By Charles Duhigg
October 7, 2024
The corner of dollar bills laid out in a grid representing binary code.
A person familiar with Fairshake, a super pac, said that the group had
�a simple message�: �If you are pro-crypto, we will help you, and if
you are anti we will tear you apart.�Illustration by Javier Ja�n

One morning in February, Katie Porter was sitting in bed, futzing
around on her computer, when she learned that she was the target of a
vast techno-political conspiracy. For the past five years, Porter had
served in the House of Representatives on behalf of Orange County,
California. She�d become famous�at least, C-span and MSNBC famous�for
her eviscerations of business tycoons, often aided by a whiteboard that
she used to make camera-friendly presentations about corporate greed.
Now she was in a highly competitive race to replace the California
senator Dianne Feinstein, who had died a few months earlier. The
primary was in three weeks.

A text from a campaign staffer popped up on Porter�s screen. The
staffer had just learned that a group named Fairshake was buying
airtime in order to mount a last-minute blitz to oppose her candidacy.
Indeed, the group was planning to spend roughly ten million dollars.

Porter was bewildered. She had raised thirty million dollars to
bankroll her entire campaign, and that had taken years. The idea that
some unknown group would swoop in and spend a fortune attacking her,
she told me, seemed ludicrous: �I was, like, �What the heck is
Fairshake?� �

Porter did some frantic Googling and discovered that Fairshake was a
super PAC funded primarily by three tech firms involved in the
cryptocurrency industry. In the House, Porter had been loosely
affiliated with Senator Elizabeth Warren, an outspoken advocate of
financial regulation, and with the progressive wing of the Democratic
Party. But Porter hadn�t been particularly vocal about cryptocurrency;
she hadn�t taken much of a position on the industry one way or the
other. As she continued investigating Fairshake, she found that her
neutrality didn�t matter. A Web site politically aligned with Fairshake
had deemed her �very anti-crypto��though the evidence offered for this
verdict was factually incorrect. The site claimed that she had opposed
a pro-crypto bill in a House committee vote: in fact, she wasn�t on the
committee and hadn�t voted at all.

Soon afterward, Fairshake began airing attack ads on television. They
didn�t mention cryptocurrencies or anything tech-related. Rather, they
called Porter a �bully� and a �liar,� and falsely implied that she�d
recently accepted campaign contributions from major pharmaceutical and
oil companies. Nothing in the ads disclosed Fairshake�s affiliation
with Silicon Valley, its support of cryptocurrency, or its larger
political aims. The negative campaign had a palpable effect: Porter,
who had initially polled well, lost decisively in the primary, coming
in third, with just fifteen per cent of the vote. But, according to a
person familiar with Fairshake, the super PAC�s intent wasn�t simply to
damage her. The group�s backers didn�t care all that much about Porter.
Rather, the person familiar with Fairshake said, the goal of the attack
campaign was to terrify other politicians��to warn anyone running for
office that, if you are anti-crypto, the industry will come after you.�

The super PAC and two affiliates soon revealed in federal filings that
they had collected more than a hundred and seventy million dollars,
which they could spend on political races across the nation in 2024,
with more donations likely to come. That was more than nearly any other
super PAC, including Preserve America, which supports Donald Trump, and
WinSenate, which aims to help Democrats reclaim that chamber. Pro-
crypto donors are responsible for almost half of all corporate
donations to PACs in the 2024 election cycle, and the tech industry has
become one of the largest corporate donors in the nation. The point of
all that money, like of the attack on Porter, has been to draw
attention to Silicon Valley�s financial might�and to prove that its
leaders are capable of political savagery in order to protect their
interests. �It�s a simple message,� the person familiar with Fairshake
said. �If you are pro-crypto, we will help you, and if you are anti we
will tear you apart.�

After Porter�s defeat, it became obvious that the super PAC�s message
had been received by politicians elsewhere. Candidates in New York,
Arizona, Maryland, and Michigan began releasing crypto-friendly public
statements and voting for pro-crypto bills. When Porter tried to
explain to her three children why she had lost, part of the lesson
focussed on the Realpolitik of wealth and elections. �When you have
members who are afraid of ten million dollars being spent overnight
against them, the will in Washington to do what�s right disappears
pretty quickly,� she recalls saying. �This was naked political power
designed to influence votes in Washington. And it worked.�

�And I�m saying you need to come look at this.�
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Porter�s defeat, in fact, was the culmination of a strategy that had
begun more than a decade earlier to turn Silicon Valley into the most
powerful political operation in the nation. As the tech industry has
become the planet�s dominant economic force, a coterie of
specialists�led, in part, by the political operative who introduced the
idea of �a vast right-wing conspiracy� decades ago�have taught Silicon
Valley how to play the game of politics. Their aim is to help tech
leaders become as powerful in Washington, D.C., and in state
legislatures as they are on Wall Street. It is likely that in the
coming decades these efforts will affect everything from Presidential
races to which party controls Congress and how antitrust and artificial
intelligence are regulated. Now that the tech industry has quietly
become one of the most powerful lobbying forces in American politics,
it is wielding that power as previous corporate special interests have:
to bully, cajole, and remake the nation as it sees fit.

