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