Thiel vs. McConnell, Round 2

blake masters
Photo: Brandon Bell/Getty Images
Theodore Schleifer
September 13, 2022

Last Sunday night in Miami, Arizona Senate hopeful Blake Masters dropped by the waterfront mansion of top Republican fundraiser Keith Rabois to deliver a closing pitch to 40 G.O.P. donors. Some enjoyed risotto while trying not to fall into a nearby pool. Others chatted up Tucker Carlson’s videographers, who told attendees they are working on a documentary about the race. Then Masters made his way to the garden to speak. Dressed in a long-sleeve brown t-shirt and grasping a wireless microphone, Masters launched into his usual spiel—tearing down Democratic incumbent Mark Kelly and lamenting that two-parent families can’t get by on a single income anymore—before a donor interjected during the Q&A with a more provocative prompt: Why is the Republican establishment letting him twist in the wind? 

Masters, after all, is in a vise. Mitch McConnell’s political allies believe the current polling shows he “doesn’t have a shot” of defeating Kelly in November, a person familiar with their thinking told me, which is why the the Senate Leadership Fund, McConnell’s super PAC, recently redirected $8 million in planned September ad spending to more winnable races. McConnell’s mandate, after all, is to secure a 51-seat Senate majority for the G.O.P., not to support seemingly longshot Republican candidates.

Nevertheless, Masters was brimming with confidence this weekend, and came prepared with a diplomatic answer. Ronna Romney McDaniel has been great and Rick Scott has been helpful, Masters essentially responded, according to three sources who offered their recollections of the Miami event. Then Masters brought up McConnell. I’m going to do so well over the next few months that the establishment won’t have a choice but to fund me. I don’t necessarily need the money. I could use the money. And ultimately the money will be there.

The money, of course, already was there: Standing just a few feet away from Masters was Rabois’s co-host, and old Stanford Review buddy, Peter Thiel. Just a few moments before, Thiel had introduced Masters with his own well-worn spiel—about how Democrats are the “evil party,” and Republicans are the “stupid party,” but Blake is somehow neither. He took his own shots at Kelly, a retired Navy captain and former astronaut, a profession that Thiel deemed as “basically a fancy version of a monkey” as one source recalled. Helping Blake win Arizona, Thiel argued, would be critical to elevating a new generation of Republican leadership.

Unmentioned, naturally, was the fact that Thiel himself has yet to spend a dollar on Masters in the general election after seeding his primary campaign with some $15 million. Thiel believes that should be the job of McConnell, and feels he is essentially being extorted (the recent leaks won’t help). McConnell, in turn, seems to be withholding funds with the expectation that Thiel will eventually blink—after all, in his view, Thiel created this “problem” by helping buy Masters and J.D. Vance’s nominations in the first place. Why shouldn’t he pick up the rest of the bill?

Neither McConnell nor Thiel have displayed any public sign of backing down since I first reported on their game of chicken two weeks ago. But Masters has been working diligently to bring the brinkmanship between the two to some kind of resolution. While campaign finance laws limit what even a crafty guy like Masters can do when it comes to outside money, I am told that Masters has spent plenty of quality time with both his former boss and his potential future boss over the past few weeks. In addition to the Rabois fundraiser, Masters and Thiel overlapped at NatCon, the marquee New Right conference earlier that day: Masters hosted a V.I.P. reception for several big donors and Thiel gave a keynote speech in which he said the G.O.P. was too “nihilistic” and compared himself to Han Solo and Trump to Obi Wan. Thiel also reportedly took a meeting there with Scott, the chair of the National Republican Senatorial Committee.

