Original author: Charles Duhigg
Original translation: Block unicorn
From cryptocurrencies to artificial intelligence, the tech industry is pumping millions into super PACs to intimidate politicians into supporting its agenda.
Katie Porter was lying in bed one morning in February, browsing on her computer, when she learned that she was the target of a vast tech-political conspiracy. For the past five years, Porter has represented Orange County, California, in the House of Representatives. She is known—at least to a lesser extent—for her sharp questioning of business moguls at congressional hearings, both on C-span and MSNBC, networks that can influence political choices. She often uses a whiteboard to create visual, easy-to-understand presentations of corporate greed for television viewers. Now she is running in a hotly contested race for the seat vacated by the late California Senator Dianne Feinstein, with the primary election coming up in three weeks.
Block unicorn Note: C-SPAN (Cable-Satellite Public Affairs Network): This is a television network focused on the US government, politics, and public affairs, mainly broadcasting official events such as congressional hearings, speeches, and press conferences.
MSNBC: This is an American cable news network that provides 24-hour news coverage and other timely news. Known for its relatively liberal views, MSNBC focuses more on political, social, and government policy news and analysis.
Porter had seen a text message from a campaign staffer who had just learned that a group called Fairshake was buying up advertising time for a last-minute assault against her candidacy—in fact, it planned to spend about $10 million.
Porter was bewildered. She had raised thirty million dollars for the entire campaign, which had taken years. She told me that the idea that an unknown group had suddenly emerged and spent vast sums of money to attack her struck her as absurd: “I was like, What the hell is Fairshake?”
Porter hurriedly searched on Google and found that Fairshake was a super PAC funded primarily by three tech companies involved in the cryptocurrency industry. In the House of Representatives, Porter is close to Senator Elizabeth Warren, an outspoken advocate of financial regulation, and Porter is also aligned with the progressive wing of the Democratic Party. But Porter has not expressed radical views on cryptocurrency in particular; she is neither for nor against the industry. When she continued to investigate Fairshake, she found that her neutral position did not matter. A website that aligns with Fairshakes political stance called her extremely anti-cryptocurrency, although the evidence provided by the website was actually false. The website claimed that she opposed a pro-cryptocurrency bill when it voted on a House committee: but in fact she was not on the committee and did not participate in the vote at all.
Soon after, Fairshake began running attack ads on television. Without mentioning cryptocurrency or anything tech-related, the ads called Porter a “bully” and a “liar” and falsely implied that she had recently accepted campaign donations from big pharmaceutical and oil companies. The ads did not disclose Fairshake’s ties to Silicon Valley, nor did they mention its support for cryptocurrency or its larger political goals. The negative campaign had a clear effect: Porter initially polled well, but she tanked in the primary, finishing third with just 15% of the vote. However, according to a person familiar with Fairshake, the super PAC’s intentions weren’t just to attack Porter. The group’s supporters didn’t particularly care about Porter. The real goal of the attack campaign, this person said, was to scare other politicians—“If you’re for cryptocurrency, we’ll help you, and if you’re against it, the whole industry will come against you.”
Soon, the super PAC and its two affiliated organizations disclosed in federal filings that they had raised more than $170 million, which could be used in political campaigns across the country in 2024, with more donations likely to come. That’s more than almost every other super PAC, including Preserve America, which supports Donald Trump, and the Super PAC, which aims to help Democrats win back the Senate. Pro-cryptocurrency donors account for nearly half of all corporate donations in the 2024 election cycle, and the tech industry has become one of the largest corporate donors in the country. The purpose of all this money, like the attack on Porter, is to draw attention to the financial power of Silicon Valley—and to prove that its leaders are capable of extreme political means to protect their own interests. “The message is simple: If you’re in favor of cryptocurrency, we’ll help you; if you’re against it, we’ll destroy you,” the person familiar with the matter said.
Porter’s defeat is, in fact, the culmination of a strategy that began more than a decade ago to transform Silicon Valley into the nation’s most powerful political operative. As the tech industry became a dominant global economic force, a group of experts—led in part by the political operative who coined the concept of a vast right-wing conspiracy—taught Silicon Valley how to play the political game. Their goal was to help tech leaders gain as much influence in Washington, D.C., and in state legislatures as Wall Street has. In the decades to come, these efforts are likely to influence everything from presidential races to which party controls Congress, as well as antitrust laws and the regulation of artificial intelligence. Now, the tech industry has quietly become one of the most powerful lobbying forces in American politics, wielding that power to threaten, entice, and reshape the country as corporate special interests have done before.
Chris Lehane was not yet 30 when he coined the concept of a “vast right-wing conspiracy” to explain Republican efforts to undermine Bill and Hillary Clinton. It was an inspired propaganda strategy that Hillary Clinton even made one of her signature statements. At the time, Lehane was a lawyer in the Clinton White House, responsible for defending the administration against allegations of scandal, but he was good at controlling the political discourse and finding colorful ways to put Republicans on the defensive. Strategies like claiming that the US president was the victim of a mysterious conservative cabal were so effective that The New York Times later called Lehane a modern “master of the dark arts of politics.”
