Of Kings and Kingmakers
The influence of unregulated money in politics.
Many of us marched in the “No Kings” rallies last weekend. What we need to tackle next are the kingmakers—the wealthy mega-donors who manipulate our federal elections, intending to build influence and wield power. But a kingmaker is only half of the equation. On the other side are the members of Congress, the Supreme Court, and the Administration, who are willing to put aside the public good to pursue their own interests when the carrot is dangled in front of them. These are the ‘wolves’ that Thomas Jefferson warned the early congress about. “The time to guard against corruption and tyranny,” he said, “is before they shall have gotten hold on us. It is better to keep the wolf out of the fold, than to trust to drawing his teeth and talons after he shall have entered.”
Super PACs and Dark Money
The 2024 election cycle reveals that the wolf has indeed entered the fold, as super PAC spending and dark money donations set new records. Super PACs from both parties raised over $5 billion – almost double the amount raised in the last presidential election ($2.7 billion). And about half of that money—$1.3 billion—came from undisclosed, or dark money, donors.
Corporations, groups, or individuals can donate unlimited sums to a political cause or candidate through nonprofit 501(c)(4) organizations that are exempt from federal election disclosure rules. Super PACs are political organizations allowed to spend unlimited amounts of money on election ads and other election activities, such as canvassing and ‘get out the vote’ campaigns. Combine the two, and you have billions of dollars from unknown sources funding billions of dollars' worth of influence.
Take, for example, the secretive Future Forward USA Action, a nonprofit group that worked to elect Harris in 2024. The group amassed $700 million, much of it funnelled to its super PAC (Future Forward USA), which in turn paid to create ads, analyze their effectiveness, and purchase ad space.
Then we have Donald Trump. His story is still about big money, but it’s slightly different than Harris’. While Harris outperformed Trump in terms of dark money donations, high-wealth individuals (through super PACs) openly donated huge amounts to Trump’s campaign. Nearly 47% ($700 million) of the $1.45 billion raised to help elect Donald Trump came from just 10 donors.
What they got for their money
Now, you might ask, “So what? People can donate. It doesn’t mean they actually get anything for their donations … right?”
It's exceedingly difficult to prove a quid pro quo relationship between money spent on behalf of a candidate and a result favorable to the donor. However, we can examine recent legislation, along with executive orders and appointments, to judge for ourselves whether they pass the ‘smell test’.
The GENIUS Act
Let’s start with my favorite—the GENIUS Act (can you feel my eyes rolling?). The Act, written in close coordination with cryptocurrency leaders, sets up a regulatory system that legitimizes so-called ‘stablecoins’. Stablecoins are a type of cryptocurrency designed to be tied to a more stable currency or commodity. They are thus more “stable” than their untethered counterparts, which are used for speculative investment rather than the purchase of goods and services. Stablecoin companies have been lobbying Congress to regulate their products, thereby moving them from the fringes of the economy closer to its trusted center.
And then there’s the Trump connection. In March, World Liberty Financial Inc. (WLFI) issued a stablecoin, USD1. WLFI is closely affiliated with the Trump family, with the New York Times explaining that “World Liberty Financial has eviscerated the boundary between private enterprise and government policy in ways without precedent in modern American history.” When President Trump issued his Executive Order to create a U.S. cryptocurrency reserve, WLFI holdings jumped temporarily. Luckily for the Trump family, they are entitled to 75% of certain revenue from coin sales through revenue-sharing arrangements.
The Biden Administration and many Democrats in Congress had long been skeptical about establishing a regulatory framework for this still-unproven currency. But then the super PACs stepped in. As the New York Times reported:
“Ahead of the 2024 election cycle, a network of Silicon Valley crypto executives and political strategists set their sights on Washington. They formed a number of crypto-focused super PACs which spent a total of more than $130 million to influence tight congressional races across the country. Candidates backed by the super PACs, which supported both Democrats and Republicans, had a staggering success rate, winning 53 of 58 races. […] Now that work has begun to pay off.”
