Buttigieg’s Small Donor Surge: Less There Than Meets the Eye?

Bernie Sanders’ success with small donor funding has turned some of the old rules of American politics on their head. Not only is a high proportion of small donor contributions seen as proof of grass root support, it’s now seen as an indicator that a candidate can operate free of obligation to big money backers. The darling of “smart” Democrats, Pete Buttigieg, has filed reports with the FEC that show that over 64% of his contributions thus far are below $200. That percentage is lower than that of Bernie Sanders and Elizabeth Warren. As Lambert pointed out, his small donor haul stand in stark contrast to that of corporate-friendly Kamala Harris, at 37% and Ann Klobuchar, at 35%.

Buttigieg is a corporate wet dream: McKinsey, Rhodes Scholar, military service, and his thin record in South Bend looks awfully accommodating to commerce, with Buttigieg touting displacing 1000 families in the name of prettying up the city as an accomplishment. He’s picked up big Obama bundlers as well as endorsements from former ambassadors, which in the US are patronage positions. Buttigieg looks like he was packaged by Burson Marsteller. So how do you square that with his small donor results?

We queried Thomas Ferguson, Paul Jorgensen, and Jie Chen, who have worked intensively on political contributions, about Buttigeg’s donor data. They responded, recalling that the Obama campaign had encouraged large donors to break up contributions into smaller amounts to support a myth of strong backing from ordinary voters. Even if you give over $200 to a candidate in a year and therefore have your donations reported in your name, those donations are not aggregated. For instance, if you gave $750 in the form of 5 donations of $150 each, they would likely be listed as 5 donations of $150 in your name, and not $750 by you as a donor. As you can imagine, for outsiders to attempt to put together how many unique donors there are is an huge and fraught exercise, even before getting to the fact that donations by the same donor might have variant renderings of their name (John Smith, John Jay Smith, John J. Smith, J.J Smith) even before you get to errors (Jon Smith) and deliberate attempts to muddy the data.

And it is pretty much impossible to track the source of donations laundered through the party. The maximum individual donation to a political party per year is now $200,000. Contributors can earmark portions of their donation to Congressional and Presidential candidates. The FEC does not require the parties to report on donations over $200 to particular candidates laundered through them, nor are the individual campaigns required to obtain and report this information.

As Ferguson discussed in more detail below, Buttigieg’s donations are “barbell” shaped, meaning the total amount is clustered on the small end and large end, with relatively little resulting from mid-sized contributions per donor. The barbell pattern is not unusual, but it is far more typical of Republicans than Democrats.

One possibility is that the small donor percentage will drop over time. For instance, in other parts of the country, current and former mayors running for higher office often pull in a lot of small donations early on from people in or connected to their town, like the cement company in a neighboring state that has contracts. But another possibility is that Buttigieg’s small donor results may not seem to be, particularly given his use of Obama operatives, who used tricks to make it appear that he more little guy backing than he really did. And if that was seen as a worthwhile goal in 2008, the pressure to look man-of-the-people-ish is even more acute now.

Among Democratic candidates, the desire to show their independence from corporate funders has become so widespread that once-powerful interests like Wall Street are feeling neglected. From New York Magazine:

It would appear from the outside to be happy days on Wall Street. Banks smashed previous profit records in 2018, taxes were down, stocks were up, and few people in power in Washington were talking about tightening regulations. But the arrival of Alexandria Ocasio-Cortez was seen on Wall Street as a tremor portending a broader earthquake on the left. Indeed, there has been no greater mobilizer of wealthy centrists than her primary win in June. In July, a few hundred gathered in Columbus, Ohio, to find a policy platform that would defeat both Trump and Sanders….

Meanwhile, parts of the Democratic field were doing the same, with most candidates focused on building Sanders-style small-dollar, email-driven fund-raising machines. (Sanders raised $10 million that way in just his first week as a candidate.) “It’s kind of stunning how a bunch of these people running for president haven’t gotten ahold of [a list of top past contributors] and said, ‘What can I do to get this person?’ ” fumed a hedge-fund honcho out of the loop for the first time in two decades. “It’s sort of basic political IQ.”

