A December 29th report from Politico highlights that big donors had a huge influence on the Fall 2014 elections, with the top 100 donors contributing almost as much to political campaigns as just under five million small donors combined. Hedge funds played a big part in the elections, as well.
The donation numbers were drawn from Federal Election Commission reports and IRS data. This new data paints a picture of an electoral landscape where the balance of power has tilted dramatically toward the ultra-rich.
Hedge funds – Breakdown of the numbers on big donors in 2014
The most important point to note is that only 0.28% of American adults donate to political campaigns, according to the Center for Responsive Politics. This apathetic participation level obviates the power of large numbers of citizens to counterbalance the impact of a few large political donors.
The Politico report points out that less than five million Americans made political donations in 2014, and that the 100 largest campaign donors contributed $323 million in 2014, just under the approximately $356 million given by the 4.75 million who donated $200 or less to a political campaign.
Paul Singer, Jim Simons, and Tom Steyer were all in the top ten list. Meanwhile, Seth Klarman, Dan Loeb, Ken Griffin, and George Soros, were among the prominent names in the top 30 list.
Hedge funds other rich to control election outcomes in the future?
Rich political donors have taken advantage of recent federal court rulings, regulatory decisions and feeble oversight to spend huge amounts of money on elections. Even worse, the increasing contributions from big donors in 2014 comes against a backdrop of a decline in the number of average Americans making contributions, as well as a giant shift in political power and money to external organizations not bound by the rules restricting political parties and candidates.
The trend reflects a new political reality in which a handful of super-rich can exert more sway over elections than millions of donors of average means. The situation becomes even more worrisome when you also consider that the overwhelming majority of voters never spend a single dime on politics, paving the way for the rich to control election outcomes.
The rapidly growing influence of the rich illustrates “the insanity of this system” and also discourages potential small donors, says Larry Lessig, a Harvard professor who partnered to launch a “crowdfunded” super PAC. His Mayday PAC spent $10.6 million from a mix of small and large donors to try to elect congressional candidates who it hoped would support policies that empower smaller contributors.
“As you see that your democracy is controlled by a smaller and smaller number of funders, you have less and less interest to be engaged in it,” said Lessig.