Did billionaires pay off Republicans for passing the Trump tax bill?

A Center for Public Integrity analysis suggests the timing of big donations may be more than a coincidence.

SOURCEThe Center for Public Integrity
Image Credit: Jonathan Ernst/Reuters file

This story was published in partnership with Mother Jones.

Introduction

In late June 2017, Texas political mega-donor Doug Deason had a stern message for Republicans seeking campaign donations: The “Dallas piggy bank” was closed until they repealed Obamacare and passed major tax cuts. Deason said he had urged about two dozen of his wealthy Texas friends to do the same. The billionaire Koch brothers Charles and David also hinted at withholding money.

Just weeks later, the GOP effort to repeal Obamacare collapsed. Tax reform, which one Republican senator said would make repealing Obamacare look like a piece of cake, ominously loomed as the next item on the GOP agenda, and time was running out. Panic set in. By November, as Congress struggled to push a massive tax cut bill forward, Rep. Chris Collins from New York summed up the stakes: “My donors are basically saying: ‘Get it done or don’t ever call me again.’”

Lawmakers got it done. Just days before the holiday break, relieved Republicans delivered those wealthy donors what they wanted: one of the biggest tax cuts in history, one that would almost exclusively benefit the wealthy.

From the looks of it, GOP politicians got what they wanted, too. From the time the tax bill was first introduced on Nov. 2, 2017, until the end of the year, a 60-day period, dozens of billionaires and millionaires dramatically boosted their political contributions unlike they had in past years, giving a total of $31.1 million in that two months, a Center for Public Integrity analysis of data from the Center for Responsive Politics found.

The Center for Public Integrity’s analysis found that 144 wealthy donors, some household names and some behind-the-scenes, contributed at least $50,000 to Republicans and conservative groups in that time frame. For 87 of those, three out of five, the surge of giving at year’s end reflected a marked change in their giving behavior. These well-heeled donors increased the share of their annual giving in the last two months of 2017 compared with previous off-year elections going back to 2009.

Most telling, say campaign finance experts, is that 25 wealthy donors gave all their 2017 money in the final two months of the year, the first time they did so during the previous four off-election years – 2009, 2011, 2013, 2015, according to the Center’s analysis of data collected by the Center for Responsive Politics. The contributions the Center analyzed do not include the hundreds of millions of dollars given to “dark money” groups, which are not required to identify donors.

The evidence shows that big donors, collectively, acted to leverage their clout to help push through the tax cut law that would enrich the kinds of corporations, limited partnerships, real estate holdings and huge investments that many of them own, campaign finance experts say.

For sure, donors give for many reasons, but the timing of the donations, said Tom Ferguson, professor emeritus at the University of Massachusetts in Boston and an expert in money and politics, provides “a solid block of evidence that points to some very grateful people rewarding their champions.”

Grateful people such as Deason, who according to campaign finance records nearly shut down all donations to Republicans until the tax bill looked certain, told the Center in an email that holding off giving “certainly got some legislators’ attention but I think they were probably swayed by their own constituents who were giving them an earful.”

Not all wealthy donors march in lockstep. The Center found some big contributors give all year long, with their largesse ebbing and flowing, and sometimes even between political parties. Thirteen of the late givers to Republican causes also gave a total of $305,000 to Democratic candidates and organizations in the last two months of 2017. But many donors are typically motivated to give at particular moments, campaign finance experts say, and many of these rich donors were motivated to give at the end of 2017, a stretch of time that coincided with a significant political event: the passage of the tax bill that enriched the wealthy – some of the same wealthy donors who Republicans felt were essential to their survival.

Such giving is not unusual, said Thomas Stratmann, a professor at George Mason University who has shown how contributions to lawmakers from PACs are aimed at encouraging them to vote for a bill or to reward them for passing it. “Donors say: If you deliver this legislation, then we will pay and contribute” to your campaigns, he said.