For decades to come, these efforts are likely to affect everything from presidential campaigns to control of Congress, antitrust bills, and artificial intelligence regulation. Today, the tech industry has quietly become one of the most powerful lobbying forces in American politics, and is using that power, as corporate special interests did in the past, to intimidate, bribe, and reshape the country to achieve its goals.
After serving in the White House, Chris Lehane joined Al Gore’s presidential campaign as press secretary. After Gore lost the election, he founded his own firm in San Francisco. Despite California’s size and electoral importance, many campaign operators still viewed the state as a political fringe because it was too far from Washington. However, Lehane, who had worked on the 1996 Telecommunications Act, was convinced that Silicon Valley was the future, so he quickly built a firm to provide political services to wealthy Californians.
When trial lawyers wanted to raise the state’s cap on medical malpractice jury verdicts, they turned to Lehane. He helped create fliers that looked like cadaver footmarks and ads that suggested doctors might perform surgery while intoxicated. A few years later, when a prominent environmentalist hired Lehane to oppose the Keystone XL pipeline, he had activists carry samples of sludge from an oil spill to a news conference; the sludge was so toxic that reporters fled. He then hired a Navy SEAL who had helped kill Osama bin Laden to talk to reporters, explaining that if the pipeline was approved, a terrorist attack could cause one of the largest oil spills in U.S. history in Nebraska.
Lehane explained his theory of civil discourse to reporters: Everyone has a game plan until you punch them in the face, so we punch them in the face. This tough political tactic reflects his determination and ability to build political power in Silicon Valley.
But the tech industry was generally unimpressed by Chris Lehane’s efforts. For decades, Silicon Valley companies had seen themselves as mostly disconnected from electoral politics. As one senior tech executive explained to me, until the mid-2000s, “If you were a venture capitalist or a CEO, you might hire a lobbyist to talk or chat with a politician, but other than that, most people in Silicon Valley thought politics was stupid.” Within a decade of Lehane’s move to the West Coast, however, a new kind of tech company began to rise: the so-called sharing economy companies, like Uber, Airbnb, and TaskRabbit. These companies were “disrupting” long-standing industries, including transportation, hospitality, and contract labor. Politicians had long assumed the right to regulate these industries, and as some startups reached billion-dollar valuations, they began to make demands on them. They were infuriated by companies like Uber’s refusal to comply with even modest regulations. Other companies took a more conciliatory approach, but soon found themselves mired in local political battles and municipal bureaucracies. Regardless, another senior tech executive said, “Not understanding politics has become an existential risk, and there’s a general awareness that we have to engage in politics whether we want to or not.”
In 2015, San Francisco became the focus of a major regulatory battle in the form of Proposition F, a ballot measure designed to limit short-term home rentals that both sides acknowledged was an attack on Airbnb. The proposal was born out of pent-up frustration: Some San Franciscans complained that many buildings had effectively become unpermitted hotels, hosting reveling visitors who never turned off their music, didn’t clean up their trash, and — most worryingly for city leaders — didn’t pay taxes the city would have collected from their Marriott stays. Other residents argued that Airbnb’s presence made it harder to find affordable housing because it was more profitable to rent homes to short-term visitors than to long-term tenants. Proposition F would essentially reduce Airbnb’s opportunities to work with many hosts to a few weeks a year, and early polls showed it was popular. Many other cities were considering similar legislation, eagerly watching to see whether lawmakers in San Francisco — where Airbnb was headquartered — could teach them how to limit the internet giant, which was then worth about $25 billion.
Panicked, Airbnb executives immediately called Chris Lehane and asked him to come to headquarters; he arrived within minutes of the call, wearing the sweatpants and baseball shirt he wore to his son’s Little League games. Lehane was a lanky man used to intense exercise—he ran every day, often fifteen miles at a time, while firing off oddly punctuated emails and fluent voicemails. His front teeth were slightly crooked, which made his receding hairline seem less pronounced. For an Airbnb leader, he didn’t look like an unlikely political expert. But once Lehane regained his breath, he launched into an impassioned speech. You’re looking at this situation the wrong way, he said. Proposition F wasn’t a crisis—it was an opportunity to change the political landscape of San Francisco and upend the narrative. The key, he told the executives, was to build a campaign against Proposition F that was as sophisticated as Barack Obama’s recent presidential campaign and to devote huge sums of money to warning politicians that “Airbnb voters” existed—and shouldn’t be ignored. He laid out a three-pronged strategy, explaining to executives that politicians care most about getting re-elected. If companies could show that opposing Airbnb would make it harder for them to stay in office, they would comply, and Lehane was soon named Airbnb’s head of global policy and public affairs.
His first move was to mobilize Airbnb’s natural advocates: the hosts who profited from renting out their properties, and the tourists who avoided expensive hotel rooms by using the service. By the end of 2015, more than 130,000 people were renting or offering rooms in San Francisco. Lehane recruited several former Obama campaign staffers to lead a team that made tens of thousands of calls warning Airbnb hosts and guests about Proposition F. Team members also urged hosts to attend town hall meetings, talk to neighbors, and contact local officials. During this time, the company (allegedly by accident) sent an email to everyone who had stayed at an Airbnb in California, urging them to contact the California Legislature. The legislature was flooded with messages from around the world. The Senate President Pro Tempore called Lehane to tell him the messages had been received and to ask him to stop the attack. “If I had known Airbnb had this much influence, I would have done it,” one person involved in the campaign told me (this statement implicitly threatens candidates to reject Measure F or call on Airbnb beneficiaries not to vote for them, because the bill would affect Airbnb and hosts’ revenues, increase hosts and Airbnb’s operating costs, and also mean higher accommodation costs for guests).