Masters also had the opportunity to spend time with McConnell in Washington last week, where the Senate minority leader hosted a fundraiser for him. (A follow-up donor event is in the offing, I am told.) The two had never spoken in person before, but, as Masters told his audience at the Rabois fundraiser, their meeting in D.C. was productive and Masters is now optimistic about McConnell’s future involvement. McConnell, after all, is a thick-skinned pragmatist who wants to retake power, and the latest polls coming out of Arizona look more promising than before for the G.O.P.  “[Masters] is currently being outspent six-to-one or seven-to-one, so it’s not like Peter is going to close that gap independently,” one close Thiel ally told me. “I think there’s a good chance McConnell is going to come in in October. He’s a savvy, rational guy and he’s going to see that the polls are better there than in, say, Pennsylvania.”

In the meantime, Masters is getting some financial cover to hold him steady: I reported in Tara Palmeri’s private email on Thursday that the Masters super PAC, Saving Arizona, recently received $1.5 million from an undisclosed donor who is not Peter Thiel, enabling them and operative Chris Buskirk to put a few more ads on the air. And on Monday, $6 million more in planned independent expenditures arrived, including $1 million from the American Principles Project and a $5 million pro-Masters offensive from a super PAC affiliated with the Heritage Foundation. “You had this public disparaging match between Thiel and McConnell, and when it became clear that they were both going to pause, at least for now, that’s when we saw our opening,” Jessica Anderson, the head of the Heritage super PAC, told me. “We’re Switzerland in all of this.” All told, these recent contributions make up for the S.L.F.’s $8 million aborted Masters ad campaign. On the hard-dollar side, Masters—along with almost the entire rest of the Senate G.O.P. slate—is raising money this week from two of Thiel’s closest friends, Rabois and David Sacks, again in Miami.

All well and good, but Masters is still being heavily outspent by Kelly, and he still needs more money from Thiel, from McConnell, or from both. In the meantime, time is ticking. Over the next few weeks, McConnell’s team will have to decide whether to cancel any of their October reservation. Ann Coulter, who is close with Thiel, offered me an entirely different solution. “Trump should pay for Masters’ ad spending. What on Earth is he doing with that $100 million+?” she wrote. “Unless he wants to be a TOTAL LOSER when all his candidates flame out, what’s he waiting for?”

Obama’s $250K-a-Seat Fundraiser

I wrote earlier this year about the political arrival of Jeff and Dr. Erica Lawson, the Democratic fundraising power couple who are replacing Marc and Lynne Benioff as the liberal, social justice-minded, big-money Silicon Valley heroes from the world of enterprise software. Their ascendance is important to the Democratic Party because the Benioffs have sworn off politics now that they own Time magazine (logic that continues to strike many progressive fundraisers as specious). First, the Lawsons hired a pair of high-powered Democratic operatives: Heather Smith and Nick Salter. Then, they launched a new advocacy organization, Democracy First. Now, we now have another data point of their rise.

The Lawsons are the hosts of Barack Obama for an intimate, high-dollar event benefiting a Democratic National Committee fund on September 29 in San Francisco, I’ve learned. Ticket prices are, predictably, through the roof: from a minimum of $36,500 for a “friend” ticket to a staggering $250,000 for a “host” ticket, a price that turned heads in the Democratic finance community. The only other names on the invite alongside the Lawsons are Ron Conway and Reid Hoffman—another indication of how the husband and wife team are becoming legit Silicon Valley royalty. Suffice it to say, invitations to play host to Obama aren’t handed out willy-nilly—they are a sign of respect and credibility in fundraising circles. The Lawsons are not in the innermost circle of the 44th president, but they did score a sit-down with him a few years back as they donated somewhere between $1 million and $5 million to the Obama Foundation. Now they get the Obama treatment. (Other interesting Democratic events on the agenda in the Bay Area over the next few weeks include two functions for Raphael Warnock featuring Joe Gebbia, Tom Steyer, Jon Ossoff, Conway, and the one and only Willie Brown; and another trip by Pete Buttigieg to Silicon Valley for the D.N.C.) 

