The 2016 election cycle, referred to in some corners as “toxic” and a “nightmare,” has undoubtedly made many Americans want to run and hide.
And while many of the Wealthiest Angelenos have kept their powder dry so far this campaign season, several are playing an active role, writing checks to candidates, hosting fundraisers, and giving to super PACs.
As usual, the biggest spender of the bunch appears to be perennial Democratic booster Haim Saban (No. 13, $4.1 billion). The chairman and chief executive of Saban Capital Group gave nearly $500,000 between Jan. 1, 2015, and April 25, 2016, to support state party committees and candidates such as Hillary Clinton, according to the Federal Election Commission. He also threw in an additional $2.5 million to Priorities USA Action, a super PAC supporting Clinton.
Joining the ranks of the big donors was DreamWorks Animation Chief Executive Jeffrey Katzenberg (No. 37, $1.55 billion), who has donated nearly $430,000 to Democratic candidates as well as $1 million to Priorities USA Action, according to the FEC.
Former Facebook Inc. President Sean Parker (No. 4, $7.1 billion) has also contributed heavily, though his money is split between a slew of Democratic candidates, including Clinton, and a few Republicans, such as Florida Sen. Marco Rubio and Utah Sen. Orrin Hatch. He also gave $200,000 to Defending Main Street, a super PAC supporting moderate Republican candidates. Noted GOP backer and Daily Journal Corp. Chairman Charles Munger (No. 47, $1.24 billion) gave $400,000 to a super PAC supporting Carly Fiorina’s ill-fated presidential campaign.
Still, many have chosen to take a backseat thus far, for a variety of reasons.
Public records show that one-third of the region’s richest residents did not give to any federal candidates and of the 50 wealthiest 11 gave less than $10,000 since January 2015.
Local politicians got even less attention: Just 15 of the 50 wealthiest gave to L.A. electeds.
Some billionaires have been waiting for the chaos of primary season to die down and the candidate landscape to clear up. Others don’t see any candidates they like and have been put off by the bombastic back and forth in this year’s campaign. Still others are shunning the spotlight of direct contributions and instead plowing their donations into super PACs and other nonprofits.
Whatever the reason, the dip in political giving has been noticed.
“I’ve actually seen a drop-off in donations this year compared to the last two presidential campaign years,” said Brent Kessel, chief executive of Santa Monica financial advisory firm Abacus Wealth Partners, whose clients have a net worth of from $10 million to $200 million.
“The extreme rhetoric we’ve seen in this year’s campaign may have something to do with the drop-off,” Kessel said.
Quiet money
The 2010 U.S. Supreme Court decision in the Citizens United case also opened the door for unlimited donations to super PACs and nonprofit groups, giving high-net-worth donors the chance to escape public scrutiny by funneling their money through various companies.
“We’re seeing this consistently this year – more secret money than ever before and more wealthy individuals and corporations looking for ways to be politically active but still hide their money,” said Richard Grenell, a Republican communications strategist and consultant based in Manhattan Beach.
A big reason for this, said Grenell, is the extreme partisanship that’s defining the campaign.
“Whether it’s the owner of a major restaurant chain who donates to pro-life candidates or the operator of a hedge fund who donates to LGBT organizations,” said Grenell, “these folks realize that the moment their donations become public, one group or another is going to launch a boycott of their businesses.”
Yet some have been quite public about their donations.
Take developer Rick Caruso (No. 18, $3.8 billion), who made a big splash at the end of March announcing his support for Republican Ohio Gov. John Kasich.
Caruso said then that the Kasich camp was pinning its hopes on a nomination fight on the floor of July’s Republican National Convention in Cleveland. Plans changed when Kasich withdrew on May 4 and Donald Trump became the presumptive GOP nominee. Caruso was putting the finishing touches on organizing a fundraiser in Los Angeles when Kasich suspended his campaign.
“We were planning an event for the governor next week and we had a stellar lineup planned,” he said. “It’s too bad. I think John would have done well in California.”