The second part of Chris Lehane’s strategy was to use vast sums of money to put pressure on San Francisco’s politicians. The company hired hundreds of campaigners to knock on the doors of 285,000 people—roughly a third of the city’s population—urging them to contact their local elected officials and argue that opposing Airbnb amounted to an attack on innovation, economic independence, and American ideals. The relentless campaign posed an explicit threat to the city’s Board of Supervisors: If one official supported Proposition F, Airbnb might encourage others to run against him. “We put the dark side out in the open,” one campaign worker said. “The goal was to intimidate, to let everyone know that if they went against us, they would regret it.” Overall, Airbnb spent eight million dollars on the campaign, about ten times more than all the backers of Proposition F combined. “It was the most ridiculous campaign I’ve ever been involved in,” the worker told me. “It was all so over the top and so extreme. You shouldn’t spend that much money on a municipal election.” Still, the worker enjoyed his job at Airbnb: “It was the most money I’ve ever made working in politics.”
The third prong of Lehane’s strategy was to subvert the debate over Proposition F by proposing alternative solutions. Otherwise, Lehane and Airbnb CEO Brian Chesky believed the company would face similar proposals in other cities. “You can’t just be against everything, you have to be for something,” Lehane told Airbnb’s board. As a compromise, Airbnb voluntarily began paying taxes on short-term accommodations within the city. It also provided some internal company data, such as the number of guests visiting the city each month, to help local officials monitor the service’s impact on the community. In addition, Airbnb eventually offered to build a web interface for San Francisco officials to register hosts and track rental patterns. The solution was somewhat self-serving, as it made the city dependent on Airbnb for monitoring its activity. But the proposals addressed many of the complaints that had prompted Proposition F. More importantly, they secured tens of millions of dollars in tax revenue for San Francisco each year. When Proposition F finally came to a vote, it was overwhelmingly defeated.
Airbnb’s strategy in the political conflict stands in stark contrast to that of Uber, which had just become the world’s most valuable startup and was immediately attacked by cities and countries for its resistance to various taxi regulations. Airbnb’s tactics are designed to appeal to politicians’ lofty ideals. After the Proposition F campaign, Chris Lehane began working with the Service Employees International Union (SEIU), one of the largest unions in the country, to unionize workers who clean Airbnb rentals. While the plan ultimately failed, pro-union politicians in San Francisco and New York began to see Airbnb as a potential ally.
To other political manipulators, Lehane’s tactics might not seem novel. But in Silicon Valley, the approach is a revelation. “It turns out that the ROI in politics is much higher than people expected, with relatively small investments and huge returns,” one tech executive told me.
Block unicorn note: The success of this strategy shows the growing involvement of technology companies in political activities, especially in areas that face regulatory challenges. Airbnb has effectively transformed its relationship with politics and made itself an influential political force by establishing partnerships, enhancing its public image, and using the power of money to show its toughness.
After Measure F was defeated, San Francisco’s Board of Supervisors eventually agreed to many of Airbnb’s proposals. By then, Lehane had moved on to other places, running similar Airbnb campaigns in dozens of cities, including Barcelona, Berlin, New York, and Mexico City. When the 2016 U.S. Conference of Mayors convened in Washington, D.C., Lehane was invited to speak after Michelle Obama. “Listen to me, we want to pay taxes,” he told the attendees. Airbnb soon had deals with more than a hundred cities, and when local politicians were recalcitrant—Austin’s leaders seemed unresponsive to Airbnb’s proposals, for example—the company simply bypassed them. In Texas, it persuaded the state legislature to make it difficult for any municipality to ban short-term rentals. Today, Airbnb has agreements with thousands of cities.
A few years after Lehane joined Airbnb, a venture capitalist pulled him aside at a party and said, “It used to be that hiring the right CFO was the most important thing to get a company public. But you’ve shown that politicians are just as important.” Lehane, however, had a bigger insight. These events revealed that tech companies—particularly platforms like Airbnb that connect people who might otherwise face hardship—may now be the most powerful group in politics. “Once upon a time, organizations like unions or political parties could organize and really mobilize large numbers of voters,” Lehane told me. “Today, internet platforms have much more influence; tech companies can reach hundreds of millions of people at the click of a button.” “If Airbnb can attract 15,000 hosts in a city, that could make the difference in a city council election or a mayoral election,” Lehane said. “Fifty thousand votes could make the difference in a congressional or senate election.” Of course, simply having a large user base doesn’t guarantee that Airbnb will get everything it wants. Voters respond only to inducements they find persuasive. But Lehane understands that companies like Airbnb can make arguments faster and more effectively than almost any political party or other interest group, and that this is a considerable source of power. “Right now, the platforms are really the only entities that can talk to everyone,” Lehane said.
