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FOCUS: Billionaire Peter Thiel Goes All-In to Disrupt America's Democracy
Andrew Gumbel, Guardian UK
Gumbel writes: "Peter Thiel is far from the first billionaire who has wielded his fortune to try to influence the course of American politics."
Re-energized this election cycle, the tech entrepreneur joins other mega-donors apparently out to undercut the political system
Peter Thiel is far from the first billionaire who has wielded his fortune to try to influence the course of American politics. But in an election year when democracy itself is said to be on the ballot, he stands out for assailing a longstanding governing system that he has described as “deranged” and in urgent need of “course correction”.
The German-born investor and tech entrepreneur, a Silicon Valley “disrupter” who helped found PayPal alongside Elon Musk and made his fortune as one of the earliest investors in Facebook, has catapulted himself into the top ranks of the mega-donor class by pouring close to $30m into this year’s midterm elections.
He’s not merely favoring one party over another, but is supporting candidates who deny the legitimacy of Joe Biden’s election as president and have, in their different ways, called for the pillars of the American establishment to be toppled entirely.
Thiel’s priorities this midterm cycle have partly aligned with those of Donald Trump, with whom he has had an on-again, off-again relationship since writing him a $1.25m check during the 2016 presidential campaign.
Thiel, like Trump, has made it his business to end the careers of what he calls “the traitorous 10”, Republican House members who voted to impeach Trump in the wake of the January 6 insurrection. Four of these members opted not to run for re-election at all, and four more, including Liz Cheney, the vice-chair of the House committee investigating January 6, went down in the primaries.
But there are also signs that Thiel is thinking around and beyond the former president. The lion’s share of his largesse – $28m and counting – has been directed towards two business proteges who, with his help, have established themselves as gadfly rightwing darlings: JD Vance, the best-selling author of the blue-collar memoir Hillbilly Elegy, who is running for Senate in Ohio, and Blake Masters, a self-styled “anti-progressive” and anti-globalist who is running for Senate in Arizona.
Over the past decade, ever since the supreme court dramatically loosened the rules of political campaign giving in its Citizens United decision, Thiel has placed sizable bets on candidates who are not only conservative but have sought to challenge longstanding institutional traditions and break the Republican party’s own norms: Senator Ted Cruz in Texas and Senator Josh Hawley in Missouri as well as Trump himself.
Masters, who has campaigned on the notion that “psychopaths are running the country right now” and spoken approvingly of the anti-establishment philosophy of the 1990s Unabomber, and Vance, a frequent speaker on the university circuit during his book tour days who now says “universities are the enemy”, fit the same mould. They and Thiel all have ties to a branch of the New Right known as NatCon, whose adherents believe, broadly, that the establishment needs to be torn down, much as Thiel and his fellow Silicon Valley disrupters believed two decades ago that the future lay in destroying longstanding business models and practices.
Thiel himself opined as far back as 2009 that he no longer believed democracy to be compatible with freedom and expressed “little hope that voting will make things better”. While a member of Trump’s presidential transition team in 2016, he flashed his institution-busting instincts by proposing that a leading climate change skeptic, William Happer, be appointed as White House science adviser. He also pushed for a libertarian bitcoin entrepreneur who did not believe in drug trials to head up the Food and Drug Administration.
Such proposals were too much even by Trump’s iconoclastic standards. Steve Bannon, Trump’s ultra-right campaign manager and political strategist, told a Thiel biographer: “Peter’s idea of disrupting government is out there.”
Thiel did not respond to a request for an interview, and his representatives did not respond to multiple invitations to comment.
Masters and Vance also did not respond to inquiries.
Democracy under attack: the mega-donors
Thiel sat out the 2020 election but appears to have been re-energized by the Covid-19 pandemic, Trump’s claims of a stolen presidential election and the January 6 insurrection. Addressing a NatCon convention this time last year, he denounced the “incredible derangement of various forms of thought, political life, scientific life and the sense-making machinery generally in this country”.
Liberal democracy, in his view, had turned the United States government into a dissent-squashing Ministry of Truth working toward a “homogenizing, brain-dead, one-world state” – a problem to which only rightwing nationalism could provide an “all-important corrective”.