“Everyone wants to seem relevant,” one prominent investor told me. But for the first time he or any of his friends could remember, “we’re just not fucking relevant. We’re not that big of a deal anymore. None of us!”….

Those candidates still reaching out to Wall Street have mostly done so underground, visiting the homes and offices of wealthy donors while adamantly demanding secrecy — at least seven candidates privately auditioned for a group of 16 leading Obama donors in D.C. in February.

But Barack Obama successfully cultivated both myths, that his campaign was significantly funded by small donors and that he was a “hope and change” agent who would shake up the system so as to benefit ordinary people. Neither was true. The Obama campaign directed large donors to break up their contributions so as to appear to come from more voters.

And as we know, Obama threw his weight behind the established power structure. He gave the financial services industry a second post-crisis bailout in the form of a “get out of liability almost free” card in the form of the so-called National Mortgage Settlement of 2012. Obamacare legislation was written by a health care lobbyist and Big Pharma and health insurer stocks rose when it was passed. Income and wealth inequality continued to widen under Obama, with black wealth taking a dive due to the Obama Administration’s refusal to pressure mortgage servicers to make mortgage modifications, particularly when many borrowers had only missed a payment or two or would have been viable on a modification that would have lost investors less money than a foreclosure.

By e-mail, Ferguson, Jorgensen, and Chen summarized their findings on Buttigieg:

You asked us about the size distribution Mayor Buttigieg’s presidential campaign fundraising, so we took a look.

My colleagues and I have worked up it up in the table below. We can’t tell you, without a lot more work, exactly who most of these people are. The individual listings do sometimes reference major employers, including a fair number of banks, but we know from experience that many entries for employers are incomplete.

The lesson we take away is that stories about a mountain of small funds propelling the campaign are half-truths. We know, because one of us has seen emails, that candidates are going around asking for  contributions of  even one dollar, so they can build up their list of small donors. When total contributions reach $200, though, the donor’s name is supposed to be reported. That’s untestable at the moment, though we think in time we may be able to check at least some claims. We believe most of the time that injunction is obeyed.

There are some anomalies in the data; some contributions go way over the legal limit. We assume those will eventually be returned or otherwise ironed out of the data. Such things happen in listings.

In the donor distribution below, you can see the other half of the facts that don’t come out in the news accounts. The distribution is really a barbell – bulging at the top and the bottom. These are fairly common, though usually on the Republican side, as our International Journal of Political Economy essay on 2012 discussed.

Note Buttigieg’s recent announcement that he intends to return contributions from lobbyists. Obama made similar pronouncements but did not follow through. See, e.g, https://www.politifact.com/truth-o-meter/statements/2012/jan/04/barack-obama/barack-obamas-campaign-says-they-dont-accept-lobby/ and https://www.commoncause.org/media/sadly-president-obamas-fundraising-from-lobbyists-is-more-of-the-same/

It will be interesting to see whether campaign follows through; news reports claim that major Obama donors are flocking to the campaign.

The campaign’s sanctimonious claim that it does not accept donations from corporate pacs is, of course, just as hollow as similar claims advanced by so many other Democratic candidates. That grand gesture is worthless, as we have explained in detail.

It’s too soon to reach any conclusions about Buttigieg’s backers. But his emulation of Obama and the important role Obama funders and operatives have assumed in his campaign says that the campaign’s claims about its money sources bears close scrutiny.

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61 comments

    1. The Rev Kev

      The US Presidential elections are about 553 days away. If you do not think that anybody that puts their hand up to be President should not be rigorously examined at this stage of the game, what do you think that it will be like by this time next year when things get intense and any remaining candidate come under extreme attack? Now is a good time to sort the wheat from the chaff to see who is worth following and Buttigieg is no exemption.

      Reply
    2. Lambert Strether

      You read the post, right? What’s “speculative” about an academic study from subject matter experts who are, moreover, one of the few (the only?) who are able to untangle this sort of data? That was done on a custom basis for Naked Capitalism?

      Reply
    3. jrs

      I suspect everyone is doing it (getting money hauls in from not so small donors). The solution is to somehow remove money from politics.