The tech industry has endured a tumultuous period during the Trump administration, with the president attacking tech platforms for bias against conservatives, while liberals slammed Silicon Valley social media companies for helping propel Trump into the White House. Tech executives have publicly supported immigrants in the industry in response to Trump’s Muslim ban and border separation policies, while also facing protests and walkouts from employees over racial injustice, sexual harassment, and gender-neutral bathrooms — issues they weren’t trained to handle in engineering or business school.
When Joe Biden won the presidential election in 2020, Silicon Valley leaders breathed a sigh of relief. The Biden administration seemed like a return to the days of “Pax Obama,” when technology was considered fashionable and politicians proudly claimed close ties to Mark Zuckerberg. Biden’s victory also meant that Chris Lehane, a man with deep Democratic roots, was undoubtedly Silicon Valley’s top political consultant. Many companies sought his help, and employees liked that he was generous with his kudos and made politics fun, and former colleagues often proudly talked about the nicknames he gave them. Most importantly, he made those who worked with him feel that they were working for a just cause.
Silicon Valley’s enthusiasm for Biden quickly faded, however. Biden quickly appointed three prominent tech skeptics—Gary Gensler, Lina Khan, and Jonathan Kanter—to run the Securities and Exchange Commission, the Federal Trade Commission, and the Justice Department’s antitrust division, respectively. The government soon filed lawsuits or launched investigations into companies such as Google, Apple, Amazon, Meta, and Tesla. Although some of the lawsuits and investigations were launched during the Trump administration, Biden’s SEC has focused specifically on the cryptocurrency industry. Gensler, who is close to Elizabeth Warren, has filed more than 80 legal actions alleging that crypto companies or promoters have violated the law, often by selling unregistered securities.
Many of the executives indicted by the SEC have generously supported Democrats. Brad Garlinghouse, CEO of cryptocurrency company Ripple, who once raised money for Obama, feels persecuted. He told Bloomberg that the federal government is acting like a bully and tweeted: Democrats continue to support Genslers illegal war on crypto - destroying Americas ability to innovate. No wonder Republicans have announced their support for crypto... Voters are watching.
All this shows the importance and influence of Silicon Valley in the political struggle. As technology companies become more and more important in the political arena, the role of political consultants has become more important.
To some, the government’s approach seemed unusually aggressive. One cryptocurrency executive told me that she found her bank account frozen without explanation when she tried to withdraw money to repair a serious septic tank failure at her home. At the same time, regulators were warning banks about the risks posed by the cryptocurrency industry. When the executive’s account was later unfrozen, again with no clear explanation, she began to wonder if the government’s goal was to intimidate the industry. (The Office of the Comptroller of the Currency, which oversees national banks, says it does not instruct banks to freeze individual accounts.)
Yet the Biden administration’s oppositional stance seemed justified in 2022, when FTX, a massive cryptocurrency exchange and hedge fund led by Sam Bankman-Fried, collapsed after it was revealed that more than $8 billion in funds had been misallocated or lost. Bankman-Fried was once an active political donor, and violating campaign finance laws was one of the charges he was arrested for. Another cryptocurrency executive said that after the FTX scandal, many in the industry “just want to lie low,” adding: “The less people notice us, the better.”
But for Silicon Valley’s wealthiest class, retreating wasn’t an option. Powerful venture capital firm Andreessen Horowitz has raised more than $7 billion for cryptocurrency and blockchain investments. “Super angel” investor Ron Conway has poured millions into crypto companies through his venture capital fund. Lehane urged some of the biggest crypto investors and companies, many of whom were squabbling on Twitter, to instead form an alliance to change the public narrative. He began hosting private, biweekly gatherings, called the “Ad-Hoc Group,” to discuss various collaborations. Eventually, a former Andreessen Horowitz partner, Katie Haun, suggested that big crypto company Coinbase bring on Lehane as an advisor on its board.
Lehane met with Coinbase co-founder Brian Armstrong and told him that, just as at Airbnb, the crisis was actually an opportunity. “This is not the time to be silent,” Lehane told him. “This is an opportunity to define your company and the industry, to prove that you are different from FTX.” In 2023, Lehane joined Coinbase’s global advisory board. Twenty-five days later, the SEC filed a lawsuit against the company.
Lehane built a strategy group whose main goal was to convince politicians that the political consequences of opposing cryptocurrency would be extremely painful. “It wasn’t really about explaining how cryptocurrency worked, or anything like that,” one Fairshake insider (who was then an employee at Coinbase) told Coinbase. “It was about putting pressure on politicians where they were most sensitive — reelection.” Armstrong further clarified this goal at a crypto conference in 2023. The goal, he said, was to ask candidates, “Are you for us, or are you against us? Are we going to advertise for you, or against you?”
While Lehane’s basic strategy was similar to the one he’d used at Airbnb, that campaign focused on local issues and local elections. The cryptocurrency effort was national, targeting Senate and House races—and possibly even the presidential race—and would require far more money. Lehane suggested that Armstrong set aside $50 million for outreach. “How about $100 million,” Armstrong responded. Coinbase, Ripple, and Andreessen Horowitz (founder of A16z) have contributed more than $140 million to the crypto super PAC Fairshake, and executives from other companies have contributed millions more.
