Wall Street donors keep wallets closed as 2024 race heats up

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06 December 2023- Big Republican donors warned months ago that the only way to stifle Donald Trump’s comeback bid was to coalesce around one of his rivals.

That never happened.

Many of the donors who fuel presidential ambitions with their checkbooks — Citadel’s Ken Griffin, Blackstone Inc.’s Stephen Schwarzman and Elliott Investment Management’s Paul Singer – have so far stayed on the sidelines.

Now it might be too late. Trump has charted a clear path to the Republican presidential nomination for the third time without a strong party challenger in his way. Less than six weeks before the Iowa caucuses, Trump’s lead in the polls has only grown, and donors are panicked that staying out of the race so long means no one will be able to make up the necessary ground in time to beat the former president.

Major Republican donors have so far given less than $1.5 million to presidential campaigns, according to a Bloomberg analysis of Federal Election Commission records. That’s down from about $5 million in reported giving at the same point in the 2016 cycle.Some of those who have until now kept their wallets closed are starting to express preferences, while others are going as far as direct donations. But it might be too late.

Griffin said he’s interested in Nikki Haley, and JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has encouraged Democrats to join with Republicans to back the former South Carolina governor.

Billionaire Reid Hoffman, who like Dimon has historically backed Democrats, went a step further, giving $250,000 to a super political action committee supporting Haley. She has an opportunity for another strong debate showing Wednesday night when the candidates take the stage in Tuscaloosa, Alabama.

Haley’s Rise

Haley, a former US ambassador to the United Nations, caught Wall Street’s eye after strong performances at the first three primary debates. The Israel-Hamas war and ongoing Russian invasion of Ukraine allowed her to showcase her foreign policy credentials, which led to a rise in the polls that has left her challenging Florida Governor Ron DeSantis for the No. 2 spot in the race behind Trump.

Haley’s standing in the polls has increased more than any other candidate in recent months, according to a Wednesday poll from Monmouth University. Haley has risen to 12% support from 3% in July, but she still lags Trump at 58%, according to the poll.

Haley’s attention and increased popularity hasn’t translated into a fundraising boost from the biggest donors – at least not yet. Major donors still want more assurance that she can actually win, a Trump donor said.

Both Singer and Susquehanna International Group’s Jeff Yass have expressed interest in donating to Haley’s political operation, but neither has yet, according to a person familiar with her fundraising.

Support from Griffin, who has called her a “rock star,” could put Haley on equal financial footing with Trump.

While the Americans for Prosperity network, backed by billionaire Charles Koch, announced in late November it would support Haley, that’s likely to only provide a marginal boost. Haley is trailing Trump by roughly 30 percentage points in the early-voting states.

Singer, who has never been a fan of Trump, has flirted with some of the other candidates in the race. In 2016, he co-hosted a luncheon for former New Jersey Governor Chris Christie. He’s also donated to Haley in the past. Singer regularly speaks with several Republican campaigns, but he hasn’t yet decided if he will donate to any presidential contender, according to a person familiar with his thinking.

Schwarzman favors candidates who embody the “Reagan conservative” ethos, prioritizing geopolitical stability and economic growth, according to a person familiar with his thinking.

Some donors – completely dissatisfied with the options – have opted to sit out the 2024 election entirely. Among them is former Republican mega-donor Peter Thiel, a person familiar with his thinking told Bloomberg. Despite publicly supporting Trump and previously speaking at the Republican National Convention, Thiel now believes the GOP is focused on the wrong issues – namely the culture wars, the person said.

Buyer’s Remorse

Donors are also taking cues from others who jumped into the race and now regret it. Real estate magnate Robert Bigelow gave $20 million to DeSantis’s allied super PAC, but has since expressed dissatisfaction with the Florida governor’s position on abortion and poor showing in the polls and said he may switch allegiances to Trump.

In a party where fidelity to the former president remains high, the donor class doesn’t hold much sway over voters. But a well-funded candidate could use that money to buy advertising, hire staff and finance a campaign that could rival Trump’s reach.

Of the top 10 Republican donors in the 2020 presidential cycle, only two have said they’ll support Trump’s third bid for the White House, according to OpenSecrets.

One of those donors – Home Depot Inc. co-founder Bernie Marcus – said he decided to endorse Trump after it became clear he was the only candidate who could win the GOP nomination.

In an op-ed explaining his reasoning for jumping into the race, he wrote: “I understand the frustration of some of my Republican friends who do not like or are offended by things Donald Trump does and says. I, too, have been frustrated at times, but we cannot let his brash style be the reason we walk away.”

Trump – particularly in contrast to President Joe Biden – has some policy positions that are intriguing to donors. He has pledged to make permanent the tax cuts he signed into law in 2017, many of which are set to expire in two years.

Keeping the tax cuts, though, is likely to be a priority for any Republican in the White House, and, for many donors, the unorthodox trade policies and geopolitical chaos that would likely accompany a second Trump term outweigh any positives.

But it might be too late for donors to turn the tide that’s running in Trump’s direction.

“When you’re 50 points ahead, the donor class is not going to matter,” said Larry Kawa, a Florida bundler who has yet to back a candidate.