Hiltzik: Trump's cabal of billionaires

Venture capitalists Marc Andreessen, left, and Ben Horowitz

By Michael HiltzikBusiness Columnist

Oct. 29, 2024 3 AM PT

They’re hedge fund operators, cryptocurrency and AI promoters, scions of and heirs to family fortunes, and others who have it all and want to keep it all. They’re the billionaires who have lined up to support Donald Trump’s reelection campaign with tens of millions of dollars, even hundreds of millions, in donations.

The eye-catching torrent of cash has made the role of America’s billionaires in the electoral system, and their sedulous backing of Trump, a front-burner political issue especially among progressive commentators.

The American Prospect, a progressive website, titled its analysis of tech entrepreneur support for Trump “Valley of the Shadow.” It focused much of its coverage on contributions by Marc Andreessen and Ben Horowitz, partners in the Silicon Valley venture investing firm a16z, citing a July podcast in which they wrung their hands over then-Democratic candidate Joe Biden’s technology policies.

“The future of our business, the future of new technology, the future of America is literally at stake,” Horowitz said. “For little tech [whatever that is], Donald Trump is actually the right choice.”

That’s a clue to the fundamentally transactional nature of billionaires’ electoral investments. Many are voting their pocketbooks, enticed by Trump’s record of providing tax cuts for the wealthy and deregulation for corporations and promising more of the same in a second term — Trump’s open threats to the democratic model be damned.

As the veteran labor reporter Steven Greenhouse observed on Slate.com, “They’re far more concerned about slashing taxes and regulations than about the risks of electing a demagogue who hails Hungary’s authoritarian leader, Viktor Orban, as a model.”

Some may wish to curry favor with Trump, or fear his retribution if they don’t support him. Backers with interests in the crypto and AI industries such as Andreessen and Horowitz are irked at the Biden administration’s regulatory campaigns. Indeed, the official GOP platform for 2024 bowed to those sectors directly.

“Republicans will end Democrats’ unlawful and unAmerican Crypto crackdown,” it read, replicating Trump’s diction. “We will defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control. ... We will repeal Joe Biden’s dangerous Executive Order that hinders AI Innovation, and imposes Radical Leftwing ideas on the development of this technology.”

The future of our business, the future of new technology, the future of America is literally at stake. ... For little tech, Donald Trump is actually the right choice.

— Venture investor Ben Horowitz

They’re not alone among Silicon Valley investors backing Trump. As my colleagues Wendy Lee, Laura J. Nelson and Hannah Wiley reported, Trump attended a fundraiser in June at venture capitalist David Sacks’ San Francisco mansion that raised $12 million. It was Trump’s first visit to the city in at least a decade.

There can be no question that the financial weight of America’s billionaire class has landed on the side of Trump and his fellow Republicans. Of the top 25 individual donors in the current election cycle, 18 have given exclusively or chiefly to Republicans, according to a compilation by Open Secrets of campaign disclosures.

The largest single donor, Timothy Mellon, had given $165 million to Republicans through Aug. 21. An heir to the family of Andrew Mellon, the plutocrat who served as Herbert Hoover’s Treasury secretary, and the source of millions of donations to right-wing causes over the years, Timothy Mellon has given $125 million to the Trump super-PAC Make America Great Again, including $50 million on May 31, the day after Trump was convicted of 34 felonies in connection with the payment of hush money to porn actress Stormy Daniels.

The top-ranked donors who have concentrated their funds on Democrats, according to data released by the Federal Election Commission as of Oct. 17, are former New York Mayor Michael Bloomberg ($42.2 million), LinkedIn founder Reid Hoffman ($25.9 million) and the late hedge fund operator and philanthropist James H. Simon and his wife, Marilyn. Andreessen and Horowitz have also contributed to Democrats, though their donations are heavily skewed toward Republicans, who have received $8.6 million combined from the two investors, versus $3.1 million for Democrats.

Almost all the donors on the full list are billionaires or near-billionaires. That underscores a major issue in the American economy: its extreme inequality. As I’ve pointed out before, the Founding Fathers themselves considered the accumulation of dynastic wealth to be a threat to the pursuit of happiness and to democracy itself.

“Whenever there is in any country, uncultivated lands and unemployed poor,” Thomas Jefferson wrote to James Madison in October 1785, “it is clear that the laws of property have been so far extended as to violate natural right.”

Madison in 1792 viewed the duty of political parties as acting to combat “the inequality of property, by an immoderate, and especially an unmerited, accumulation of riches.” Benjamin Franklin urged the Constitutional Convention in Philadelphia, albeit unsuccessfully, to declare that “the state has the right to discourage large concentrations of property as a danger to the happiness of mankind.”