Lehane worked closely with Fairshake to begin building a pro-cryptocurrency message and help build a “grassroots” army. He told the Coinbase team: “We need to prove there are crypto voters, there are millions of people in the United States who own this stuff, and we need to prove they will vote to protect it.”
The Federal Reserve says that in 2023, fewer than 20 million Americans will own cryptocurrency. Polls show that the issue is not a priority for many voters. A Coinbase employee pointed out this discrepancy to Lehane, saying, “I don’t know if there is a crypto voter.”
Lehane responded: “Then we’ll make one.”
Coinbase began touting the results of surveys that claimed 52 million Americans owned cryptocurrency and that many intended to vote to protect their digital wallets. Those surveys showed that 60 percent of cryptocurrency owners were millennials or Generation Z, and 41 percent were people of color—groups that the parties were trying to win over. Lehane also quietly helped launch an advocacy group, Stand with Crypto, which advertises every time Coinbase’s millions of American customers log in, encouraging cryptocurrency owners to contact their lawmakers and sign petitions. The group says it now has more than a million members. A Coinbase employee told me that Stand with Crypto identifies cities like Columbus, Ohio, that have large numbers of cryptocurrency enthusiasts, and then sends them a flood of push notifications aimed at organizing town hall meetings and rallies. “If you can get fifty or sixty people to show up, with good camera angles you can make it look like a few hundred people,” the employee explained. “In a small state or a close election, that can be enough to scare a candidate.”
This so-called army of crypto voters connects directly to the next phase of the attack: intimidating politicians. Walk with Crypto has set up an online dashboard that grades the cryptocurrency support of U.S. senators and representatives, as well as many of their challengers. The scores always seem to be “A (strongly pro-crypto)” or “F (strongly against crypto),” although the data behind the scores is sometimes inaccurate. “Most people don’t really have a clear position,” another Coinbase employee told me. “So we look at the speeches they’ve given, or who they’re friends with, and then make some guesses. If you’re friends with Elizabeth Warren, you’re more likely to get an F.”
Still, Lehane insists that Fairshake remain nonpartisan. The super PAC is careful to support an equal number of Democratic and Republican candidates and, at Lehane’s suggestion, plans to stay out of the 2024 presidential race altogether. One venture capitalist who has advised the crypto industry told me that the group’s nonpartisanship is crucial because “if we want to get regulations right, we have to get it through Congress, and that means we need bipartisan votes.” Moreover, Fairshake aims to “create a nonpartisan cost for being negative about crypto and tech,” the venture capitalist added. “People need to know there are consequences for doing this.”
To underscore the point, Lehane and Fairshake wanted to find a race where the group’s spending would be sure to attract national attention. Fairshake put together a list of high-profile races, with the California race to replace Dianne Feinstein near the top. The obvious target was Katie Porter, whose strongest opponent in the Democratic primary was Rep. Adam Schiff. California is a reliably blue state, so if Fairshake helped defeat Porter, the group wouldn’t be accused of handing a seat to a Republican. Plus, California’s primary is March 5—early in the campaign season, meaning Porter’s campaign would draw a lot of attention, and Fairshake would have time to promote its involvement and strike fear into candidates in other states. Because Porter is friendly with Elizabeth Warren, she could be portrayed as anti-crypto, though whether that’s fair remains questionable. What’s more, many polls showed Porter unlikely to win the primary, so if the super PAC “poured huge amounts of money, created a sensation, and she lost, Fairshake could celebrate victory anyway,” said one Coinbase employee. The calculation was forward-looking: Fairshake’s spending helped Porter lose the primary, while the general election looked like it would be won by Schiff (who gets an A on “Being Crypto”). Another political operator said: “If you criticize us even a little bit, we’re not just going to kill you—we’re going to kill your family, we’re going to end your career. From a political perspective, it’s a perfect game, and Porter will be out of government at the end of the year.”
After Katie Porter was defeated, many politicians who had been dismissive or hostile to cryptocurrency suddenly became supporters. In May 2023, two months after Porter was eliminated, a bill supporting cryptocurrency was voted on in the House of Representatives. Similar bills in the past have stalled due to lukewarm Republican support and Democratic opposition. The new bill—the 21st Century Financial Innovation and Technology Act—was openly opposed by President Biden, but easily passed the House with almost unanimous Republican support and 71 Democratic votes in favor. Senate Majority Leader Chuck Schumer recently participated in a virtual town hall with Crypto 4 Harris, promising that passing legislation this year is “absolutely possible,” adding that “cryptocurrency is here to stay.” Democratic Senator Sherrod Brown, a longtime cryptocurrency critic, is running for reelection in Ohio, and Fairshake has invested $40 million in his opponent’s ads; Brown has recently softened his criticism of the industry in public. Earlier this year, cryptocurrency donors signaled they might get involved in Montana’s Senate race, where incumbent Democrat Jon Tester, a former cryptocurrency skeptic, faces a fierce reelection challenge. Shortly after, Tester voted in favor of weakening SEC regulation of cryptocurrencies, earning a “C” rating. As long as Tester keeps voting right, it looks like Fairshake will stay out of the Montana race. A similar situation occurred in Maryland, where both leading candidates declared their support for cryptocurrencies after a super PAC threatened to take a stand in the state’s Democratic Senate primary.
