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

0:02 Bloomberg Audio Studios, podcasts, radio, news. You've been following the money all election season. Big picture, what makes this midterm season different? >> Well, there is more money than ever, and that's true on a campaign level to individual candidates. It's true on a pack 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 mega donors 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.

0:56 There is a new corporate influence playbook that is being honed in this year's midterms. It was incited by cryptos 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, "Okay, we're going to try it out this cycle in 2026."

1:36 So, US companies have spent $517 million on the 2026 US 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. >> 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.

2:29 I'm Sarah Holder and this is the Big Take from Bloomberg News. Today on the show, how political spending is shaping the US midterms. I'm joined by Bloomberg corporate lobbying and influence reporter Emily Bernbomb and wealth reporter Amanda Gordon to talk about the donors funding candidates behind the scenes and what's at stake for Republicans and Democrats. Amanda, you've been tracking spending by big individual donors in US midterm races. How much money are we talking about and how does it compare to previous years?

3:09 >> 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 in to 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 triedand-true donors like Miriam Adlesen, Jeff Yas, Richard Uline, Deborah Simon on the Democratic side, private equity titans like Steve Schwarzman and Mark Rowan and Paul Singer who runs a hedge fund in New York that they have been known as early money. 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 measured a measure might be giving less. Ken Griffin gave a huge amount over a hundred 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. 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 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 packs, and how do their goals differ and align? So leading the future is backed primarily by AI billionaires Mark Andre, Ben Horowitz and OpenAI President Greg Brockman. So its aim is to pass one federal standard for regulating AI that is light touch, businessfriendly, focused on allowing the AI companies to continue to innovate without excessive government intervention. And the creation of that pack 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 donors so far has been anthropic one of the leading AI firms that promotes statebystate 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, "Okay, basically both of them support AI but have differing visions for how to regulate it."

6:30 >> 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. >> Exactly. 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 Donald's. Donald's 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 states should play a role. you can, you know, 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. The 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 Donald's 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.

8:06 The 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 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 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.

8:56 >> And 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. That's still the name of the game when it comes to campaigning.

9:46 Coming up, where candidates backed by big money are losing and what it says about corporate influence in the midterms and beyond. Amanda, 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?

10:19 >> The race that comes to mind for me is New York 12. so that's where New York State Assemblyman Alex Bores 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 Andre and Horowits which advocate for light touch regulation. So when Leading the Future announced that they would spend against Borez, they accidentally incited this huge wave of money from AI safety advocates.

11:01 Leading the Future ultimately spent $8 million against Borez, tying him to things that are unpopular with Democrats immigration enforcement. But on the other side, ProAI safety super PACs end up spending over 21 million in favor of Bores in that race. Overall, it showed >> Borz lost. >> Bores ended up losing like have the groups taken lessons from how that race played out? >> Yes. Bores 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. That 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.

12:00 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 in the Democratic primary over Abdul Elsed and ultimately that 30 million and another 30 million spent in favor of Stevens by outside interests did not win the day. Elsaded won that primary. It was very close, but there is this growing backlash to outside spending in races. is 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 Apac put behind Haley Stevens, which is the most Apac has ever spent on a single candidate according to the Associated Press, that became a big selling point for Abdul Elsad or a big talking point for Elsa that his opponent was being supported by this pro-Israel political action group. What does that say about, you know, Apac'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 Apac you know, mostly in light of Israel's response to the events of October 7th, 2023. So, you know, you contract popular sentiment has soured on Israel and along with that there has been an increasing skepticism of Apac 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.

14:12 Another 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 to1. 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 and 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's still something to be said about what voters in your district want, care about, how they respond to you as a candidate.

15:00 and 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. There are people who who attract the big traditional pots of money but their but their message is is distinctly sort of they stand on their own. They stand for the people as I guess all politicians on some level you know have to make this argument that they are distinct and independent of the money that's that's coming to them. I 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 that he attracted >> and Obama. Yes, Bill Clinton. And they're looking for they're looking for candidates like that 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. 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 Elsai 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 US? And as we head towards the general where that $ 1.6 6 billion in individual donations might only increase. Are there any efforts to increase transparency?

17:48 >> There definitely calls to increase transparency and there are some people who would like to not see any money being 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 Mam Donny'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 and have more of a chance to back candidates.

18:31 >> Exactly. >> Who don't necessarily have that corporate support. Yeah, 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.

19:11 We are going to know less than ever probably by the next election. That's an an interesting outcome of voters being more and more skeptical of corporate donors. corporate donors will just go deeper underground. >> Yes, 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/mpodcast offer. If you like this episode, make sure to follow and review the Big Take wherever you listen to podcasts.

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