      Reply
    4. jrs

      if someone just wanted to get a candidate in the debates wouldn’t they give a small amount, it’s support but of a soft squishy sort if that’s the goal (but hey Gaval, Yang etc. there are people raising money strictly for that purpose). It is number of donors not money raised.

      Reply
    5. voteforno6

      Well, Buttigieg is one of the Best and the Brightest, so perhaps we should be careful about criticizing him.

      Reply
        1. Michael Fiorillo

          Yes, and thank you.

          As a NYC public school teacher I was always cynically amused to see the arrogant, know-nothing colonizers (many/most from Teach For America) seeking to privatize public education, invariably referred to as “The Best and the Brightest,” and with no clue about Halberstam’s intended irony.

          Needless to say, they’ve been as successful as Kennedy and Johnson’s best and brightest were.

          And as successful as Mayor Pete, the McKinsey Candidate, is likely to be…

          Reply
    6. Clive

      I was completely taken in by Obama the first time and, even more disgraceful considering how incredulous I am, wanted to give the benefit of the doubt the second time.

      I can console myself with telling a nice story that distance makes it trickier to get the sorts of details needed to remove the onion-like layers of gift wrapping that were piled onto Obama but that’s not really true because even here in the U.K. we got what was, if I had been paying attention, an even more reductionist folk tale spun which was if anything more transparent than the sophisticated nuancing that was laid on, one assumes, for domestic consumption.

      Buttigieg is being given exactly the same mainstream media storybook for international consumption that Obama was. Little guy, doing stuff that matters on the ground, there for the ordinary people, cultured, possessing of special minority insight and resultant empathetic abilities, nicely liberal on social issues but has his economics “heart” in the “right place”.

      If I can see it from all the way across the Atlantic, I don’t know what glasses you’re wearing. Granted, you’re exposed to a better messaging campaign so it’s easier to be hoodwinked. But if I may make an observation, you guys in the US really need to exercise your cynicism muscles a bit more.

      Reply
      1. JohnnyGL

        “I was completely taken in by Obama the first time and, even more disgraceful considering how incredulous I am, wanted to give the benefit of the doubt the second time.”

        Adolph Reed famously recognized him early, but I don’t think Martin Wolf of the FT got enough credit. I recall picking up my jaw from the floor when Wolf wrote a column in Jan/Feb of 2009 that with the appointment of Larry Summers and Tim Geithner, it was already clear that Obama was going to fail.

        I tried hard not to believe Martin Wolf nailed it….but he was exactly right.

        Reply
      2. Joe Well

        I wasn’t taken in by Obama in 2008, but I did think we was on the whole far better than the Clintons (not on education and a few other things, but on the whole) and needless to say, any possible Republican presidential nominee. I still believe that. Do you think otherwise?

        That is stunning that Buttigieg is getting any coverage at all in UK news outlets.

        Reply
    7. russell1200

      I agree. Why is this a story about Buttigieg?

      It should be a story about gaming the donor pool in general. There is no particular evidence that he is doing this, or that he isn’t.

      It is even noted that as a Mayor, it wouldn’t be unusual for him to get a surge of small donations from his constituents.

      Reply
      1. Clive

        As I learnt at my mother’s knee, “two wrongs don’t make a right”. As the piece states, when it comes to corporate Democrats like Harris and Biden, that kind of hoodwinking is just customary and expected. It goes with their territory and it would be more suprising if they didn’t get up to such tricks. Buttigieg’s dubious little-guy, I’m-one-of-you, act certainly has superficial credibility. Which is all the more reason why it’s worse, for him, than some of the other candidates.

        Often in court sentencing, a judge will look at the nature of the individulal when passing sentence. Rich people who steal or perpetrate frauds, for example, not out of desperation but simply for, say, thrill-seeking, get harsher sentences — and justifiably so — than someone in dire poverty or with a serious illness shoplifting out of necessity.

        Reply
      2. Darius

        Why eliminate agency? No one is responsible? It’s just trends? Those of us burned by Obama are hypersensitive to the similarly shifty signals Buttigieg sends. Why is that remarkable or surprising?