In total, Fairshake and its associated super PACs have spent more than $100 million on 2024 political campaigns, including $43 million on Senate races in Ohio and West Virginia and $7 million on four congressional races in North Carolina, Colorado, Alaska and Iowa. $3.5 million was used to defeat two left-wing representatives, members of the so-called Squad: Jamaal Bowman in New York and Cori Bush in Missouri. In the 42 primaries in which Fairshake participated, the candidates it supported won 85% of them. The latest filings show that the super PAC has more than $70 million to spend for the rest of the election cycle. Its donations to political candidates are comparable to those of the oil and gas industry, the pharmaceutical industry and labor unions.
Just as Airbnb has tried to change the conversation around Proposition F by offering various concessions, such as paying taxes and sharing data, the cryptocurrency industry has also become a seemingly solution-oriented advocate: creating new regulations for cryptocurrencies and blockchains. Critics, however, have pointed out that these proposals are self-serving. A major debate between the cryptocurrency industry and regulators is whether cryptocurrencies are securities — similar to Apple shares, whose sales are regulated by strict investor protection laws — or commodities, such as a whole bunch of corn, which can be sold with little government intervention. Most fiat currencies — that is, currencies issued by governments — are primarily used to buy food and clothing, rather than to gamble on the rise and fall of exchange rates. In contrast, cryptocurrencies are often difficult — and in some cases impossible — to use to buy physical goods, and are often held by speculators simply as a bet that their value will rise. There are currently thousands of cryptocurrencies, some of which — notably Bitcoin and Ether — are considered commodities, and the status of most of the rest is still under debate.
Within the cryptocurrency industry, many hope that Congress will pass regulations that would treat mainstream cryptocurrencies as commodities, which are regulated by the Commodity Futures Trading Commission (CFTC). The CFTC is a relatively cool agency that most people are unfamiliar with and is generally more moderate than the Securities and Exchange Commission (SEC). If the CFTC becomes the primary regulator of cryptocurrencies, lawsuits and fines against large crypto companies may decrease or cease. Whats more, selling Dogecoin (a cryptocurrency associated with Shiba Inu), Dentcoin (a unique cryptocurrency created by dentists for dentists), or CumRocket (a cryptocurrency for porn lovers) will become significantly less risky and more profitable.
However, some in the government believe this would be disastrous. To be frank, a lot of these tokens have no real utility, no real use, and are just used for gambling or defrauding people, said one official familiar with the SECs thinking. We have established regulations that have been protecting investors in situations like this for decades. Cryptocurrencies just want to not follow those regulations. If your whole business plan is to ask can we get Kim Kardashian to tweet for us? And then take peoples money, the government needs to get involved.
Indeed, proving to average Americans that the cryptocurrency industry is a healthy, customer-centric place is difficult: Polls show that most people don’t view the crypto industry as safe. So Lehane and his industry colleagues have shifted strategy slightly. Pushing Congress to pass friendly legislation remains a priority, but the push is now presented as serving a loftier goal: protecting innovation, entrepreneurship, and America’s future.
In July 2023, Marc Andreessen and Ben Horowitz of Andreessen Horowitz released a 91-minute video accusing President Biden of weakening the United States. The attack on a new industry is so brutal that I have never experienced it before, Andreessen told Horowitz. I am completely shocked that this is happening. Horowitz responded: They basically subverted the rule of law to attack the crypto industry. They said that these government actions threatened the United States economy, technological advantages and military power. Bidens refusal to accept various technology industry proposals gave China an opportunity to catch up. The future of technology and the future of the United States are at stake, Horowitz declared. The two men said they were so worried that they had no choice but to support Donald Trump in 2024. They also mentioned that billionaires like them might have to pay more taxes under Biden, but this issue has received less attention.
Within the cryptocurrency industry, the video has gained significant attention, attracting support from Elon Musk and multiple other industry giants, and many people believe it was a brilliant strategy. As one Coinbase employee said: Now you have Andreessen and Musk and other rich and powerful people saying that cryptocurrency is part of a larger debate. This is an attack on American innovation, progress and the future! It changes the focus of the discussion from cryptocurrency is a scam to does Biden really care about middle-class entrepreneurs?
Although Lehane opposed Trumps campaign and had nothing to do with the video, Andreessen and Horowitzs move was clearly part of Lehanes strategy. Lehanes ability to teach people in Silicon Valley how to get involved in politics has enabled others to imitate his strategy. In July of this year, Lehane joined the board of directors of Coinbase. A Coinbase employee praised: Lehane is a genius. I dont know how he thinks of these things, but he can change reality. He makes magic happen.
The annual conference for bitcoin enthusiasts is not usually a place for politicians to show up. The event regularly draws more than 25,000 people, many of whom are skeptical of the government. Wandering among the booths, you can get free vodka at 10 a.m. or discuss tax avoidance strategies that are somewhere between fraud and fantasy. People sell Edward Snowden T-shirts and cryptocurrency-themed board games. Its a safe haven for bitcoin briefs enthusiasts. However, when the event was held in Nashville in July, the scene was star-studded. Political celebrities, including eight senators, nearly a dozen representatives and countless state and national candidates, all showed up, some of whom gave impromptu speeches during pauses in the electronic music. The most eye-catching person was Donald Trump.