“We’re close to a Toto moment, a little dog pulling aside the curtain on the holy of holies only to find there’s nobody there,” he told the crowd. “We always think of democracy as a good thing. But … where do you shift from the wisdom of crowds to the madness of crowds? When does it become a mob, a racket, a totalitarian lie?”
Such views might be easy to write off as the eccentricities of a wealthy man but for the money that Thiel has spent buying influence and supporting like-minded candidates – thanks in large part to a campaign financing system that, while still capping contributions to individual campaigns, allows unlimited funding of nominally outside groups and political action committees.
Campaign finance experts see Thiel as a symptom of a much broader problem: a political environment in which a small group of mega-donors are growing ever bolder in the size of the checks they write and the erosion of any nominal firewall between the war chests run by candidates and the funds controlled by outside groups dedicated to their success.
“It does seem to be getting worse,” said Chisun Lee, an expert on campaign finance who directs the Brennan Center’s Elections and Government program at New York University. “Outside spending in this federal midterm cycle is more than double the last midterm cycle. Since Citizens United, just 12 mega-donors, eight of them billionaires, have paid one dollar out of every 13 spent in federal elections. And now we’re seeing a troubling new trend … that some mega-donors are sponsoring campaigns that attack the fundamentals of democracy itself.”
Thiel’s spending has been dwarfed this year by at least three other mega-donors – Soros ($128m to the Democrats), shipping products tycoon Richard Uihlein ($53m to Republicans) and hedge fund manager Kenneth Griffin ($50m to Republicans). And Thiel has some way to go to match the consistent giving, cycle after cycle, of the Koch brothers or Sheldon Adelson, the late Las Vegas casino magnate.
Many experts also believe the attack on democracy began long before it became as explicit as Thiel has made it, because the whole point of funneling large amounts of money into the political system is to sway policy away from the will of the majority to the narrow interests of the donors and their friends.
This ability to control the policy agenda drives spending even more than the desire to see specific candidates win, says the Harvard law professor Lawrence Lessig, whose 2011 book Republic, Lost offers an enduringly devastating analysis of the relationship between money and political influence. And the spending is likely only to increase.
“You’re going to see much, much bigger individual contributions and an acceleration of contributions to Super Pacs [like the ones established to support Vance and Masters],” Lessig said. “The candidates and the Super Pacs can’t coordinate on spending, but that doesn’t mean they can’t coordinate on the fundraising. Since the Super Pacs are outspending candidates by orders of magnitude, it’s all a dance to flush money into Super Pacs … They basically call the shots, and politicians can’t get anything through that they oppose.”
Less than a month from election day, both Vance and Masters are trailing their Democratic opponents in the polls (Vance by less than Masters). But, Lessig says, it would be wrong to conclude Thiel – or any of the other mega-donors – are wasting their money.
“If you’re a candidate and you know $10m is going to come in against you on a particular issue,” he said, “you are going to bend to avoid the effect of that money, whether or not it’s going to decide the race … If you’re someone who would otherwise be a strong climate activist, but you know that if you mention a carbon tax, a million dollars will drop from some anti-carbon tax Super Pac, you won’t talk about it.”
Thiel’s bid to overthrow the system, in other words, goes well beyond his ability to determine which party controls the Senate next year. The money will solidify the notion that the country is being run by psychopaths, at least among a hard core of Republican voters, analysts warn, and will further harden the ideological battle lines that have split the country in two and made common ground ever harder to find. It also brings the extreme opinions of NatCon further into the mainstream, making it easier for radical Republican candidates to run and win in future races, they say.
“We are at a crisis point here, not so much because the ideas are hard to defeat but we don’t have a context in which to defeat them,” Lessig said. “The fact that the same number of people believe the election was stolen as believed it on 6 January is a profound indictment of the information ecology in America.”
The Brennan Center believes there are ways of improving the system, at least at the state and local level, and points to efforts in both red and blue states to close certain loopholes and introduce public financing models to rein in the influence of the mega-donors. Lee said she would also like to see federal legislation to build a meaningful firewall between campaign funds and Super Pacs.
“The legislation exists,” she said, “and it would be a constitutional improvement even under [the] Citizens United [ruling]. All we need is the political will to act.”
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