Mayor Pete Is Silicon Valley's Hottest New Startup

August 6th 2019

Pete Buttigieg - Caricature (DonkeyHotey)

By Jeff Hauser, Eleanor Eagan and Max Moran
Center for Economic and Policy Research

You might think Big Tech is facing an existential reckoning in Washington, based on recent congressional hearings with Facebook, Amazon, Apple, and Google. Add in Facebook’s $5 billion Federal Trade Commission settlement and the Trump administration pursuing antitrust inquiries into Big Tech while “looking into” Peter Thiel’s accusation that Google has been treasonously collaborating with China and it begins to sound consequential.

But if you look elsewhere — to the fundraising totals released by presidential candidates this month, and perhaps even to this week’s presidential debates — you can glimpse the seeds of the industry’s political revival. A wide swathe of Big Tech executives are going in big on political newcomer Pete Buttigieg, perhaps hoping “Mayor Pete” will head off the Beltway’s newfound scrutiny and let the biggest tech firms keep doing mostly whatever they like.

It looks like a good match. Springing from the milieu that produced Facebook (he was its 287th user), Buttigieg seems to have retained his starry-eyed view of tech’s potential to change the world. As mayor of South Bend, Indiana, he sought investment from technology firms and gushed about the potential for tech to change residents’ lives. An alum of McKinsey & Company with an optimistic mien and unquestioned brainpower, Buttigieg comes across like an idealized version of how the tech industry sees itself. So it’s not surprising that he happily hosted Mark Zuckerberg’s definitely-not-a-presidential-trial-balloon tour in South Bend in 2017, months after the Cambridge Analytica scandal had broken.

But since then, technology’s Big Four have faced wrath from lawmakers on both sides. For years, their public gestures of social progressivism, combined with quiet but voluminous donations to lawmakers and think tanks, buoyed their images and helped them grow unchecked.

Perhaps inevitably, however, Big Tech overplayed their hand. They lost the public’s trust and incited a growing coalition of angry onlookers eager to testify against them. As recent Congressional hearings demonstrate, lawmakers have caught on to the public anger. Big Tech’s allies on both sides of the aisle are dwindling.

Having burned existing bridges, these companies seem to be seeking new blood, in the form of an old college buddy who’s now the young, charismatic, tech-friendly leader of a mid-sized midwestern city. They are betting, it seems to us, that a Pete Buttigieg presidency will save Silicon Valley from accountability.

As a presidential candidate, Buttigieg has exhibited none of the same qualms about cozying up to Big Tech as many others in the race. According to his second quarter FEC filings, he raised a significant amount of money from Google, Facebook, and Amazon employees, part of his $24.8 million fundraising haul.

His donors include David Marcus, a longtime Silicon Valley executive now running Facebook’s cryptocurrency project (he testified before Congress for a series of hearings this week); August de los Reyes, the former head of design at Pinterest and current head of user experience at Google; and Scott Belsky, the CPO and VP at Adobe. Buttigieg has also received money from Scott Kohler, the senior corporate counsel at Google and Reed Hastings, the founder of Netflix, who also hosted a fundraising event for Buttigieg in Menlo Park last week. He’s taken checks from corporate executives who supervise lobbyists, including Brian Huseman and Nick Panagopoulos of Amazon and Airbnb, respectively (if you supervise lobbyists, but don’t lobby yourself, Buttigieg will happily take your contributions).

And while Elizabeth Warren has welcomed the antipathy of Trump-supporting tech titan and Facebook board member Peter Thiel, Buttigieg has welcomed the avid support of Thiel’s business partner Cyan Banister. All of these executives have donated generously to the Buttigieg campaign, and the companies they lead appear all over his funding disclosures.

The rank and file are also opening their wallets. In the most recent quarter, Buttigieg received over $120,000 in donations from employees at Facebook, Amazon, Apple, and Google — the most of any other candidate. He also raised more money from large donors in California over the last three months than even home-state Senator Kamala Harris. With that growing support among Big tech workers, lobbyists, and executives, Buttigieg has solidified his place as a frontrunner in the Democratic money race.

But what is it, exactly, that tech executives see in Buttigieg? With little record, strong personal ties, and few public policy commitments, he appears malleable. Moreover, his persona fits neatly with Silicon Valley’s own political identity: outwardly progressive, but without much evident anger at the American oligarchs feeding excessive corporate power and economic inequality. And even if his prodigious fundraising doesn’t win him the nomination, the 37-year-old Buttigieg could remain a consequential figure in public life for a long time to come. Venture capitalists of the world, think of the potential investment returns of getting in on Mayor Pete when he’s still in startup mode!

But if all goes according to plan, President Buttigieg would have broad power to either rein in Big Tech or leave it be. Tech companies have long recognized this fact: Google actively and successfully sought a major presence in the Obama administration, and the lightly regulated rise of the Big Four tech firms during Obama’s eight years in power was no accident. Now, a Google alumna who helped orchestrate Google’s place in the Obama transition, Sonal Shah, just joined Buttigieg’s campaign as National Policy Director.

So as you’re watching the debates this week, look for indications as to which potential president might enable Big Tech’s continued dominance as Obama did, even as the consequences of that failure become increasingly severe. Buttigieg’s tech ties in particular create a disturbing possibility that industry friendly people might be appointed to powerful jobs — and there’s plenty of them to go around, such as United States Chief Technology Officer, Director for International Cyber Policy at the National Security Council, and gigs in the Office of Science Technology Policy, the Communications Security, Reliability, and Interoperability Council, the Federal Trade Commission and the Department of Justice’s Antitrust Division.

Members of Congress are finally taking on companies like Facebook, Amazon, and Google. Will the next president commit to deploy all the resources of the executive branch to rein in Silicon Valley? Every candidate needs to explain how they would manage the executive branch and address Big Tech, but with Buttigieg these questions are especially urgent.

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