Trump’s presence at the event and his willingness to spend a campaign day in a state he could win confirmed that the cryptocurrency movement started by Lehane is having an impact. As Trump spoke in front of a packed house, people in the room donned orange wigs and “Make Bitcoin Great Again” hats. He promised, “On day one, I’m going to fire Gary Gensler,” to a standing ovation and chants. One man even let his wife watch the speech on FaceTime, even though she was in the delivery room waiting to give birth.
Trumps attitude towards cryptocurrencies has undergone a 180-degree turn. During his presidency, he tweeted that he does not like cryptocurrencies, saying they are not money and may facilitate illegal behavior such as drug trafficking and other illegal activity. He also added: We only have one real currency in the United States, and that is the US Dollar! Later, Trump also said that Bitcoin looks like a scam.
However, after leaving office, Trump began to seek new sources of income, such as the sale of non-fungible tokens (NFTs) - a type of digital content based on blockchain, which brought him $7.2 million in revenue in 2023. With this success, Trump became convinced of the potential of cryptocurrency. His campaign team became one of the first presidential campaigns to accept cryptocurrency donations and announced that he would become the chief cryptocurrency advocate of World Liberty Financial.
At a Bitcoin conference in Nashville, Trump promised that if elected, he would have the federal government hold billions of dollars in cryptocurrency reserves, and declared that the United States would become the global crypto capital and the Bitcoin superpower of the world! Trump even began parroting the views of cryptocurrency advocates, saying that if the United States doesnt act, China will!
While it might seem like Trump’s about-face might please Chris Lehane, the fact that it doesn’t is a sign that Lehane’s strategy may be going too smoothly. Like Airbnb, Lehane doesn’t want the cryptocurrency industry to be closely aligned with either party because it would make it more difficult to legislate, and almost any policy Trump advocates would automatically become a partisan issue.
President Biden’s announcement in July that he was dropping out of the race seemed to offer the crypto industry an opportunity to reset relations with the Democratic Party. The rise of Vice President Kamala Harris, a tech-friendly Californian, raised the possibility of balancing partisan forces. In a September speech about her economic plans as president, Harris promised that “the United States will maintain its leading position in artificial intelligence, quantum computing, blockchain, and other emerging technologies.” The détente seems to be working: On October 4, Ben Horowitz, a venture capitalist who had appeared in a video attacking Biden, told his staff that he and his wife would make personal donations to “entities supporting the Harris Walz campaign”—in part because some private conversations he had with Harris and her team had left him “very hopeful” that she would abandon Biden’s “destructive” cryptocurrency policies as president. Chris Lehane, for his part, has donated $35,000 to Harris’ campaign (and none to Trump).
Meanwhile, the cryptocurrency coalition, which Chris Lehane helped found, began to splinter, falling victim to partisan divisions. In August, California powerbroker Ron Conway sent an email to other funders of the super PAC Fairshake, including Andreessen and Armstrong. Complaining that the movement was alienating Democratic lawmakers, he wrote, “How shortsighted and stupid can you be?” Conway noted that Schumer felt “insulted” by Fairshake’s donation to Senator Brown of Ohio. He continued: “No one told me what you were doing in advance, which shows that billionaires can’t even communicate at the most basic level. We have two factions: a moderate faction and a Donald Trump faction (Coinbase founder and A16z founder)… I have worked with people who do not share the same values for too long, and this is unacceptable to me. Due to your selfish and lack of transparency in the way you handled it, it is time for us to part ways… I will no longer compromise myself through association or help.”
Republican leaders have expressed similar complaints, and in the summer of 2024, Anderson attended a Republican retreat in Jackson Hole with other cryptocurrency executives, where attendees expressed anger over Fairshake’s ad spending supporting Democratic candidates in Senate races in Arizona and Michigan.
Whether or not Chris Lehanes alliance survives, one thing is clear: Silicon Valley has learned how to navigate the political sphere, and tech giants have gradually mastered political means, combining their money and political wisdom to perpetuate their support for interests such as cryptocurrency, the sharing economy and social media. However, the U.S. Securities and Exchange Commission (SEC) is full of fear because once cryptocurrency wins, other financial institutions may follow suit and move their products to the blockchain to bypass the existing regulatory system, which could lead to disastrous consequences.
Even Lehane’s colleagues aren’t sure what they’re doing is good for the public. Coinbase employees acknowledge that while Silicon Valley is more politically skilled now, that doesn’t necessarily mean it’s good for the public.
Silicon Valley’s new political wisdom can be viewed from two perspectives:
The first view is that this is what modern democracy should be like. “I’d rather see people actively engaged and willing to discuss regulation openly and have their say than all the rich people making deals in the back room, as has been the case in the past,” noted Peter Ragone, a prominent Democratic consultant. Some of the most proud political battles in American history, such as the fight for marriage equality, universal suffrage, and environmental protection, succeeded in large part because of supporters with deep pockets and strong resolve. And the tech industry has those advantages, too. Moreover, money can’t decide elections unless voters agree with its agenda. “No matter how rich you are, if the majority of people don’t agree with you, you can’t get into office,” Ragone said. From this perspective, advocates in the tech industry, like many Americans, have simply learned to advocate for a cause, build coalitions, and make sure their voices are heard.
