Why Big Donors Aren’t Translating to Big Success in the US Midterms

0:00Sarah Holder:Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans.

0:42Sarah Holder:When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, that isn't always easy. Risk can touch multiple parts of an organization at the same time, often in ways that aren't immediately obvious. It might involve property, liability, or cyber. It could stem from regulatory requirements or challenges tied to a specific industry or the scale of an operation. At that level, managing risk becomes an ongoing discipline, not a one-time decision. At The Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive.

1:16Sarah Holder:That means working with companies to identify where they're exposed, decide what matters most, and put practical standards in place so risk is managed as part of day-to-day operations. And when losses do happen, the Hartford can pair that risk control work with insurance coverage grounded in underwriting, risk engineering, and claims experience developed over time. Learn more at thehartford.com slash risk mitigation. If you like YouTube, you'll love YouTube Premium. Hi, I'm Sean Evans from Hot Ones, and I want to tell you about YouTube Premium. It has offline downloads, so you can watch without Wi-Fi.

1:51Sarah Holder:Background play, so you can lock your phone, and it still plays, baby. Oh, and it is completely ad-free. Yes, I said it, ad-free. Try YouTube Premium for two months free at youtube.com slash premium. Trial eligibility varies, terms apply, cancel anytime. time.

2:13Bloomberg Audio Studios. Podcasts. Radio. News. You've been following the money all election season. Big picture, what makes this midterm season different?

2:26Sarah Holder:Well, there is more money than ever. And that's true on a campaign level to individual candidates. It's true on a PAC level. And it's true in this dark money category as well. So far, federal political action committees have brought in more than$4.7 billion, according to a Bloomberg analysis from May. Just the top 50 megadonors have spent more than$1.6 billion, according to a Washington Post analysis of FEC filings out this month. But there's also hundreds of millions of dollars coming from companies and industries that want their interests represented in political office. There is a new corporate influence playbook that is being honed in this year's midterms.

3:14It was incited by crypto's unprecedented spending in the 2024 midterm elections, especially cutting edge industries like AI, sports gambling. They saw the effectiveness of crypto's playbook, spending millions and millions in favor of both Democrats and Republicans. in order to elect friends and oust enemies to their regulatory agenda. And they said, OK, we're going to try it out this cycle in 2026. So U.S. companies have spent$517 million on the 2026 U.S. House and Senate races in the last 15 months. That exceeds the record set in 2024. But for candidates on both sides of the aisle, having powerful donors backing you doesn't guarantee success.

4:07Sarah Holder:The fact is that money has not proven to be the definitive factor in winning an election. And already in some primaries, big spending is backfiring. It's very clear that candidates are benefiting from attacks on their opponents that focus on, you know, they are allied with special interests, with corporate interests, and they're not for the people.

4:39I'm Sarah Holder, and this is The Big Take from Bloomberg News. Today on the show, how political spending is shaping the U.S. midterms. I'm joined by Bloomberg corporate lobbying and influence reporter Emily Birnbaum and wealth reporter Amanda Gordon to talk about the donors funding candidates behind the scenes and what's at stake for Republicans and Democrats.

5:08Amanda, you've been tracking spending by big individual donors in U.S. midterm races. How much money are we talking about and how does it compare to previous years?

5:19Sarah Holder:In 2022, in the midterms, it was over a billion donated by top dollars. And this year it is looking at 1.6 billion. That's where we're at. So we're far ahead and we haven't even come into those last stretches. The fact is that the money increases every cycle. There's something a little bit inevitable about it. You know, it's interesting because some of those tried and true donors like Miriam Adelson, Jeff Yass, Richard Uline, Deborah Simon on the Democratic side, private equity titans like Steve Schwartzman and Mark Rowan and Paul Singer, who runs a hedge fund in New York, they have been known as early money.