Only eight wealthy donors responded to the Center’s request for an interview. They denied any connection between their giving and the tax law, or declined to either confirm or deny any linkage. The remaining 79 donors whose giving departed from earlier patterns didn’t return the Center’s requests for comment or could not be reached.Among the politicians and PACs that benefited directly or indirectly from this flood of largesse were the Republican National Committee; Team Ryan, run by former House Speaker Paul Ryan, R-Wis.; and the Trump Victory committee, which has ties with the RNC and state Republican committees. Also receiving a large share of the contributions were the Congressional Leadership Fund and Senate Leadership Fund, whose goals are to elect Republicans to Congress.Among the top three PACs receiving the most money was one operated by Restoration Action, a so-called social welfare organization. At one time, Restoration Action listed on its website more than two dozen goals it was pursuing, including reducing “every federal tax by 25%.” Money also went to smaller leadership PACs run by individual lawmakers, such as one managed by Sen. John Cornyn, a Texas Republican and a member of the Finance Committee, which pushed through the tax bill, as well as statewide PACs that support Republican candidates and organizations.None of the organizations the Center reached out to replied to requests for comment.

Famous and not so

The billionaire donors the Center identified as changing their giving pattern represent a Who’s Who of GOP megadonors: Stephen Schwarzman, chief executive of the private equity and property firm Blackstone Group L.P., and his wife Christine; Elliott Broidy, head of investment firm Broidy Capital Management, who was implicated in questionable business dealings and other matters related to Trump and associates (he denies any wrongdoing); and Joseph Craft III, chief executive of the coal mining firm Alliance Resource Partners L.P., a close acquaintance of former EPA administrator Scott Pruitt, and husband of Kathy Knight Craft, the Trump administration’s U.S. ambassador to Canada.

Also giving in late 2017 was Imaad Zuberi, who runs venture capital firm Avenue Ventures LLC and was named in a subpoena served this month by federal prosecutors concerning the financing of Trump’s inauguration. Zuberi, who also has given to Democratic candidates, gave proportionally more in late 2017 than he has in the past, donating $133,900 between the National Republican Congressional Committee and the Trump Victory committee.

The Koch brothers gave heavily in the last two months of 2017, but they donated late in previous years as well. Still, because they had hinted they were holding off until they saw progress on the tax bill, the donations by Charles and Elizabeth Koch of $247,700 each to Team Ryan – all on Nov. 29, 2017 – were noteworthy.

Several big multinational companies that saw their tax rates slashed but had rarely given in the waning months of an off-election year also decided to pony up big money at a time the tax law looked certain. Occidental Petroleum Corp. in Houston, one of the three largest oil producers in Texas, gave $300,000 between the Congressional and Senate leadership funds. RAI Services Co., a subsidiary of cigarette giant Reynolds American Inc., gave $250,000 to the Congressional Leadership Fund. Executives at Occidental and RAI Services did not respond to requests for comment.

Smaller companies also stepped out of their giving pattern. Just one day before Trump signed the tax bill into law, real-estate developer Hillwood Development Co. LLC, founded by H. Ross Perot Jr., son of 1990s presidential candidate and billionaire H. Ross Perot, divvied up $1.5 million between the Congressional Leadership Fund and American Crossroads, which is linked to Senate Majority Leader Mitch McConnell and dedicated to electing Republicans to the Senate. Perot did not respond to requests for comment.

The list also included the not-so-well-known, such as William Austin, chief executive of Starkey Hearing Technologies Inc., the nation’s largest privately held hearing-aid manufacturer. He also upped his donations in late 2017 unlike previous years, writing a check for $75,000 to the RNC in December when the House and Senate were hashing out differences between their two tax bills. Austin and his wife, Tani, give to Democrats as well, donating heavily to Democratic causes in the first part of 2017, including to the Democratic Senatorial Campaign Committee.

