Mike Bloomberg and the Self-Funded Presidential Campaign
Former New York City Mayor Michael Bloomberg officially entered the Democratic presidential primary last week, and it didn’t take long for his opponents to react. Sen. Elizabeth Warren (D-Mass.) criticized the fact that Bloomberg, who is worth an estimated $54 billion, plans to self-finance his campaign. He will not take donations from any individual, organization, or political action committee. (To punctuate the notion that he has plenty of money to go it alone, the Bloomberg campaign announced it already has purchased nearly $40 million in TV ad space.)
Not only did Warren accuse Bloomberg of thinking he can win using “bags and bags of [his own] money,” she also alleged that “his view is that he doesn’t need people who knock on doors. He doesn’t need to go out and campaign, people. He doesn’t need volunteers.” Fellow candidate Sen. Bernie Sanders (I-Vt.) also jumped on, saying, “We do not believe that billionaires have the right to buy elections.”
In a Democratic primary – particularly this Democratic primary – those words are ones that could sting.
The mayor is hardly the first billionaire to run for higher office using his own money, however. In fact, he is not even the only one in the current Democratic primary. Over the first three months of his campaign, California billionaire and current Democratic presidential candidate Tom Steyer wrote his campaign checks totaling $47.6 million. (While Bloomberg has pledged not to take donations from anyone, Steyer did raise $2 million from other sources.)
Is this the way our campaign finance system was meant to work? According to the Founding Fathers, yes.
Here is how the Center for Responsive Politics (CRP), an organization that tracks all campaign spending, says America’s first political candidates would have viewed the Bloomberg v. Warren debate: “The idea of candidates asking for contributions to fund their campaigns was completely foreign to George Washington. … In 18th- and early 19th-century America, openly stating that you were running for office appeared ambitious—an unseemly trait. Wealthy, well-connected candidates financed their own campaigns …” Presidential candidates typically spent what we now consider to be the campaign trail at their homes, allowing their surrogates and supporters to campaign informally for them.
Bloomberg could argue he is only walking in Washington’s boots, but then there is this unseemly fact: While it’s true that America’s first candidates self-financed, they also routinely gave gifts, like whiskey, to encourage voters to cast ballots in their favor.
Today, we’d call that a bribe—even if it wasn’t a great bottle of whiskey.
It was not until 1828 that a presidential candidate actively raised money, or even campaigned. According to CRP, Andrew Jackson, who had no family wealth, was “the first organized campaigner, harnessing the power of the media and forming an early grassroots movement to win the presidency.” Jackson even had two campaign offices and, according to Nashville Public Television (Jackson was a Tennessean), raised funding from local sources. NPT called that 1828 race “a triumph of democracy over aristocracy, inaugurating the age of the common man.”
With money, though, came corruption.
President Jackson regularly rewarded his donors, handing out jobs to donors and supporters. When Jackson advocated rewarding loyalists with political office, Sen. William Marcy of New York reportedly agreed, saying, “To the victor belong the spoils of the enemy.”
The patronage system outlived President Jackson, of course, remaining, according to the Center for Responsive Politics, “alive and well during much of the 19th century.”
Congress tried to step in. The first law regulating campaign finance passed Congress in the wake of the Civil War in 1867, banning officers and employees of the government from soliciting money from naval yard workers. Sixteen years later, Congress passed the Civil Service Act, which prohibited government jobs from being filled by employees with “specific political ties or party affiliations.”
In the years after the Civil Service Act, presidential candidates turned to businesses and corporations for financing. As The Atlantic explained in 2007, “In the 1896 presidential election, direct contributions from corporate treasuries helped swell William McKinley’s Republican campaign fund to $16 million against the $600,000 raised by the Democrat-Populist William Jennings Bryan.” ($16 million in 1896 would be the equivalent of nearly $500 million in today’s dollars.)
Teddy Roosevelt advocated for a ban on corporate political fundraising in 1904—even as he was accepting Wall Street money during that year’s presidential election—and three years later, Congress answered the call. The Tillman Act prohibited corporations and national banks from contributing money to federal campaigns. (Political Action Committees, or PACs, came along a few decades later, but limits on their spending and donations were put into place in the early 1970s with the Federal Election Campaign Act.)
In 1925, Congress passed one of the first pieces of legislation to improve transparency surrounding donations. An amendment to the Federal Corrupt Practices Act required quarterly financial disclosures from any organization that made political contributions. Congress passed even stricter disclosure rules in 1971 with the Federal Election Campaign Act.
Making the system less opaque proved easier than limiting donations. While the prohibition on corporate financing stuck, after Congress set limits on individual donations to House and Senate candidates in primary elections in 1911, the Supreme Court ruled the law was unconstitutional.
Congress tried again more than 60 years later. In 1974—after Watergate—federal lawmakers set contribution and spending limits for all federal campaigns. (That legislation also created the Federal Election Commission, which oversees the enforcement of campaign finance law.) In Buckley v. Valeo two years later, the Supreme Court upheld the idea that campaign contributions could be limited but rejected the notion that spending by candidates could be capped ... and that included personal spending by individual candidates. While that ruling hardly has been last word on campaign finance (traversing the entire history would take the entire Thanksgiving holiday to read), it does bring us back to Michael Bloomberg.
Sens. Warren and Sanders’ instant pounce seems to indicate they are worried about Bloomberg’s capacity to spend. Should they be?
Maybe a little, but Bloomberg’s largesse does not necessarily predict a win. J.B. Pritzker spent $171.5 million of his own cash in the 2018 Illinois governor’s race and won. (Pritzker, incidentally, has not endorsed a Democrat in this year’s presidential primary, but he is no fan of Sen. Sanders. In 2016, he took to Twitter to try to undermine the senator’s reputation as a revolutionary.) President Donald Trump spent $66.1 million of his own money in 2016, a sum that represented about 20 percent of his campaign’s total spending, and, of course, Bloomberg poured more than $300 million of his own money into his successful 2001, 2005 and 2009 mayoral races. (For those of you keeping score at home, that translates to about $130 per vote, per New York City election. At that rate, Bloomberg would have to devote more than $8 billion of his fortune to the 2020 presidential race if he hoped to match then-candidate Donald Trump’s popular vote total in 2016.)
On the other hand, as the Los Angeles Times noted this week, self-funded candidates have historically tended to perform poorly. Ross Perot in 1992 and Steve Forbes in 2000 both spent more than $100 million of their own money on presidential campaigns and lost. So did Meg Whitman, the former eBay and Hewlett Packard CEO who ran for California governor in 2010 and spent nearly $150 million of her own money.
Bloomberg has said he does not plan to campaign in the first four nominating contests of the 2020 primary – Iowa, New Hampshire, Nevada, and South Carolina – and, because he is self-financing, he will not be able to participate in the remaining Democratic debates as the Democratic National Committee’s criteria for qualifying for the debates includes fundraising metrics. That means Americans will have to wait until Super Tuesday on March 3, 2020 to see whether Bloomberg’s self-funded campaign has legs.