:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/S5EGMAGJCKB74FSJYWNN4VOSUM.jpg)
:quality(70)/s3.amazonaws.com/arc-authors/irishtimes/06b1d091-4897-4dce-b93a-f7b343434e87.png)
Elections in the United States float on a sea of money from outside donors.
Almost from the time of election, politicians are concerned about raising sufficient funds for the next time they have to face the electorate.
Campaigning, particularly advertising, is expensive. However, the donors can provide unlimited amounts of money to support their favoured candidates.
A controversial supreme court ruling in 2010 – in a case known as Citizens United – found that restricting “independent political spending” from corporations and other groups violated the right to free speech under the first amendment of the US constitution.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/MUL2DFF6EZBWBNPMHDEMJF3NGY.png)
:quality(70):focal(1990x1511:2000x1521)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/RJ77L2IM7LI4B6ND3CR2N4TL2I.jpg)
:quality(70):focal(1530x590:1540x600)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/JBCOI7MWD2H4NCPWPGDEPDXMXA.jpg)
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/YCT7KB6QQFWHOUY7ABRYO32VNI.jpg)
This ruling opened the door to a deluge of funding from outside donors.
As long as they do not co-ordinate directly with candidates, outside groups can spend huge amounts, for example on advertising, in support of whoever they want to win a particular election.
The pinnacle of such fundraising comes in presidential elections. Candidates and their supporters must raise hundreds of millions of dollars to be competitive.
This weekend marks the deadline for candidates to set out how much they raised for their war chests in the key second quarter of 2023 when many announced officially they were running for the White House.
Donald Trump’s joint fundraising committee says it took in more than $35 million between April and June. This is nearly double the $18.8 million it raised in the first three months of the year. The implication seemed to be that Trump’s legal troubles (in the most recent quarter, he was indicted on criminal charges on two occasions) were no impediment to generating funds, and maybe even stimulated this process.
Trump’s closest rival for the Republican Party nomination to run for the presidency, Ron DeSantis, raised $20 million in the first six weeks of his campaign, which was launched towards the end of May.
The Republican Party is also using fundraising records as a mechanism to whittle down the number of candidates seeking its nomination.
If candidates are to get on the stage for the crucial first TV party debate, to be held in August, they will have to show that they have received money from at least 40,000 unique donors.
To try to reach this threshold, some candidates have been using funds from larger donors to encourage supporters to give small amounts – even a dollar.
However, in recent days a new campaign tactic has emerged among some candidates: in effect paying people to contribute to their campaign.
One of the lesser-known candidates for the Republican nomination is the governor of North Dakota, Doug Burgum. He is independently wealthy, having sold his software company to Microsoft for $1.1 billion in 2001 and then served as vice-president of the tech giant until 2007.
This week the Burgum presidential campaign announced that it would offer a $20 gift card to donors who give his campaign as little as $1 in a bid to allow him to reach the 40,000 threshold to get on to the debate stage in August.
[ Ron DeSantis has got it all wrong in his fight against Trump ]
His campaign said on Twitter that 50,000 people who donated would receive Visa or Mastercard gift cards at their mailing addresses. The Politico news organisation said the initiative would cost the campaign $950,000.
The campaign argued that the measure was aimed at helping out those who were hurting as a result of inflation under the presidency of Joe Biden.
Another Republican candidate, biotech entrepreneur, investor and conservative activist Vivek Ramaswamy, announced another novel fundraising measure this week. He said he wanted to break up the “cartel” of the small “oligopoly” of political fundraisers.
Ramaswamy’s plan involves establishing what he described as a “kitchen cabinet” which will allow anyone to raise funds for his campaign and take a 10 per cent cut from the proceeds. “If someone else is getting rich on this, it might as well be you,” he told supporters.
The 37-year-old Ramaswamy is another independently wealthy candidate – the business magazine Forbes estimated that Ramaswamy has a net worth of at least $630 million, thanks to his biotech and asset management companies. As of March 31st, he had provided loans of more than $10 million to his campaign.
He is polling at over four per cent on average, according to various polls. This is way behind Trump, the front-runner by a distance for the Republican Party nomination, but very respectable for someone who had little name recognition before entering the presidential campaign.
Money talks in American politics and we may not have seen the last of innovative fundraising strategies as the deadline for the cull of candidates takes place before the Republican debate next month.