6:07Sarah Holder:So we've seen their donations as early as at the end of 2025 in the cycle because that early money is very valuable for signaling where the interest is going to be. But at the same time, there are people who measure to measure might be giving less. Ken Griffin gave a huge amount, over$100 million in one cycle. And this cycle, it looks like it's going to be less. So some Democrats are just frustrated and they're most interested in 2028. It's not that they don't want the Democrats to win, but they feel that there's enough money pouring in that they're just on the sidelines waiting to see what happens.

6:54Sarah Holder:And so it'll be interesting to see where that money goes. And on the corporate donation side, Emily, I want to talk about the role that AI has played in these races and AI spending has played because you've been tracking two political action committees, both backed by leading AI voices with different aims, leading the future and public first action. Emily, who's putting money behind each of these PACs and how do their goals differ and align? So Leading the Future is backed primarily by AI billionaires, Mark Andreessen, Ben Horowitz, and OpenAI President Greg Brockman. So its aim is to pass one federal standard for regulating AI that is light touch, business friendly, focused on allowing the AI companies to continue to innovate without excessive government intervention.

7:50And the creation of that PAC then prompted the creation of an opposing force that is also backed by AI industry interests. So that is public first, started by AI safety advocates. and its biggest donor so far has been Anthropic, one of the leading AI firms that promotes state-by-state regulation of AI, which allows for more intensive standards set at the state level. So to a lot of candidates, they don't understand the difference between these two super PACs. They say, OK, basically, both of them support AI but have differing visions for how to regulate it. And both of them are being supported by companies and individuals, many of whom have financial interests in AI becoming a bigger part of society.

8:51Exactly. I was really interested in the dynamics in the Florida gubernatorial race, where both super PACs spent in favor of the leading Florida gubernatorial candidate, Byron Donalds. Donald was able to give public statements that hedged just enough. So he said, yes, I believe that the federal government should be in charge of regulating AI, but because our Congress is so dysfunctional, that probably won't happen. So the state should play a role. You can read as much as you want into those statements. And so both claimed him as an ally. Ultimately, Donald, who was already the leading candidate, did win the race last week.

9:34The other two Republicans that he was running against were much more aggressive in terms of their visions for AI regulation, supporting a moratorium on data center construction, supporting intense AI safety guard rails. Byron Donalds was the most business friendly candidate in the race. So I was talking to a strategist who's aligned with leading the future. And they were saying, you know, in many ways, the other candidates in this Republican primary are more aligned with the sort of AI safety worldview. But public first is a savvy political operation, and they wanted to get behind the guy who was going to win.

10:16The crypto industry had its own playbook and its own spending strategy during the last election. Is the AI industry using a similar playbook? Yes, it's a very similar playbook, and it's structured almost exactly the same. In both instances, there's a primary super PAC and a dark money group that funnel money into a Republican super PAC and a Democratic super PAC. So that was pioneered by the crypto industry. So they spend in favor of candidates on both sides of the aisle without ever mentioning the issue that they really care about. They rarely ever mention AI, just like crypto rarely ever mentioned crypto, because to the average voter, those are not the top issues that they are thinking about.

11:06And we'll get into sort of how effective this money has been in shaping key races in a moment. But stepping back for a second, what exactly is this money paying for? For the most part, it is showing up in television advertising and digital streaming advertising. That remains the primary way that super PACs spend. So it's really important to understand super PACs cannot give money directly to candidates. They can only spend on their behalf. So they are spending on TV ads, mailers going directly to people's homes, calls to their cell phone and to whatever landlines are left. So for the most part, it's advertising.

11:51That's still the name of the game when it comes to campaigning. Coming up, where candidates backed by big money are losing and what it says about corporate influence in the midterms and beyond.

12:09Sarah Holder:Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans.

12:51Sarah Holder:Hey, this is Kevin. This is Joe. And Nick Jonas from Hey Jonas. This episode of Hey Jonas is brought to you by the all-new drink lineup at McDonald's. I don't have to tell you that there are already so many great drink options at McDonald's, but the new drink lineup, I mean, it takes things to another level. They've got delicious caffeinated refreshers like the strawberry watermelon refresher, crafted sodas like the Spriteberry Blast, and now the all-new Red Bull Dragonberry Energizer. We're talking about a total game changer. It's made with Red Bull. It's mixed with blue raspberry flavor and topped with freeze-dried dragon fruit.

