1: you know, between thirty and forty percent of the Republican base,
Speaker 1: and there's almost nothing that I a wealthy donor, can
Speaker 1: do to sway that population.
Speaker 3: So while they wait it out and hope another frontrunner emerges,
Speaker 3: these big donors are taking another approach to tip the
Speaker 3: scale of politics by targeting down ballot races. We'll get
Speaker 3: to that after the break. We're back. Just like many
Speaker 3: of US, investors can't figure out who they want in
Speaker 3: the White House, so instead they're using their money to
Speaker 3: advance what they want from their government. Part of that
Speaker 3: strategy is to hedge their bets by getting involved in
Speaker 3: smaller races. Here's Bloomberg's Laura Davison.
Speaker 1: Again, they're looking at how can I provide a counterweight
Speaker 1: either to Trump or to Biden if he's in the
Speaker 1: White House. That's why you see all this money going
Speaker 1: into house races, congressional races. They're looking at, how can
Speaker 1: we get Republicans that align with our sort of pro business,
Speaker 1: anti regulation worldview into office.
Speaker 3: Let's take a moment to talk about how donating money
Speaker 3: to downballot races can influence policy in a different way
Speaker 3: than donating to a presidential campaign. First, we have to
Speaker 3: understand campaign finance.
Speaker 1: Campaign finance laws are really complicated. So if the donor
Speaker 1: wants to give to a specific campaign, are only allowed
Speaker 1: to give a couple thousand dollars. This limit changes every year.
Speaker 1: For this year it's thirty three hundred dollars. But when
Speaker 1: you look at kind of how they're giving in totality,
Speaker 1: some of the biggest donors are giving, you know, more
Speaker 1: than one hundred million dollars annually or tens of millions
Speaker 1: of dollars. But that's spread across dozens of not hundreds
Speaker 1: of candidates and other entities, super packs, regular packs, leadership.
Speaker 3: Packs, pack stands for political action committee, and the essentially
Speaker 3: funnel money to campaigns to get around those donation caps.
Speaker 3: So when push comes to shove, big money donors can
Speaker 3: dole out millions of dollars however they please, and support
Speaker 3: from one key investor has the power to trickle down
Speaker 3: because while you or I might not change your votes
Speaker 3: based on, say, who Ken Griffin decides to back some
Speaker 3: of the employees or clients at Citadel his investment firm, might.
Speaker 1: The way that political fundraising works a lot of these
Speaker 1: times is a certain person who is a big advocate
Speaker 1: for a candidate will host a fundraiser at their home
Speaker 1: or you know, with our country club or some their
Speaker 1: site and invite all their friends to come, and that's
Speaker 1: how they reel people in. So if you have a
Speaker 1: really big name who's very trusted supporting and endorsing a
Speaker 1: certain candidate, you can get a lot of other donors
Speaker 1: who are maybe not, you know, going to give tens
Speaker 1: of millions of dollars, but might give hundreds of thousands
Speaker 1: of dollars. People who aren't necessarily a hedge fund founder,
Speaker 1: but that person is their boss or their boss's boss's boss,
Speaker 1: and they see, ah, okay, Ken Griffin is backing this candidate.
Speaker 1: That might be a person that I want to back.
Speaker 1: I trust his judgment as an investor. I probably also
Speaker 1: will trust his judgment as a donor.
Speaker 3: And what kind of impact can that money have on
Speaker 3: an election cycle?
Speaker 1: So it can have a lot of impact, particularly when
Speaker 1: you're looking at House and Senate races, when the total
Speaker 1: budget for a specific candidate for that race might be
Speaker 1: about a million dollars. If a really wealthy investor comes
Speaker 1: in and gives, you know, one hundred thousand dollars, that
Speaker 1: can really sway the race. And of course that investor is,
Speaker 1: you know, as it's such a big donor, is definitely
Speaker 1: going to get FaceTime with the candidate. So that person
Speaker 1: can really have a lot of sway in the kind
Speaker 1: of issues they're talking about, where they're campaigning, how they're campaigning.
Speaker 3: It's a bit of a different picture when it comes
Speaker 3: to a presidential campaign. According to Open Secrets, the twenty
Speaker 3: twenty election cycle brought in a record five point seven
Speaker 3: billion dollars.
Speaker 1: The numbers we're talking about are just so much bigger
Speaker 1: on the presidential side. So in that case, it's a
Speaker 1: little bit more about influence of Okay, can I get
Speaker 1: a meeting at the Treasury Department if this candidate wins?
Speaker 1: Can I have a meeting at the White House?
Speaker 4: Well?
Speaker 1: I invited to a state dinner? That kind of thing
Speaker 1: of a little bit more soft power.
Speaker 3: Laura has poured over Federal Election Commission filings and she's
Speaker 3: found that the same donors who have given a fraction
Speaker 3: of what they did in the past to the presidential
Speaker 3: candidates themselves, they've actually given more to Republicans overall, to
Speaker 3: House and Senate races, the party in general, and super packs.
Speaker 1: At this time in twenty sixteen, they've given eleven million
Speaker 1: in total. When you look at that number for twenty
Speaker 1: twenty three, this group has given almost fifty three million.
Speaker 1: So they're giving a lot more. They're just giving a
Speaker 1: lot less to presidential candidates.
Speaker 3: And because these donors are putting more money into smaller,
Speaker 3: more local races, there's now an entire ecosystem helping them
Speaker 3: choose where to spend it.
Speaker 1: This is really interesting. There's almost a little cottage industry
Speaker 1: that has sprung up of people who advise some of
Speaker 1: these top donors about how to pick candidates. So they
Speaker 1: are going out, they're doing research, and they're picking maybe
Speaker 1: twenty thirty congressional districts that they think will be important.
