The Most Expensive Midterms Ever

[MUSIC] There's just one week to go until the midterm elections. [MUSIC] Odds are, you've been seen campaign ads everywhere. Online, on TV, getting texts to your phone. And that's because spending is off the charts. [MUSIC] >> People are projecting it might be the most expensive political cycle ever. Our colleague Maggie Severance follows the money that funds election campaigns. >> It'll definitely be the most expensive midterm ever. And that tends to be a trend, right? Like every cycle seems to get more and more expensive. In the last two weeks of this election, it's estimated that people are going to see over a billion dollars in TV commercials. >> Just in the last two weeks. >> Just in the last two weeks, that's been booked arranged. So it's a lot of money. It's a lot of money that's going around. According to one estimate, ad spending in this election cycle alone totals more than $11 billion. [MUSIC] >> How does that amount of money strike you as somebody who covers election and campaign finance? >> You know, it's funny because I started really tracking this stuff probably around 10 years ago, not too long before Trump ran for president. And every time the amount of money seems like a lot. Like you hear about someone giving $10 million and you might think yourself, oh my gosh, $10 million. I've never seen money like that in my life. That is so much money. And then all of a sudden we're talking about a $50 million donation and then a $100 million donation. >> In her reporting about ultra wealthy donors, Maggie's heard about a new logic for the never ending upward spiral of money. The thinking goes, given how important government regulations are, maybe we're not spending enough. >> Why are we cutting a $50,000 check when we could pour $50 million and get a whole new slate or try and get a whole new slate of regulations? This hasn't necessarily worked in kind of the one-to-one. You cut a check, you get results way that I think that some people were hoping. But you have industries like cryptocurrency, increasingly AI, who are now being huge amounts of money into elections. And then you have on kind of a completely different interest side. You have APEC that's spent a lot of money to try and defend candidates who are pro-Israel. >> And while all this spending has gone up, the level of federal oversight has gone down. >> For some people, there's a sense this cycle that things are just reaching this point where they're going kind of off the rails or things are getting, the numbers are getting so big that it feels crazy to people. >> Welcome to the journal, our show about money, business, and power. I'm Ryan Knudsen. It's Tuesday, October 27th. Coming up on the show, the mid-term's money madness. [MUSIC] >> No one has thrown more money at this election than Elon Musk. >> And Elon in particular has been funneling money to be spent on the Texas Senate race, which is a big one. >> Hippocrite James Telereca will do anything to push his radical agenda, even if it leaves families, broke, and jobless. >> I'm Ken Paxton and I approve this message. You have James Telereca, the Democrat up against Ken Paxton, who's a Republican who has great history with Trump. >> Paxton won a bruising primary, and he's faced some serious controversies, which have been hurting him in the polls. >> And Elon has a home in Texas, lives there quite a bit of the time. So I think it is a particularly big deal for him to keep Texas in red hands. So we've seen him just dumping huge amounts of money. Musk has reportedly spent upwards of $440 million on Republican races this mid-term cycle. Then there's the Democratic side. >> I'm Troy Jackson. I approve this message, and I'd be honored to have your vote. I'm Dr. Abdul Alsaid. I approve this message because promised him matters. >> My name is Angie Nixon, and I'm running for US Senate because change can't wait. >> For Democrats, many of their biggest donors have been players for decades. You always have someone like George Soros, who has a lot of theories on political giving. He's been giving a lot. Michael Bloomberg recently poured $80 million to help Democrats. So there are some really late in the game, huge checks. Bloomberg is someone who we didn't really see around for most of the election. And Democrats have been hurting for money from people like him. And he came in and then the most recent disclosures there he was. Democrats have also been getting a surge of money from a big crop of new donors, mainly backing progressives. >> And it's kind of the first time that we've seen people who are super motivated by the Warren Gaza as an issue. So these are people who saw APAC, saw what APAC was doing. >> APAC is the American Israel Public Affairs Committee, which lobbies for Israel. >> And decided they wanted to give money to, in some cases, a group that's really billing itself as an anti-APAC. And will spend around $10 million. So not very much money compared to what we're seeing others. But it is, it's interesting to see new people and new excitement on the left. >> It seems like a lot of this money that we are talking about is going to individual campaigns or candidates, rather than say