Chris Lehane was just shy of thirty years old when he came up with the
notion of �a vast right-wing conspiracy,� to explain Republican efforts
to undermine Bill and Hillary Clinton. It was such an inspired bit of
showmanship that Hillary Clinton adopted it as one of her signature
lines. At the time, Lehane was a lawyer in the Clinton White House
tasked with defending the Administration from charges of scandal, but
he specialized in seizing control of the political conversation,
finding colorful ways to put Republicans on defense. Tactics such as
declaring that the President of the United States was the victim of a
shadowy conservative cabal were so effective that the Times later
declared Lehane to be the modern-day �master of the political dark
arts.�

After serving in the White House, Lehane joined Al Gore�s Presidential
campaign, as press secretary, and after Gore�s defeat he set up shop in
San Francisco. Despite the size and the electoral significance of
California, many campaign operatives viewed the state as a political
backwater, because it was so far away from Washington. But Lehane, who
had worked on the Telecommunications Act of 1996, was convinced that
Silicon Valley was the future, and he quickly built a business
providing his dark arts to wealthy Californians. When trial lawyers
wanted to increase the state�s caps on medical-malpractice jury awards,
they brought in Lehane, who helped send voters flyers that looked like
cadaver toe tags, and produced ads implying that doctors might be
performing surgery while drunk. A few years later, when a prominent
environmentalist hired Lehane to campaign against the Keystone XL
Pipeline, he sent activists into press conferences carrying vials of
sludge from an oil spill; the sludge was so noxious that reporters fled
the room. Then he hired one of the Navy SEALs who had helped kill Osama
bin Laden to talk to journalists and explain that if the pipeline were
approved a terrorist attack could flood Nebraska with one of the
largest oil spills in American history. Lehane explained to a reporter
his theory of civil discourse: �Everyone has a game plan until you
punch them in the mouth. So let�s punch them in the mouth.�

Video From The New Yorker

But Lehane�s efforts generally failed to impress the tech industry. For
decades, Silicon Valley firms had considered themselves mostly detached
from electoral politics. As one senior tech executive explained to me,
until about the mid-twenty-tens, �if you were a V.C. or C.E.O. you
might hire lobbyists to talk to politicians, or gossip with you, but,
beyond that, most of the Valley thought politics was stupid.� Within a
decade of Lehane�s move West, however, a new kind of tech company was
emerging: so-called sharing-economy firms such as Uber, Airbnb, and
TaskRabbit. These companies were �disrupting� long-established sectors,
including transportation, hospitality, and contract labor. Politicians
had long considered it their prerogative to regulate these sectors,
and, as some of the startups� valuations grew into the billions,
politicians began making demands on them as well. They felt affronted
by companies like Uber that were refusing to abide by even modest
regulations. Other companies tried a more conciliatory approach, but
quickly found themselves mired in local political infighting and
municipal bureaucracies. In any case, �not understanding politics
became an existential risk,� another senior tech executive said. �There
was a general realization that we had to get involved in politics,
whether we wanted to or not.�

In 2015, San Francisco itself became the site of a major regulation
battle, in the form of Proposition F, a ballot initiative to limit
short-term housing rentals, which both sides acknowledged was an attack
on Airbnb. The proposal had emerged from built-up frustrations: some
San Franciscans complained that many buildings had essentially become
unlicensed hotels, hosting hard-partying tourists who never turned off
the music, didn�t clean up their trash, and�most worrying for city
leaders�hadn�t paid the taxes that the city would have collected had
they stayed at a Marriott. Other residents argued that Airbnb�s
presence was making it harder to find affordable housing, because it
was more profitable to rent to short-term visitors than to long-term
tenants. Proposition F would essentially make it impossible for Airbnb
to work with many homeowners for more than a few weeks a year. Early
polling indicated that the initiative was popular. Numerous other
cities had been considering similar legislation, and were eagerly
watching to see if lawmakers in San Francisco�where Airbnb was
headquartered�could teach them how to rein in the Internet giant, then
worth some twenty-five billion dollars.

Airbnb�s executives, panicked, called Lehane and asked him to come to
their headquarters; he showed up within minutes of their call, in the
sweatpants and baseball jersey that he�d been wearing at his son�s
Little League game. Lehane has the lean build of someone accustomed to
athletic self-torture�he runs daily, often fifteen miles at a stretch,
typically while sending oddly punctuated e-mails and leaving stream-of-
consciousness voice mails�and he has a boyish crooked front tooth that
offsets the effect of his receding hairline. To Airbnb�s leaders, he
didn�t look like much of a political guru. But, once Lehane caught his
breath, he launched into a commanding speech. You�re looking at this
situation all wrong, he said. Proposition F wasn�t a crisis�it was an
opportunity to change San Francisco�s political landscape, to upend a
narrative. The key, he told executives, was to build a campaign against
Proposition F as sophisticated as Barack Obama�s recent Presidential
run, and to deploy insane amounts of money as a warning to politicians
that an �Airbnb voter� existed�and ought not be crossed. He proposed a
three-pronged strategy, and explained to executives that what
politicians care about most is re�lection. If the company could show
that being anti-Airbnb would make it harder for them to stay in office,
they would fall in line. Lehane was soon named Airbnb�s head of global
policy and public affairs.

His first step in this role was to mobilize Airbnb�s natural advocates:
the homeowners who were profiting by renting out their properties, and
the visitors who had avoided pricey hotel rooms by using the service.
By the end of 2015, more than a hundred and thirty thousand people had
rented or hosted rooms in San Francisco. Lehane recruited several
former Obama-campaign staffers to lead teams who made tens of thousands
of phone calls to Airbnb hosts and renters, warning them about
Proposition F. The team members also urged hosts to attend town-hall
meetings, talk to neighbors, and call local officials. During this
period, the company�accidentally, it says�sent an e-mail to everyone
who had ever stayed in a California Airbnb, urging them to contact the
California legislature. The legislature was inundated with messages
from around the world. The Senate president pro tem called Lehane to
let him know that the message had been received, and to beg him to stop
the onslaught. �I kind of wish we had done it on purpose,� someone
close to that campaign told me.

