BILLIONAIRES ARE BUYING OUR ELECTED OFFICIALS AND USING DARK MONEY TO HIDE

U.S. elections are awash in money and billionaires are the dominant spenders. Wealthy interests have been allowed by the Supreme Court to engage in unlimited political spending, and they have found ways to avoid disclosing that they are the sources of the funding. Democrats made a huge political mistake years ago in not regulating campaign spending.

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Elections in the U.S. are awash in money. The Supreme Court’s 2010 Citizens United decision (and related ones) allowed unlimited spending by wealthy individuals and corporations. Supposedly, the donors and spending would be disclosed, as well as independent of candidates’ campaigns. This would, according to the supportive Supreme Court justices, ensure that there was no corruption. Most observers knew from day one that the independence of such spending and the prevention of corruption were not realistic. Time has proven this sentiment to be correct.

Wealthy interests have found or manufactured loopholes to get around disclosure and independence requirements. Furthermore, the lack of enforcement from the Federal Elections Commission (FEC) and the Internal Revenue Service (IRS) has eviscerated disclosure and independence laws.

Sixteen billion dollars were spent on the 2024 federal elections for president and Congress. Roughly $5.5 billion was spent on the presidential race and over $10 billion on congressional races. The record of over $18 billion from 2020 still stands. However, both the 2024 and 2020 amounts are roughly double what was spent in prior presidential election years before wealthy interests had figured out how to fully take advantage of the Citizens United decision. [1]

To win a seat in the U.S. House now costs on average about $3 million and about $30 million for a seat in the Senate. Incumbents win well over 90% of the time. Business interests’ campaign spending on behalf of incumbents is roughly 50 times what they spend for challengers. Business interests spend about 16 times what labor interests spend, despite the fact that labor represents millions of every day workers (and to some extent all workers) while business interests represent lifeless but immortal legal entities (e.g., corporations) and the self-interest of a small number of wealthy executives and investors. 

Campaign donations by small donors ($200 or less) are overwhelmed in most races by big donors. Of the 535 members of Congress, only 16 got over 50% of their donations from small donors. Over 40%, 230 of them, got less than 5% (1/20th) of their donations from small donors. Over 80%, 432 of them, got less than 20% (one fifth) of their donations from small donors.

The dominant campaign spenders today are the billionaires. Just 150 billionaire families spent $2 billion on federal elections in 2024. More than one-sixth (over 16%) of spending in the presidential race came from billionaires. Over 70% of billionaires’ money went to Republicans. Although determining exact figures is probably impossible, Elon Musk spent roughly $250 million in support of Trump’s campaign and additional tens of millions supporting other Republicans. Timothy Mellon spent $197 million on Republican campaigns. In the list of the top ten campaign spenders, only two supported Democrats, Michael Bloomberg and Dustin Moskovitz (Facebook co-founder). Their combined spending of less than $100 million pales in comparison to the money spent by wealthy individuals supporting Republicans. [2]

Much of this spending, including Musk’s $250 million, is spent through super PACs. Super PACs can accept unlimited contributions, but they must be reported to the FEC. However, wealthy donors who want to hide their identities have found a way to avoid this disclosure. A non-profit organization is created under section 501(c)(4) of the IRS code, which does not have to disclose donors. However, it can make unlimited contributions to super PACs, as well as engage in lobbying or issue advocacy for the public good (independent of candidates’ campaigns of course). Political activity is not supposed to be their primary activity, but IRS enforcement of this has been largely non-existent. Therefore, wealthy interests and super PACs are using 501(c)(4)s extensively. Most super PACs have an affiliated 501(c)(4) organization to facilitate secrecy for any donors who would like it. Hence, money flowing through 501(c)(4)s is referred to as “dark money.”

In the 2024 election cycle, about half of the $4.5 billion in election spending outside of candidates’ own campaigns was so-called “dark money,” i.e., funneled through 501(c)(4)s to hide the identity of the donors.

Democrats have historically raised more money for campaigns than Republicans, including through super PACs and dark money. It is projected that Democratic candidates got more dark money funding in the 2024 elections than Republicans. In 2020, Democratic candidates got about $500 million of dark money while Republicans got about $200 million.

Republicans have now caught up and, by aggressively innovating, ignoring the law, and pressuring the FEC and IRS to be lax in their enforcement activities, are poised to take the lead in campaign fundraising. With the majority of wealthy interests favoring Republicans, along with laws that allow unlimited spending, Republicans and the overwhelming wealth of their supporters are likely to be more dominant and powerful than ever in the coming years.

To reap big contributions from wealthy individuals and corporations, Democrats have catered to the wishes of these interests to the detriment of workers and everyday Americans. This has undermined Democrats’ electoral success. As the Democratic National Committee (DNC) selects new officers, it has tried to keep its membership list secret. Apparently, this was to limit grassroots advocacy and to hide the number of big money people on the list. In addition, the dominant funders of the DNC are corporations and venture capital companies. [3] This underscores the DNC’s focus on big money as opposed to workers and everyday Americans. [4] This is a major reason the Democrats did not perform better in the recent elections.

Democrats made a huge political mistake in not reforming campaign finance laws when they had chances to do so years ago. Democratic party leaders were too enamored with big contributions from the wealthy to see the writing on the wall over the long-term. President Clinton was a primary culprit in this big mistake.

Future posts will go into more detail on how our campaign finance system has become so corrupted, what the effects of this are, and what can be done about it.

[1]      Open Secrets, retrieved from the Internet 1/10/25, “Elections overview,” (Elections Overview • OpenSecrets)

[2]      Goldstein, L., 12/10/24, “The money game,” The American Prospect (The Money Game - The American Prospect)

[3]      Johnson, J., 1/10/25, “Progressive magazine published previously secret DNC membership list,” Common Dreams (Progressive Magazine Publishes Previously Secret DNC Membership List | Common Dreams)

[4]      Sifry, M. L., 1/10/25, “Opening the DNC’s black box,” The American Prospect (Opening the DNC’s Black Box - The American Prospect)