The GENIUS Act passed the Senate last week. 18 Democrats, including Sens. Cory Booker (D-N.J.) and Adam Schiff (D-Calif.), joined 50 Republicans to pass the bill. This was over the objections of many other Democrats, who argued that it “lacked strict-enough regulations or oversight to prevent abuses, including anti-corruption rules that would bar President Trump and his family from continuing to profit from cryptocurrency.”
When news of the passage broke, shares of Circle, the largest stablecoin company, went up 170%. I’d say that’s a pretty good return on investment.
The Big Beautiful Bill
According to the Brennan Center, the budget bill (officially titled the ‘One Big Beautiful Bill Act’, H.R. 1) now being considered in the Senate includes “a large package of policy changes that many observers have noted will disproportionately benefit wealthier Americans while cutting benefits for the poorest.” The bill continues the tax breaks for wealthy income brackets passed in Trump’s first term, “shields an additional million dollars in wealth from the estate tax (which only applies to multimillionaires), and increases the size of the pass-through deduction, a tax break for certain business owners that disproportionately benefits the wealthy.”
The tax cuts in the budget bill are not new. They were passed in 2017 as the Tax Cuts and Jobs Act (TCJA) during the first Trump Administration and are set to expire at the end of this year. At the time they were passed, the general public opposed the tax cuts by a 2:1 margin, and 54% specifically opposed the corporate tax cut. The Center on Budget and Policy Priorities reported that the Congressional Budget Office estimated in 2018 that the tax cuts would cost $1.9 trillion over a 10-year period. Meanwhile, an extensive study published in 2024 found that “51% of gains [from corporate tax cuts] flow to firm owners, 10% flow to executives, 38% flow to high-paid workers, and 0% flow to low-paid workers.”
The tax cuts were passed anyway, likely because large donors insisted on them:
“Get Obamacare repealed and replaced, get tax reform passed. You control the Senate. You control the House. You have the presidency. There’s no reason you can’t get this done. Get it done and we’ll open it [fundraising] back up.” — Billionaire Doug Deason to the GOP, 2017.
“My donors are basically saying, ‘Get it done or don’t ever call me again.”’--Rep. Chris Collins (R-N.Y.), 2017.
“We don’t get taxes through, we’re all going home. Pack the bags.”-- Rep. Dave Brat (R-Va.), 2017.
That’s blatant language! This is where the definition of corruption comes in. The behavior in question doesn’t have to be a bribe. It can smell just as bad when elected officials forget that their duty is first to all the people they represent, and second to their own moral and ethical compass. ‘Keeping on the donor’s good side’ should never be a motivation for passing laws that affect everyone in the country.
Cabinet Appointments
It used to be that donating heavily to a presidential campaign might get you appointed as Ambassador to Canada or New Zealand. In the Trump Administration, donors occupy positions of immense power, sometimes as Cabinet secretaries for agencies with regulatory scope over their industries. Here are a few examples:
Howard Lutnick, Secretary of Commerce
According to Open Secrets, Howard Lutnick “has been a prolific Republican donor, co-chair of Trump’s presidential transition team, and head of investment bank Cantor Fitzgerald. He maintains extensive crypto industry ties that have raised conflict-of-interest concerns.”
Linda McMahon, Secretary of Education
According to Open Secrets,
“Linda McMahon and her husband Vince have a history as friends and financial supporters of Donald Trump. [...] America First Action, the super PAC that McMahon commands, is affiliated with America First Policies, a "dark money" 501(c)(4) nonprofit that was founded by several current and former Trump team members. The America First groups, along with Rebuilding America Now, which McMahon contributed to heavily, were wrapped up in an alleged illegal coordination controversy with the NRA.”
Scott Bessent, Secretary of the Treasury
A hedge fund executive, Bessent has been selected to oversee the Treasury Department and is a seven-figure donor. The New York Times reported that:
“Having won the trust of Mr. Trump and his inner circle, Mr. Bessent would lead a Republican economic agenda of cutting taxes, culling federal regulations and enacting sweeping tariffs. [...] Mr. Bessent has given about $15 million to political causes over the years and all but $300,000 has gone to Republicans. He gave $1 million to Mr. Trump’s inauguration in 2016.”
