The $100 Million Plan to Completely Fix Washington

Reid Hoffman
Photo by Phillip Faraone/Getty Images for WIRED25
Theodore Schleifer
October 20, 2021

One afternoon earlier this month, a source sent me a note on Signal asking an unexpected question. They wanted my take on an invitation they had received to meet with a political group that had a name so inscrutable that it sounded like a new moonshot from Google X: The Institute for Political Innovation. Had I heard of it? I cover the world of Silicon Valley fundraising pretty closely, but no, I apparently was not read in on the Peninsula’s latest, greatest innovation. I’d figure it out and get back to him. After all, with a name like that, how lame could this be?

But the group, whose strategy hasn’t been reported, is one of the most ambitious, if quixotic, political attempts to come through Silicon Valley—a Grand Unified Theory to fix everything that is wrong with American politics. With heavyweight co-chairs including Reid Hoffman and members of the Sobrato family, the billionaire real estate dynasty, the Institute has all the right connections as it sets out to raise $100 million over the next year to run ballot initiatives and legislative campaigns in up to a dozen states across the country. Next week, the group will be introduced at a private event to some of Silicon Valley’s biggest donors, who, in the throes of Donald Trump’s takeover of the G.O.P., are grappling with whether they want to invest even more in tackling the fundamental problems in American democracy—or cut and run altogether. 

The group is not based in Silicon Valley, but make no mistake, it is very much of Silicon Valley, with its earnest recitations of Harvard Business School papers, its preachy nonpartisanship and its bedrock belief in the power of incentives. After all, there’s nothing that Silicon Valley’s handymen love more than a design flaw. 

The animating idea of I.P.I. is that the American election system is broken. States and congressional districts over-produce extreme general-election candidates, I.P.I contends, because of flaws within the party primary system, which encourages hopefuls to appeal to their party’s fringes to capture nominations. Instead, these reformers want states to ditch party primaries and allow the five most popular candidates in an open contest to appear on a general-election ballot, and then to use ranked-choice voting to determine which of them has the broadest support.

“What’s the Charlie Munger quote? ‘Show me the incentives and I’ll show you the outcome.’ That resonates with the people who see it as a design issue,” said Sol Lieberman, one of the group’s executive directors. “It also takes the romanticism out of it. It takes it out of this sacrosanct space that you can’t tweak or you can’t fix, which I think a lot of people make the mistake of assuming—that our political system is a static thing that we just have to accept.” The reality, Lieberman argues, is that anything, even American elections, can be optimized. “I think for people who are tinkerers and people who like to rebuild systems, it works. If nothing else, to me that says Silicon Valley.”

The idea is, at first blush, fanciful. Rewriting the entire American election rulebook? It is certainly ambitious, perhaps more ambitious in scale than any other pet political project of the mega-donor set. On second thought, however, Lieberman is right: Individual states—those so-called laboratories of democracy—do change their election rules from time to time. In Alaska this past November, voters signed off on an initiative pushing through a ranked-choice system that is pretty similar to what I.P.I. is hoping other states will pass in the coming years.

That’s why I was somewhat befuddled and disoriented in my attempt to answer my source’s question over the last few days. On the one hand, the idea is sweeping in its goals and carries a whiff of naivete, especially in the post-Trump era, when homilies to being “cross-partisan,” as the group calls itself, can ring a little hollow. Some of the people involved in the effort also struck my network of sources, when I asked about them, as potentially unserious. On the other hand, the initiative does have two of the richest people in the world as its co-chairs, and several sources I respect told me that they found I.P.I. to be credible given the muscle behind it, even if they question whether these reforms are a civic elixir. 

The Institute for Political Innovation launched last year, somewhat modestly, as a think tank to advance the ideals of its founder, Katherine Gehl, a scion and chief executive of a recently-sold Wisconsin dairy conglomerate. Gehl recently authored a book on the topic (democracy reform, not cheese). But I.P.I. has now pivoted to embark on a much more aggressive advocacy campaign, I am told, in which it is seeking to recruit and partner with local officials and business leaders to push through changes in a dozen states over the next “three to ten years.” To support its efforts, I.P.I. is on the hunt for big money: A recent job posting I found for a fundraiser says that it is looking for someone comfortable “securing six and seven-figure donations” to help I.P.I. and potential allied campaigns meet “a goal of approximately $100 million by November 2022.” I.P.I.’s Aaron Menenberg said that goal is an “aspirational number,” and one that the group may not need. But if I.P.I.’s theory of change is correct, then certainly the $100 million would be money well-spent, with an enviable return on investment.

R.O.I. is the supposed north star of every major Silicon Valley political philanthropist, which is why Hoffman’s involvement speaks volumes. Being able to brandish Hoffman’s name as a co-chair is a serious boon for any fledgling political effort. He is, after all, one of the Democratic Party’s top donors and his signature is in constant demand. His support, then, lends immediate credibility to a cause that first struck me as a kooky, never-gonna-happen pipe dream. The LinkedIn founder is contributing his own elbow-grease, too. This past June, Hoffman hosted a Zoom event introducing about 20 people in his network to Gehl, with whom he serves on the New America board, and asked them to support her quest, I am told.

“We have come to believe that changing how we elect people to Congress—i.e. changing the incentives that govern elected officials’ behavior—is key to strengthening our democracy and breaking the partisan gridlock,” Hoffman and his co-host, former Lyft chief strategy officer Raj Kapoor, wrote in their invitation, according to someone who read me the note. “It will enable us to address our most critical challenges, including climate change and disparity.”

