The lowdown on joint fundraising committees

Make Me Smart May 9, 2024 Transcript

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Sabri Ben-Achour

I’m getting an implant.

Kimberly Adams 

Oh, no. That’s serious. Hello everyone, I’m Kimberly Adams. Welcome back to Make Me Smart, where we pulled Sabri out of the dentist chair to make today make sense. Kai is out today, so joining me is Marketplace’s Sabri Ben-Achour. I’m sorry about your dental work.

Sabri Ben-Achour 

I didn’t realize we were on the air. Oh my god. Well, it is very good to be back. Thanks everyone for joining us on this Thursday, May 9. Today we are going to listen back to some of the big stories of the week. So, we’ve got some audio clips lined up for that.

Kimberly Adams 

Yes, our first clip is from an interview that I had with Ki Hong, who is a lawyer at the firm Skadden Arps, and I was reporting in the last couple of weeks about how joint political fundraising committees’ work. And these are basically umbrella organizations that allow candidates and party committees and PACs and all other sorts of political entities to pool their fundraising efforts. And so, rather than asking a donor individually for a donation up to whatever the contribution limit is for that type of group, which are different, depending on if you’re a PAC or party committee or candidate campaign or whatever. They get themselves together, and they just ask donors for one massive check, and they set up a formula that then divvies up the money to everybody who’s in that umbrella organization, you know, based on their contribution limits in order of priority or whatever. And Hong, who works on the sort of corporate side, which is often people and organizations who are being asked for these massive checks, told me about sort of the side effect of the growth of these joint political fundraising committees.

Ki Hong

“The more ways there are to raise a significant amount of money, the more money is going to go into the system. That’s just by nature how it works. And so, this is another way of increasing the budget and the cost of elections because you have to keep up with the other party.”

Kimberly Adams 

Right. So, these joint fundraising committees do make it easier for aligned campaigns to raise money more quickly. If you’re a super-rich person or organization that wants to contribute, it means that you only have to write one check instead of 50 or something like that. But it is raising the bar for how much elections cost. Hong told me that during the last federal election cycle, joint fundraising committees were asking donors for checks around that like $600,000. Yes, like from one person sometimes. But now in this cycle, they’re asking for checks of like $800,000 and up. And for some context, if you feel like you’re hearing about this a bit more now than maybe in the past. It’s because in 2014, the Supreme Court overturned what were called aggregate limits. So, there used to be a limit on how much any individual could donate to political campaigns in general. So, you had a cap on what you could donate. But now they’re like, no, you can donate as much as you want to, as long as you follow the contribution limits for each individual group. So, the more organizations you pull under one umbrella, the joint fundraising committee, the bigger the check can be. And so, there’s nothing really to stop, say the Biden campaign, from joining 100 different PACs and the 51 state party committees because yes, they can, DC. And the, you know, Democratic Committee and the Democratic Congressional Campaign Committee, and the convention committee and the Senatorial Committee, and you know, the Attorney General’s committee. Whatever you want. They could put all those under one umbrella and ask for just a massive check.

Sabri Ben-Achour 

Wow. And then they decide how to split it up.

Kimberly Adams 

Yeah, but it has to adhere to the individual contribution limits of each individual campaign. So, say, it was like the Biden Victory Fund, maybe the first four presidential races, I think it’s like $3,300 or something like that. So, that would go there. And then maybe go to the DNC whatever the limit is for the party committees, and then the individual state committees would get their allotment and on down the list according to the priority. And then PACs have their own contribution limits, and they could set sort of who gets what first.

Sabri Ben-Achour 

What is the advantage of doing it that way?

Kimberly Adams 

On the donor side, giving your money to a joint fundraising committee just saves you time, right? It means you write one check instead of 50. And if you are a smaller campaign, and this happens a lot with sort of congressional candidates. If you are in a safe district, say you’re an AOC or something like that, but you’re still raising a ton of money. You can put that money into a joint fundraising committee, and you’re still going to get up to your limit. But then that money can be redistributed to the rest of the party, so that people who are in more competitive races can also get a slice of it. And that’s why you have these sorts of Senate leadership funds and congressional leadership funds aligned with like Steve Scalise or something like that. And that helps people who are in safe districts kind of allocate resources to folks who are in more difficult races. And under the auspices of a joint fundraising committee, you can coordinate, say, fundraising emails or ad campaigns. So, maybe everybody who’s under that joint fundraising committee pays into the pool for a company to come up with ads on a similar message that then get distributed across the whole network. Probably more than you’ve ever wanted to know about driving fundraising.

Sabri Ben-Achour 

No, that’s crazy. It’s like a plumbing system for campaign money, like, you know, swiftly moving things all over the place.

Kimberly Adams 

Yeah, and it’s another way for people who have a lot of money to give more of it in politics. But all of that to say, small dollar donors are still giving more in these federal races than in terms of overall dollar amounts at this point, than the big money donors, at least the money that we can trace.

Sabri Ben-Achour 

Well, that’s good to know that like, you know, like, everyday people still have a voice there.