The second part of Lehane�s strategy was to use large amounts of money
to pressure San Francisco politicians. The company brought on hundreds
of canvassers to knock on the doors of two hundred and eighty-five
thousand people�roughly a third of the city�s population�and urge them
to contact their local elected officials and say that opposing Airbnb
was the equivalent of attacking innovation, economic independence, and
America�s ideals. The relentless campaign posed a clear threat to the
city�s Board of Supervisors: if an official supported Proposition F,
Airbnb might encourage someone to run against him or her. �We said the
quiet part out loud,� a campaign staffer said. �The goal was
intimidation, to let everyone know that if they fuck with us they�ll
regret it.� In all, Airbnb spent eight million dollars on the campaign,
roughly ten times as much as all of Proposition F�s supporters
combined. �It was the most ridiculous campaign I�ve ever worked on,�
the staffer told me. �It was so over the top, so extreme. You shouldn�t
be able to spend that much on a municipal election.� That said, the
staffer loved her time at Airbnb: �It was the most money I�d ever
earned working in politics.�

The third aspect of Lehane�s strategy was upending the debate over
Proposition F by proposing alternative solutions. Otherwise, Lehane and
Airbnb�s chief executive, Brian Chesky, believed, the company would
face similar proposals in other cities. �You can�t just be against
everything,� Lehane told the Airbnb board. �You have to be for
something.� As a compromise gesture, Airbnb had voluntarily begun
paying taxes on short-term stays within the city. It also offered to
share some internal company data�such as the number of guests visiting
the city each month�that would help local officials monitor the
service�s impact on the community. What�s more, Airbnb eventually
offered to build a Web interface that San Francisco officials could use
to register hosts and track rental patterns. The solution was self-
serving, in that it made the city dependent on Airbnb for monitoring
Airbnb�s activities. But the proposals addressed many of the complaints
that had prompted Proposition F. More important, they guaranteed San
Francisco tens of millions of tax dollars annually. When Proposition F
finally came to a vote, it was resoundingly defeated.

Airbnb�s approach to political conflict was in stark contrast with that
of Uber, which had just become the most valuable startup in the
world�and which, owing to its resistance to various taxi regulations,
was soon under fire from multiple cities and nations. Airbnb�s tactics
were designed to appeal to politicians� higher ideals. After the
Proposition F campaign, Lehane began working on a partnership with the
S.E.I.U., one of the nation�s largest labor unions, to unionize the
workers who cleaned Airbnb rentals. The plan never came together, but
labor-friendly politicians in San Francisco and New York began viewing
Airbnb as a potential ally.

To other political operatives, Lehane�s tactics hardly seemed
groundbreaking. But within Silicon Valley his approach was a
revelation. �It was a huge bang for a relatively small outlay,� a tech
executive told me. �It turns out the R.O.I.��return on investment��on
politics is way better than anyone suspected.�

After the defeat of Proposition F, San Francisco�s Board of Supervisors
eventually agreed to many of Airbnb�s suggestions. By then, Lehane had
moved on to other locations. He began similar Airbnb campaigns in
dozens of other cities, including Barcelona, Berlin, New York, and
Mexico City. When the U.S. Conference of Mayors convened in Washington,
D.C., in 2016, Lehane was invited to speak after Michelle Obama. �Read
my lips,� he told the gathering. �We want to pay taxes.� Airbnb soon
had agreements with more than a hundred cities, and when local
politicians proved intransigent�leaders in Austin, for instance, seemed
immune to Airbnb�s overtures�the company simply went over their heads.
In Texas, it persuaded the state legislature to make it hard 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, hiring the right C.F.O. was
the most important thing to make sure a company goes public. But you�ve
proved a political person is just as important.� Lehane, however, had
had an even bigger insight. These campaigns had revealed that tech
companies�particularly firms, like Airbnb, with platforms that connect
people who might otherwise have trouble finding one another�were now
potentially the most powerful cohort in politics. �At one point,
organizations like labor or political parties had the ability to
organize and really turn out large numbers of voters,� Lehane told me.
Today, Internet platforms have the bigger reach; a tech company can
communicate with hundreds of millions of people by pushing a button.
�If Airbnb can engage fifteen thousand hosts in a city, that can have
an impact on who wins a city-council race or the mayoralty,� Lehane
told me. �In a congressional or Senate race, fifty thousand votes can
make all the difference.� Of course, simply having a huge user base
doesn�t guarantee that Airbnb can get everything it wants. Voters
respond only to enticements that they find persuasive. But companies
like Airbnb, Lehane understood, could make arguments faster, and more
efficiently, than nearly any political party or other special-interest
group, and this was a source of considerable power. �The platforms are
really the only ones who can speak to everyone now,� Lehane said.

For the tech industry, the Trump years were a bewildering mess. The
President attacked tech platforms for being biased against
conservatives, and liberals railed against Silicon Valley�s social-
media companies for propelling Trump into the White House. Tech
executives declared their support for the industry�s many immigrants in
the face of Trump�s Muslim ban and border separations; they also
contended with walkouts and protests from employees over racial
injustice, sexual harassment, and all-gender bathrooms�subjects that
neither an engineering degree nor business school had prepared them
for. When Joe Biden won the Presidency, in 2020, the Valley�s leaders
were relieved. The Biden Administration seemed like a return to the Pax
Obama, an era when tech was considered cool and politicians boasted of
knowing Mark Zuckerberg. Biden�s victory also meant that Lehane, with
his deep roots in the Democratic Party, was unquestionably Silicon
Valley�s top political guru. Companies sought him out; employees loved
that he was generous with credit and made politics fun. (Many former
colleagues talk proudly about the nicknames that he bestowed upon
them.) Most of all, he made the people he worked with feel like they
were on a righteous quest. Peter Ragone, a prominent adviser to
numerous Democratic politicians, told me that, among the handful of
political consultants transforming Silicon Valley, �Chris is the tip of
the spear. His capacity for processing information at speed is
breathtaking.�

The Valley�s enthusiasm for Biden, however, was short-lived. The
President quickly appointed three prominent tech skeptics�Gary Gensler,
Lina Khan, and Jonathan Kanter�to oversee the Securities and Exchange
Commission, the Federal Trade Commission, and the antitrust division of
the Department of Justice, respectively. Soon the government was suing
or investigating Google, Apple, Amazon, Meta, Tesla, and dozens of
other companies. Some of those suits and inquiries had been initiated
under Trump, but Biden�s S.E.C. found a particular target in the
cryptocurrency industry. Gensler, an ally of Elizabeth Warren, filed
more than eighty legal actions arguing that crypto firms or promoters
had violated the law, most often by selling unregistered securities.
Some of the executives being sued by the S.E.C. had contributed
lavishly to the Democrats. Brad Garlinghouse, the C.E.O. of the crypto
firm Ripple, who had been a fund-raising bundler for Obama, was among
those under legal fire, and he clearly felt victimized. He told
Bloomberg that the federal government was acting like �a bully,� and
tweeted, �Dems continue to enable Gensler�s unlawful war on
crypto�sabotaging the ability for American innovation to thrive. It�s
no wonder the GOP has announced a pro-crypto stance . . . . Voters are
paying attention.� (Last year, a federal judge upheld some portions of
the S.E.C.�s case against Ripple and dismissed others.)