        Reply
        1. jrs

          I do wonder though are Gavel’s donations barbell like, Yangs, etc.? Actually NO other candidates are looked into as far as data as far as I can tell.

          Reply
          1. Darius

            Yang can self fund. If you know of any big money corporate centrists fronting cash for Gravel’s shoestring renegade insurgency and what would be in it for them, please step forward. The point of Gravel’s fundraising isn’t to conceal big donors but to get enough unique individual contributions to make the debate stage.

            Nice try, but most regulars here are already on to Yang. And you’re going to have to try harder to get anyone to waste time being suspicious about Gravel.

            Reply
            1. jrs

              Well I think they are both likely to have a lot of small donors because just like Buttigieg people are giving them money JUST to get them in the debate.

              Buttigieg has a positive impression among almost everyone I talk to (overwhelmingly Democrats), that’s purely anecdotal, but it’s possible it translates into donations.

              All I see is a report focused on one single candidate and leaving out the entire rest of the field.

              Reply
              1. Darius

                No need to worry about Buttigieg. The money people will make sure he meets whatever threshold he needs to. Unlike Biden, Buttigieg is smart so it won’t be a Keystone Kops operation. Pete’s as smooth as Obama.

                Reply
          2. Darius

            This piece focuses on Buttigieg because the corporate centrists appear to have settled on him as as the Stop Bernie ringer. And he’s getting all this manufactured buzz. That should be fairly obvious.

            Reply
      3. NotTimothyGeithner

        It does raise questions, and I’m not sure Joe Scarborough and Rahm Emanuel have their finger on the pulse of smaller donors.

        Reply
      4. lyman alpha blob

        It’s about Buttigieg because he is not well known, and yet is surging in the polls, and has a great deal of establishment backing and encouragement. He is certainly not being ignored by the media as Sanders was last cycle.

        If the establishment supports him, at this point in history it’s fairly safe to assume there’s something fraudulent going on somewhere. That’s just how this country works – charlatans and mountebanks everywhere you look.

        Reply
        1. Andy Raushner

          Ignored???? Pleeeaaasseee. The media loved buttering up Sanders as they disliked Clinton, using him as folly.

          Reply
          1. jrs

            This is based on airtime I believe, of course even Clinton was relatively ignored by that standard as compared to Trump as Trump just dominated the airtime (Russian bots on social media are supposed to be a huge influence on the election, but constant MSM free media for Trump nothing – I mean how crazy is that). But at least Hillary got airtime even if dwarfed by Trump, Bernie got vastly less.

            I haven’t even seen any info on Buttigieg and airtime, or any of the others, Harris, Beto, Warren, Sanders etc.. I suspect Sanders gets some now being a front runner but I don’t know.

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            1. Andy Raushner

              The media considers Butt to be unqualified story of the week. At this stage, you got Biden and Sanders at the top, others like Warren and Beto looking for a hole to squeeze through. It’s so early, guys like Butt will get noise.

              Reply
          2. lyman alpha blob

            Yes he was ignored. He definitely did not get the billions of dollars in free air time and that Trump did which is a fact, not just my opinion.

            I distinctly remember one network declining to show a Sanders speech so they could cut away to an empty podium while they waited for Trump to show up. https://fair.org/home/cable-news-covers-everyones-speech-but-sanders-who-made-the-mistake-of-discussing-policy/

            And when they do mention Sanders, it is quite often in a negative light, to convince the rubes that his policies cost too much.

            Buttigieg is getting precisely the opposite coverage – he has nothing to say, no policies to speak of, just some vague notion that he’s a nice guy who can get both sides to compromise which in DC means forcing rightwing policy down the throats of the left. And yet they can’t stop talking about his candidacy over the last few weeks, as vacuous as it is.

            Reply
          3. Darius

            In 2016, Sanders’ coverage was grudging and full of falsehoods and memes, like the Bernie Bro thing, or the chair throwing. Neither of which was an actual thing but repeated ad nauseum without question by the media.

            Or the AP writing a story the day before California saying Hillary had it sewn up. I don’t see how you can say the media by and large wasn’t massively pro-Hillary throughout 2016.

