Just in time for July 4th, Tom Ferguson, Paul Jorgensen, Matthias Lalisse, and Jie Chen share the above graph and write:
What can one Senate race reveal about the hidden machinery of American politics? In Maine, donor patterns expose how campaign finance can shape party competition, political narratives, and the choices voters are asked to make long before ballots are counted. . . .
Platner is strongly supported by Senator Bernie Sanders and other progressives, while many establishment Democrats dislike him. Major media keep printing articles questioning his character. By contrast, Collins’ somewhat contradictory legislative history attracts less coverage. . . .
Our tabulations of the race show that Collins is much closer to a typical Republican pattern (or, to be fair, those of the Old Guard Democratic leaders [Nancy Pelosi and Chuck Schumer, along with Paul Ryan and Mitch McConnell]) in a key respect: the size profile of her donors. . . .
The Republican Senator from Maine is hugely dependent on very large donors. By contrast, Platner strikingly resembles Sanders: he attracts essentially no big money. Recently the numbers of billionaires supporting the candidates has emerged as an issue. A very few have supported Platner with small sums. Almost a hundred (counting spouses) have made contributions of varying sizes to Collins. The overall configuration is as shown [above] and is perfectly obvious.
They also report:
If you put aside contributions that are below the $200 threshold for disclosure, the percentage of money received from Maine donors differs sharply between the candidates. Senate elections have been nationalized for a long time. Contributions from Maine itself make up approximately 20% of all money for Platner; by contrast, Collins’ rate is slightly under 3%. (Not a misprint.) Her biggest contributors include a Who’s Who of prominent financiers in private equity and hedge funds, including Steve Schwarzman of BlackRock, Ken Griffin of Citadel, along with other well known Republican donors, including Larry Ellison of Oracle.
And they give an example of how this works:
A day after a Super Pac backing her received a $2 million dollar contribution from a private equity magnate who, according to press reports, stood to gain munificently from President Trump’s One Big Beautiful Bill, [Collins] provided a crucial vote to spring the bill out of committee. Then she loudly voted against it on the floor.
Another way of looking at this is to ask, why a person living outside of Maine give $100,000+ to Susan Collins? Roughly speaking, the following conditions are needed:
1. The donor has to be rich enough to be able to spare $100,000 as loose change.
2. It has to be legally possible to give this amount of money, or the perceived consequences of violating the law have to be minimal.
3. The donor has to consider Republican Party control of the U.S. Senate has to be important enough to be worth spending $100,000 to make a small change in the probability of this happening.
4. It has to be easy to write the check; that is, the donor does not need to get the agreement of many other people to release the money.
5. Any negative political, social, and economic consequences of revealing oneself to be a strong partisan have to be mild, compared to the perceived benefits of making the donation.
And in recent years these five conditions have increasingly been present:
1. There are more and more super-rich people who can spend $100,000 without blinking an eye.
2. The Supreme Court keeps liberalizing campaign finance laws, also the government has become much more encouraging and tolerant of corruption. On the rare occasions where people are prosecuted, they get off, and even on the rare occasions are imprisoned for corruption, they get pardoned.
3. With political polarization, the two parties are further apart than ever, and party-line voting in Congress has become the norm.
4. The money is being given by individuals, or by companies controlled by single individuals. It’s not like the old days, where, if General Motors made a campaign contribution, they’d need the coordination of some board of directors.
5. This last one is the most interesting. A flip side of partisan polarization is that, if you give a lot of money to the Republicans, it will piss off a lot of Democrats, and vice versa. Political independents might not be so happy either. One way out is that it’s becoming easier and easier to skirt the regulations and campaign in secret. Beyond this, I guess these donors have decided that the Republican business sphere is large enough that they can afford to alienate Democrats and independents. And Black Rock, Citadel, and Oracle are not primarily customer-facing businesses.
Some of these spending patterns reflects outright corruption – perhaps legal, but unethical by my standards. But I think most reflects the avoidance of uncertainty by big business. The long-time incumbent is not going to dramatically change the rules, while the newcomer might. So, even if votes are not being “bought” through these donations, I think they are attempts to constrain uncertainty. Collins is a known quantity; Platner is not. Of course, Sanders is also a known quantity but one who advocates big changes.
I would be interested in seeing the distribution of size contributions by business size. My suspicion is that the larger the business, the more threatening change and uncertainty are. Small businesses can more easily be wiped out by changes in regulations or laws – but these are just like many other risks they face (pandemics, climate change, consumer tastes, etc.). Large businesses need predictability (I think that is what the 5% stake in Open AI potentially being offered to the government represents). Campaign financing is such a disaster that it doesn’t serve the public interest even if there was no outright corruption (that is, unless you subscribe to the “what’s good for …. is good for America”).
Perhaps I have failed to understand the graph correctly, but as I understand it, there is a mechanical effect that pushes the high donation tail upwards. For example, if I ran a campaign and had four donors contributing 5 USD each and one donor contributing 100 USD, then 100/120 = 5/6 would end up in the large bin and 1/6 in the small bin. In other words, the x-axis and the y-axis show transformations of the same variable.
I would be more interested in comparing the donor profile by the number of donors in each donation bracket. My suggested graph has its own issues (for example, what if there are large donations in the open bin?), but it would not produce the same mechanical lift in the right tail.
Aren’t you more interested in the amount of the contributions than the number of contributors? There are many more potential individual contributors than large corporations, so the number of contributors is largely meaningless. Where the money is coming from, and in what quantities, seems more relevant to me and isn’t that what the graph is showing? I guess a more direct measurement would just show the number of total dollars received by different size contributors, but that would be skewed by the vastly different sizes of the total across candidates. I think the graph shown is the best single choice, unless I am also misunderstanding the graph.
Raphael:
What Dale said. I agree with Ferguson et al. that what’s most relevant for the candidates is where the money is coming from, hence the units of money rather than people.