By Dawn Kopecki, Sheila Dang, Alexandra Ulmer and Virginia Furness
NEW YORK, Nov 5 (Reuters) - Elon Musk spent nearly half a billion dollars on the US midterm elections, but the record expenditure yielded little for the world's richest man and leader of SpaceX and Tesla.
Just three of the 43 Republicans Musk backed for the House of Representatives won on Tuesday night, compared to 33 who lost. The remaining seven races had not been called by late Wednesday, though Democrats are running ahead in tallies
so far.
Of the seven Senate Republican candidates Musk backed, six lost and one race hangs in the balance. In that last race, Alaska, Democrat Mary Peltola is narrowly ahead with 77% of votes counted.
In Texas, where SpaceX and Tesla are headquartered and where Musk plans a chipmaking venture, Musk also came up empty after spending almost $230 million on the Senate contest, $5 million on the governor's race, and $500,000 on the lieutenant governor vote.
"A lot of Democrats see him as the Mr. Money Bags for their Republican opponents and that’s certainly going to color how they’re going to treat him personally," said David Hopkins, political science professor at Boston College. "He’s particularly at risk because he’s been part of the Trump administration and his companies have direct government involvement."
Shares of SpaceX and Tesla fell 3.9% and 3.3% respectively on Wednesday on investor concerns that a Democratic-controlled Congress would tighten scrutiny of Musk's Starlink satellite service and his AI data center projects.
Musk's outsized donations, which helped drive spending in this election cycle to a new record, have provoked the ire of Democrats who have said investigations into Musk and his businesses topped their agenda. With their newfound power, Democrats say they are adding campaign finance reform to their wish list.
Musk spent $445 million on federal races alone, according to nonpartisan campaign finance watchdog OpenSecrets. The full extent of his money's reach may never be known. He spent tens of millions more through dark money nonprofit groups — which disclose less about their donors than political action committees — a person familiar with his campaign spending said, and millions more on state and local elections that do not have uniform disclosure rules, local media outlets have reported.
Musk's political action committee, America PAC, and his attorney Alex Spiro did not respond to requests for comment.
OPPOSITION IN TEXAS
Spending in recent elections has surged with the rise of super PACs, which can take unlimited donations from wealthy individuals and corporations and spend on campaigns with few restrictions.
Political advertising tracker AdImpact said the Texas Senate contest was the most expensive US non-presidential race ever, with roughly $573.2 million in total spending.
"We've just sent a message to every millionaire mega donor, to every trillionaire mega donor, every corrupt defender of this broken political system. In this state, in this country, power belongs to the people," US Senator-elect James Talarico said in his acceptance speech late Tuesday in Austin, Texas.
The Democrat, whom Musk targeted with $153.5 million worth of attack ads, compared himself and Musk to the biblical David and Goliath, saying: "Tonight we beat Goliath."
Democratic candidates significantly outraised Republicans with small-dollar donations, making Republicans more dependent on wealthy donors. Billionaire Michael Bloomberg donated $80 million to Democrats in the last weeks of the race.
Incoming Texas Governor Gina Hinojosa, who beat Republican Governor Greg Abbott, indicated this year that she would challenge Musk's close relationship with the state if elected.
"Abbott gave control of our Boca Chica Beach to the highest bidder. That beach is our inheritance," she said. SpaceX launches rockets from Boca Chica Beach in South Texas.
Hinojosa has sued Abbott's office for access to unredacted emails involving Musk and his companies. Abbott is appealing, according to Houston Public Media.
“This lawsuit is a baseless stunt and nothing more than an act of desperation,” Abbott's press secretary Andrew Mahaleris said on X.
'MUSK LOOPHOLE'
Musk will face other battles in Washington.
The incoming chair of the House Committee on Oversight and Government Reform, US Representative Robert Garcia, a California Democrat, plans to introduce legislation closing the "Musk loophole," referring to a provision in campaign finance law that allows individual executives to spend unlimited personal money on political campaigns, even though their companies are banned from doing so.
Democrats are expected to open a flurry of congressional investigations scrutinizing Musk's companies, their contracts, his work running the Department of Government Efficiency, involvement in Ukraine and contact with Russia.
Some inquiries have already begun. Democrats on House and Senate investigative committees wrote to SpaceX, the Department of Defense and White House last month, looking into the company's restriction of its Starlink satellite system in Ukraine during a critical time in its war against Russia. Others have questioned Musk on AI chatbot Grok's dissemination of sexualized images of women and children, conflicts of interest while he ran DOGE, and SpaceX's federal contracts with NASA and the Defense Department.
Early on Wednesday, as the election results became clear, Musk posted on X: "Guess my election-interfering space lasers didn’t work this time."
(Reporting by Dawn Kopecki in New York, Alexandra Ulmer in San Francisco, Sheila Dang in Houston, Virginia Furness in London and Joey Roulette in Washington. Editing by Rod Nickel)