            This claim is similar to the one that Bernie attacked Hillary savagely when in fact he generally ignored her. The liberals just can’t abide Bernie so they invent stuff to throw at him.

            Reply
          4. Yves Smith Post author

            Are you out of your mind? What about the fake “Bernie Bros,” don’t you understand? Bernie polls better among women than men, yet the media was perfectly happy to amplify that Clintonite smear.

            More generally, the media LOVED Clinton and ignored Sanders, and then when they couldn’t, did their best at minimizing and mischaracterizing his successes.

            Reply
      5. Yves Smith Post author

        It’s because the Buttigieg data doesn’t square with observable facts.

        He’s been courting Dem big money as visibly and if anything more successfully than Harris. His reported data is very much at odds the enthusiasm of big $ backers for him. Many of them were Obama bundlers, and the Obama campaign encouraged big donors to break up their donations so as to look like small donations.

        Reply
    8. sparagmite

      I would be shocked if someone weren’t at least a little skeptical about this candidate. How do you explain all the appearances on mainstream media sources? (Doesn’t it remind one of Trump?) Beware what your saying about yourself when you start commanding people to hide their critical faculties. That type of rhetorical move is as suspicious as a cardboard cut-out candidate.

      Reply
  1. ObjectiveFunction

    [Tries and abjectly fails to suppress shameful peal of sophomoric laughter]

    Centuwion, I will not have my fwiends widiculed by the common soldiewy. I want that man fighting wabid wild animals within a week!

    Reply
    1. The Rev Kev

      Sounds like there are several seditious scribes on NC. I wonder what what Biggus Dickus would have to say about the matter.

      Reply
      1. ObjectiveFunction

        +1. This was meant as a reply to the very first comment… “Mayor Pete’s” last name + words like ‘slamming’ = low hanging fruit for the incurable Rabelaisians* among us….

        EDIT: “low hanging fruit” bwhahahaha [I am soooo ashamed but it proves my point; the SouthPark lines just write themselves about this poor guy….]

        * The NC Thelemic Abbey is the best Thelemic Abbey

        Reply
        1. NotTimothyGeithner

          You don’t even need to make jokes about Buttigieg. Just watch the video of Buttigieg making a pilgrimage out to see Al Sharpton, a man known for his regular appearances on Tucker Carlson’s MSNBC show.

          Buttigieg is trying to replicate the Clinton strategy of building a progressive sounding good ole boys network. Its just what exactly is the Al Sharpton bloc. I believe Team Clinton thinks their celebrity endorsements matter to the electorate, and this is why Neera is so outraged by Susan Sarandon. Neera really believes HRC lost votes because Sarandon didn’t clap loudly enough.

          Reply
          1. Michael Fiorillo

            If Mayor McKinsey’s handlers don’t know that FBI-informant, Roger Stone pal and Civil-Rights-“Leader”-For-Rent Sharpton’s sell-by date has long since passed, maybe he’s not as smart as he’s being portrayed.

            Reply
  2. Jerri-Lynn Scofield

    Given that small donor contributions are cited as suggesting Buttigieg has broad, grassroots support – rather than being yet another corporate lackey put forward for us onto which we may project our deepest political fantasies – I think NC has a responsibility to debunk that rationale.

    Ferguson, Jorgensen, and Chen are the gold standard for doing this sort of thing (if not the only ones). Think how much better we’d now be off if more scrutiny had been directed at the role of bundling in 2008. Then we’d not be in a position of getting fooled again.

    How much longer do we need to get rolled by plays from the same playbook?

    Reply
    1. Jerri-Lynn Scofield

      Sorry, I was sloppy – I said bundling when I meant breaking up larger contributions to support the myth that a candidate has wider grassroots support – e.g., by goosing the small contributions number – than s/he actually has.

      My apologies for my error.

      Reply
          1. Tim

            De-concatenated

            I typed this as a joke, but am disappointed to see the spell checker treats it as a real word.

            Reply
  3. Fern

    For some reason, this excellent investigative TYT piece about Buttigieg’s firing/demotion of South Bend’s popular first black police chief has not gotten the attention it merits. It also seems to have been virtually delisted on Google.

