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Billionaire Donors Bypass K Street

When the country’s top political mega-donors want to get something for their corporations from Congress, chances are K Street is not their first call.

The most politically generous billionaires invest almost unlimited personal resources in supporting federal candidates and super PACs. But the hedge funds and other companies that fuel their bank accounts put up a relatively puny amount of cash toward disclosed federal lobbying, according to a CQ Roll Call survey of the top 25 donors. (Those donors are based on campaign donations in the 2012 and 2014 elections, as compiled by the nonpartisan Center for Responsive Politics.)

“What these major donors are trying to do is shift the agenda in Washington long before anybody ever crafts a bill or drops a bill, which is what most lobbyists are hired to do,” said Timothy LaPira, an associate professor of political science at James Madison University in Virginia. “But if one of these billionaires calls a senator, they pick up the phone.”

Some of the firms founded or owned by the biggest donors leave no paper trail revealing any history of lobbying work. But even when they don’t list a roster of pricey hired help from K Street, these top donors — and their companies — still exert influence.

While the billionaire political donors may at times press for specific issues on Capitol Hill or in the executive branch, the elite level of campaign giving often is more about taking a long view of priming government, with a favored slate of candidates, to ultimately carry out a big-picture agenda.

“These guys are in their own world, living in their own universe, and they don’t get down and dirty with people on K Street all that much,” said Democratic lobbyist Larry O’Brien, one of K Street’s top donors.

GOP donor and lobbyist Kenneth Kies concurred. “They barely know K Street even exists,” he said.

The Big Picture

Whenever the biggest donors take the traditional route of hiring K Street representatives to press their corporate agendas in Washington, the dollars spent are often miniscule when compared to their political giving.

Farallon Capital, the investment firm founded by top Democratic donor and climate-change activist Thomas Steyer, has stopped reporting any federal lobbying efforts. Steyer gave more than $75 million in traceable political money in the past two cycles, but Farallon’s entire lobbying tab totals a mere $1.5 million going back to 2001.

The company of major GOP donor Sheldon Adelson, Las Vegas Sands Corp., has recently stepped up its lobbying against online gambling and is on track to spend more than $1 million this year as the industry’s trade group, the American Gaming Association, is neutral on the issue. But $1 million is tiny when compared with the $99 million Adelson and his wife, Miriam, donated in the 2012 and 2014 cycles, making him the biggest campaign contributor of all.

George Soros, known for giving generously to Democrats, and his Soros Fund Management firm haven’t reported federal lobbying activities since 2004, when it disclosed $120,000 of K Street spending.

Koch Industries, owned by top conservative donors Charles and David Koch, has spent big on K Street work compared to most other enterprises owned by billionaires. The company reported spending $5.6 million for the first half of this year on its team of five in-house lobbyists and a dozen outside K Street firms. Koch Industries’ federal agenda included lobbying on new chemical safety standards, tax law, cybersecurity and renewable fuels, in addition to trying to shutter the Export-Import Bank.

“They have an integrated operation where their nonprofit organizations lobby in the same direction as their business interests,” says Darrell West, director of governance studies at the Brookings Institution. “Lobbying gets you members of Congress, electioneering gets to the candidates, and the nonprofit organizations affect thought leadership.”

Despite its diverse interests before Congress, the energy and manufacturing conglomerate is not among the top corporate spenders on federal lobbying.

Changing the Conversation

Steve Elmendorf, a Democratic operative and top K Street donor, said the giving among the billionaires is usually ideological and not about a company’s bottom line.

“They’re not trying to influence the tax extenders bill,” said Elmendorf, who runs the lobby shop Elmendorf Ryan. “They’ve come to the conclusion that the micro-lobbying doesn’t work for them. They have to change the national conversation.”

Donald Trump, who claims his net worth is more than $10 billion, took a dig at lobbyists and donors for controlling politicians when he declared his bid in June for the GOP presidential nomination. His company, the Trump Organization, hasn’t retained any federally registered lobbyists since 2001, according to lobbying disclosures.

Michael Cohen, executive vice president and special counsel at the Trump Organization, said his boss doesn’t need hired help to get the attention of lawmakers and federal regulators.

“His ability to be heard on issues is greater than what any lobbying firm could offer, which is why Mr. Trump does not retain lobbyists,” Cohen said. “I have never known Mr. Trump to leave a message for anyone and that message go unreturned.”

Most major CEOs and the companies that spend a lot on federal lobbying shy away from mega-sized political donations because they view such partisan activities as risky to their corporate brands, said Doug Pinkham, president of the Public Affairs Council, an association for lobbying and public relations professionals.

“It often outweighs any upside to the influence of donating,” he said.

Business vs. Ideology

Not surprisingly, then, some of the companies associated with the biggest political donors were quick to put distance between the corporate entities and the donors.

Joe Ricketts, who founded TD Ameritrade, was a director on the online trading company’s board until 2011 when he retired, said TD spokeswoman Kim Hillyer.

Ricketts spent more than $22 million in the 2012 and 2014 cycles, including on a super PAC called Ending Spending, which says on its website it wants to end “wasteful” government spending. The super PAC supported the campaigns of Republican Sens. Ted Cruz of Texas and Orrin G. Hatch of Utah and GOP Rep. Paul D. Ryan of Wisconsin, among others.

TD Ameritrade, which spent the most it ever has on federal lobbying in 2014 at $370,000, reported lobbying on changes to the tax code. Both Hatch and Ryan would be critical figures in any tax overhaul because they hold the gavels to the committees of jurisdiction, Senate Finance and House Ways and Means, respectively.

Many of the biggest donors own firms that lobby through their trade associations or other nonprofit organizations, which are not required to disclose their donors or members. The U.S. Chamber of Commerce, the perennial top-lobbying spender, so far this year has disclosed $42.5 million to influence issues ranging from free trade expansion to cybersecurity. Even the chamber would not confirm which of the companies owned by the biggest political donors pay dues and are among its members.

“We do not discuss our membership,” said chamber spokeswoman Blair Latoff Holmes.

Some of the billionaire donors fund organizations that are unrelated to their business interests. Michael Bloomberg spends big on gun-control causes, which isn’t tied to his financial data and news business Bloomberg LP.

Koch Industries, by contrast, seems more aligned with Charles and David Koch’s political interests.

“For some of them, they clearly bring an ideology to how they think about government and so they’re pushing causes very much from a philosophical point of view,” said Brookings’ West, author of the book “Billionaires: Reflections on the Upper Crust.”

But he noted: “There are often are business advantages that overlap with their ideology.”

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