It will be interesting to see who else Obama sits down with when he comes out to the Bay. Obama has been spending tons of time in, or thinking about, Silicon Valley over the last few years, staying close with local aides like David Plouffe, Jim Messina and Jason Goldman, who is sort of Obama’s whisperer to the tech community. Obama typically builds in some private meetings—on a recent trip to the Bay, for instance, he slipped into Laurene Powell Jobs’s offices and home in Palo Alto.

Emerson’s New Political Muscle

Speaking of Powell Jobs, our friends at The Information, Jessica Lessin and Nick Wingfield, had an interesting scoop the other day about a new project from L.P.J. focused on fostering “civil online conversations”, led by Emerson Collective C.T.O. Raffi Krikorian and Nick Thompson, the C.E.O. of the Emerson-owned Atlantic. I have a few more details on that project: It is, for now at least, internally called Narwhal. It may have a different name when it goes public.

“Narwhal is a new kind of social discussion platform, designed from the ground up to make conversations better. The plan is to create a digital space where people feel they can come to talk openly, honestly, and empathetically, and where the powers of the Internet are harnessed to create understanding not division,” reads the website for the holding page. “It will be a place where the design, the algorithms, and the business model are all aimed in one direction: sensible, structured, productive conversations. Like a Narwhal, it may sound like something magical – but it’s actually real.” The product, according to a job posting, is being built from “near scratch.” Laurene, more than many other tech moguls, has been thinking deeply about the perils of the Internet—even spending time with Obama on that issue.

But there is another move at the Emerson water cooler that fascinates me and other eagle-eyed observers of the Silicon Valley political scene: Emerson, for the last six to twelve months, has been working with Mike Yang, the political consigliere to Ron Conway, to advise on the company’s political work, I am told by people with knowledge of the arrangement. Referring to Yang as a “hire” is a little bit of a verbal stretch—Yang, the former general counsel at Pinterest, and before that, the second public policy hire at Google, has made his mint and works for Conway for free. But it is a formal arrangement with Ron, and I am told it is a formal arrangement with Emerson, which confirmed the new advisory role to me (but stressed that he isn’t advising Laurene personally). Yang is close with many donors and is as well-connected as they come, but he has told some people that he is working for Emerson about one day a week on political projects, which ain’t nothing. 

Yang got into politics during the Trump era, and has “been trying to get out entirely, but keeps getting pulled back in” in the words of one friend, paraphrasing Michael Corleone’s famous phrase. And yet it should be little surprise that he would make time for Emerson: Laurene and Ron are close friends and have collaborated on many a domestic policy and democracy project. Then again, doing so for Conway is very different than doing so for Laurene and her team: Conway, with his fondness for ALL CAPS emails—not infrequently sent to the wrong person—is a workhorse with a blunt but high-minded and ferociously effective style of getting what he wants; Powell Jobs is of a very different temperament, with greater finesse and polish, broader interests that span art, sports, and entertainment, and much less love of the media spotlight. (She was still very impressive at Code last week as she unveiled a new archive featuring never-before-seen correspondence from Steve Jobs.)

Donor-advisors matter—they execute the plays behind the scenes that make politics happen. L.P.J. is advised by her longtime chief of staff, Stacey Rubin, who went from working in the Clinton administration to advising Jobs for two decades and so, yes, knows a thing or two about politics; but as empowered as she is, Rubin has many other responsibiltiies as the chief of staff at a 150-person organization. Then there is Michael Schrum, a former top Joe Biden aide, Ben Wessel, the political strategist who once served as the top aide to Tom Steyer and now oversees Emerson’s democracy work, and Krikorian, the firm’s C.T.O. and former tech chief at the D.N.C., who chips in with his thoughts on the more technical projects, too.

Powell Jobs has historically shied away from straight-up partisan giving, tending to fund advocacy organizations, movement groups and media companies that might create more holistic, societal change. I wonder how Yang, who is very well-regarded and, as a technologist, often is called upon by the industry to credibly validate or invalidate ideas to the Silicon Valley donor set, will refine that strategy. Will Powell Jobs get more political, or less?