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Michael Beckel, Issue One Research Director, joins Yahoo Finance’s Kristin Myers and Alexis Christoforous to discuss the role corporations and megadonors play in political donations.
- A new study from Issue One shows the role of the super rich in politics since the Supreme Court loosened restrictions about a decade ago. Here to walk us through those findings is Michael Beckel, research director at Issue One. So Michael, thanks for being with us. Just give us sort of a bird's eye overview here. How great an influence are these so-called megadonors having on American politics?
MICHAEL BECKEL: These megadonors are having a huge influence on American politics. Our new report, which is available at issueone.org outlines that just 12 ultra-wealthy Americans, at least eight of whom are billionaires, accounted for $1 out of every $13 in politics since the Citizens United decision back in 2010. This was a total of $3.4 billion. So these donors certainly play an outsized role in our political landscape today.
- So Michael, this sounds incredibly disheartening if you're anyone that does not have Michael Bloomberg money or another ultra-wealthy and megadonor. What can be done for regular folks to get involved in politics, at least financially, if they don't have millions, or hundreds of thousands, or even just thousands of dollars to donate to the political process?
MICHAEL BECKEL: That's right. Every donor on our list of the top 12 megadonors contributed at least $16 million over the last decade to federal candidates, to party committees, like the DNC, or RNC, and to Super PACs. And the Citizens United decision really opened the door for unlimited contributions from individuals, from labor unions, from corporations. And as we see in this report, individuals are really taking advantage of that financial freedom, giving at the level of hundreds of millions of dollars in some cases. Congress right now should see this as a wake up call to do something about the fact that our system is awash with money, and our government can't be responsive to all Americans if it's beholden only to the elite donor class.
- But I guess even if you throw a lot of money at something, it doesn't mean you're necessarily going to succeed. I think Michael Bloomberg, the former New York City mayor, is a good example of that. According to your list, he's the single biggest spender on federal campaigns from 2009 to '20, spending $1.4 billion during that time. And I think a billion of it went toward his own failed presidential bid. So what do you make of donors like a, like a Michael Bloomberg and whether or not their money really does have the power to affect change?
MICHAEL BECKEL: That's right. We see on this list, the top two Democratic donors, former New York City Mayor, Michael Bloomberg and former hedge fund manager, Tom Steyer. Both ran for president themselves in 2020 and failed. They've contributed each more than $300 million to Super PACs, to candidates, to party committees. But this also shows that money alone doesn't guarantee success in an electoral contest. Candidates matter, campaigns matter, and certainly, every candidate likes to be the candidate with more money at their disposal.
So during that contentious 2020 Democratic primary, there was a cacophony. A lot of candidates running, a lot of ads on the air. And somebody like Michael Bloomberg was able to dominate the airwaves in a way that many other candidates weren't. But ultimately, voters are the ones who do decide elections, but the megadonors can often dictate what issues are being talked about through their financial investments in our elections.
- So Michael, we're talking a lot about these individual megadonors but what is the role of corporations? I know that they spend a lot of money, at least when it comes to lobbying either individual politicians, but also donating really large sums to essentially, the Republican Party or the Democratic party. So where do they fit into this?
MICHAEL BECKEL: That's right. Corporations want to have their voices heard in politics, and there's a lot of ways that they try to play the influence game. From making campaign contributions, through their political action committees, from donating to groups like Super PACs, to hiring lobbyists. And ultimately, most corporate spending in politics is through lobbying. There are millions of dollars being spent by many corporations every quarter. And when you look at campaign contributions, a lot of businesses are more risk averse. If you are making a donation to a Super PAC from your corporate treasury, that could risk alienating part of your customer base. There's a few Fortune 500 companies who have gotten into the Super PAC game, companies like Chevron, for instance.
But as we see from this new report, it's really wealthy individuals who are driving a lot of the spending into SUPER PACs with their personal contributions. And then you got groups that are trade associations like the US Chamber of Commerce, which are often vehicles for corporate spending in elections. Well, we did another study that showed that the US Chamber was the number one dark money spender in US elections since Citizens United. So some companies could be steering funds through a trade group like the Chamber of Commerce to help have their voice heard and influence elections as well.
- Michael, what about just the average person who's going online and making a donation of $5, $10, $25, what's their role in all of this? And I would imagine that that has grown quite a bit over the past few years.
MICHAEL BECKEL: That's right. Certainly, the good news is that small dollar donors who are going online and making contributions are playing a larger role than ever before. Both Democratic candidates and Republican candidates are raising record amounts of money from online donors using tools like ActBlue or WinRed, which are platforms that party operatives have created to help all candidates raise money. So today, it is very easy for donors to give money to candidates online, and there's a lot of groups trying to raise money, to steer money from online donors into the most competitive House races, into the most competitive Senate races.
And we see that playing out in the fundraising data, where you see our elections have been nationalized and small dollar donors are playing a larger role than ever before. Just look at the fundraising that happened earlier this year around the special election, the Senate run off races at Georgia, which were helping dictate which party was going to control the US Senate. Scores of donors from across the country made online contributions, often in small dollar amounts, to help their preferred candidates in those races.
- All right, we're going to leave it there. Michael Beckel, research director at Issue One, thanks so much. These are really interesting insights.