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Washington, D.C. - It's election season, which means over-hyped political conventions, negative TV ads and, of course, money.
And no one can toss it around like America's billionaires. While the U.S.' richest people aren't making quite the news splash they did during the 2004 presidential contest - remember financier George Soros' $26 million effort to put Sen. John Kerry in the White House? - they're still staying plenty involved in politics, whether it's directly through the election, or as part of some broader cause.
Since U.S. law caps individual contributions to candidates for federal office at $2,300, one of the most popular ways for billionaires to flex their political muscle is through donations to advocacy groups like "527" committees. Lightly regulated groups that are named after a section of the U.S. tax code, 527s can sway an election but are not officially associated with a specific candidate.
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According to the Center for Responsive Politics, Soros, Las Vegas Sands Chief Sheldon Adelson and Cincinnati businessman Carl Lindner are among the billionaires who have contributed most to advocacy groups during this election cycle.
Soros has contributed nearly $4.7 million to these organizations, including $3.5 million to the now defunct Fund for America, a group closely aligned with Democrats. Adelson, popular with Republicans, has dropped almost $3.6 million on American Solutions for Winning the Future, a group that's lobbying for domestic oil and natural gas drilling. Lindner has donated at least $660,000 to the same organization.
Of course, there's a more effective way for billionaires to make sure their money is being used for the political issues they support: They simply run for office themselves. It's a risky bet - just ask Ross Perot - but it worked for New York Mayor Michael Bloomberg, whose name was floated last year as a possible presidential nominee after he shook off his Republican yoke and became an Independent.
It remains to be seen whether Bloomberg will have a role in the next presidential administration, but when he leaves City Hall in the Big Apple, another billionaire, supermarket titan John Catsimatidis, is looking to fill his seat.
It's obvious why billionaires take such an active role in political causes: because they can. But they're also among the few people who have the financial resources to make a significant difference in certain issues. For example, earlier this year Blackstone Group co-founder and former commerce secretary Peter G. Peterson committed $1 billion to a new foundation that bears his name.
It has an ambitious agenda: increasing awareness and prompting action on the national debt, entitlement programs, energy, health care, education and nuclear non-proliferation. The foundation is also behind the promotion of a new movie about the national debt, I.O.U.S.A., which premieres later this week.
Another billionaire, oilman T. Boone Pickens, is using the politically charged environment to gin up interest in his own pet cause, renewable energy. He's launched a massive PR campaign for his "Pickens Plan", which aims to make wind power the source of 20% of the nation's electricity within 10 years. Pickens was a major force behind the Swift Boat veterans' successful effort to derail John Kerry's presidential aspirations, but he's not officially supporting either candidate this time around.
Smart move. Pickens supports aspects of both candidates' energy plans - within the last few days he has met with both Republican John McCain and Democrat Barack Obama. Pickens stands to make a pile of money from his plan, and aspects of both candidates' energy proposals could help him achieve this goal.
Aside from the money that billionaires can funnel to a particular cause, there's another benefit: the celebrity factor. In July, Obama very publicly convened a brain trust of top economic minds, including several former treasury secretaries and former Federal Reserve chairman Paul Volcker. But the adviser who stole the media spotlight was the one who contributed to the meeting by phone: Berkshire Hathaway Chairman Warren Buffett.
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