like the Republican or Democratic party, their national committees. Is that new? >> I think that particularly among Democrats, there's been a real interest in funding individual candidates. So one thing that we have written about is how people have been hesitant to help the DNC the cycle. But they've been really excited about someone like Telleriko, the Texas Senate candidate. They're really excited about Jon Ossoff. They're really thinking about 2028. So all the 2028 candidates are also out there handshaking and some of them are running for office. And so it's an interesting moment where people I think are a little disillusioned by Washington, disillusioned by institutions, but they see a lot of kind of bright stars out there. >> How are you seeing industries line up during this election cycle? Are there clear lines about which parties certain industries are donating to? >> There are some very clear examples of industries deciding to spend against candidates. So a really good example is Crypto Shared Brown. >> Brown is a Democrat running for the US Senate in Ohio. >> There is a pro-cryptocurrency super PAC called Fair Shake and it has a couple of affiliates. And Fair Shake decided to pour around $50 million into the Ohio Senate race to spend against Democrat Shared Brown. The candidate there, because they think that Brown's opponent, John Hustead, will be better on their issues. He voted to raise the gas tax by 30% and give social security benefits to illegals. Ask yourself, whose side Senator Shared Brown is really on? >> John Hustead is voted for crypto-friendly legislation in the past. >> I know that the 2010 Supreme Court decision citizens united outpaved the way for the existence of super PACs. But can you just help me understand how it's possible for people to give seemingly unlimited amounts of money? Now, I get a little tangled up over what the actual rules are. >> If you are going to go give to a candidate, you're limited in the low thousands of dollars. And most of the time when we talk about people wanting to help candidates, what we're talking about is people giving to super PACs and other kind of outside efforts where a political consultant will say, hey, I'm raising money. I am going to raise money for Ryan's campaign and how about you come and give me a million dollars and it will be spent on Ryan's campaign. >> He's running for Congress in New York, you know, this is a fictional campaign I'm making up. >> Ryan for president, actually, 2028, Go Bigger Go Home. >> Yeah, Ryan for president. And, you know, when I started covering this about 10 years ago, there were a lot of taboos in place. Because super PACs are supposed to be independent of a candidate, right? They're not allowed to speak and coordinate with the candidate and there were all these taboos in place where you had to seem. If you were a super PAC, very independent of a candidate or a campaign. And that's one of those things that normatively we've just seen slide. Now, Ryan, if you were running for president, you can't solicit checks for your super PAC. You can't say like, here, give me 10 million dollars and I'll give it to the super PAC, that's not allowed. But we could throw a nice fundraiser and you could come to the fundraiser and you could talk to everyone. And then, you know, me or fundraiser could walk around 10 minutes later and say like, okay, so the, you know, donation for this event was $500,000. Have you paid up yet? >> During the most expensive midterms ever, the public knows less about where all this money is coming from. One, because so many donations these days are shrouded by layers and layers of different business entities. So one example of a problem that's been changing kind of and growing slowly over time is dark money being given to super PACs, right? So like, we'll see a disclosure showing how much money. a super PAC is raised, but a bunch of the spenders aren't people, they're these random LLCs or other things that you've never heard of. One recent analysis found that nearly $400 million of dark money went to super PACs for both Democrats and Republicans' cycle. So there's tons of other kind of dark money floating around there, but that's $400 million that just came from places where we don't know, you know, it's just an anonymous giver. There is a government watchdog with the authority to investigate where all this dark money is coming from, but Maggie says that regulator can't really do its job right now. We're at a moment when voters are really hungry for a fixed reform and a more honest Washington, and I think that there's real irony in the fact that not only has the cop on this beep been basically out of commission for the last 18 months, there's also very little appetite to change things on Capitol Hill right now. That's next. All right, Maggie, introduce us to the cop on the beep here when it comes to campaign spending. So the cop on the beep when it comes to campaign finance is this like Nixon era regulator, the Federal Election Commission. The Federal Election Commission is designed to be a panel with three Republicans and three Democrats. And they hear cases, they hear challenges, they vote, and they make decisions. That is