Also on the list: Edmund Schweitzer III, founder of Schweitzer Engineering Laboratories in Pullman, Washington, which builds systems that protect power grids, and his wife Beatriz. On Dec. 19, 2017, when the House agreed to the final bill, the couple gave a combined $300,000 to McMorris Rodgers American Dream Project, a joint fundraising committee run by Rep. Cathy McMorris Rodgers, R-Wash., which recruits and funds “candidates who believe in the American Dream,” according to her website. Austin and the Schweitzers didn’t return requests for comment.

Among those super-rich were many who had never – or just once – given in an off-year election at any time going back to 2009 but felt compelled to open their wallets in the last two months of 2017 to collectively lavish Republican PACs and candidates with millions of dollars. Included in that group were Ronald Lauder, heir to the Estée Lauder Companies cosmetic fortune and president of the World Jewish Congress, a nonpartisan group that advocates for Jewish communities in governments and international organizations; Larry Davis, with LNS Capital in Hawaii, whose wife, Nickie Lum Davis, has been linked to Broidy’s business dealings; and Craig Duchossios, chief executive of the Duchossios Group Inc. in Chicago, which owns garage door opener manufacturers and an investment firm. None returned requests for comment.

“Get tax reform passed”

In the first six months of 2017, Texas donor Deason gave $33,800 to Republican candidates. His last donation was made on June 30, just days after vowing, “Get Obamacare repealed and replaced, get tax reform passed. Get it done and we’ll open it back up.”

Deason, president of a firm that manages about $1.5 billion in assets from the family fortune, remained nearly true to his word. Between July 1, 2017, and Nov. 9, 2017, he gave just one time to a political candidate – a $2,700 donation in September to the campaign committee for Rep. Michael Burgess, a Republican representing the congressional district northwest of Deason’s Dallas home.

Doug Deason, here at The Texas Tribune Festival last year, said he resumed donating to GOP campaigns in November 2017 because Republicans “finally stood up and did what they had promised to do.” (Steve Moakley for The Texas Tribune)

By early November, though, the impossible started to look possible. The tax bill was speeding through Congress. On Nov. 9, 2017, a tax bill was introduced in the Senate and later that same day, the House Ways and Means Committee approved its version. Before the House committee voted on its bill, Rep. Joe Crowley, a Democrat from New York, chastised Republican colleagues for the sentiments reflected in those comments by Collins – that GOP donors would stop giving if there were no tax cut bill. (Sen. Lindsey Graham, R-S.C., also gave a similar warning that day.)

“It couldn’t be more clear as to what the motivation is in terms of getting this bill rammed through the House of Representatives before Christmas,” Crowley said. “It is all based on the ‘D word,’ donors. …That is what you are putting together, a backroom deal for your donors.”

The next day, Nov. 10, Deason renewed his giving with a $2,700 donation to Van Taylor, a Texas Tea Party Republican who was victorious a year later in a race to represent another congressional district near Deason’s home. Not stopping there, Deason would commit a total of $41,100 to 12 congressional campaigns and one PAC in the last six weeks of the year, supporting congressional and Senate candidates in Texas and other states such as Michigan and Ohio. (Deason was not included on the Center’s list of large donors because he gave less than $50,000 in November-December 2017.)

Deason’s late-year giving was out of character. Except for one donation he made Nov. 3, 2015, Deason had never before given in the last two months of an off-election year going back to 2007, according to campaign records.

Deason acknowledged in an email to the Center that he began to give again to Republicans in November as the tax bill was moving through Congress “because the Republicans who had run on those two issues finally stood up and did what they had promised to do. [I] believe politicians, whether R or D, should stand up for what they believe in and vote that way or go do something else.”

Deason said his statement that he would stop giving to Republicans until Obamacare was repealed and they passed a tax-cut bill “was misrepresented by mainstream media. All we were saying was that we were not going to support legislators anymore until they did what they promised to do when they were elected.”