Another view is that Silicon Valley politics are a symptom of systemic corruption, proof that American governance and lawmaking have been so warped by money that few, if any, people other than billionaires can push their agenda. This dynamic is particularly dangerous because the U.S. economy has funneled vast wealth into the hands of a small, disaffected and unaccountable tech elite. Many critics of Silicon Valley believe that today’s entrepreneurs and venture capitalists, like the nouveau riche of earlier times, are using their wealth for selfish ends. In the process, they are behaving like the robber barons and industrial tyrants of a century ago — when income inequality was as high as it is today.
While acknowledging the flaws in our political system, Chris Lehane is also convinced that he is driving its improvement. He emphasizes that his success is largely due to working with many talented colleagues to build a better and fairer world. Lehane said that his work goal has always been to help little people gain greater economic benefits. For example, he cited Airbnbs challenge to large hotel chains, which aims to allow teachers and nurses to earn extra income by renting out spare rooms; and Coinbase provides people with a way to avoid the high fees of large banks.
However, Lehanes mission is not only philanthropic, his efforts have also made him personally very wealthy. Although he did not disclose the specific amount of wealth, he emphasized that his motivation is not simply to make money, but to pursue the battle for justice. In his social media profile, he appears in an image wearing boxing gloves and punching, symbolizing his commitment to these battles.
In August, artificial intelligence giant OpenAI announced the hiring of Lehane as vice president of global affairs. Unlike the clearer battles he fought at Airbnb and Coinbase, the political struggle in the field of artificial intelligence is more complex and has just begun. There are many conflicts of interest within the technology industry. For example, Marc Andreessen has called for minimal or no additional regulation of artificial intelligence technology, believing that hindering the development of technology that could benefit humanity is tantamount to murder.
Opposing OpenAI’s position is a group of AI engineers who believe that the technology they have created may soon become powerful enough to pose a threat to humanity. Therefore, strict regulation must be passed to ensure that only the “best” experts can engage in this complex technological innovation. The technicians who promote these arguments inevitably see themselves as one of these “inspirers”, and their so-called “more responsible” vision of AI development often coincides with the business plans of their own startups.
At the center of this debate are Chris Lehane and OpenAI. In July, the company’s CEO, Sam Altman, published an article in The Washington Post with Lehane’s support that portrayed the fight over AI regulation as a confrontation between democracies and authoritarian regimes. “Democratic AI has a head start on authoritarian AI because our political system gives American companies, entrepreneurs, and academics that advantage,” Altman wrote. But he went on to note that this lead is not guaranteed and can only be protected through legislation that encourages important software advances and prioritizes “rules of the road” and “norms for AI development and deployment.” Altman has indicated that OpenAI is willing to accept strict restrictions on data security and transparency, and supports the creation of a government agency to regulate the development and use of AI.
While this rhetoric sounds very noble, there is no lack of self-interest in Altman’s position. For example, small competitors may find it costly and cumbersome to comply with these rules and regulations, making them more difficult to deal with than OpenAI. Altman’s article is also a typical Chris Lehane reshaping: instead of discussing the competition between big AI companies and small startups, or the tension between rapid technological progress and safer but slower progress, he reframes the AI battle as a battle between good and evil, and in this story, Silicon Valley is portrayed as a righteous superhero.
Some AI industry observers are skeptical of this view. Suresh Venkatasubramanian, a computer science professor at Brown University and co-author of the White House Blueprint for an AI Bill of Rights, advocates for regulation around data privacy, transparency, and preventing algorithmic discrimination. He noted that OpenAI’s reluctance to talk about its alleged copyright violations is “anti-democratic” and, if true, definitely “anti-American.” (ChatGPT was developed by scraping text from the internet in bulk, and in most cases without paying or attributing the original authors; OpenAI claims this is fair use.)
Moreover, Altman’s redefinition ignores key disagreements that may exist among democracies, such as who should bear the environmental costs of AI data centers or what privacy regulations should govern AI. Venkatasubramanian believes that OpenAI’s strategy is to ensure that they have a seat at the table in future political decisions. As he said, “The goal is to get a voice so that you can influence the outcome.”
The impact is already starting to be felt in states. Workday, for example, is lobbying in several states to insert a subtle loophole into legislation on “automated decision-making tools” in the workplace that would shield companies that sell AI-powered recruiting software from lawsuits over racial discrimination or other bias.
Chris Lehane, an AI researcher at the University of California, Berkeley, also acknowledged that the political movement for AI is still in its early stages, with specific pressure points unclear and alliances and rivalries constantly changing. However, what is certain is that Silicon Valley will continue to use money and its large user base to attract and threaten politicians.
Even so, history suggests that Big Tech may eventually face challenges, just as the powerful corporations of the Gilded Age were eventually defeated and the industrial tyrants of the 20th century were gradually suppressed by public opinion.