Kimberly Adams 

And I won’t go as far as all that. Hold on, I want to say something about that. Because I have thoughts. So yes, the overall volume of money from small dollar donors is greater. But if you think about who actually gets to sit in the room and be a part of the conversations and shape the policy, it still is the people who write those big checks. They’re the ones showing up at the fundraising dinners. They’re the ones that get invited to the closed-door meetings because they’re writing the bigger checks. Somebody giving 10 $20 for a campaign is not a part of those conversations.

Sabri Ben-Achour 

Okay. Well, my hopes were briefly lifted. And now, we’re back to being depressed about it again, so thank you.

Kimberly Adams 

You’re welcome.

Sabri Ben-Achour 

Okay, onto the next clip.

Geoffrey Gertz

“Chinese companies may be operating at a loss for very long time but are not necessarily incentivized to exit the market as would otherwise happen. You have this kind of a continual sort of excess reserve, as it were of production. And you’re incentivized to continue producing even if the market is telling you there’s no need for it.”

Sabri Ben-Achour 

So, that was from a conversation I had with Geoffrey Gertz. He’s a senior fellow at the Center for a New American Security. It was for a story I was working on about something the US and Europe have been complaining about with regard to China, which is this thing called overcapacity. And this is the idea that China, you know, subsidizes or pumps up some of its industries so much that entities, businesses that should be going out of business do not. And they just keep making stuff and flooding markets, and undercutting you know, producers all over the world, who, you know, are beholden to, you know, the laws of capitalism. And particularly the US and China or the US and Europe are complaining about this taking place in green technology, like electric vehicles, or batteries. Mostly, it’s about electric vehicles. The problem is overcapacity, making a bunch of stuff in selling your extras abroad, sounds a lot like just being an exporter. You know, like, if you can sell.

Kimberly Adams 

You make the money you need, so you sell it abroad.

Sabri Ben-Achour 

Yeah. Yeah. Like the US makes a ton more soybeans than we need. Do we have soybeans overcapacity that we should be punished for? And this is China’s argument partly as well. You know, they will make that argument and it also says, you know, I know you’re upset that our cars are cheaper and better, but that’s just because they are. There are plenty of examples of Chinese subsidies that have pumped up their industries and given them a major advantage. And there are ongoing advantages that they get, you know, they get credit that a normal business would not. Free land, tax benefits, etc. All that aside. China just did better with electric vehicles, and some of them did not benefit from all these extra perks like BYD. Yeah, so it’s kind of a stretch.

Kimberly Adams 

Where’s the line between a competitive advantage and an unfair advantage? Because I mean, what we’re doing with the CHIPS Act, for example, is giving incentives giving tax credits, giving grants giving billions of dollars in incentives to make chips here, right? And eventually, that could potentially with all that assist lead to an overcapacity. I mean, I think that’s in an ideal world. Like, where do you think you draw the line between incentivizing businesses you want to have in your country, and then exporting the excess versus an unfair advantage and dumping, aka overcapacity?

Sabri Ben-Achour 

Yeah. Well, dumping has a specific definition that involves selling abroad for cheaper than the market price at home, which is even harder.

Kimberly Adams

But that’s the case with these cars, right?

Sabri Ben-Achour

No, cars are not necessarily cheaper abroad than they are at home, I don’t believe.

Kimberly Adams 

Oh, I see. You’re saying cheaper. I understand. Okay, go ahead.

Sabri Ben-Achour 

Yeah. Yeah, that’s a really good question. And the answer is that it can really vary by industry by industry. And it’s very sort of data dependent, data driven, based on the, you know, specific things, the specific perks that are being granted. And that is why this is so tricky. It’s also tricky because China’s system is just so different. You know, the connection and the intermingling between the government and industry is so different on so many levels, whether it’s a fair or unfair thing. It’s kind of comes down to specific either WTO rules in some cases, or you know, specifically the kind of support that’s been given.

Kimberly Adams 

Okay. All right, moving on. Another clip. Let’s go.

Brad Lightcap

“We believe very strongly that there has to be a dialogue and a conversation between companies that train AI models and content owners and publishers. And so, this is, you know, our first step in what I think is the beginning of a dialogue, as to how we think content should be managed, should be, you know, should be allocated, and ultimately kind of used responsibly for everyone’s benefit in the age of AI.”

Kimberly Adams 

One might argue that the first step in the conversation should have been asking to use content first, perhaps. Anyway, that was the COO of OpenAI, Brad Lightcap on CNBC talking about a new content tool that OpenAI is developing. The company says that this tool will allow writers, artists, and other content creators to identify their work to OpenAI and then choose whether or not they’re okay with it being used to train their AI models now that the models are already trained. I’m sorry. I’m trying to keep the sarcasm out of my voice, but they’re just like, oh yeah, we’re just starting this process now that we’ve already scraped all of your content, and it’s the beginning of a conversation now that we have all your stuff. And sure, you can ask us to take it out. It’ll be fine. Trust us. Anyway, this comes after AI companies, including OpenAI have been accused of infringing on intellectual property rights by using works without the creator’s permission to chain AI models like ChatGPT. Very famously, the New York Times and others have sued them. A bunch of content creators have sued them. And there is a way already to sort of indicate on websites that you don’t want your content scraped by these training models. And this is sort of an additional thing that they’re saying that they’re going to allow content creators to do. But at the end of the day, if you’re a content creator, ourselves included, you kind of just have to trust that they’ll take it out and that the system hasn’t already baked in. Like, I remember our colleague Matt Levin was playing around with ChatGPT when it first rolled out and asked it to write a story. Like, to read some of his work, and then write a story about a thing he’d already written about in the style of himself, and it was very similar. I did a bunch of stories on the mermaid industry, right? And I asked ChatGPT to write a radio story in the style of Marketplace about the mermaid industry, and it was disturbing how similar it was.