To certain people, the government�s approach felt oddly aggressive. One
crypto executive told me she discovered that her bank accounts had been
frozen�with no explanation�only when she tried to make a withdrawal to
repair a catastrophic home-septic-system failure. Around this time,
various regulatory agencies were warning banks about the risks posed by
the crypto industry. When the executive�s accounts were later
unfrozen�again, without a clear explanation�she was left wondering if
the government�s goal was to intimidate the industry. (The Office of
the Comptroller of the Currency, which regulates national banks, said
that it does not direct banks to freeze individual accounts.)

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The Biden Administration�s oppositional stance, however, seemed
warranted when, in 2022, FTX�the enormous crypto exchange and hedge
fund led by Sam Bankman-Fried�imploded amid revelations that more than
eight billion dollars had been misallocated or lost. Bankman-Fried had
been a prolific political donor, and violating campaign-finance law was
among the crimes for which he was arrested. Another crypto executive
told me that, after the FTX scandal, many figures in the industry �just
wanted to put our heads down and disappear,� adding, �The less people
noticed us, the better.�

But among Silicon Valley�s most moneyed class retreat wasn�t an option.
The powerful venture-capital firm Andreessen Horowitz had already
raised more than seven billion dollars for crypto and blockchain
investments. The �super angel� investor Ron Conway had poured millions
of dollars into crypto firms through his venture fund. Lehane urged
some of the largest crypto investors and companies, many of whom were
bickering on Twitter, to instead form a coalition devoted to changing
the public narrative. He began hosting private biweekly gatherings,
known as the Ad-Hoc Group, where various collaborations were discussed.
Eventually, a former partner at Andreessen Horowitz, Katie Haun,
recommended that the large crypto firm Coinbase, where she was a board
member, bring on Lehane as an adviser.

Lehane met with Coinbase�s co-founder Brian Armstrong and told him
that, just as with Airbnb, what seemed like a crisis was actually an
opportunity. �This is not the time to go quiet,� Lehane told him. �This
is your chance to define your company and the industry, and prove
you�re different from FTX.� In 2023, Lehane joined Coinbase�s Global
Advisory Council. Twenty-five days later, the S.E.C. sued the firm.

Lehane established a war room with the primary goal of convincing
politicians that the political consequences of being anti-crypto would
be intensely painful. The person familiar with Fairshake, who was then
an employee at Coinbase, told me, �It wasn�t really about explaining
how crypto works, or anything like that. It�s about hitting politicians
where they are most sensitive�re�lection.� Armstrong clarified this aim
at a crypto conference in 2023. The goal, he said, was to ask
candidates, �Are you with us? Are you against us? Are we going to be
running ads for you or against you?�

Although Lehane�s basic strategy resembled the one he�d used at Airbnb,
that campaign had been focussed on municipal issues and local political
races. The crypto effort was national in scale, targeting Senate and
House races�and potentially even the Presidential contest�and would
require significantly more money. Lehane suggested to Armstrong that
crypto firms set aside fifty million dollars for outreach. Let�s
earmark a hundred million, Armstrong replied. Coinbase, Ripple, and
Andreessen Horowitz donated more than a hundred and forty million
dollars to Fairshake, the crypto super pac. Executives at other firms
contributed millions more.

Lehane, collaborating closely with Fairshake, began crafting a pro-
crypto message and helping to build a �grassroots� army. �We need to
demonstrate there�s a crypto voter,� he told the Coinbase team.
�There�s millions and millions of Americans who own this stuff. We need
to prove they�ll vote to protect it.�

The Federal Reserve has said that in 2023 fewer than twenty million
Americans owned cryptocurrencies. Polling indicates that the issue is
not an electoral priority for many voters. One Coinbase staff member
pointed out this discrepancy to Lehane, saying, �I don�t know if there
is a crypto voter.�

�Then we�re going to make one,� Lehane replied.

Coinbase began loudly promoting the results of surveys reporting to
show that fifty-two million Americans owned cryptocurrencies, and that
many of them intended to vote to protect their digital pocketbooks.
Those polls indicated that sixty per cent of crypto owners were
millennials or Gen Z-ers, and forty-one per cent were people of
color�demographics that each party was trying to woo. Lehane also
quietly helped launch an advocacy organization, Stand with Crypto,
which is advertised to Coinbase�s millions of U.S. customers every time
they log in, and which urges cryptocurrency owners to contact their
lawmakers and sign petitions. The group says that it currently has more
than a million members. The Coinbase employee told me that Stand with
Crypto would identify a city with a significant population of crypto
enthusiasts, like Columbus, Ohio, and then inundate them with push
notifications aimed at organizing town halls and rallies. The employee
explained, �If you can get fifty or sixty people to show up, with good
photo angles you can make it look like hundreds. In small states or
close elections, that�s enough to convince a candidate they should be
paranoid.�

This supposed army of crypto voters fed directly into the next stage of
the assault: scaring politicians. Stand with Crypto built an online
dashboard that assigned grades to U.S. senators and representatives�and
to many of their challengers�which reflected their support for crypto.
The scores seemed to inevitably be either �A (Strongly supports
crypto)� or �F (Strongly against crypto),� though the data undergirding
the grades were sometimes specious. �Most of them hadn�t really taken a
side,� another Coinbase staffer told me. �So we�d, you know, look at
speeches they�d given, or who they were friends with, and kind of make
a guess. If you were friends with Elizabeth Warren, you were more
likely to get an F.�

