Campaign finance in the United States
Encyclopedia
Campaign finance
in the United States
is the financing of electoral campaigns
at the federal
, state
, and local levels
.
At the federal level, the primary source of campaign funds is individuals; political action committee
s are a distant second. Contributions from both are limited, and direct contributions from corporations and labor unions are prohibited. On January 21, 2010, the Supreme Court
overturned a 20-year-old ruling that had previously permitted state laws that prohibit corporations and unions from using money from their general treasuries to produce and run their own campaign ads.
The Federal Election Commission
(FEC) is an independent federal agency created in 1974 by amendments to the Federal Election Campaign Act
(FECA) to enforce FECA.
Public financing is available for qualifying candidates for President during both the primaries
and the general election
. Eligibility requirements must be fulfilled to qualify for a government subsidy and those that do accept government funding are usually subject to spending limits. The system is designed so that the Democratic
or Republican
candidates for President of the United States
routinely qualify for funds, while excluding most other party candidates.
Races for non-federal offices are governed by state and local law. Over half the states allow some level of corporate and union contributions. Some states have limits on contributions from individuals that are lower than the national limits, while six states (Illinois, Missouri, New Mexico, Oregon, Utah and Virginia) have no limits at all.
Campaign finance is a controversial issue, pitting concerns about free speech against concerns about corruption
and inequality on the part of those who favor existing or further restrictions.
practice of shaking down naval yard workers for political donations. In 1883, the Civil Service Reform Act aka Pendleton Act applied the Naval Appropriation Act to all government workers. The Hatch Act
prohibited contributions to federal candidates from federal workers and contractors and limited individual contributions to $5,000 per year. The Tillman Act and Federal Corrupt Practices Act
sought to limit more broadly the influence of money on the campaigns, but these were largely ignored. In 1971, Congress consolidated its earlier reform efforts in the Federal Election Campaign Act
(FECA), instituting more stringent disclosure requirements for federal candidates, political parties
, and political action committees (PACs). Federal candidates include those running for the House
, the Senate
, the President
and the Vice President.
After the Watergate affair, Congress took action to specifically regulate federal campaigns. Amendments to the FECA in 1974 created an independent agency
, the Federal Elections Commission (FEC), to monitor donations and spending on federal campaigns. It also created a
commission to enforce the Federal Election Campaign Act provisions. The limits included $1,000 individual contribution limit and a $5,000 PAC limit. FECA also placed limits on expenditures, which were invalidated on First Amendment grounds in the Supreme Court decision of Buckley v Valeo. In 1979, the FECA amendments package allowed the use of donations to political parties rather than candidates, the first time Congress enacted such reform.
In 1986, several bills were killed in the U.S. Senate by bipartisan maneuvering which did not allow the bills to come up for a vote. The bills would impose strict controls for campaign fund raising. Later in 1988, legislative and legal setbacks on proposals designed to limiting overall campaign spending by candidates were shelved after a Republican filibuster. In addition, a constitutional amendment to override the Supreme Court decision failed to get off the ground.
In 1994, Senate Democrats had more bills blocked by Republicans including a bill setting spending limits and authorizing partial public financing of congressional elections. In 1996, bipartisan legislation for voluntary spending limits which rewarded those who comply, and which banned soft money, was killed by a Republican filibuster.
In 1997, the McCain-Feingold bipartisan bill sought to close soft money and TV advertising expenditures but the legislation was defeated by a Republican filibuster. Several different proposals were made in 1999 by both parties. The Campaign Integrity Act (H.R. 1867) proposed by Asa Hutchinson (R - Arkansas) put a ban on soft money and raised hard money limits. The Citizen Legislature & Political ACT (H.R. 1922) sponsored by Rep. John Doolittle (R - CA) would repeal all federal freedom ACT election contribution limits and expedite and expand disclosure. H.R. 417 Campaign Reform Act Shays-Meehan Bill, sponsored by Christopher Shays (R - CT) and Martin Meehan (D - MA), banned soft money and limited types of campaign advertising.
