Facebook CEO Mark Zuckerberg wrote checks to Sens. Marco Rubio and Chuck Schumer, as well as House GOP leader John Boehner and Democratic chief Nancy Pelosi. POLITICO PRO Tech's political reality: Big money, little payoff

A poor showing in the midterm elections taught the well-heeled tech moguls at Google, Facebook and Yahoo a lesson about 2016: There’s a limit to what their endless cash can buy.

These companies’ high-profile executives finished the 2014 cycle with a markedly mixed record after throwing their weight behind a high-profile candidate who ultimately lost and funding a super PAC with grandiose, contradictory and unsuccessful ambitions to attack money in politics.


The heightened tech engagement this year offers the latest affirmation that Silicon Valley no longer is apathetic about Washington. But it also serves as a reminder that politics is as much about strategy as it is dollar signs — a crucial lesson for the industry with the next presidential election already looming.

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“We are the folks developing the tools and technologies that are allowing every single campaign in this country to do the sort of data analytics and person-to-person campaigning they are doing,” said Dean Garfield, president and CEO of the Information Technology Industry Council, which represents companies like Apple, Google, Facebook and Microsoft.

“We’re learning a lot each election cycle and improving as we go,” he continued. “So if you judge things by the initial effort, then you may miss the point: We’re innovating and growing and maturing, and it will just continue to improve over time.”

Silicon Valley’s most prominent political action committees raised and spent record sums this cycle. Google donated more than $1.6 million to candidates and political parties during the midterms, while Facebook spent more than $400,000 over the two-year cycle, according to the most recent records filed with the Federal Election Commission. Others, like Twitter and the Internet Association, debuted their campaign operations for the first time this year — with an eye instead on 2016.

And those companies’ bosses spent considerably, too. Google’s Eric Schmidt contributed huge sums to Democratic candidates and groups — including more than $60,000 to support House and Senate Democrats and another $250,000 to Democratic-leaning Senate Majority PAC.

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Meanwhile, Facebook CEO Mark Zuckerberg wrote checks to Sens. Marco Rubio and Chuck Schumer, as well as House GOP leader John Boehner and Democratic chief Nancy Pelosi. Yahoo CEO Marissa Mayer helped host a Democratic fundraiser featuring President Barack Obama, while Salesforce.com CEO Marc Benioff continued donating big bucks to Democratic candidates.

Many tech executives this year also coalesced around Ro Khanna, the fresh-faced Democrat challenging a fellow party member, Rep. Mike Honda, to represent California’s tech-heavy 17th District.

But the support of the Silicon Valley set didn’t translate to a victory on Election Day.

Democratic brass officially backed the congressman, who touted his seniority throughout the race. So did a number of local labor groups and unions. But well-known tech names — including Schmidt, Mayer, Benioff and new Microsoft CEO Satya Nadella — sensed a stronger, more vocal ally in Khanna. His writing on Internet policy and innovation dazzled industry elites.

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The tech industry’s support for Khanna by the end of October had totaled more than $400,000, making it the second biggest source of his campaign funds, according to data compiled by the Center for Responsive Politics. Some of those donations, however, came from outside the 17th District. And others channeled their support into an unofficial super PAC, Californians for Innovation, which ran ads attacking Honda. Its list of backers included Sameer Gandhi, a venture capitalist with Accel Partners, and Benedict Gomes, a vice president for engineering with Google, according to FEC records. Each chipped in $10,000. A final tally of the super PAC’s efforts won’t be available until December.

To strategists familiar with the state’s political terrain, though, tech always faced a tough fight — no matter how much it spent.

“In California, the Democratic Party and labor are still the political forces that matter,” said Jim Ross, a party consultant who didn’t work with either candidate. “The tech industry tends to operate outside of that labor-Democratic power structure.”

But Ross said tech is just warming up.

“We have a congressional delegation that’s all pushing their late 60s and 70s,” he said. “There will be other opportunities in the next two, four, six years for the tech industry to try to refine how they approach this.”

Other tech titans turned their attention nationally, chipping in a broad swath of the roughly $10 million raised by Mayday PAC, an effort by Larry Lessig to expose money in politics and unseat candidates who don’t clamp down on it. Google search leader Matt Cutts, along with his wife, donated $100,000 to the group; Sean Parker, formerly of Facebook, chipped in $500,000; and LinkedIn founder Reid Hoffman spent $150,000 on Mayday PAC this cycle.

But the “super PAC to end all super PACs,” which backed eight candidates, didn’t turn the tide: Only one endorsed candidate, North Carolina GOP Rep. Walter Jones, succeeded on Election Day, and he long had been favored to win. Days later, Lessig declined to be interviewed for this story. Instead, he noted in a statement the election brought a “tough night across the board for supporters of reform, but we’re glad we engaged in this fight.”

Mayday PAC said it learned a valuable lesson.

“We entered the races we did to win, but we obviously recognized with at least some of the races we entered that victory wasn’t likely,” the group wrote in a later memo to supporters. “In the four biggest races we entered, our intervention was a significant tax on our opponent, forcing him to spend significantly to neutralize the effect of our campaign. The threat of that tax will motivate other candidates to avoid the risk of a similar fight.”

In the process, though, Lessig’s effort still sparked a controversy among the Washington tech crowd. After Mayday PAC ran ads against veteran Michigan Rep. Fred Upton — a Republican who leads a key, tech-focused House committee — reports surfaced that a senior aide to the congressman personally called and criticized tech CEOs who funded the super PAC. Those reports proved to be untrue, but they nonetheless set off days of hand-wringing among tech lobbyists on K Street.

Proffering a similar political calculation was FWD.us, which emerged in time for the 2014 midterms and sought to run advertisements backing immigration-minded candidates in television ads. And, like Mayday PAC, it didn’t entirely reshape the electoral landscape.

The group, started by Facebook’s Zuckerberg, opted in October to spend just shy of $1 million through its left-leaning affiliate, the Council for American Job Growth, on TV spots backing Sen. Jeanne Shaheen (D-N.H.), who emerged victorious on Election Day. But the advertisement didn’t even mention immigration — it touted the Democratic lawmaker’s record on veterans issues. Meanwhile, the conservative arm of FWD.us, Americans for a Conservative Direction, ran ads this season for Rubio and Republican Reps. Paul Ryan of Wisconsin, Mike Coffman of Colorado and Renee Ellmers of North Carolina.

For all the group’s work, immigration reform remains a long shot — and Republicans have blasted Obama for even weighing whether to address the issue through a series of presidential actions.

The pols closest to Silicon Valley still know its power and promise. “I received substantial support from the tech sector, and I was reelected with 67 percent of the vote,” said Democratic California Rep. Zoe Lofgren, a top voice for tech policy on Capitol Hill. “To use the screen of just a couple elections to judge the sector’s success would be a mistake.”

But the tech industry’s Washington insiders see plenty of opportunity for growth entering the 2016 cycle.

“I’m hopeful there will be a more well-delineated agenda against which we can evaluate candidates and determine who we’ll support,” Garfield said.

Kate Tummarello contributed to this report.