Nevertheless, Lehane insisted that Fairshake maintain a nonpartisan
tone. The super PAC was careful to support an equal number of
Democratic and Republican candidates, and, following Lehane�s advice,
it planned to stay out of the 2024 Presidential race altogether. A
venture capitalist who has advised the crypto industry told me that the
group�s nonpartisan stance was essential, because, �if we want to get
the right regulations in place, we have to get a bill through Congress,
which means we need votes from both parties.� Moreover, Fairshake�s
goal was to �create a nonpartisan cost for being negative on crypto and
tech,� the venture capitalist added. �People need to know there are
consequences.�

To make this point, Lehane and Fairshake wanted to find a contest in
which the group�s spending was certain to attract national attention.
Fairshake compiled a list of high-profile races, and near the top was
the fight to replace Dianne Feinstein in California. The obvious target
was Porter, whose strongest opponent in the Democratic primary was
Representative Adam Schiff. California was reliably blue, and so, if
Fairshake helped defeat Porter, the group wouldn�t get blamed for
handing a seat to the Republicans. What�s more, California�s primary
occurred on March 5th�early in the campaign season�which meant that
Porter�s race would get lots of attention and Fairshake would have time
to broadcast its involvement and petrify candidates in other states.
Because Porter was friendly with Elizabeth Warren, she could be
painted�fairly or not�as anti-crypto. Best of all, many polls indicated
that Porter was unlikely to win the primary anyway, so if the super PAC
�went in with a big spend, and made a big splash and she lost,
Fairshake could take the victory lap regardless of whether it tipped
the scales,� the Coinbase employee said. The calculation was prescient:
Fairshake�s spending helped doom Porter in the primary, and the general
election appears to be a lock for Schiff (who got an A from Stand with
Crypto). As another political operative put it, �Porter was a perfect
choice because she let crypto declare, �If you are even slightly
critical of us, we won�t just kill you�we�ll kill your fucking family,
we�ll end your career.� From a political perspective, it was a
masterpiece.� Porter will be out of government at the end of this year.

After Porter�s defeat, many politicians who had once treated crypto
with disdain or hostility suddenly became fans. In May, two months
after Porter�s defenestration, a pro-crypto bill came up for a vote in
the House. In previous years, similar bills had languished amid tepid
Republican support and strong Democratic opposition. The new bill�known
as the Financial Innovation and Technology for the 21st Century Act�was
openly opposed by President Biden. But it sailed through the House,
with nearly unanimous Republican backing and seventy-one votes from
Democrats. The Senate Majority Leader, Chuck Schumer, recently joined a
Crypto4Harris virtual town hall and promised that passing the
legislation this year is �absolutely possible,� adding, �Crypto is here
to stay.� The Democratic senator Sherrod Brown�a longtime crypto
critic�is running for re�lection in Ohio, where Fairshake has directed
forty million dollars to ads in support of his opponent; Brown has
lately been tempering his public criticisms of the industry. Earlier
this year, crypto donors indicated that they might get involved in
Montana�s Senate race, where the incumbent Democrat, Jon Tester, once a
crypto skeptic, is facing a difficult fight. Soon afterward, Tester
voted to weaken S.E.C. oversight of cryptocurrencies, earning him the
unusual grade of �C (Neutral on crypto).� It looks like Fairshake will
stay out of Montana as long as Tester keeps voting the right way. A
similar dynamic occurred in Maryland: after the super PAC threatened to
take sides in the Democratic Senate primary there, both major
candidates proclaimed their pro-crypto bona fides.

In total, Fairshake and affiliated super PACs have already spent more
than a hundred million dollars on political races in 2024, including
forty-three million on Senate races in Ohio and West Virginia, and
seven million on four congressional races, in North Carolina, Colorado,
Alaska, and Iowa. Three and half million dollars was used to help
vanquish two left-wing representatives who were members of the so-
called Squad: Jamaal Bowman, of New York, and Cori Bush, of Missouri.
Of the forty-two primaries that Fairshake has been involved in this
year, its preferred candidate has won eighty-five per cent of the time.
The super PAC�s latest filings indicated that it had more than seventy
million dollars to spend in the remainder of the election cycle. Its
donations to political candidates are on par with those of the oil-and-
gas industry, the pharmaceutical industry, and labor unions.

Just as Airbnb sought to change the conversation around Proposition F
by proposing various concessions�paying taxes and sharing data�the
crypto industry has become a vocal proponent of a seemingly solutions-
oriented fix: new regulations for cryptocurrencies and the blockchain.
Critics, however, say that these proposals are self-serving. A central
dispute between the crypto industry and regulators concerns whether
cryptocurrencies are securities�akin to, say, a share of Apple, the
sale of which is governed by strict investor-protection laws�or
commodities, like a bushel of corn, which can be sold with very little
government involvement. Most fiat currencies�that is, those issued by
governments�are used primarily to buy such things as food and clothing,
rather than to gamble on the rise and fall of exchange rates.
Cryptocurrencies, in contrast, are often difficult�or, in some cases,
impossible�to use for purchasing physical goods, and they are
frequently held by speculators solely as a wager that their value will
rise. There are several thousand cryptocurrencies in existence. A
few�most notably, Bitcoin and Ether�are considered commodities. The
statuses of most of the rest are up for debate.

�Now, to demonstrate that he has come of age, Jeffrey will open a
childproof bottle of acetaminophen in front of all his friends and
family.�
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Many within the industry want Congress to pass regulations that would
treat mainstream cryptocurrencies as commodities, which are overseen by
the Commodity Futures Trading Commission, a relatively sleepy agency
that most people have never heard of�and that tends to be less
belligerent than the S.E.C. If the C.F.T.C. becomes the primary
regulatory body for crypto, it�s likely that the stream of lawsuits and
fines against large crypto companies will slow or cease. More
important, selling Dogecoin (the cryptocurrency associated with a Shiba
Inu dog), Dentacoin (�the only cryptocurrency by dentists, for
dentists�), or CumRocket (cryptocurrency for the pornography
aficionado) would become significantly less risky, and more profitable.