Speaker 1: They're looking at the Senate map saying you are going
Speaker 1: to be the competitive races, and then they're going to
Speaker 1: these places and interviewing all the candidates. It's a very
Speaker 1: meticulous process, a very data driven process.
Speaker 3: These donors get a platform to talk to candidates and
Speaker 3: express exactly which policies they want advanced.
Speaker 1: Ken Griffin has been very clear, I'm interested in education,
Speaker 1: I'm interested in deregulation and how do we make it
Speaker 1: possible for innovators and businesses to thrive.
Speaker 3: And these down ballot races can sometimes hinge on one
Speaker 3: major donor, unlike the president race, where money can only
Speaker 3: go so far. Sure it might get you a dinner party, inviter,
Speaker 3: a phone call, but it won't decide the race or
Speaker 3: necessarily shape policy. Sometimes these investors are influencing races from
Speaker 3: thousands of miles away. An investor based in Florida might
Speaker 3: donate to congressional campaigns in North Dakota or Nebraska. And
Speaker 3: Kyle Bass, he lives in Texas, but he told me
Speaker 3: he's given to California Governor Gavin Newsom in the past,
Speaker 3: Boy gave.
Speaker 4: To Gavin because I wanted to get to know him,
Speaker 4: you know, under the nod eyed Enemy statute in San Francisco.
Speaker 3: All this raises a question do billionaires think about everyday people,
Speaker 3: the voters and families in a particular district, for example,
Speaker 3: when they get involved in these races. Bass told me
Speaker 3: he does think about what everyday American voters want because
Speaker 3: they make up the economy that he invests in.
Speaker 4: I was at a meeting of ex fed governors where
Speaker 4: one of the masked a question. They said, you know,
Speaker 4: do you think that service workers' wage demands are related
Speaker 4: to their future expectations of inflation?
Speaker 3: In non academic terms.
Speaker 4: The question was, do you think bartenders and waitresses are
Speaker 4: demanding higher wages because they think inflation's going to accelerate
Speaker 4: in the future or stay high in the future. And
Speaker 4: I listened to them for forty five minutes. Tobate the
Speaker 4: Phillips curve.
Speaker 3: You don't have to know what the Phillips curve is
Speaker 3: to know these guys were lost in their academic modeling.
Speaker 3: They were far from the realities of paying bills and
Speaker 3: making ends.
Speaker 1: Meet.
Speaker 4: After forty five minutes, I raised my hand and I said,
Speaker 4: have any of you spoken with a service worker in
Speaker 4: the last six months? And they all looked at each
Speaker 4: other and not one hand one up And I said, well,
Speaker 4: I have investments in a few restaurants. So I sit
Speaker 4: down with the bartender, and I sit down with the
Speaker 4: waitress who now has three jobs, and they only care
Speaker 4: about one thing. All they care about is paying their rent,
Speaker 4: their car payment, and their food bill and their insurance.
Speaker 3: Be a bit of an exception. Not all big investors, economists,
Speaker 3: or others with influence over the economy are sitting down
Speaker 3: to talk with bartenders and waitresses, but they are potentially
Speaker 3: looking to take cues from everyday people. Who voters pick
Speaker 3: in the early primaries like New Hampshire next week could
Speaker 3: determine which Trump alternative Wall Street may rally behind, or
Speaker 3: whether they end up backing Trump.
Speaker 4: I think if you see Nikki Haley have some traction
Speaker 4: in the first few primaries, you're going to see money
Speaker 4: come in to Nicki Haley's campaign from the GOP and
Speaker 4: it's going to be big money. This is all going
Speaker 4: to come down to the wire, There's no doubt. So
Speaker 4: I actually think. I do think that big money can
Speaker 4: sway opinions.
Speaker 3: Hearing Bass say that made me think of a moment
Speaker 3: for my conversation with Laura Davison. Let's think a really
Speaker 3: big picture here for a second. Trump has a pretty
Speaker 3: big lead in the polls right now. If a bunch
Speaker 3: of investors, just every investor with all the money got
Speaker 3: behind one of his opponents DeSantis or Haley right now,
Speaker 3: it would make a difference.
Speaker 1: At this point, it's too late. Money takes time. You
Speaker 1: have to hire staff, you have to run advertisements, you
Speaker 1: to create those advertisements. It's not like you can put
Speaker 1: it in a campaign and have it give you a
Speaker 1: bump in your poll numbers immediately. And so at this point,
Speaker 1: voters are going to the polls. A lot of people
Speaker 1: have already made up their mind. The kind of leads
Speaker 1: that Trump has in the polls suggests that he could
Speaker 1: potentially have this nomination sewed up, you know, March April time.
Speaker 1: Money really won't make a difference. It's the candids themselves
Speaker 1: that have to win it for themselves.
Speaker 3: Thanks for listening to The Big Take DC podcast from
Speaker 3: Bloomberg News. I'm Sleiah Mosen. This episode was produced by
Speaker 3: Julia Press and Naomi Shaven. It was fact checked by
Speaker 3: Molly Nugent. A special thanks to Bill Allison and Laura Davison.
Speaker 3: Alex Sugia and Blake Maples are mixed engineers. Our story
Speaker 3: editors are Caitlin Kenny, Wendy Benjaminson, and Michael Shepherd. Sage
Speaker 3: Bauman is our executive producer and head of Podcasts. If
Speaker 3: you like what you have, please be sure to subscribe, rate,
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Speaker 3: Thanks for tuning in. I'll be back next week.