    If you want to get some insight into Buttigieg, it’s a must-read. It involves racist white cops who allegedly wanted to get rid of their popular black police chief, disingenuous and probably downright mendacious reasons the mayor gave for firing/demoting him and the revelation that Buttigieg’s largest donor — $12,000 in one election alone for a small town mayor’s race — had a close relationship with one of the racist white cops in question. In fact, the allegedly racist police officer under question once came with gun, badge and uniform to intimidate contractor involved in a civil dispute with this donor, and was suspended for doing so. This large Buttigieg donor also underwrote a large loan to this white police officer so that he could run for sheriff in a subsequent election.

    It doesn’t look good for Pete. This is a huge scandal by small town mayor standards.

    https://tyt.com/stories/4vZLCHuQrYE4uKagy0oyMA/2bmmTSQD7wsAQXplMP6XVY

    Reply
    1. JohnnyGL

      I saw you posted this yesterday, but didn’t get to comment.

      Yes, this cover up on behalf of the police looks like a much bigger scandal than the gentrification thing. There’s actually quotes from some residents regarding gentrification that say he backed off after hearing a litany of complaints.

      Firing a bunch of whistleblowers and NDA-ing them to silence is a much bigger deal. Looks reminiscent of Obama’s war on whistleblowers.

      It’s worth noting Kamala Harris’s record as AG also involves what looks like scandal clean up activity. I don’t think she went to these lengths, though.

      Reply
  4. sundayafternoon

    I am probably being statistically and politically illiterate here but even if the figure of ‘64% of his contributions thus far are below $200’ is not a fiddle, is it not irrelevant as he could still be pulling most of his actual income from a small group of big donors?

    Reply
  5. Harold

    I can’t remember so much continual, blatant, wall-to-wall lying and misrepresentation on an industrial scale from our media and politicians and their supporters in all my life. It’s like a tsunami. What has happened?

    Reply
    1. shinola

      Good find flora – well worth a read. From the article:

      “In 10 years of reporting about politics, almost every politician has told me their donors do not influence their behavior. If this were true, they would be the only individuals on planet Earth who are not tempted by money.

      What Sanders is arguing is the opposite – if he started doing big-ticket fundraisers with corporate executive and lobbyists, he would be influenced by their money. He is admitting his human flaws, and taking corrective action to make up for them.”

      Reply
      1. Michael Fiorillo

        Thanks for the improved link.

        That’s their dirty secret (even if some hide it from themselves): the Donor Class and McResistance wing of the Party would prefer Trump re-elected President to Bernie getting the nomination.

        They must continue controlling the Party apparatus, no matter what, and Trump is a fundraising gold mine for them.

        Reply
  6. Anonymous Coward

    Here’s something I will guarantee that the MSM does not pick up on, nor will 538. In the CNN poll released today – http://cdn.cnn.com/cnn/2019/images/04/29/rel6a.-.2020.democrats.pdf – not only is Tulsi now polling at 2% but buried deep in the breakouts (p. 36) is a very interesting statistic …

    Among respondents who earn less than $50,000/year, Tulsi polls at 5% of the total, which places her 5th among the candidates, and ahead of Harris (4%) and Buttigieg (3%).

    We’re talking about such small numbers and the differences may not be statistically significant, but thought I would point it out all the same. Looks like a surge to me. :)

    Reply
    1. Michael Fiorillo

      The judgement was paid off for him by political supporters, among whom were Johnny Cochran, Earl Graves and Harlem political fixer Percy Sutton.

      However, he never apologized to Steven Pagones, the Dutchess County ADA he slandered and libeled with kidnapping and rape accusations.

      Typical behavior for Reverend Al, who can’t be bought (but can be rented).

      Reply
  7. cgregory

    Campaign finance regulation based on vendors and donors of goods and services being liable to provide the same or equivalent to all qualified candidates would level the playing field. The concept is called “Vendor-based Oversight.” No matter how much any donor gives or any candidate receives, it doesn’t matter. It levels the playing field almost miraculously.

    Reply

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