Portfolio Management

Narrowing 2016 Field Puts Money Up for Grabs

Anti-establishment candidates continue to flourish among small donors.

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A collection of U.S. $1 bills sits in this arranged photograph in London on Jan. 29, 2016.

Photographer: Chris Ratcliffe/Bloomberg

In an upside-down campaign season that's seen a political dynasty done in by a celebrity businessman and a self-declared democratic socialist rapidly gain on the Democratic favorite, establishment money may finally find its footing.

With Jeb Bush's exit from the Republican presidential race, the field of candidates competing for the wealth behind the more than $100 million raised by his super-PAC, Right to Rise USA, has narrowed. Candidates will now need to lock down sufficient resources to compete on Super Tuesday and beyond.

In January, according to new Federal Election Commission filings, Senator Marco Rubio's campaign and the super-PAC supporting him together raised $7.4 million. Ohio Governor John Kasich, who like Rubio is competing to win the party's establishment vote, brought in $4.1 million, including the money raised by a super-PAC affiliated with his campaign.

The outsider candidates fared better: Senator Ted Cruz and his quartet of super-PACs raised $9.3 million, while front-runner Donald Trump took in $6.1 million, including $4.9 million that the billionaire developer loaned to his own campaign.

On the Democratic side, Hillary Clinton remains the money front-runner. Through the end of January, her campaign raised $131 million and had almost $33 million in the bank. Meanwhile Priorities USA, the super-PAC supporting her, has raised a total $50.6 million, with $44.8 million of it unspent. Sanders, who has eschewed super-PACs, raised more money than Clinton in January with a flood of small donations, bringing in $21 million. At the end of the month, Sanders had $14.6 million still in the bank.

Thus far, big money flowing through super-PACs has failed to be the determining factor in which candidates rise to the top. The sheer number of candidates made it difficult to stand out, and Trump, meanwhile, neutralized much of the ad spending with his ability to consistently get into the media without spending any money at all. The role of outside groups armed with millions of dollars may change now that the field is smaller. 

"In June, Right to Rise had $100 million, and everyone thought that that coupled with the Bush name would catapult him to the front of the pack," said Candice Nelson, an American University professor who directs its Campaign Management Institute. "Once Trump became a force, it all went out the window."

Rubio's campaign had just $5.1 million in the bank at the end of January, while Conservative Solutions PAC, the super-PAC supporting him, had $5.6 million. But he might be able to raise money quickly.

"The establishment loved Jeb Bush, and they'll love Marco Rubio," said Alison Dagnes, a professor of political science at Shippensburg University.

Rubio's super-PAC has already seen some of that money. In January, longtime conservative donor Richard DeVos, a co-founder of Amway and the owner of the NBA's Orlando Magic, gave Conservative Solutions PAC $250,000. The Harlan R. Crow Family Branch Partnership also chipped in $250,000. Harlan Crow, a Dallas-based real estate developer, gave $50,000 to Right to Rise USA in 2015. Conservative Solutions PAC's biggest donation was a $1 million contribution from Oracle CEO Larry Ellison, who is the 10th-richest individual in the world with a net worth of $38.9 billion, according to the Bloomberg Billionaires Index.

"Tonight’s results in South Carolina make it clear that this is a three-candidate race," a statement issued by the super-PAC said, "with Marco Rubio best positioned to challenge for the lead going forward. As the field continues to shrink, Rubio is the candidate whose support is most likely to grow."

Kasich, who is competing with Rubio for the establishment vote, spent $2.1 million in January ahead of his second-place finish in the New Hampshire primary, and ended the month with $1.5 million in the bank. His super-PAC, New Day for America, raised almost $3.3 million. The biggest donor, coal-mine owner and operator Boich Co., contributed $1 million, while Dan Gilbert, the chairman and founder of Quicken Loans Inc. and the majority owner of the Cleveland Cavaliers, gave $100,000.

Both Cruz and Ben Carson continued to do well with small donors giving $200 or less. Carson, the retired neurosurgeon, raised $3.4 million in January, with 47 percent of the total coming from small donors. Cruz, who ended January with $13.6 million in the bank, raised $3.2 million of his $7.6 million total from small donors.

"The establishment candidates have these well-honed machines raising money from donors who give every election," Dagnes said. "If you're an outsider, it makes sense to go to the small donors."

Cruz, whose super-PACs have had the biggest donations yet in the race, didn't see as many major contributions in January. Two of the four Keep the Promise super-PACs supporting him raised nothing at all. The biggest donation was $1 million for Keep the Promise PAC from Richard Uihlein, chairman and CEO of Wisconsin-based Uline Inc., which sells shipping and packing materials. Stand for Truth, another super PAC supporting Cruz, raised $2.5 million. The biggest chunk was a $1 million donation from Trinity Equity, a firm that shares the same address as Houston-based private equity firm Quantum Energy Partners. Its founder, Toby Neugeberger, gave Keep the Promise II PAC $10 million last year.

Trump was his own biggest source of funds.

On the Democratic side, Sanders continued to rack up small donors while Hillary Clinton's campaign received $4.7 million from contributors giving the maximum. Priorities USA Action, the super-PAC supporting her, raised $9.6 million, with $3.5 million coming from James Simons, the billionaire founder of Renaissance Technologies. It also received $2 million from the Laborers' International Union of North America's super PAC and $1 million each from Slimfast Foods founder Daniel Abraham, Houston lawyer John Mostyn, billionaire Chicago venture capitalist J.B. Pritzker, and his wife, Mary Pritzker.

Sanders, who has made criticism of Wall Street a major theme in his campaign, received little from financial industry donors. Hollywood, however, supported both Democratic candidates. Goldie Hawn, Teri Hatcher, Alfre Woodard, Chevy Chase, Mark Hamill and Sofia Coppola contributed to Clinton. Sanders' campaign got the support of musicians Norah Jones and Jackson Browne, as well as actors Joaquin Phoenix, Zach Galifianakis, Eliza Dushku and Susan Sarandon, who has campaigned with the candidate.

Small donors giving $200 or less accounted for $2.7 million, or 18 percent, of the $14.9 million Clinton raised. Sanders, by contrast, raised 63 percent of his January fundraising haul from small donors.

"Hillary is continuing to raise money from donors who max out," Nelson said. "It's a pattern we've seen before. Sanders is doing even better than Obama did with small donors."

—With assistance from Greg Giroux.

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