Billionaires bankroll Silicon Valley congressional candidate
Peter Dixon of Portola Valley is running for Rep. Anna Eshoo's seat in California's 16th congressional district. Photo courtesy of Dixon for Congress.

From Walmart to Amazon, the world’s wealthiest corporations and billionaires are part of a multimillion-dollar effort to send a Silicon Valley political newcomer to Congress. So is a super PAC that the candidate himself created.

The dizzying maze of money began in a political action committee (PAC) started by congressional candidate Peter Dixon before funneling through several other PACs in an effort to pave his path to succeed retiring Rep. Anna Eshoo in Washington.

Dixon co-founded the With Honor Fund super PAC in 2017 to help elect veterans to Congress, but it was dissolved three months before he launched his own campaign for the Congressional District 16 seat. Millions of dollars from that dissolved fund have been funneled through three PACs to support Dixon’s campaign.

Dixon, 40, is a retired Marine who worked in the Pentagon and a founder of cybersecurity company Second Front Systems. Though he’s new to the Silicon Valley political scene, he appears to be connected to some of the most powerful and wealthy people in the country.

The With Honor Fund received $10 million from Amazon’s Jeff Bezos; $500,000 from the Walton family, who own Walmart; and $750,000 from Michael Bloomberg, the media mogul, philanthropist and former New York City mayor over the last few years before it dissolved on Sept. 13, 2023. The fund’s remaining $5.9 million was transferred through two different PACs over the past year before landing in a new super PAC, called the Next Generation Veteran Fund. That fund was created in January to support Dixon and has raised $1.3 million as of last month, a San José Spotlight review found.

Dixon is also bringing his own wealth to the campaign. He loaned his campaign $1.4 million and raised an additional $1.4 million through direct donations from others — more than any of his opponents. But with political heavy hitters like former San Jose Mayor Sam Liccardo and Santa Clara County Supervisor Joe Simitian in the race, the millions from PACs fund political mailers, TV commercials and other voter outreach to help Dixon win.

Is it illegal?

Funneling money from one PAC to another isn’t illegal, but could raise ethical questions.

“In situations like this, (someone) may have made a determination that they’re going to run, and more likely than not, before they actually run, they are tying up loose ends,” Sean McMorris, a transparency and ethics expert for good government nonprofit California Common Cause, told San José Spotlight. “To try and ensure they are disconnected from this warchest as a candidate, but also ensure that others, even if it is through wink-and-nod or non-explicit coordination, know how to and are on board with legally funneling all of that money through different PACs or organizations so that it eventually gets back to the candidate.”

Taylor Hebble, spokesperson for Dixon’s campaign, said Dixon is proud of his work with the With Honor organization and has never shied away from his involvement. She said his involvement ended when he decided to run for office.

“His desire to continue to serve was a heartfelt family decision that came together very quickly in early December, as it did for almost every candidate in the race,” Hebble told San José Spotlight. “Peter immediately resigned his limited board duties from the With Honor Action 501(c)(4) not-for-profit. His campaign does not coordinate with any outside entity.”

The With Honor organization also confirmed its support for Dixon, but did not explain why it dissolved the original PAC.

“With Honor is focused on fighting polarization in Congress by supporting principled veteran leadership and we hope to see Marine Corps veteran Peter Dixon win on March 5,” spokesperson Kate Constantini told San José Spotlight. “All of our campaign entities’ spending is public and reported to the FEC.”

Super PACs are political action committees that can receive unlimited contributions from individuals, corporations and labor unions and spend without limitation to support a candidate — as long as the PAC does not coordinate with the candidate on what that support looks like.

That means a PAC that Dixon helped create — such as the With Honor Fund — couldn’t spend to support his campaign as long as he’s involved. A workaround is to dissolve that PAC and funnel money through different groups, McMorris said.

In addition to the millions Bezos contributed to the original With Honor Fund super PAC, Bezos’ parents, Miguel (Mike) and Jacklyn, donated more than $12.6 million. Dixon’s parents, Donald and Elizabeth, donated $180,000 to the super PAC, coincidentally on the same days that Bezos’ parents made donations. Dixon donated $500 to the super PAC.

“It defies belief to think that it’s all not connected,” McMorris said. “But whether you can prove it or not, is another story.”

Follow the funnel

Dixon created With Honor, a cross-partisan advocacy group, in October 2017 with investor Rye Barcott and David Richmond Gergen, former presidential advisor for Richard Nixon, Gerald Ford, Ronald Reagan and Bill Clinton.

The With Honor Fund super PAC was the elections arm of a larger political advocacy group of the same name. It raised millions of dollars and helped elect 19 veterans to Congress in 2018 — making national headlines.

The PAC dissolved on Sept. 13, 2023 and its remaining $5.9 million was moved into a new super PAC called With Honor Fund II. The new PAC is part of the same advocacy group and still led by Barcott.

Both the With Honor Fund super PAC and With Honor Fund II super PAC also have the same treasurer, Timothy Koch.

The With Honor Fund II donated $1.25 million into the super PAC Principled Veterans Fund from Dec. 4, 2023 to Feb. 12, 2024. The Principled Veterans Fund super PAC — which also lists Koch as treasurer but appears to have no real political activity — got another $750,000 from Bloomberg. It sent $1.5 million to the Next Generation Veteran Fund.

The final destination is the Next Generation Veteran Fund and it supported only one candidate: Dixon.

It’s spent more than $1.3 million on TV and digital advertisements, mailers and polling to support Dixon as of Feb. 27, campaign filings show.

The cash shuffling isn’t illegal unless Dixon is coordinating with the super PACs on how to spend the dollars. The Federal Elections Commission sets conditions around what’s considered coordination, but McMorris said the conditions are vague and hard to prove.

One example is when a candidate’s former staffer or family member is working for the PAC. Another is if the candidate speaks at a fundraiser for the PAC.

“The only sure way (to prove coordination) is through emails or a go-between who’s relaying information,” McMorris said. “You almost have to have a whistleblower come forward to get that kind of information.”

Contact Jana at [email protected] or follow @Jana Kadah on X, formerly known as Twitter.

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