Billionaire Reid Hoffman quietly became a major force in Democratic politics over the last two years, but his groups’ clashes within the party and involvement in controversial campaign tactics are causing some Democrats to question whether partnering with him on a $35 million-plus overhaul of the party’s data infrastructure would be a mistake.
Democratic operatives and groups that have worked with Hoffman say his spending in 2017 and 2018 put him in the league of top party givers such as Tom Steyer and Donald Sussman. But some Democrats told POLITICO they believe the LinkedIn co-founder and his allies — intent on taking risks with his money and breaking with the status quo — failed to properly vet their partners and made avoidable mistakes as they rapidly expanded their political work.
During the 2017 gubernatorial and state legislature races in Virginia, party leaders and a Hoffman-funded group fought bitterly over strategy and access to voter data. By the summer before that year’s November election, they had stopped communicating altogether.
More recently, Hoffman apologized for funding another group in Alabama that used Facebook to spread disinformation aimed at hurting a Republican Senate candidate in 2017 — tactics that in some cases mirrored those used in the last presidential election by Russian operatives.
The dynamic between Democrats and the tech entrepreneur reflects the party’s uneasiness with Silicon Valley, which has grown since Russia used social media to meddle in the 2016 elections and is only set to build as the party navigates the 2020 race to defeat President Donald Trump.
“While there’s something to be said about fighting fire with fire, there’s also concern that some of the tactics he’s funded will propel us on a race to the bottom,” one Democratic operative said. “What does it mean for our democracy as tech titans with ambiguous values expand their dominance of the Democratic Party?”
Hoffman’s defenders told POLITICO his investments through his political fund, Investing in US, were critical to Democratic startups that flourished after Trump’s election. And they say Democrats can’t afford to lose ground — or ignore millions of dollars in funding from Silicon Valley types — by clinging to a status quo that left the party out of power in Washington and statehouses across the country.
“I think some of the pushback, with not just Investing in US but any donor program that’s out there thinking differently, is if they’re choosing people who are not within the long-term spaces of power,” said DeJuana Thompson, founder of Woke Vote, an organizing group that started after the 2016 elections and got funding from Investing in US.
“Reid and his funding have been a common thread in many of the most exciting organizations that have emerged in the last two years,” said Vicky Hausman, co-founder of Forward Majority, a group that focuses on state legislatures and has received funding from Investing in US. “People are outraged with the election of Trump and the state of our democracy more broadly, but few people have put their money where their mouth is like Reid Hoffman has.”
Nonetheless, the controversy surrounding Hoffman is now threatening the data-infrastructure project, which was already caught up in turf battles between the Democratic National Committee and state parties.
Jane Kleeb, chair of the Nebraska Democratic Party, told POLITICO that "state parties will not turn our data over to a corporate guru with reckless electioneering practices.”
Hoffman and Investing in US co-founder Dmitri Mehlhorn declined to comment for this story.
The total amount of Hoffman’s spending in the years since Trump was elected is not publicly available because he has put the bulk of his money into private and nonprofit groups that do not have to reveal their donors.
But within months of the 2016 elections, Hoffman — who had some history of political giving but was not at the time a megadonor — began spreading money to dozens of organizations, according to people familiar with his spending. Many of them were new groups like Woke Vote and Forward Majority; Hoffman has also invested in super PACs such as Senate Majority PAC, the American Civil Liberties Union, and an array of other voter turnout, litigation and data-focused endeavors.
In addition to investing his own money, Hoffman also raises funds from other like-minded donors that are spent through Investing in US.
The 2017 elections in Virginia, which were widely watched across the country as the first major contests after Trump’s election, provided a testing ground for Hoffman’s team as they expanded their political work.
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Hoffman spent in Virginia via organizations he was funding, such as Win the Future, and he teamed up with a coalition of donors operating a PAC called Win Virginia to put money into local races. That group raised $1.3 million and was one of the largest spenders on the House of Delegates races, and Hoffman’s $300,000 contribution made him by far its largest donor, public disclosure records show.
In May and June 2017, Win Virginia met repeatedly with state party operatives to urge them to put more resources into long-shot conservative districts and invest in a massive push online. Hoffman didn’t personally attend meetings, but Mehlhorn took a hands-on role in Virginia, according to people who worked in the state at the time.
But operatives working for the state party — which had already hired consultants and mapped out an electoral strategy — felt their resources would be used more wisely on flipping more moderate parts of the state that Hillary Clinton had won in 2016.
“They were trying things, and we could tell them it’s not going to work. They didn’t want to listen,” one Democrat said of Win Virginia.
Win Virginia wound up following its own strategy, cutting ads, holding trainings and providing technology to candidates that Virginia Democrats had written off.
“Win Virginia was the most helpful organization for my campaign, period,” said Kelly DeLucia, who lost a race for the state House of Delegates in a heavily Republican district. “I give them a lot of credit. I know that they made some waves.”
Democrats in the state were also vexed by Win Virginia’s expenses: The group rented office space from one of its founders, Shashikant Gupta, and paid ex-gubernatorial candidate Tom Perriello an unusually high $24,670-a-month salary, according to public disclosure records.
The relationship reached a breaking point in the summer of 2017, after Win Virginia asked for access to the state party’s voter data, which Democrats denied, citing legal and security concerns. After that, Win Virginia and the state Democrats didn’t communicate for the remainder of the election, despite being two of the largest players in an overwhelmingly successful effort to elect Democrats in the state.
Around the same time that the Hoffman-backed group was battling the Virginia Democrats, other organizations with his funding were launching experiments with new online tactics in Alabama, where Democrat Doug Jones defeated Roy Moore for an open Senate seat.
A Hoffman-funded group, called Project Birmingham, ran political Facebook ads targeting the special Senate election, some of which spread disinformation about the race. One project used a Facebook page that appeared to be run by conservative Alabamians to try to push a write-in candidate and hurt Moore, while another made it appear that Moore was benefiting from Russian bots following him on social media. Hoffman has said he did not know his money was being spent on such advertising and called it “highly disturbing.”
Facebook is investigating an additional Hoffman-funded group, called News for Democracy, that ran ads during the 2018 election, some of which sounded like news companies but did not clearly disclose their funding source.
Now, some Democrats are dubious about his role in the data infrastructure overhaul. POLITICO first reported that he was the primary investor in that $35 million-plus effort.
The DNC had been working on its own data plan, and the party is now trying to combine efforts with Hoffman’s money and team, which includes several former members of the Obama administration.
The state parties, which currently own the rights to the party’s valuable voter file, were already skeptical of the DNC’s data overhaul efforts, which call for them to license out the file to a new for-profit "data trust" that would pool data from progressive groups like Planned Parenthood and labor unions. The structure is similar to the model the Republican Party has adopted in recent years.
Hoffman’s involvement has made state parties more resistant to licensing out their data, people involved in the dispute said.
“Silicon Valley does not have all the answers when it comes to data,” said the Nebraska Democratic Party’s Kleeb. “In fact, given the recent dust-ups with Facebook, I’m more comfortable with our mom-and-pop data practices, which rely on shoe leather, campaign staff and volunteers who care deeply about winning elections.”