Caruso was not alone in giving to candidates who pulled out before the convention; Anthony Pritzker (No 20, $3.53 billion) backed Rubio.
On the Democratic side, Marc Nathanson (No. 39, $1.53 billion) said he upped his donations this year to frontrunner Clinton (FEC records show he donated $250,000 to Priorities USA Action). He’s called Clinton a lifelong friend ever since the former Arkansas attorney represented him 30 years ago in the acquisition of some cable systems in that state.
“It’s an election year, and when friends are running, we increase our spending,” Nathanson said, referring to donations made along with his wife, Jane.
But even Nathanson is exercising some caution this year. Unlike when Clinton ran for president eight years ago, he has yet to host a fundraiser for her in this election cycle.
“I’m waiting until she wins the nomination,” he said.
Few ultrawealthy Angelenos have donated to local candidates or been active at the state level.
“The wealthiest Angelenos tend to get interested more in national politics, which provides so many openings for large individual donors,” said Raphael Sonenshein, president of the Pat Brown Institute for Public Affairs at Cal State Los Angeles. “Local politics in Los Angeles tends to be more the politics of interests rather than the province of wealthy individuals.”
Yet those few who remain active locally continue to wield considerable influence.
Take billionaire philanthropist Eli Broad (No. 3, $7.64 billion), who has long contributed to Democrats nationally, but has also focused his efforts locally, including in recent years backing reform-minded candidates for the Los Angeles Unified School District Board of Education, with mixed results.
A few of the wealthiest Angelenos have been active on the state level in recent years, most notably Public Storage Co. heir Bradley Wayne Hughes Jr. (No. 33, $1.67 billion), who was the single biggest contributor to Proposition 47 to reduce prison terms for certain felony convictions. The proposition passed in 2014.
Another local billionaire sponsoring a statewide initiative is Napster co-founder Sean Parker (No. 4, $7.1 billion), who is part of the coalition that earlier this month reported it had gathered more than 600,000 signatures to place a marijuana legalization measure on the November ballot.
– Howard Fine
Stumping for Trump?
Now that the nomination picture has firmed up and Clinton and Trump seem headed for a November showdown, the stage is set for more Wealthiest Angelenos to enter the game in a public way.
There’s little question that more billionaires in the Democratic camp, such as Nathanson, will now step up and host fundraisers for Clinton.
But will local billionaires with Republican leanings decide to throw their hat in the ring for Trump? Chances might have improved now that the man tasked with convincing them to do just that is a local banker likely familiar to many on the list.
On May 5, Trump named Steven Mnuchin, the former chairman of Pasadena’s OneWest Bank and now CIT Group Inc. board member, as national finance chairman. Mnuchin, who also serves as chairman and chief executive of New York’s Dune Capital Management and stepped down as Relativity Media co-chairman in May of last year. Colony Capital founder Thomas Barrack will also hold a fundraiser for Trump at his home May 25.
He will have his work cut out for him. Caruso, for one, said he’s not at all certain who he’s going to support for president.
“I’m planning on meeting with both Trump and Clinton during the course of the campaign and then I will evaluate them and decide which one I will support,” he said.
Caruso added that he has been troubled by some of Trump’s comments during the long primary campaign, especially concerning immigrants and Latinos.
“I’m particularly troubled by the way he has characterized the Latino community,” Caruso said. “It’s a very important community, full of pride. And it will make a big difference in the campaign.”
The mall developer might not be alone, according to wealth adviser Kessel.
“The Republican-leaning clients I have tend to be more centrist, and those I’ve talked to about it are either not voting or switching to Hillary given that fiscal conservatism is their main reason for being Republican and Trump is untested,” he said.
Other wealthy Republican Angelenos could shift focus, said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC.
“They either don’t think that Trump can win or don’t want him to win, or both,” he said. “Their approach is based on the idea that maintaining a Republican Congress as a balance to a Democratic president should now be their top priority.”
