Big Money: The Role of Big Spenders in U.S. Elections

• In Event: Electoral Spending Strategies and Political Influence

Abstract

A small group of donors spends many millions of dollars in U.S. federal elections each election cycle. These big spenders constitute a tiny portion of all donors, but the impact of this elite and highly unrepresentative (e.g., Aneja et al. 2022) group of donors on the overall flow of money and on the campaign finance system itself is immense. Their spending has a potentially outsized impact on election results and on policy outcomes. Thus, understanding big spender campaign finance behavior is crucial for a serious examination of the U.S. campaign finance system and for considering the system’s impact on democracy and representation.

Building on my 2023 APSA preliminary examination of the contribution strategies of a few big spenders since 1998 (Dwyre 2023), I integrate big spender data from the Database on Ideology, Money in Politics, and Elections (DIME) (Bonica 2023) into my analysis to expand the number of big spenders analyzed, add data on big spender state and local campaign finance activities, and add Bonica’s measure of ideological ideal points for donors.

How do these big spenders distribute their significant donations among the many possible recipients: candidates, parties, PACs, super PACs, 527 groups, 501(c) nonprofits, direct spending? How do changes in the campaign finance rules influence their spending strategies and entry into and exit from the big spender ranks? How and why do some of these big spenders act to bend the fundraising and spending rules to their benefit?

I propose that the hydraulic theory of campaign money, that money, like water, will find a new channel when an old one is shut by reform or other changes in the rules (Issacharoff and Karlan 1999, 1713), does not fully explain the complex campaign finance activities of the biggest spending individual donors (or of any campaign finance players, for that matter). I develop a more nuanced theoretical approach to explain the spending activities of this relatively small but influential and changing group of individual donors who spend far more than most other contributors.

This approach accounts for the fact that some big spenders are more proactive and entrepreneurial than reactive to new opportunities or changes in the system, as we see with other political actors such as party leaders (e.g., Herrnson and Menefee-Libey 1990). For instance, some big spenders attempt to shape the rules themselves by filing deregulatory lawsuits or requesting Federal Election Commission advisory opinions to allow activities that push the regulatory envelope (e.g., the Koch brothers). Some redirect their spending (e.g., from parties to super PACs), some decrease or halt their big spending, while others may enter the big spender ranks as changes in the rules create new options and outlets for their campaign money (e.g., Michael Bloomberg and Tom Steyer after the 2010 Citizens United decision). And the approach considers donor motivation—are big spenders ideologically motivated, that is, sincere in their giving (Francia et al. 2003), or do big spenders follow an investment strategy, donating in ways to gain access or policy outcomes (Snyder 1990). This analysis will provide the most comprehensive analysis of big spender campaign finance activity to date to better understand the “dynamics of contribution behavior and the vital role individual donors play in shaping the political landscape” (Bonica 2014, 382).

References

Aneja, Abhay P., et al. 2022. “FINANCIAL INCLUSION IN POLITICS.” New York University Law
Review 97(2): 566-630.

Bonica, Adam. 2014. “Mapping the Ideological Marketplace.” American Journal of Political
Science 58(2): 367-386.

Bonica, Adam. 2023. Database on Ideology, Money in Politics, and Elections: Public version 3.1.
Stanford, CA: Stanford University Libraries. https://data.stanford.edu/dime.

Dwyre. Diana. 2023. “Hey Big Spender! How Do Changes to Campaign Finance Rules Impact
Big Donor Contribution Strategies?” Paper Presented at the 2023 American Political Science Association.

Francia et al. 2003. The Financiers of Congressional Elections: Investors, Ideologues, and
Intimates. New York: Columbia University Press.

Herrnson, Paul and David Menefee-Libey. 1991. “The Dynamics of Party Organizational
Development.” American Review of Politics 11 (Winter): 3-30.

Issacharoff, Samuel and Pamela Karlan. 1999. “The Hydraulics of Campaign Finance Reform.” Texas
Law Review 77(7): 1705-1738.

Snyder, James M., Jr. 1990. “Campaign Contributions as Investments: The U.S. House of
Representatives, 1980–1986.” Journal of Political Economy 98(6): 1195–227.

Author

• Diana Dwyre, California State University, Chico