I could go on about Elon Musk and DOGE, but we're all familiar with that story by now.
How did we get here?
U.S. citizens on both the left and right see that the game is rigged. 82% of Americans agree that the influence of money in politics is a threat to American democracy. And 77% support a constitutional amendment to limit the amount of money that can be donated and spent in elections. It may take a constitutional amendment to fix the problem. Recent history shows that as soon as Congress finds the courage to enact meaningful laws to limit unregulated money flowing into political elections, conservatives in the Supreme Court dismantle them, citing free speech.
Citizens United
Back in 2010, a rightwing group called Citizens United wanted to air a movie critical of Hillary Clinton. It was illegal at the time for outside groups to broadcast election ads within 60 days of a general election. Citizens United sought to air it anyway, saying it infringed on their right to free speech.
The conservatives on the court agreed with the plaintiffs, but they didn’t stop there. Unasked by the plaintiffs, the conservative justices took the opportunity to profoundly weaken the Federal Election Campaign Act (FECA), the regulatory system Congress passed in 1971.
Here’s a brief history of the push and pull battle between Congress as it sought to regulate campaign finance and the Supreme Court, which sought to remove those regulations.
The Federal Election Campaign Act: Establishing Modern Campaign Finance Rules
The FECA allowed corporations and unions to make donations and spend money on elections, as long as the money was kept in a separate fund, known as a Political Action Committee (PAC). Corporations and unions, through their PACs, could solicit money from their members (in a separate, segregated fund called an SSF) or from the public (in a nonconnected PAC).
It was important that PACs could not be run by, or coordinated with, parties or candidates. And PACs, party committees, and campaign funds were required to disclose all donations and spending both during and after campaigns. These two requirements — no coordination and disclosure — were intended to prevent corruption and the appearance of corruption.
In 1974, after the Watergate Scandal exposed influence peddling all the way to the office of the president, Congress strengthened FECA to limit campaign contributions and spending, and established the Federal Election Commission (FEC) to replace the decentralized enforcement system.
The Buckley Decision: SCOTUS weakens FECA
In 1976, the Supreme Court ruled that limits on PACs’ indirect campaign donations and spending were an unconstitutional restriction on free speech. The Court left the limits on direct donations and reporting requirements intact.
After the Buckley decision, ‘soft money’ donations exploded. Soft money was “unlimited, unregulated, and undisclosed financial contributions to national political parties” given for a general purpose, as opposed to promoting a specific candidate. Political parties could spend soft money on whatever they wanted, as long as it served to ‘increase the vote.’
The Bipartisan Campaign Reform Act (BCRA): Congress Fights Back
In 2002, Congress sought to close the soft money loophole by passing the BCRA, which prohibited soft money donations and strictly defined what PACs could spend on election advertisements. The BCRA limited donations, but did not limit independent expenditures made by groups, including PACs, as long as these expenditures were not coordinated with campaigns or parties.
“Supporters of the BCRA sought to preserve the integrity of the U.S. electoral system, reduce the role of money and corruption in politics, and give ordinary Americans an opportunity to express political ideas without being overshadowed by megacontributors. Critics continued to charge that by limiting contributions and expenditures, the law was limiting First Amendment freedoms.”
Citizens United v. FEC: SCOTUS blows up financial regulations
The Citizens United decision in 2010 was the nuclear bomb that finally defeated those who wished to regulate the influence of money in campaign finance. The Supreme Court's conservative ruling struck down BCRA provisions that restricted independent expenditures by corporations and unions, leading to the rise of super PACs that can spend unlimited funds.
Justice Kennedy, writing the decision, argued that big donors “may have influence over or access to elected officials,” but that “does not mean that these officials are corrupt.” He went on to say that ‘governmental interest in preventing corruption’ cannot extend to combating influence, but was ‘limited to [combating] quid pro quo corruption.’