how it is supposed to work. But thanks to a very basic problem, the FEC hasn't been working that way for a while. In order to actually vote and make decisions, the FEC, which is supposed to be a six-member panel, needs to have at least four people, and since about a year and a half ago, they've had two. There are still lawyers that work at the FEC. There are still some things that get done, but basically it's becoming kind of a clearing house for self-reported information about spending. It hasn't been a strong regulator in a long time, but now it's a regulator that literally can't do its job. The stalemate is happening at a time when the way people try to influence elections is changing by moving online. I've covered influencers a lot. Influencers are getting paid millions of dollars from campaigns. We don't know exactly who's getting paid or how we see money going to management firms, but there aren't rules if you want to post about a candidate and get paid for that. There's no rule that you have to put a disclosure on it and say, you know, this was paid for by Ryan for president. Plus, there's a ton of new questions about the use of AI. There are a bunch of people who've asked the FEC, like, can AI make robocalls? Can AI send text? That's the kind of thing that they should be thinking through, right? And instead, there's no quorum. It feels like you can, if you have a novel idea, why not try it, because unless you are literally breaking federal law, unless someone will take you to court. If you're in kind of a gray area, like, hey, I want to pay a fancy person $500,000 to make a bunch of online posts about my campaign, like push the limit, see where it goes, and maybe at some point we'll have regulators that are interested. The FEC hasn't had a quorum since April of 2025. The Trump administration has nominated two potential commissioners, but the Senate hasn't taken them up. I think the other side of this is that we have been talked about as much as Congress, right? You have lawmakers who are constantly running on this idea that they're going to clean up Washington. And whoever's in charge, these priorities tend to fall away, or they get kind of poisoned by things that keep the bills from passing. So I think we can blame the FEC for large amounts of this problem, but, like, ultimately, this is something that Congress should be doing, right? There's huge, huge appetite among voters to clamp down and clean up in Washington. And yet, both parties have been in charge while I think that appetite's there, and we haven't seen anything happen. This coupled with the Citizens United decision, which found the campaign spending should be treated more like speech, has really let the guardrails off campaign finance. It sort of feels like, in some ways, Citizens United, which happened 16 years ago, and now has its driver's license roaming around town, was kind of like the beginning of, like, lifting regulations on campaign finance. And now what we're seeing at the FEC is sort of just like a continuation of, like, less, less, you know, less rules, less enforcement, like, just wild west. Yeah. And I think that people, you know, I talk about this sometimes with former lawyers, people who have worked at the FEC, and it's hard when something has been such a slow change to pinpoint, like, when did things really fall apart? You know, some people say, like, this is the cycle when things are really falling apart. Like, they're not even pretending anymore. They used to at least do a few things, but, you know, it's been an agency that people have been very disillusioned with for a long time. The Trump administration and the FEC didn't return requests for comment. Do you have a sense of how, I mean, ultimately, you know, these, all the spending, the goal is to affect the outcome of elections. But does it always work that way? I mean, it's not always the case that the more money you spend, the, you know, it's not a guarantee for victory. No, it's not money is not everything in these elections, right? So, like, cryptocurrency is actually a pretty good example. They've spent hundreds of millions of dollars on elections. And they're still having problems getting the legislation they want passed through Congress, right? They have more friends and allies now than they did when they first started doing this. They've managed to drive some critics off Capitol Hill. Like, I'm not saying that they have been ineffective, but it's not like everyone saw the cryptocurrency industry coming in and immediately lined up and did exactly what they wanted, right? Like, there are a lot of different things at play in politics and a lot of different things can happen. They must be frustrating, frankly, if you're, if you're someone who's out like a hundred million dollars and nothing happens. Yeah, I mean, they should put it toward Ryan for president in 2028. Then we'll see results now open. Um, just kidding. We won't need money because it's going to be entirely grassroots organic movement. There you go. That's all for today, Tuesday, October 27th. The journal is a co-production of Spotify and the Wall Street Journal. I'm Ryan Knutzen, and I approve this message. See you tomorrow.