“The thing that wealthy people do”

Deason’s willingness to talk about his campaign giving is a rarity. The Center attempted to contact all 87 donors who had changed their giving pattern in 2017. Only eight responded, with seven denying their contributions were linked to the passage of the tax bill and one neither confirming nor denying a connection.

Mike Ricatto, president of Ricatto Enterprises, a real estate leasing and sales company in Kew Gardens, New York, which could stand to benefit from the tax cuts in the new law, said the tax bill had nothing to do with his giving $50,000 to the Trump Victory fund on Nov. 27, 2017 – his first donation ever to a national campaign group, according to the Federal Election Commission database. “I just saw this year that we could get soundly whupped in the mid-terms, so that’s why I gave,” he said.

Not all of the giving was directed strictly to PACs whose primary goal is to reelect congressional Republicans. Michael Porter, who is retired and describes himself as “a simple cowboy,” said his $500,000 contribution in late 2017 to ProjectRedTX, a super PAC that he mainly funds and is devoted to influencing Texas redistricting efforts to favor Republicans, was “not about the tax bill.”

“It’s just all about Texas,” Porter said.

Some of the donations in late 2017 were among the largest these wealthy donors had made for years and at a time they typically don’t make donations. That was the case for Los Angeles real estate developer Geoffrey Palmer, whom Politico Magazine called “Trump’s Los Angeles money man.”

On Nov. 3, 2017, a day after the tax bill was unveiled in the House, Palmer gave $2 million to America First Action, which donates to Republican candidates who back Trump’s agenda and supported House and Senate candidates in the 2018 midterm. Other than a miniscule $1,000 donation in November 2011, Palmer hadn’t given money in the last two months of any year going back to 2009. Only once before had he given a $2 million one-time contribution at any time, according to FEC records.

In an email, Palmer said the timing of his November 2017 donation was “mere coincidence [that] had nothing to do with taxes. Was in furtherance of helping elect congressional candidates.”

The fact that most of the wealthy donors didn’t respond to requests for comment or denied any linkage to the tax bill shouldn’t come as a surprise, said Benjamin Page, a professor at Northwestern University. Respondents to survey questions often don’t know their motives and they don’t reveal them if they do know, said Page, co-author of “Billionaires and Stealth Politics,” in which he and his colleagues found that the ultra-rich rarely, if ever, make public statements about their positions on public policy.

The kind of campaign giving the Center’s analysis found “is of course the crucial thing that wealthy people do in politics, which is give money,” Page said. “They just don’t talk about the fact that they are giving, or what they are giving for, or what policies they favor.”

Making tax cuts pay

The RNC formally used the hope of tax cuts at least twice to encourage donations. In a Sept. 25, 2017, email to supporters, the RNC, under Trump’s name, told donors “it’s time to simplify the tax code” and asked them to take a survey about proposed tax changes. Once submitted, respondents were asked to donate. The RNC sent another email under Trump’s name on Oct. 29, 2017, four days before the tax bill was introduced in the House, reminding donors that, with their help, Republicans have “been able to advance some of the biggest projects you voted for last November, including: tax cuts and once-in-a-lifetime reform” as well as other policies.

Loyal billionaire donors also were holding high-priced fundraising events where tax cuts were mentioned. On Dec. 2, the day the Senate passed its tax bill in the early morning hours, Trump attended three Republican fundraisers in New York City, one a meal held by Blackstone CEO Schwarzman at his New York apartment, according to The Washington Post. At the event, which required at least a $100,000 donation, Trump reportedly touted the tax bill to the ultra-wealthy donors who would receive a windfall from the legislation.

On Dec. 2, 2017, hours after the Senate passed its tax bill, Stephen Schwarzman, chief executive of the private equity firm Blackstone Group, held a high-priced fundraiser at his New York City apartment. President Donald Trump attended and mentioned the tax bill. Five wealthy donors who reportedly attended donated to Republican-backed committees in the last two months, a marked change in their usual off-election-year giving patterns. See who they were.

