Billionaires Find New Ways to Support Campaigns

Google Executive Chairman Eric Schmidt speaks at the Conference on Internet Freedom in The Hague, on December 8, 2011. US Secretary of State Hillary Clinton warned Internet firms to avoid offering the 'tools of oppression' to authoritarian Middle East regimes trying to crush democracy protests.AFP PHOTO/POOL/J. Scott Applewhite (Photo credit …
J. Scott Applewhite/AFP/Getty Images

Billionaire Google Executive Eric Schmidt hasn’t contributed directly to Hillary Clinton’s presidential campaign, but the savvy tech mogul as found a more meaningful way to support her efforts. Schmidt is the angel investor behind The Groundwork, a new data mining firm under contract with the Clinton campaign.

The private firm was formed immediately after the Obama reelection campaign by some of its lead technology staffers with start-up funds from Schmidt. Groundwork is just one of at least three new firms founded by former Obama staffers with funding from Schmidt.

The firms provide compaigns, through regular vendor relationships, with cutting edge technology and, most importantly, expert software engineers who would otherwise not be available to an individual campaign.

The startups also allow Schmidt to indirectly assist the Clinton campaign far outside the normal federal limits on campaign contributions. The Clinton campaign is The Groundwork’s only political client. It is also one of the Clinton campaigns largest vendors, billing the campaign $177,000 for services in the second quarter.

It is impossible to tell whether or not this amount billed to the campaign is in any way commiserate with the work that was done. If the Clinton campaign is its only political client, it would need a robust private sector business to justify its startup costs. That is, of course, if financial returns were an important factor in its business.

For the last several decades many political observers, especially those on the left, have bemoaned the impact of money in politics. There is an entire political-industrial complex designed to further restrict the amount of money individuals or organizations can contribute to political campaigns.

In the wake of the Citizens United decision in 2010, the left has gone crazy over the alleged problem of “billionaires” trying to buy elections. Since at least the 1970s, the left has been engaged in a running battle trying to impose limits on political speech as quickly as politics itself evolves.

Of course, the major caveat to the left’s concerns is that they are only worried about conservative or right-of-center billionaires trying to buy elections. The work of left-wing billionaires like Tom Steyer or George Soros escape all notice.

For decades, leftists build their dreams of campaign finance on public financing. A complicated system for providing public money to presidential campaigns was actually enacted and observed for years. The system finally fell apart when two candidates announced they would forgo public financing and raise unprecedented amounts of contributions on their own. Those candidates? Hillary Clinton and Barack Obama.

I don’t recall the self-righteous hand-wringing over the unprecedented sums raised by Barack Obama in his campaigns for the White House. It is of course fitting, and entirely predictable, that the first candidate to break the $1 billion dollar threshold for a campaign was a far left candidate.

Setting aside the obvious partisan motive behind most calls for campaign finance restrictions, Schmidt’s new effort shows the ultimate futility of such efforts. Schmidt’s efforts to fund companies that can provide highly specialize expertise to campaigns can’t, nor shouldn’t, be restricted by any hypothetical law.

There is no legislative draft that could or again should bar a former high-ranking Google executive, like Stephanie Hannon from taking an enormous cut in pay to head up the technology efforts of the Clinton campaign. In the crazy world of campaign finance zealots, her deferral of pay at Google could be seen as an in-kind contribution to the Clinton campaign.

Ultimately, the only real way to get money out of politics, if that is even desirable, is to get politics out of money. The federal government spends over $3 trillion a year, spending unknown billions on contracts and services. Its regulations reach into every facet of the economy and our lives. Its tax code stretches tens of thousands of pages with innumerable carve outs, exemptions and deductions.

Almost every decision the federal government makes impacts billions of dollars. It is hopelessly naive to think that people, whose livelihoods and dreams hang in the balance, wouldn’t try to impact that.

As Google has grown into one of the largest companies on the planet, it is increasingly dependent on decisions made by federal lawmakers and regulators. Schmidt is simply adapting to that reality and finding a new way to help Clinton get elected without so much as writing a check.

“There are a lot of people who can write big checks,” says Michael Slaby, who runs Groundwork. “Eric recognizes how the technology he’s been building his whole career can be applied to different spaces. The idea of tech as a force multiplier is something he deeply understands.”

It is also something the campaign finance Calvinists will never understand.