Money might be hard to come by in many parts of America, but it’s cheap in the 2016 election. Wealthy Republican donors have given nearly $400 million so far to presidential candidates with zilch to show for their efforts, including at least $63 million donated to super PACs supporting the latest GOP dropout – Sen. Ted Cruz.
Cruz quit the race after losing the Indiana primary election to Donald Trump, who has nearly locked up the GOP presidential nomination. With nine primary contests left, Trump now seems all but certain to win enough delegates outright to clinch the nomination, leaving no path for rivals.
At this point, it’s no longer surprising that Trump is trouncing opponents. What is surprising, however, is the vast sum Trump foes have wasted trying to steer the nomination toward anybody other than Trump. Yahoo Finance has been tallying the millions spent in futility on this year’s presidential campaign, and the total spent on super PACs supporting losing Republican candidates now totals roughly $375 million. That’s more than Mitt Romney’s entire estimated net worth. It’s equivalent to two years’ worth of profits for Netflix.
Cruz enjoyed the support of a small number of rich donors willing to commit large amounts of money to his cause. New York hedge-fund manger Robert Mercer of Renaissance Technologies donated at least $13 million to a Cruz super PAC, allowed to accept unlimited donations, called Keep the Promise I. Toby Neugebauer, a Texas energy investor and son of a member of Congress, gave another $10 million to a second super PAC called Keep the Promise II.
The third Cruz super PAC, Keep the Promise III, collected $15 million from two Texas brothers, Dan and Farris Wilks, who became billionaires after they sold a fracking operation in 2011. Including the contributions of smaller donors, those three promise-keeping super PACs raised more than $41 million for Cruz.
A fourth Cruz super PAC, Stand for Truth, raised another $11 million. That super PAC had no eight-figure donors, but federal records show that Adam Roos, CEO of Goldcrest Investments in Dallas, gave $1 million, as did Gale Alger of Palm Beach, Fla., and a Houston company called Trinity Equity Partners. Other donors gave as much as $325,000 each. Much of the money was used running ads against Marco Rubio and Donald Trump. Smaller contrubitions from other donors pushed total funding for Cruz super PACs to $63 million.
As of the end of March, the super PACs supporting Cruz had spent about $42 million of the $63 million they raised, and it's likely they spent more in April as Cruz made his final stand against Trump. Still, there may be some money left to return to donors or pass on to other political groups. Interestingly, Keep the Promise II, funded entirely by Neugebauer, had almost all of its cash on hand as of March 31, suggesting some sort of deal between the donor and the candidate; Neuegbauer may have insisted, for instance, that the money be spent only on the general election.
Cruz also raised at least $78.5 million for his traditional campaign, with the maximum donation being $5,400. That fundraising total is the third highest of any candidate so far, behind Bernie Sanders and Hillary Clinton. Since there’s a relatively low limit on the maximum amount any individual can donate to a traditional campaign – which must pay for campaign staff, travel costs, event rentals and direct campaigning expenses – there’s still a need for small donations from ordinary voters.
But a single rich donor giving millions to a super PAC can counteract thousands of small-dollar donations to a competing candidate, which is why super PACs have become so important. Still, the lesson of 2016 is that they’re hardly decisive. Donald Trump is poised to win the Republican nomination with virtually no super PAC support. He has mastered the dark art of getting free media coverage, worth millions in itself, and finding other ways to connect with voters that don’t require millions in spending.
Democrat Hillary Clinton does enjoy super PAC support, totaling about $76 million in fundraising so far. But that’s pretty much the entire super PAC haul on the Democratic side. Bernie Sanders doesn’t accept super PAC support, and three other Democratic candidates raised a paltry amount through super PACs.
The tally for now shows Republican donors have burned through about $375 million in super PAC donations meant to support failed candidates, compared with about $1 million in super PAC donations for failed Democratic candidates. If you’ve got money to burn, maybe that lopsided ratio is no big deal. But anybody comfortable burning money tends not to have money for all that long.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman .