The U.S. midterm elections will be a battle of billionaires

Can a few of America’s richest citizens sway the outcome in critical races?

<p>In this February 26, 2007 file photograph, Charles Koch, head of Koch Industries, talks passionately about his new book on Market Based Management. (Bo Rader/Wichita Eagle/MCT)</p>

Bo Rader/Wichita Eagle/MCT

Bo Rader/Wichita Eagle/MCT
Bo Rader/Wichita Eagle/MCT

Though Barack Obama is not on the ballot in the U.S. mid-term elections on Nov. 4, much is at stake. The President’s unpopularity is weighing down Democrats, and polls suggest Republicans could take control of the U.S. Senate, which would pit Obama against an entirely Republican legislative branch for the remainder of his presidency. All seats in the solidly Republican-controlled House of Representatives are up for re-election, as are the governorships of 36 states. There are divisive ballot initiatives on issues ranging from restricting abortion rights (Colorado, North Dakota) to strengthening gun rights (Alabama, Missouri) to legalizing marijuana (Alaska, Oregon).

Enter the billionaires.

After a series of court rulings that removed restrictions on independent political spending in recent years, outside groups are now able to collect and spend unrestricted amounts on elections. In some races, independent groups are outspending the candidates themselves. Once critics of campaign finance free-for-all, Democrats are now trying to catch up. The result is the most expensive mid-term elections in history. Some $4 billion will be spent by candidates, political parties and outside groups to sway voters. By comparison, the 2010 mid-terms cost $3.6 billion; the 2006 contest cost $2.9 billion.

In one state, the partisan financial arms race is leading to the surreal spectacle of one billionaire spending millions on attacking a candidate for benefiting from the millions spent by other billionaires. “It really is the battle of billionaires on both sides,” says Viveca Novak, a spokeswoman for the Center for Responsive Politics, a campaign finance watchdog group in Washington that calculated the $4-billion estimate. “It’s new since early 2010, and it has become more and more of an issue in each election—the ultra-wealthy being able to contribute to outside groups in any amount.”

In 2012, the biggest spender was Sheldon Adelson, the conservative Las Vegas casino magnate who single-handedly propped up the ill-fated candidacy of Newt Gingrich with $10 million. Overall, Adelson spent $93 million supporting Republicans in the 2012 congressional and presidential elections.

Richard Drew/Reuters
Richard Drew/Reuters

This year, the single biggest spender on record is a Democrat, Tom Steyer, a financier who focuses on environmental causes, especially climate change. He has been a leading voice against U.S. approval of the Keystone XL pipeline from Alberta’s oil sands. He has also so far contributed $73 million to his political groups, including NextGen Political Action Committee (a so-called super PAC devoted to supporting candidates who will take “bold action on climate change”), according to the Sunlight Foundation, which tracks political spending. The group has focused on six close Senate races. Its biggest target: $6 million spent on ads attacking Cory Gardner, the Republican candidate in a tight Colorado Senate race, on issues such as women’s health, climate change and marriage equality. The second-biggest contributor is former New York mayor Michael Bloomberg, who has spent more than $20 million, overwhelmingly on Democratic candidates and groups.

But Steyer and Bloomberg notwithstanding, Republicans are expected to have the edge on spending. Their party committees and outside groups will spend at least $1.92 billion, compared to at least $1.76 billion by their rivals on the Democratic and liberal-leaning side, according to estimates from the Center for Responsive Politics.

Among their biggest outside funders are political groups linked to billionaire brothers Charles and David Koch, which have already aired 44,000 political ads—accounting for one in 10 Senate ads run as of September, according to the Center for Public Integrity. The Kochs have said they intend to raise $300 million to help Republicans take the Senate, according to the Daily Beast, though they are not personally included on lists of top donors, because their groups are not required to disclose their funders. Such “dark-money” groups are limited to making “issue” ads, rather than explicitly endorsing or attacking a candidate.

In some races, the money men are making each other the subject of ads. Steyer’s groups spent $3.6 million in Michigan to attack Teri Lynn Land, a Republican challenging Democrat Gary Peters for a Senate seat. The attack ads linked her to the Koch Brothers, who “have dumped nearly $7 million to buy her a Senate seat, because they know that Land will let them continue their dirty practices that threaten the health and safety of Michigan families.”

The vast majority of spending has been on a handful of Senate races that will determine which party controls the Senate. Conservative groups are running ads linking conservative Democrats to the unpopular President. One Koch brothers group, Freedom Partners, has spent $2.6 million against Arkansas Democrat Mark Pryor, claiming he votes to support the President’s policies 90 per cent of the time.

The single most expensive race so far has been the Senate seat in North Carolina, where incumbent Democrat Kay Hagan faces challenger Tom Thillis. More than $55 million has been spent by outside groups—outstripping the $30 million raised by both candidates themselves—in a state with only six million registered voters.

But is the money having any impact—or, in the financial arms race, do the Kochs and the Steyers merely cancel each other out?

At least in the high-profile Kentucky Senate race, where Senate minority leader Mitch McConnell is facing off against Democratic challenger Alison Lungren Grimes, money may be making a difference. McConnell suffers from a disapproval rating of 47 per cent, but has eked out a small lead over Grimes, thanks in part to a barrage of negative ads against her. “The money that has been spent on his behalf—close to $30 million he spent and $20 million spent by independent groups—has kept him in a position in which he can win, despite some toxic personal approvals,” says Joe Gerth, a political writer for the Courier-Journal newspaper in Louisville, who has followed the campaign closely. “Grimes is really being overwhelmed on TV by attack ads by McConnell’s campaign and many outsides groups.”

While Grimes has been trying to differentiate herself as an independent-minded Democrat who opposes the President’s policies on climate change and coal regulations, the ads state that a vote for her is a vote for the Obama agenda, notes Gerth. Many TV commercials end with the tag line, “Obama needs Grimes, Kentucky needs McConnell.”

Grimes has raised $20 million and benefitted from $5 million in spending from outside groups. Steyer’s group did not help in her race, presumably on account of her position on climate. “I don’t know how much of that would be Steyer being put off by her positions, or her not wanting money from him, so McConnell couldn’t use that against her,” says Gerth.

Overall, though, it’s hard to gauge whether the spending will change the overall course of the election, says Kyle Kondik, a spokesman for the Crystal Ball, an election-tracking operation at the University of Virginia Center for Politics. “The question you have to ask is, if the Koch brothers and Tom Steyer didn’t exist, how would the election be different? The answer is: probably not by much,” says Kondik. “The key thing driving the elections is that the President’s party does poorly in mid-terms. And the President is unpopular for a variety of reasons right now, and that’s why the Republicans will probably have a good night. I think a lot of it is structural.”

But Novak, at the Center for Responsive Politics, says the impact of the unlimited spending is unlikely to end with the election results. “What do these donors get for this money?” she asks. “I think that often, people give this kind of money to ensure at least that they have a seat at the table.”