13:28Sarah Holder:Wow. So McDonald's has given us a refreshing new boost for your day. And the Red Bull Dragonberry Energizer is arriving just as you're heading back to the dorms for the fall semester. It's got a boost of energy and a kick of flavor when you need it the most. You know, powering through those lectures and studying sessions, you're going to need it. Kicking the afternoon slump or rallying for the weekend. Try one of the many new drinks like the Red Bull Dragonberry Energizer, also available with Red Bull Zero, now at McDonald's. everyone's talking about how ai is transforming work especially in sales while the landscape shifts one thing remains the same the thrill of closing a deal whether it's a gong or a confetti machine every team has its celebration rituals adio is designed for that moment it's the agentic crm that turns customer signals into actionable insights helping you close deals faster with revenue agents and automations working around the clock you'll have everything you need to scale your go-to market efforts.

14:22Sarah Holder:Elevate your wins with Adio. Start your free trial at adio.com slash iHeart.

14:32Amanda, Emily, I want to talk about some of the consequential primary races that have already happened where these donors played a role. Where have you seen the most tangible evidence that big money was a factor in swaying the race? The race that comes to mind for me is New York 12. So that's where New York State Assemblyman Alex Boras ran on a pro-AI regulation platform. So he helped to write New York's AI safety legislation. And in that time, he made himself an enemy of firms like Andreessen Horowitz, which advocate for light touch regulation. So So when Leading the Future announced that they would spend against Boris, they accidentally incited this huge wave of money from AI safety advocates.

15:29Leading the Future ultimately spent$8 million against Boris, tying him to things that are unpopular with Democrats like immigration enforcement. But on the other side, pro AI safety super PACs end up spending over 21 million in favor of Boris in that race. But overall, it showed Boris lost. Yes. And Boris ended up losing. Like, have the groups taken lessons from how that race played out? Yes, Boras lost to the man who was always favored to win, Micah Lasher, who is New York political veteran, essentially. And I think the lessons learned are you can attract a lot of cash if you run on AI safety.

16:18That doesn't mean that you're going to win, but it does mean that there's probably more votes in the AI safety camp than the pro-AI camp at this point. And I think an overall trend of this race is money doesn't necessarily buy you a seat. So we also saw that with Haley Stevens in Michigan, another special interest group, APAC's Super PAC, United Democracy Project, spent over$30 million, the biggest investments of the race, in favor of Haley Stevens and the Democratic primary over Abdul El-Sayed. And ultimately, that$30 million and another$30 million spent in favor of Stevens by outside interests did not win the day.

17:03El-Sayed won that primary. It was very close, but there is this growing backlash to outside spending in races. Voters don't like how it feels when corporations come into their district and try to dictate who wins based on issues that they don't really care about. The race in Michigan, that$30 million that AIPAC put behind Haley Stevens, which is the most AIPAC has ever spent on a single candidate, according to the Associated Press, that became a big selling point for Abdul El-Sayed or a big talking point for El-Sayed that his opponent was being supported by this pro-Israel political action group.

17:45What does that say about, you know, AIPAC's influence right now and also the way that talking about corporate influence has been playing out in races this year? There has been a breakup between Democrats and AIPAC, you know, mostly in light of Israel's response to the events of October 7th, 2023. So, you know, you can track popular sentiment has soured on Israel. And along with that, there has been an increasing skepticism of AIPAC and its role in politics. And whenever APAC's Super PAC decides to spend in a race, it's almost guaranteed that the opponent will use that as an attack line against the person who is receiving that support.

