Rich Executives Bomb at the Ballot Box

Wealthy candidates, many from the business world, spent more than $500 million of their own money running for office this year. They don't have a lot to show for it.

Meg Whitman, the former eBay (EBAY) chief executive officer who failed in her bid for California governor, contributed $141.6 million from her personal fortune, the most for a single race in U.S. history. Ex-Hewlett-Packard (HPQ) leader Carly Fiorina, the Republican who sought a Senate seat from California, and World Wrestling Entertainment (WWE) co-founder Linda McMahon, a Republican who ran for the Senate from Connecticut, were also among the wealthy, self-financed losers on Nov. 2.

This year's 58 self-funded federal candidates—those seeking seats in the U.S. House and Senate and contributing at least $500,000 to their campaigns—spent a combined $159 million, according to the Center for Responsive Politics. At the local level, self-funded candidates who ran for governor and other state offices spent even more—$344.3 million, says the National Institute on Money in State Politics. (The center and the institute are nonpartisan groups that track political money.)

Of the 58 who bankrolled their own federal candidacies, 30 of them didn't even make it to Election Day, having dropped out or been defeated in primaries. Among the 28 who were still on ballots on Election Day, 11 won. The losers join Mitt Romney, H. Ross Perot, and Steve Forbes among executives who spent big and lost bids for public office. Of the top 20 self-financed federal candidates since 1990, only 5 won.

The lesson, pollsters and political scientists say, is not that money doesn't matter, but that money isn't everything. The biggest hurdle is that Big Business ranked alongside political incumbents in the level of voter scorn this year. According to the media narrative, "corporate greed, lack of regard for working people, large companies are part of the problem," says Franklin D. Gilliam Jr., dean of the school of public affairs at the University of California at Los Angeles. "You can't buy an election, and that's what it seems like they're trying to do," says Jennifer Kaiser, a hospital consultant in Los Angeles who did not vote for Whitman or Fiorina.

Decisions made by former executives, such as laying off workers, were sometimes used against them. Barbara Boxer, the Democratic senator from California, defeated Fiorina in part with ads of former HP employees who had lost their jobs during her tenure. "She shipped our jobs to China," an ex-worker says in one ad. A lack of political experience also left some of these candidates without the instincts needed to respond smartly in the parry and thrust of heated competition. "Campaigning is a difficult job that is part show biz, part policy wonk, and mostly gut instinct," says Lawrence C. Levy, executive director of the National Center for Suburban Studies at Hofstra University.

Whitman, for example, was running even with Jerry Brown until her former housekeeper claimed in late September that the candidate knew she was an illegal immigrant and fired her only after deciding to run for office. Although Whitman denied the allegation, her support fell among Latinos, women, and independents, an Oct. 28 Field Poll showed. "She fired her summarily," says Todd Gitlin, a journalism and sociology professor at Columbia University. "That doesn't play well with people hanging on to jobs by their fingernails."

Still, deep pockets can help. Rick Scott, a hospital executive, won the Florida governor's race after contributing $73.2 million of his money. Having a family fortune also boosted Ron Johnson, a Wisconsin corporate executive and first-time candidate, who spent about $8 million of his own money to defeat three-term Senator Russ Feingold. Rick Snyder, a Republican former chairman of Gateway, spent nearly $6 million and won his bid for Michigan governor, in part by calling for elimination of the state's business tax in favor of a flat 6 percent levy. Another exception to the executive-turned-politician curse is Michael Bloomberg, founder of Bloomberg LP (which publishes this magazine), who won his third campaign for New York mayor in 2009, and spent $108.4 million on the race—the biggest self-financier before Whitman.

Can unlimited funds be too much of a good thing? In the Florida governor's contest, 89 percent of likely voters said they had seen Scott's ads, and more than half called them "annoying," according to an Oct. 1 Quinnipiac University survey. Still, Scott won, even if he enters the state record books for being the first to win since 1916 with less than 50 percent of the vote, and for doing so with the smallest margin since 1900.

The bottom line: The 2010 election losses by self-funded executives proves that money isn't everything.

With Simone Baribeau

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