In 2002, Congress further attempted to reform federal campaign financing with the Bipartisan Campaign Reform Act
. This law was also challenged in the Supreme Court, but its core provisions, including restrictions on "soft money" donations to political parties and restrictions on "electioneering communications" (broadcast ads mentioning a candidate within 30 days of a primary or 60 days of a general election) were upheld by the Supreme Court in McConnell v. Federal Election Commission
.
The DISCLOSE Act (S. 3628) was proposed in July of 2010. The bill would have amended the Federal Election Campaign Act of 1971 to prohibit foreign influence in Federal elections, prohibit government contractors from making expenditures with respect to such elections, and establish additional disclosure requirements with respect to spending in such elections. The bill would also impose new donor and contribution disclosure requirements on nearly all organizations that air political ads independently of candidates or the political parties. The legislation would require the sponsor of the ad to appear in it and take responsibility for it. Obama argued that the bill would also reduce foreign influence over American elections. Democrats needed at least one Republican to support the measure in order to get the 60 votes to overcome GOP procedural delays, but were unsuccessful.
“Corporations and unions are still banned from making contributions in federal elections. PACs affiliated with, but legally separate from, those corporations and unions may continue to contribute to candidates, parties, and other PACs"; and 5), “[U]nless meeting [certain] criteria for disclosure, corporate or union funds given to an intermediary (such as a trade association) do not have to be publicly reported. Accordingly, the total sources or amounts of corporate or union funds in federal elections remains unknown.”
"Hard" money is contributed directly to a candidate of a political party. It is regulated by law in both source and amount, and monitored by the Federal Election Commission (maximum $2500).
"Soft" money is contributed to the political party as a whole. Historically, "soft money" referred to contributions made to political parties for purposes of party building and other activities not directly related to the election of specific candidates. Because these contributions were not used for specific candidate advocacy, they were not regulated by the Federal Election Campaign Act, as interpreted by the Supreme Court in Buckley v. Valeo. The Bipartisan Campaign Reform Act of 2002 (also known as McCain-Feingold) prohibited unregulated contributions to national party committees. "Soft money" also refers to unlimited contributions to organizations and committees other than candidate campaigns and political parties (except, where legal, to state and local parties for use solely in state and local races). Organizations which receive "Soft money" contributions are often called "527s", for the section of the tax code under which they operate. The term is generally used to refer to independent, nonprofit political organizations that are not regulated by the Federal Election Commission
or by a state elections commission, and are not subject to the same contribution limits as PACs. Such organizations can legally engage in political activity, but funds from "soft money" contributions may not be spent on ads promoting the election or defeat of a specific candidate.
The U.S. Supreme Court
decision Buckley v. Valeo
(1976) held that limitations on donations to candidates were constitutional
(because of the compelling state interest in preventing corruption or the appearance of corruption), but limitations on the amount campaigns could spend (spending limits or caps) were an unconstitutional abridgment of free speech under the First Amendment
. Buckley v. Valeo also held that only speech that expressly advocated the election or defeat of a candidate could be regulated. Thus organizations could spend unregulated "soft money" for a variety of activities, including "issue advertising," a broad term that included any advertising that stopped short of expressly advocating the election or defeat of a candidate through words and phrases such as "vote for," "vote against," "support," "defeat," or "elect".
Beginning in the late 1970s, parties successfully petitioned the Federal Election Commission
to be allowed to spend soft money on non-federal party building and administrative costs. Soon, this use of soft money expanded to voter registration
, get out the vote
, and issue advertising. For example, a wealthy individual could give a large contribution in soft money to a political party. The party could then spend this money on political ads. These ads could not explicitly or expressly advocate the election or defeat of a candidate (such as "Vote for Smith," "Elect Smith," "Send Smith to Congress," "Vote Against Doe," or "Defeat Doe"), but they could use the names of candidates ("Bill Smith is an honest man who stands up for the people; John Doe is a chronic liar who's taken money from special interests and advocated cutting Social Security
. Call John Doe and tell him how you feel about this.")