A little more than a week later, Schwarzman gave $344,400 to the Trump Victory fund, which immediately transferred $101,700 to the RNC. That donation helped bring the percentage Schwarzman gave in late 2017 to more than 50 percent for the year, far more than his proportional giving in the four previous off-election years going back to 2009.  Blackstone spokesman Matt Anderson said Schwarzman’s donation was “absolutely not” related to the 2017 tax bill.

Others attending the fundraiser also stepped out of their late-year giving patterns. Lauder, of the Estée Lauder fortune, gave a few days before the dinner: $100,000 to the Trump Victory fund, $60,700 of which was transferred to the RNC. He had never before given in November or December in the previous four off-election years and gave just once during any of those years, in 2011. In early 2017, Lauder gave a small donation to Democratic Sen. Bob Menendez from New Jersey. Lauder didn’t return requests for comment.

Among other guests who reportedly attended the event and also significantly increased their proportional giving in November-December 2017 were sugar mogul Jose Pepe Fanjul Sr., president of Florida Crystals Corp., and John Hess, chief executive of the oil giant Hess Corp. in New York. Of the four off-election years before 2017, Hess had only surpassed his 2017 late-year proportional giving in one, 2015. Fanjul and Hess didn’t reply to requests for comment.

Also at the fundraiser was Las Vegas casino magnate Stephen Wynn, who was RNC finance chairman at the time of the event but resigned the following month because of sexual harassment allegations. Wynn, who denies the charges, faces three lawsuits in Nevada on the harassment and other related claims. He has sued the gaming commission in Massachusetts where he is trying to obtain a casino license. The allegations caused some recipients to return Wynn’s donations, although the RNC has yet to return any money, saying early last year that it wouldn’t do so until the lawsuits were adjudicated. In November and December 2017, Wynn and his wife Andrea gave more than $455,000 to Republican organizations, including $100,000 to the National Republican Senatorial Committee a few days before the dinner and $375,000 to the RNC about a week before Trump signed the tax law. That represented 79 percent of the Wynn’s total 2017 giving, a proportion that they hadn’t come close to matching in the previous off-election years. The Wynns and the RNC didn’t respond to requests for comment.

Some of the biggest Republican donors just give all year round, including in the latter months of 2017, when they showered the GOP with millions of dollars as the tax bill was moving through Congress on its way to Trump’s desk.

Most notable were Richard and Elizabeth Uihlein, beneficiaries of the Schlitz Brewing Co. beer fortune and founders of the giant office supply and packaging materials company Uline Inc. They gave $4.6 million in late 2017 after giving $12.1 million earlier in the year. And for Charles and Elizabeth Koch, besides giving a collective $495,400 to Team Ryan in November 2017, they gave a combined $474,600 — the maximum possible under law — to the National Republican Congressional Committee in June 2017.

Hushang and Shahla Ansary also were big donors throughout the year. Hushang was chief executive of the Iranian National Oil company and Iran’s ambassador to the United States before the 1979 revolution. They supported both president Bushes. Living in Houston, where he runs a firm that owns companies manufacturing oil and gas equipment, the Ansarys have doled out millions to Republican causes. In late 2017, the Ansarys gave $894,200, most of which was donated to the RNC and the Congressional Leadership Fund the day the House passed its tax bill in November. But the couple also gave almost $842,000 in the first part of the year.

Still, campaign-finance researchers such as Ferguson are convinced that many billionaires and millionaires donate with the strategy of, as he calls it, “buying policy.” And the wealthy are buying public policy more than ever, he added.

“Money has been talking for a long time in American politics, but you are now reaching preposterous levels; what the population needs and wants moves ever further from what the collective of folks with money want,” Ferguson said. “And you’re getting really disastrous situations,” which includes the tax law.

The code and data behind this story’s analysis is publicly available on GitHub.

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