That salon event, or rather “an important virtual gathering about the future of politics in our country,” was just the beginning of what appears to be some real big-money momentum behind I.P.I. Now it’s the Sobratos’ turn. Unlike Hoffman, the Sobratos say they had resisted engaging in politics until now—this is their first ever major national advocacy push. They are, after all, as close to old money as the Bay Area gets. The dynasty is one of the rare Silicon Valley clans that didn’t make their fortune from technology—well, not directly at least. Alongside the famed Arillaga family, whose philanthropy and name is plastered all across Stanford University, the Sobratos developed the real estate that was the ground upon which so many iconic tech companies sprung. The Sobratos were, essentially, at the right place at the right time: The family is now worth about $8 billion.

Mum’s the word on how much the group, which is a 501(c)3 and is soon to launch a 501(c)4 advocacy arm, has raised, but I hear that Gehl, who is wealthy after the sale, put some of her own money in. Sobrato told me he had contributed in the high six-figures and was prepared to do much more. Hoffman declined comment, but a source familiar with his donation said he had put about $1 million into the effort. Just as importantly, the Sobratoswho sought out I.P.I. after hearing Gehl on a Mark Hyman podcast—are investing their reputational capital. Next Thursday evening, John M. and Timi Sobrato are bringing folks to their country club, Sharon Heights, on Sand Hill Road across the street from Andreessen Horowitz, to make the pitch in what the group said is its first major in-person event.

“The Sobratos are generously hosting a small group of business leaders and philanthropists for an intimate outside reception,” read the invitation from Lieberman that was flipped to me. “I hope you can join us to learn about our strategy to seed and support politically agnostic ballot initiatives and legislative campaigns to change how elections for Congress work.”

John Sobrato told me that he is “not particularly partisan,” but that he believes an open, ranked-choice system could elect more of the centrist politicians he admires, such as Joe Manchin, Kirsten Synema and Susan Collins. “$100 million, that is a big number, right?” he marveled when we spoke on the phone. “But compared to $14 billion in federal elections—that’s what is so remarkable to me. It is a big number. But if it could improve and create candidates who are less ideological and willing to reach across the aisle so we could actually get something passed in Congress, I just think the leverage on that kind of investment is tremendous.”

So has Silicon Valley actually found the One Weird Trick to fix America? Let’s not pretend that election reforms to promote centrist candidates is a brand-new idea. To begin with, there’s a group called Unite America, co-chaired by centrist Kathryn Murdoch, with some of the same goals; Gehl used to serve on its board before splintering off. Another new arrival in this sandbox is Andrew Yang, who is pushing for electoral reforms as part of his new political party, “Forward.” Lastly, I have learned there is a secretive group called Article Four, launched by a Democratic operative named Seth London, who has helped organize a more tailored, party-aligned effort to bring moderating reforms to states that are prone to electing right-wingers.

Tearing down the stranglehold that the two parties have is, of course, harder than writing a Harvard Business School case study calling for it, which is what Gehl did in 2017 when she tried to apply “industry competitive analysis” to party politics. But that report did eventually bear fruit in Alaska, a win that encouraged I.P.I. to first promote its agenda in Wisconsin. The group is now plotting which other states to place on the target list—be it through a quick ballot initiative, like in Alaska, or by slowly passing a law though the state legislature, as in Wisconsin.

My reporting suggests three challenges on the horizon. The first is that if Gehl et al. aren’t careful, they risk being caricatured as inauthentic outsiders seeking to mess with homegrown election systems. I.P.I. is highly sensitive to that possibility; rather than hiring state directors to run satellite campaigns, they’re very intentionally trying to cultivate the perception that these are organic state movements. To that end, they are also trying to maintain a low profile as a national group.

The second is more structural: State party bosses and other insiders will likely fight these reforms, given that they weaken their power over elections. Even if these reforms are good for democracy, are they good for Democrats? “I can definitely see everyone in Silicon Valley getting behind it. I can definitely see other people getting behind it,” said one person in touch with the group. “You know who is not going to get behind it is party leaders.” Black political leaders also are particularly sensitive to the possibility that such reforms could weaken the position of Black candidates in heavily-Black congressional districts.

The final factor is the most important: Would these reforms actually work? Political scientists—and the data-savvy operative class that reads their work religiously—are very cool to I.P.I.’s proposal. Jack Santucci, a well-regarded academic at Drexel who has followed I.P.I. closely, told me that he and the preponderance of his peers—you know, the actual experts—find the group’s diagnosis of the problem to be a No Labels-inspired fantasy. “It’s not based in political science,” said Santucci, who pushes for proportional representation as his solution. “The broader worry is the flirtation with anti-party stuff. We’re over here in 2021 and the only thing protecting voting rights is the Democratic Party, and the reformers basically want to break that entity up.” 

Gehl has zero political experience, as her critics are quick to note. And so the concern, to these skeptics, is that for all of I.P.I’s money, momentum and alluring message, Gehl’s band of reformers are pining for a centrist country that does not exist. I put that criticism to Sobrato. And he may be in real estate, not high tech, but the billionaire reframed it in the classic Silicon Valley language of experimentation.

“If it’s not achieving the goal, I certainly wouldn’t continue to support it, but I think it’s an interesting test. And I do not see any way it can create harm,” Sobrato told me. “There’s downside, and potentially a lot of upside, which is why I’m intrigued by it. Let’s go see what happens. I don’t think it’s a terrible lab experience that could go horribly awry.”