Sabri Ben-Achour 

Did you give it your interviews to read?

Kimberly Adams 

No, I didn’t. I intentionally did not give it. And remember, the version of ChatGPT that I was using at the time didn’t have my news stories in it, right? It just had old stuff because it was like, you know, it only had up until a certain point. And it framed it as like an interview with a host as opposed to an actual, like reported story, which is what I did, but it’s read like something we would have done. And I was just like, hey, there goes my job.

Sabri Ben-Achour 

Well, like an artist, writer is going to read Shakespeare and modern novels and Tolstoy, you know, I don’t know, read a bunch of books to understand the world of literature, and then they’ll spit something out that is, you know, part them and part a reaction to the world of literature into which in which they exist. And I feel that is kind of what you know, ChatGPT and all the others are doing. They’re familiarizing themselves with the world of one world or another, whether it’s writing or painting or whatever, and then spitting something out inspired by that or were influenced by that. So, on the one hand, that’s kind of how I see what they’re doing. On the other hand, I, as you know, myself, am an artist, dabble in art on the side.

Kimberly Adams 

Dabble, Sabri? You do full-on shows of your ceramics.

Sabri Ben-Achour 

I would be horrified if I saw elements of my stuff in something that ChatGPT whipped up, you know?

Kimberly Adams

Mid journey or something.

Sabri Ben-Achour

Yeah, mid journey.

Kimberly Adams

But you know it’s already in there, right?

Sabri Ben-Achour

Oh, God. Yeah, I know.

Kimberly Adams 

I’m sorry. I’m like crushing your soul right and left today. I’m sorry, Sabri. We gotta move on. We’ve been going on forever anyway.

Sabri Ben-Achour 

Okay, we have one last one, right?

Kimberly Adams

Yeah.

Apple ad

“Come and follow rainbows. The most powerful iPad ever is also the thinnest. All I ever need is you.”

Sabri Ben-Achour

What was that?

Kimberly Adams 

Speaking of soul crushing. That was the iPad ad. Remember, Nancy Marshall-Genzer covered that today. It was a little bit from Apple’s ad for the new iPad Pro that a lot of people are heated about. In the commercial, there’s this big pile of stuff that people use for creative purposes, like instruments, art, supplies, things like that, and it gets crushed dramatically by an industrial product. In the end, it’s being squished into a super thin iPad. And for obvious reasons, as we just discussed, people are already fearful for the future of human creativity and originality. People did not like that ad with folks common in the ad was destructive, soulless, and represented artists’ worst fears having their artistic and cultural value replaced by a piece of technology. And on that note. Because we do not want to be replaced by a piece of soulless technology. We actually need your help, and we are getting ready to start our May fundraiser. And we are human. Sabri and I are real people. We were talking about gardening before. AI cannot garden. Well, it probably can, but not with soul and complaints about pesticides, about pests, and spider mites and all the things that we discuss. Anyway. Because people like you across the country invest in Marketplace and Make Me Smart, we’re able to tell human stories behind the economic trends and with empathy because we are actual people. Stories that have heart and sometimes we hope a bit of humor. And some say that our sense of humor sets us apart, and that’s what we have that the bots don’t have yet. Except for the AI iPad jokes. So, we decided to channel that sense of humor that we do have and make a “Shrinkflation” mini tote bag for this fundraiser because mini tote bags are all the rage. It’s a public media tote bag but smaller. Eight inches by eight inches, about 45% smaller than a standard tote bag. If you’ve seen the sizes of your favorite snacks in the grocery store lately, you will get the joke. Anyway, you can get one if you invest $20 or more in Marketplace today.

Sabri Ben-Achour 

And just for Make Me Smart listeners, we also made a set of three mini pencils, so you can participate in the mini pencil economy. You can make a donation in the amount that’s right for you and pick up a thank you gift that will make you smile. Marketplace.org/givesmart, or you can follow the link in the show notes, but we appreciate it however much you give.

Kimberly Adams 

Yes, please and thank you. Make Me Smart is produced by Courtney Bergsieker. Audio engineering by Juan Carlos Torrado. Ellen Rolfes writes our newsletter. Thalia Menchaca is our intern.

Sabri Ben-Achour 

Marissa Cabrera is our senior producer. Bridget Bodnar is the director of podcasts. And Francesca Levy is the executive director of Digital.

Kimberly Adams 

Nice chunky show today. It’s very long winded.