Kennedy sought to alleviate the concerns of the more liberal judges on the court, stating that the two primary requirements aimed at combating corruption — disclosure of donors and a prohibition on direct coordination with parties and candidates — would remain in place.
Disclosure and Coordination
Unfortunately, those two requirements that were supposed to keep the corrupt wolves out of the fold have been nearly erased since Citizens United. The requirement for donors to disclose their identity was overturned by–guess who? The Supreme Court in 2021. The Americans for Prosperity Foundation v Bonta decision struck down California’s practice of requiring disclosure of donors to nonprofit political organizations. This decision led to the large amounts of dark money funneled from nonprofits into super PACs during the 2024 national election.
But wait, we still have restrictions on super PACs. They can’t coordinate directly with campaigns or candidates, so they are truly independent, right?
Again, unfortunately, no. Since Citizens United, PACs and super PACs have become more blatant about coordinating with campaigns. For those of you who watch The Colbert Report, you might remember the scandal that Trevor Potter, president of the Campaign Legal Center (CLC), exposed on a series of appearances on the show in 2011:
“One of the issues brought to light in his series of appearances was how easy it is for candidates and super PACs to illegally coordinate campaign spending. A decade later, not much has changed. Across the political spectrum, campaigns and super PACs are still going unpunished when they deliberately work together to spend money on behalf of their preferred candidate. This is due in large part to dysfunction at our nation’s only federal elections watchdog agency, the Federal Election Commission (FEC).”
Why doesn’t the FEC enforce the coordination ban?
At least four out of the six commissioners on the FEC must vote to take enforcement actions. And conservatives in Congress who opposed campaign finance regulation have confirmed FEC Commissioners who are “ideologically opposed to campaign finance laws and their enforcement. Since then, the FEC has gone from deadlocking infrequently on key enforcement matters to deadlocking a majority of the time.”
Coordination is becoming increasingly apparent, culminating in Trump’s 2024 campaign. As the Brennan Center explains:
“Elon Musk, the world’s richest person, spent more than $250 million to elect Donald Trump. He was not alone. Venture capitalist David Sacks, casino owner Miriam Adelson, and packaging supplies magnate Richard Uihlein all helped Trump with massive financial support.
Wealthy people have spent big on elections before. […] What was unprecedented this time around was that they effectively paid for, and in at least one case helped run, a presidential campaign that otherwise operated with a skeleton staff.”
This campaign was the first time wealthy donors “successfully took on many of the other core functions of a general election presidential campaign, such as door-to-door canvassing and get-out-the-vote efforts. Their activities unquestionably would have been illegal before Citizens United.”
A final note about Citizens United
Common Cause is a nonpartisan grassroots organization dedicated to reforming campaign finance. In 2014, Common Cause formally asked the Department of Justice to “investigate the apparent involvement of Supreme Court Justices Antonin Scalia and Clarence Thomas in political strategy sessions hosted by Koch Industries, the nation’s second largest privately held company.”
Common Cause believed that Scalia and Thomas had a conflict of interest that required them to recuse themselves from the Citizens United case. The Common Cause statement went on to say that “Citizens United provided a political advantage to Koch Industries and its corporate allies, many of which took part in a surge of corporate and other 'independent' political giving that pumped nearly $300 million into the 2010 mid-term elections.”
As of today, no investigation has taken place.
Where to go next
First, we need to be aware of the extent of the problem posed by big money in our elections and in our government. I’ll continue to write about it. Please spread the word and share this post with others who may find it helpful.
Second, we can support organizations like Common Cause that are fighting for campaign finance reform. We can also help those few members of Congress who refuse to accept PAC money.
Large financial interests have co-opted the three branches of government. If we are to remove the wolf from our fold, we will have to do it ourselves, through grassroots efforts.
Resources
Follow the Money, part of Open Secrets, provides an extensive list of relevant organizations.
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