People in the government think that this would be disastrous. �A lot of
these tokens, frankly, have no real utility, no actual use, and they�re
just for gambling or scamming people,� an official familiar with the
S.E.C.�s thinking told me. �We already have regulations in place that
have protected investors in these kinds of situations for decades.
Crypto just doesn�t want to abide by them. If your entire business plan
is asking �Can we get Kim Kardashian to tweet about us?� and then
taking people�s money, the government needs to be involved.�

In fact, convincing average Americans that the crypto industry is a
wholesome, customer-friendly place has been a tough sell: polls
indicate that most people do not consider the crypto sector to be safe.
Lehane�s colleagues within the industry have therefore shifted their
tactics slightly. Getting Congress to pass friendly legislation is
still a priority, but this push is now being presented as being in
service of much loftier aims: protecting innovation,
entrepreneurialism, and America�s future.

In July, Marc Andreessen and Ben Horowitz, of the Andreessen Horowitz
venture fund, made a ninety-one-minute video accusing President Biden
of weakening America. Andreessen said to Horowitz, �There�s been a
brutal assault on a nascent industry that I�ve just�I�ve never
experienced before. I�m in total shock that it has happened.� Horowitz
replied, �They�ve basically subverted the rule of law to attack the
crypto industry.� These and other government actions, they said,
threatened to doom America�s economy, technological superiority, and
military might. And Biden, by refusing to embrace various tech-industry
proposals, was allowing China to leap ahead. �The future of technology,
and the future of America, is at stake,� Horowitz declared. The two men
were so concerned, they said, that they had no choice but to endorse
Donald Trump in 2024. (They also noted that, under Biden, billionaires
like themselves might have to pay more in taxes. But that issue
received less airtime.)

To people inside the crypto industry, the video�which received a huge
amount of attention, prompting online co-signs from Elon Musk and
various other titans�was a masterstroke. As the Coinbase employee put
it, �Now you�ve got Andreessen and Musk and all these other rich,
powerful guys saying that crypto is part of a bigger debate. It�s about
an attack on American innovation and progress and the future of the
country! It changed the conversation from �Is cryptocurrency a scam?�
to �Does Biden even care about middle-class entrepreneurs?� �

Even though Lehane opposes Trump�s candidacy, and had nothing to do
with the video, Andreessen and Horowitz�s move was right out of the
Lehane playbook. Lehane had done such a good job teaching the Valley
how to play politics that others could now mimic his gambits. In July,
Lehane joined Coinbase�s board of directors. �Chris is a genius,� the
Coinbase employee said. �I don�t know how he comes up with this stuff,
but he can change reality. He makes magic happen.�

The annual conference for Bitcoin enthusiasts isn�t an event at which
politicians usually appear. The affair often draws more than twenty-
five thousand people, many of them distrustful of government. Wandering
around the sea of booths, you can get a free vodka shot at 10 a.m. or
discuss �tax-avoidance strategies� that fall somewhere between fraud
and fantasy. People sell Edward Snowden T-shirts and crypto-themed
board games. It�s a safe haven for enthusiasts of Panties for Bitcoin.
But when the event took place in Nashville, in July�at a venue just a
few blocks from the Redneck Riviera bar, where women were offering to
lift their shirts in exchange for some of �that bit stuff��it was
teeming with political luminaries. There were eight senators, nearly a
dozen representatives, and countless candidates for national and state
office, some of whom launched into impromptu speeches whenever the
techno music paused. The star attraction, however, was Donald Trump.

The event�s appearance on the Presidential campaign circuit�and Trump�s
willingness to spend one of his campaign days in a state he�s
guaranteed to win�confirmed that the crypto campaign initiated by
Lehane was having an effect. When Trump gave a speech before a
standing-room-only crowd in orange wigs and �Make Bitcoin Great Again�
hats, he pledged, �On Day One, I will fire Gary Gensler��the S.E.C.
head. This prompted a standing ovation and choruses of pro-Trump
chants. A man standing near me FaceTimed his wife and insisted that she
watch the speech, even though she was in the delivery room where their
grandchild was being born.

Trump�s embrace of crypto was a hundred-and-eighty-degree turn. As
President, he had tweeted that he was �not a fan� of cryptocurrencies,
which �are not money� and �can facilitate unlawful behavior, including
drug trade and other illegal activity.� He continued, �We have only one
real currency in the USA. It is called the United States Dollar!�
Later, he said that Bitcoin �just seems like a scam.� But after leaving
office Trump began seeking out new revenue sources, such as selling
non-fungible tokens�a type of digital content hosted on the blockchain.
This earned him a reported $7.2 million in 2023. Trump was convinced.
His current Presidential campaign was among the first to accept
cryptocurrency donations. He recently announced that�presumably in
exchange for compensation�he�d become the �chief crypto advocate� for
World Liberty Financial, a company led, in part, by an entrepreneur
who�d reportedly sold marijuana and weight-loss products. Before Trump
took the stage in Nashville, he hosted a �roundtable� fund-raiser with
crypto investors, many of whom paid more than eight hundred thousand
dollars to attend. Conference organizers have said that Trump raised
twenty-five million dollars there.

When Trump spoke at the conference, it was clear that he had been, in
the parlance of Bitcoin fans, �orange-pilled.� He promised that, if
elected, he would direct the federal government to hold billions of
dollars� worth of cryptocurrency reserves. The U.S., he proclaimed,
would become the �crypto capital of the planet and the Bitcoin
superpower of the world!� Trump began echoing the crypto campaign�s
talking points. �If we don�t do it, China is going to be doing it!� he
said.

