Critics warned that Citizens United would bring about a new era of corporate influence in politics, with companies and businesspeople buying elections to promote their financial interests. So far, that hasn’t happened much; big corporations, for instance, still play a negligible role in presidential election spending. Instead, a small group of billionaires has flooded races with ideologically tinged contributions. The result has been a shift in power away from the political parties and toward the whims of the donors themselves. In part, this explains the large number and variety of candidates fielded by the Republicans in 2016.
Few have benefited as much from this new arrangement as Cruz. The Texas senator is loathed by establishment Republicans in Washington. But in July, a group of related super-PACs known as Keep the Promise reported raising $38 million to support Cruz’s bid, almost all of it from three families no one would confuse with traditional Republican power brokers. In addition to Mercer, there’s Toby Neugebauer, a founder of a Houston investment firm who now lives in Puerto Rico, and Farris Wilks, a mason, pastor, and father of 11 from rural Texas who became a billionaire a few years ago in the fracking business. Thanks to these three men and their families, Cruz’s super-PAC war chest was larger than that of any candidate except Jeb Bush, putting to rest any doubt that he’d have the financial firepower to mount a campaign.
According to Neugebauer, Cruz laid the groundwork for his run in February 2014, at a private meeting on the deck of the Palm Beach home of prominent donors Lee and Allie Hanley. Joining the Hanleys around a table in the Florida sun were Cruz and his wife, Heidi; his strategist, Jason Johnson; Neugebauer; and Robert and Rebekah Mercer. The topic was Cruz’s chances in the election. A pair of researchers hired by Mercer and Hanley presented some intriguing findings. The country was ready for a Mr. Smith Goes to Washington figure—they used the phrase “Trump- like,” Neugebauer says—meaning that an outsider candidate should have a good shot in 2016. The elder Mercer, as usual, sat silently in his suit and tie as the group spent seven hours discussing how a race might play out.
“Finally, the senator turns to him and says, ‘Bob, you haven’t said anything all day. Tell me what you think,’ ” Neugebauer recalls. Mercer spoke for just a few minutes. “He helped us frame up how we should be thinking about our risks and opportunities,” Neugebauer says. “Bob is one of the greatest minds living.”
A year later, Cruz announced his candidacy at a Christian university in Virginia, then flew to New York. That evening, he attended a private gathering at Rebekah Mercer’s apartment in the Heritage at Trump Place, a skyscraper on the Upper West Side, where guests enjoyed sweeping views of the Hudson River. According to the Wall Street Journal, Rebekah and her husband have spent more than $28 million buying six adjoining apartments on three floors of the tower. Robert Mercer didn’t attend, but within three weeks, he’d committed $11 million to help put Cruz in the White House.
It wasn’t until late in life that Mercer had the means to bankroll a presidential campaign. He’s the son of a research scientist who held posts all over the country, mostly in the West. At 10 his father told him about a machine called a computer, sparking a lifelong fascination. In high school in New Mexico in the 1960s, Mercer filled a big notebook with code, despite having no computer to try it on.
Mercer described what he called his “computational life” in a speech in Baltimore in 2014, where he’d come to accept a lifetime achievement award from the Association for Computational Linguistics. During a college job at an Air Force weapons lab in New Mexico, he says, he found his life’s calling. “I loved everything about computers,” he said. “I loved the solitude of the computer lab late at night. I loved the air- conditioned smell of the place. I loved the sound of the discs whirring and the printers clacking.” His time at the lab also gave him an early taste of government bureaucracy. One day he figured out how to increase his computer’s speed by 100 times. “Then a strange thing happened. Instead of running the old computations in 1/100 of the time, the powers that be at the lab ran computations that were 100 times bigger. I took this as an indication that one of the most important goals of government- financed research is not so much to get answers as it is to consume the computer budget. Which has left me ever since with a jaundiced view of government-financed research.”
After earning a Ph.D., Mercer joined IBM, where he was part of a team trying to teach computers to translate human language. Linguists tackling the problem at the time were convinced they needed to teach computers the intricacies of each language’s grammar and syntax to make any progress. Mercer was part of a group of programmers who knew little about linguistics. Instead, they just dumped huge blocks of translated text into a computer and then taught it to guess at the likely relationships between words, using statistics. When the programmers presented their work at a conference in 1988, the linguists were horrified. But the IBM team’s method worked, forming the basis of modern-day speech-recognition software and tools such as Google Translate.
In 1993 executives at Renaissance Technologies took notice of Mercer’s work and offered jobs to him and several of his IBM colleagues. Situated on Long Island’s North Shore, more than an hour from New York City, the hedge fund was the brainchild of James Simons, a former military codebreaker and math professor who has an important theory named after him. Renaissance operates more like a university math department than a Wall Street trading shop. Dozens of math and physics Ph.D.s work on a 50-acre campus complete with a library, a gym, and tennis courts, using computers to crunch market data and spot patterns a human trader would overlook. When Mercer joined Renaissance, he was in his late 40s and two of his three daughters had already graduated from high school. He and a colleague from IBM, Peter Brown, rose quickly through the ranks, and when Simons retired in 2009, they became co-CEOs.
In his book More Money Than God, Sebastian Mallaby calls Renaissance “perhaps the most successful hedge fund ever.” Its main fund, known as Medallion, earned 39 percent per year on average between 1989 and 2006. The firm long ago stopped offering outsiders the opportunity to invest in it; instead, its math whizzes have focused mostly on multiplying their own money. Mallaby describes Brown as an extrovert who sometimes zips around the office on a unicycle; Mercer is “an icy cold poker player” who never recalled having a nightmare. Although the scale of Mercer’s fortune has never been estimated, Simons’s is pegged at about $15.5 billion. Simons is also a major political donor—he was one of the largest supporters of Democratic causes in 2012.