18:40Another really interesting race was in Florida. Last Tuesday, the Democratic Socialist Angie Nixon won a primary for the Senate race in Florida. She was outspent 16 to 1. Bloomberg reported that she didn't run a single TV ad. She only spent about$50 ,000 on digital ads, but she still won. Is this another example where spending did not win the day? Or does this just say more about Nixon's strength as a candidate in the resonance of Democratic Socialist messaging with voters right now? The consensus I'm hearing from political consultants is money matters, but it doesn't buy you a seat. There is still something to be said about what voters in your district want, care about, how they respond to you as a candidate.

19:28And I think that that is a really interesting counterintuitive trend that we are seeing come from the midterm elections. But in some districts, outside spending has helped candidates win handily. And that's often when they already had an edge.

19:46Sarah Holder:There are people who attract the big traditional pots of money, but their message is distinctly sort of they stand on their own. They stand for the people, as I guess all politicians on some level have to make this argument that they are distinct and independent of the money that's coming to them. I think we do see on the Democratic side, people are really starting to crave that sort of lightning in a bottle. A lot of donors are talking to me about how Clinton appeared on the scene and the energy that he attracted. Bill Clinton. And Obama. Yes, Bill Clinton. And they're looking for candidates like that.

20:33Sarah Holder:And they want it to be not about money. You cannot buy it. You can try to groom it. And probably there are candidates being groomed right now with some big checks supporting that behind the scenes. We might only see the real fruits of this money, not in this election, but, you know, a few elections from now when some of that work that's being done comes to bear. Yeah, it seems like one of the takeaways here that Emily has helped us draw out is that sometimes this money can backfire if it's backing the wrong candidate. And if it's backing the right candidate who already has the energy of the electorate behind them, it can make a real difference.

21:24Sarah Holder:And just to give an example of how really committed donors can engage, I've heard a few stories of people from New York going out to Michigan in advance of the primary and attending rallies for both El Saeed and for Stevens because they wanted to be in the room and see what the energy was. And my last question, you know, the big elephant in the room here is that while there's a lot that we do know about who and what companies are spending on elections and how much they're putting behind candidates, there's also a lot of dark money spending that is a lot harder to track. How much is still obscured about who is driving political donations in the U.S.?

22:06And as we head towards the general where that$1.6 billion in individual donations might only increase, are there any efforts to increase transparency?

22:16Sarah Holder:There are definitely calls to increase transparency. And there are some people who would like to not see any money being donated because it obscures how a candidate relates to people. The fact is that it's very unlikely that that would happen. One of the counterbalances that has been advocated for and instituted, and we did see it work in Mamdani's favor in New York City's mayoral election, is public financing, matching public funds so that the smaller dollar donations have more of an impact and have more of a chance to back candidates. Exactly. Who don't necessarily have that corporate support.

23:03Yeah, dark money is playing a huge role in this year's midterms. I think that's a source of enormous consternation, frustration. And especially as corporate interests become less and less popular in campaign spending, it means that special interests are probably going to go further and further underground to hide their spending. putting money into dark money groups that don't have to disclose where their funding comes from. We are going to know less than ever, probably, by the next election. That's an interesting outcome of voters being more and more skeptical of corporate donors. Corporate donors will just go deeper underground.

23:57Yes, exactly. And they're, you know, it's perfectly legal for them to do it. This is The Big Take from Bloomberg News. I'm Sarah Holder. To get more from The Big Take and unlimited access to all of Bloomberg.com, subscribe today at Bloomberg.com slash podcast offer. If you like this episode, make sure to follow and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back tomorrow.

24:46Sarah Holder:Adio.

25:03Sarah Holder:Start your free trial at adio.com slash iHeart. If your bookshelf and your For You page are equally important to your personality, welcome home. Pro Society is a weekly podcast that's part book club, part group chat for anyone who thinks Pride and Prejudice and Love Island deserve the same level of discourse. Each week, we're connecting the dots between books, the internet, and pop culture with your favorite writers, book talk creators, and plenty of overthought opinions. Yeah, I'm obsessed. I'm obsessed. Listen to Pro Society on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

26:00Sarah Holder:And download Roland Martin Unfiltered on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.