You might think Trump�s newfound veneration of Bitcoin would have
delighted Lehane. It didn�t. Rather, it suggested that his campaign
might be working a bit too well. As with Airbnb, Lehane doesn�t want
the crypto industry to become firmly associated with either Democrats
or Republicans, because then it will be impossible to pass legislation
around it. And virtually any policy championed by Trump becomes a
partisan matter by default.

President Biden�s announcement, in July, that he was dropping out of
the race seemed to offer the crypto industry an opportunity for a reset
with the Democrats. The ascension of Vice-President Kamala Harris, a
Californian with a tech-friendly record, raised the possibility of
balancing the partisan scales. In a September speech about her economic
plans as President, Harris pledged that the U.S. would �remain dominant
in A.I. and quantum computing, blockchain, and other emerging
technologies.� The d�tente seems to be working: on October 4th, Ben
Horowitz, the venture capitalist who had appeared in the video
attacking Biden, told his employees that he and his wife would be
making a personal donation to �entities who support the Harris Walz
campaign��in no small part because some private conservations he�d had
with Harris and her team made him �very hopeful� that, as President,
she�d abandon Biden�s �exceptionally destructive� crypto policies.
Lehane, for his part, has donated thirty-five thousand dollars to
Harris�s campaign (and nothing to Trump�s).

In the meantime, however, the crypto coalition that Lehane helped to
build has begun fraying�a victim of the same partisan divides that
plague the rest of the nation. In August, Ron Conway, the California
power broker who had given half a million dollars to Fairshake, e-
mailed the super PAC�s other funders, including Andreessen and
Armstrong, to complain that the campaign was alienating Democratic
lawmakers. �How short sighted and stupid can you possibly be,� he
wrote. Fairshake�s donations to unseat Senator Brown in Ohio were,
Conway said, a �slap in the face� to Schumer. �NOT ONE PERSON BOTHERED
TO GIVE ME A HEADS UP THAT YOU WERE DOINIG THIS,� he continued, proving
that billionaires also ignore spell-check. �We have two factions: a
moderate faction and a Donald Trump faction (Brian and Marc). . . . I
have been working too long with people who [do] not share common values
and that is unacceptable.� He went on, �Because of your selfish hidden
agendas it is time for us to separate. . . . I will I no longer
compromise myself by associating or helping.�

Republican leaders began making parallel complaints. When Andreessen
and crypto executives joined a Republican congressional retreat in
Jackson Hole this past summer, attendees expressed fury over the fact
that Fairshake had spent money on ads supporting the Democratic
candidates in the Arizona and Michigan Senate races�contests that might
well decide which party takes control of the chamber.

Whether or not Lehane�s coalition holds together, one thing is clear:
Silicon Valley has become part of a tradition that stretches back to
Boss Tweed. Tech has learned how to politick. To paraphrase Ronald
Reagan, the industry is mastering the world�s second-oldest profession
by studying the techniques of the first. Tech�s money and emerging
political savvy mean that its interests�crypto, the sharing economy,
ungoverned social media�are here to stay. For the S.E.C., Silicon
Valley�s turn has sparked something close to terror. �If crypto wins,
you�re going to see financial firms suddenly saying their products are
on the blockchain, and they�ll drive billions through that loophole,�
the official familiar with the S.E.C.�s thinking told me. �We saw this
happen with savings and loans, and with mortgage derivatives, and with
regional banks, and it always ends badly. Something�s going to blow up,
and a lot of people are going to get hurt.� Even the people who have
worked on Lehane�s campaign aren�t certain that they�re doing the right
thing. �Yeah, the Valley is more sophisticated now, but that doesn�t
mean it�s good for the public,� the Coinbase staffer told me. �The
public gives zero shits if crypto is a security or a commodity. What�s
really important to them�How do I protect myself? How do I know which
coin is safe?�that�s not part of the conversation. This isn�t
enlightened debate and discussion. This is about using money to be a
bully, so everyone knows you�re the scariest ones on the playground.�

There are two ways of looking at Silicon Valley�s new political
sophistication. The first is that it is a manifestation of how a modern
democracy is supposed to work. As Peter Ragone, the prominent Democrat
consultant, put it, �I�d rather have people getting involved and
getting their hands dirty�being willing to talk about regulation and
saying their opinions in public�than a situation like the past, where
all the rich guys cut deals in back rooms.� Many of America�s proudest
political battles�the fights for marriage equality, universal suffrage,
environmental protections�succeeded only because they were backed by
supporters with deep pockets and fierce tenacity, advantages that the
tech industry also has. And no amount of money can decide an election
unless the voters agree with the agenda. �You don�t get to take office
unless you have a majority, or close to a majority, of people agreeing
with you, no matter how rich you are,� Ragone said. In this view, tech-
industry proponents, like many Americans, have simply learned to
advocate for a cause, build a coalition, and make sure that their
voices are heard.

The other way of viewing the Valley�s political exertions is as a
symptom of systemic rot�as proof that American governance and
legislation have become so perverted by money that it is nearly
impossible for people other than billionaires to further their agendas.
This dynamic can be seen as particularly dangerous given that the U.S.
economy has dumped lavish riches on a tiny group of disaffected,
defiantly unaccountable technologists. As many critics of Silicon
Valley see it, today�s startup founders and venture capitalists are,
like the nouveaux riches of previous eras, using their wealth for
selfish aims. In doing so, they have revealed themselves to be as
ruthless as the robber barons and industrial tyrants of a century
ago�not coincidentally, the last time that income inequality was as
extreme as it is today.

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Lehane, for his part, acknowledges that our political system is flawed,
but he believes he�s making it better. He�s been successful, he told
me, only because he�s worked with so many talented colleagues devoted
to building a better, fairer world. �For me, it�s always been about
�Can you give the little guy a much bigger knife to cut a much bigger
piece of the economic pie?� � he said. As he sees it, Airbnb fought
large hotel chains so that teachers and nurses could earn extra money
by renting out their empty bedrooms. Coinbase has given people a way to
sidestep the big banks and their onerous fees. Many entrenched
industries have used politics to benefit themselves at the public�s
cost. It�s only fair, Lehane argues, to let Internet upstarts fight for
their agenda; he says his advocacy is rooted in a passionate belief
that tech, if regulated wisely, can help the powerless get their share.