Combined with the infamous 2010 Citizens United decision by the Supreme Court, which eliminated constraints on corporate political donations, and the consequence are clear: the domination of American election campaigns by big-money donors, who have come to use their wealth to pressure political leaders to enact policies they favor, then exploit those policies to build up their wealth.

One idea that has many rich Americans exercised is the possibility of a wealth tax. Liberal politicians such as Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) have proposed such a levy, either by raising income tax rates on the richest, or taxing unrealized capital gains; under current law, capital gains aren’t taxed until they’re sold, which allows wealthy investors to defer taxes on those gains indefinitely, even permanently.

The equivalent of a wealth tax was proposed by the Biden administration in a policy statement that was endorsed by Democratic presidential candidate Kamala Harris, but the chance of such a thing being proposed by Trump is plainly nil.

The billionaire who has attracted the most attention as the election draws to a close is Elon Musk, the owner of the spacecraft company SpaceX and controlling shareholder of EV-maker Tesla.

Musk has placed himself front and center among Trump’s monied supporters. He ranks sixth among the top political donors, all of whom are Republican supporters. He appeared onstage with Trump at the latter’s recent rally in Butler, Pa. Open Secrets reports that he has donated more than $118 million to America PAC, a fund-raising entity devoted exclusively to Trump, which he founded.

Musk’s interest in Trump’s reelection may be multifaceted. He has groused relentlessly about regulatory actions against him and his companies by the Securities and Exchange Commission, Federal Aviation Administration, the National Labor Relations Board and others. His political statements have aligned more openly with the right wing.

He has railed against “illegal immigration,” for example — including asserting falsely in a tweet on X, his social media platform, that the Biden administration’s policy is “very simple: 1. Get as many illegals in the country as possible. 2. Legalize them to create a permanent majority — a one-party state.” This reflects a fantasy common on the extreme right that Democrats intend to turn undocumented immigrants into a pro-Democratic voting bloc.

Among the high-profile billionaires who have drawn scrutiny for choosing not to take a sides in this contentious presidential election cycle are the owners of two of the nation’s most influential newspapers: The Times, owned by Los Angeles biotechnology entrepreneur Dr. Patrick Soon-Shiong; and the Washington Post, owned by Amazon founder Jeff Bezos. With only weeks to go before election day, both newspapers declined to endorse either candidate in the presidential race at the behest of their owners.

It has been openly speculated that both owners were concerned about Trump’s potential influence on their business prospects — Soon-Shiong’s research output could be subject to Food and Drug Administration regulation, and Bezos’ Amazon retail operation and Blue Origin space exploration venture are government contractors.

As my colleague James Rainey reported, Soon-Shiong said that he feared that picking one candidate would only exacerbate the already deep divisions in the country. “I have no regrets whatsoever,” he said in an interview with The Times last week. “In fact, I think it was exactly the right decision. ... The process was [to decide]: how do we actually best inform our readers? And there could be nobody better than us who try to sift the facts from fiction” while leaving it to readers to make their own final decision.”

Soon-Shiong also said that he considered himself a political independent, adding that, despite speculation, his stand is not based on any singular issue or intended to favor either of the major party candidates.

Bezos has felt the sting of Trumpian retribution directly. Trump has been plainly irked by the Bezos-owned Post’s endorsements of his Democratic opponents Hillary Clinton in 2016 and Joe Biden in 2020, as well as its forthright coverage of his presidential policies.

In a 2019 lawsuit, Amazon blamed its loss of a $10-billion Pentagon cloud computing contract to Microsoft on “improper pressure” by Trump, who was determined “to harm his perceived political enemy — Jeffrey P. Bezos.” A federal judge dismissed the lawsuit in 2021. The day that Bezos’ Washington Post announced that it would not endorse either presidential candidate, Trump met with the CEO of Blue Origin in what seemed, if superficially, to be an auspicious sign for the company’s destiny in a Trump administration.

The billionaires’ dollars flowing into the Trump campaign tend to reflect the source of the donors’ wealth. Among the top Republican donors are hedge fund operators and investment bankers; natural resource magnates; and others with specific concerns about federal policies that might affect their enterprises.

Billionaire Jeff Yass, for instance, has become the fifth-largest donor in this cycle, with $84.6 million funneled to Trump and other Republicans. That cash infusion may have influenced Trump to reverse his policy position on TikTok, the social media platform in which Yass holds a substantial stake, from trying to ban the Chinese-owned platform during his presidency to advocating for its preservation.

None of this means that Democratic donors are above advocating for their own interests in a Harris administration. Several, including Hoffman and Mark Cuban, have been pressuring Harris to fire the aggressive antitrust advocate Lina Khan as chair of the Federal Trade Commission if Harris wins the election. Harris hasn’t commented.

In any case, the numbers tell the story of the 2024 election: Money is talking, and loudly.