Of course, this mission has also made Lehane very wealthy. (He declined
to disclose precisely how wealthy.) �But, at the risk of being
incredibly hubristic, there�s a lot of places I could have gone to make
money,� he said. What motivates him, he added, is a righteous battle.
His X profile features a photograph of him in boxing gloves, grimacing
mid-punch.

In August, OpenAI, the artificial-intelligence giant, announced that it
had hired Lehane as its vice-president of global affairs. Unlike the
battles that he�s fought at Airbnb and Coinbase, where the ideological
lines of combat have been easy to define, the political fights over
artificial intelligence are murkier and more nascent. There are
numerous stakeholders with competing interests within the tech industry
itself. Marc Andreessen, for one, has called for little to no
additional regulation of underlying A.I. technologies, because, he
wrote in a jeremiad last year, hampering the development of technology
that might benefit humanity �is a form of murder.� In other words, �any
deceleration of AI will cost lives.� He left it unsaid that creating
regulations would also likely make it more difficult for him and other
venture capitalists to find fast-growing companies to invest in,
thereby denying them profits.

On the opposing side is a contingent of A.I. engineers who believe that
their creations may soon become powerful enough to exterminate most of
humanity. Regulation, therefore, is urgently needed to insure that only
the most enlightened technologists can practice this mysterious
alchemy. The technologists pushing these arguments, inevitably, place
themselves among those enlightened few, and their �more responsible�
visions of A.I. development often align with the business plans of
their own startups.

Somewhere in the middle is Lehane and OpenAI. The company made an
opening salvo in July, when its chief executive, Sam Altman, published,
with Lehane�s support, an op-ed in the Washington Post which portrayed
the fight around A.I. regulations as one pitting democracies against
authoritarian regimes. �The bottom line is that democratic AI has a
lead over authoritarian AI because our political system has empowered
U.S. companies, entrepreneurs, and academics,� Altman wrote. But that
lead is not guaranteed, he continued, and it can be protected only if
Congress passes regulations that encourage important software
advances�like OpenAI�s ChatGPT chatbot�and also prioritize �rules of
the road� and �norms in developing and deploying AI.� OpenAI, Altman
indicated, is prepared to accept substantial constraints on data
security and transparency, and it supports the creation of a government
agency to regulate A.I. development and use.

This rhetoric may sound high-minded, but�not surprisingly�Altman�s
position is also somewhat self-interested. The company�s smaller rivals
would probably find such rules and norms expensive and cumbersome, and
therefore have a harder time complying with them than OpenAI would. The
op-ed was also an example of Lehanian reframing: instead of talking
about big A.I. companies competing with small startups, or about the
inevitable tensions between rapid technological leaps and slower but
safer progress, Altman recast the A.I. battle as one between good and
evil. And Silicon Valley, in this story line, is the home of virtuous
superheroes.

Some observers of the A.I. industry find this perspective cynical.
Suresh Venkatasubramanian, a professor of computer science at Brown, is
a co-author of the White House�s �Blueprint for an AI Bill of Rights,�
which urges regulations on data privacy and transparency, and
protections against algorithmic discrimination. He told me, �You notice
OpenAI doesn�t want to talk about its alleged theft of copyrighted
materials, which is definitely anti-democratic and, if true, definitely
anti-American.� (ChatGPT was developed by inhaling texts from the
Internet without paying�or, for the most part, crediting�their authors;
OpenAI claims that this is fair use.) What�s more, Altman�s reframing
elides important issues that democratic nations might disagree on, such
as what kinds of privacy regulations ought to govern A.I., and who
should pay for the environmental costs of A.I. data centers.

But Lehane�s strategy of putting Altman forward as a strong political
voice guarantees that OpenAI, and the A.I. industry as a whole, will
continue to influence the American political conversation for years to
come. Venkatasubramanian told me, �The goal is to get a seat at the
table, because then you have influence over how things turn out.� The
A.I. industry�s influence is already being felt in state capitals.
Workday, a giant human-resources software company, has been lobbying in
several states to add what could be a subtle loophole to legislation
about �automated decision tools� in the workplace. Companies that, like
Workday, sell A.I.-enhanced software for hiring employees would
essentially be immune from lawsuits over racial discrimination, or
other biases, unless a litigant could prove that A.I. was the
�controlling� factor behind the rejection of a candidate. �It all comes
down to just one word in the legislation,� Venkatasubramanian said.
�One word makes all the difference, and if you are at the table, and
involved in the conversation, you can nudge that word into the
legislation, or out of it.�

Even Lehane admits that the A.I. campaign is in its early stages. The
exact pressure points aren�t quite clear yet. Alliances and enmities
are constantly shifting. What is certain, though, is that Silicon
Valley will continue to bully and woo politicians by deploying
money�and its giant user base�as a lure and a weapon.

Things could change: the robber barons of the Gilded Age were
eventually brought down; twentieth-century industrial tyrants were,
over time, shamed into retreat. The most well-known tech
companies�Google, Apple, Meta, and Amazon�have become b�tes noires to
people on both the right and the left. (So far, though, this seemingly
hasn�t done much to harm profits, or to cow executives.) Democracy, in
all its mess and glory, may prevail. The only fixed truth about
technology is that change is inevitable. Most of the tech industry �has
run independent of politics for our entire careers,� Andreessen wrote
when he announced that his political neutrality was over. Going
forward, he would be working against candidates who defied tech. As
Andreessen saw it, he didn�t have a choice: �As the old Soviet joke
goes, �You may not be interested in politics, but politics is
interested in you.� � ?

Published in the print edition of the October 14, 2024, issue, with the
headline �Silicon Valley�s Influence Game.�

https://www.newyorker.com/magazine/2024/10/14/silicon-valley-the-new-
lobbying-monster