The Reform Party, founded by Ross Perot
, made campaign finance reform a central issue in its platform
, and when Perot ran for president in 1992
and 1996
he strongly argued for it. Oddly enough, most political scientists believe that campaign finance laws hindered Perot's efforts to establish the Reform Party on a permanent basis. It again became a major issue in the 2000 U.S. presidential election
, especially with candidates John McCain
and Ralph Nader
. Organizations in favor of campaign finance reform included many public interest
groups, such as Common Cause
, Democracy 21
, the Campaign Legal Center
, and Democracy Matters
. Opposition came from a coalition of organizations such as the American Civil Liberties Union
and the Center for Competitive Politics
(both of which argue that campaign finance reform would harm free speech) and the National Rifle Association
, National Right to Life Committee
, and other organizations.
The Bipartisan Campaign Reform Act of 2002, sometimes called McCain-Feingold, amended the Federal Election Campaign Act
(1971) to ban national political party committees
(most prominently the Democratic National Committee
and Republican National Committee
) from accepting or spending soft money contributions. It also included a "stand by your ad" provision
requiring candidates to appear in campaign advertisements and claim responsibility for the ad (most commonly with a phrase similar to "I'm John Smith and I approve this message.")
The legislation was challenged in McConnell v. Federal Election Commission
(2003), but most of the act was upheld by the Supreme Court. However, a further challenge in Federal Election Commission v. Wisconsin Right to Life, Inc.
(2007), with new justices on the Supreme Court, resulted in parts of McConnell being effectively, though not formally, reversed.
After the passage of the Bipartisan Campaign Reform Act, many of the soft money-funded activities previously undertaken by political parties were taken over by various 527 group
s, which funded many issue ads in the 2004 presidential election
. The heavy spending of key 527 groups to attack presidential candidates brought complaints to the Federal Elections Commission of illegal coordination between the groups and rival political campaigns. In 2006 and 2007 the FEC fined a number of organizations, including MoveOn.org and Swift Boat Veterans for Truth, for violations arising from the 2004 campaign. The FEC's rationale was that these groups had specifically advocated the election or defeat of candidates, thus making them subject to federal regulation and its limits on contributions to the organizations. In 2006 the Campaign Finance Institute
issued a study on 527 groups. The study shows that many advocacy groups deploy three different types of organization—political action committees (PACs), 527 groups, and 501(c) advocacy entities—in their efforts to influence federal elections and public policy. These cumulative, coordinated efforts increase the groups' financial influence in elections. The CFI analysis presents much new information about the major role played by 501(c)(4) social welfare, (c)(5) labor union and (c)(6) trade association
organizations in elections, and the different ways in which they and related 527 organizations are used by Republican and Democratic-oriented groups.
and general election
as of 2009) is that campaigns seek out "bundlers," people who can gather contributions from many individuals in an organization or community, and present the sum to the campaign. Campaigns often recognize these bundlers with honorary titles and, in some cases, exclusive events featuring the candidate.
Bundling has always existed in various forms, but has become more important with the enactment of limits on contributions at the federal level and in most states in the 1970s. EMILY's List
, for example, was involved in early bundling-like activities. Bundlers grew in importance again after the Bipartisan Campaign Reform Act of 2002 prohibited soft money contributions to political parties.
Bundling became organized in a more structured way in the 2000s, spearheaded by the "Bush Pioneer
s" for George W. Bush's
2000
and 2004 presidential campaigns
. One infamous former "bundler" was Democratic Party supporter and apparel manufacturer
Norman Hsu
, who achieved a prominent role as one of Hillary Rodham Clinton's
"HillRaisers" for her 2008 presidential campaign. Hsu was then found to be a fugitive from an early 1990s fraud charge; in such cases, campaigns usually return or donate to charity the contributions that the person in question gave, but are left with the thorny question of whether to return all the other contributions that bundler gave. In some cases, including Hsu's, bundlers are suspected of having donated their own money under others' names (to circumvent the individual contribution limit) or of having coerced
employees or others to make contributions with their own money, both of which are illegal. But most bundlers operate legally and help to reduce the time and cost of fundraising for the candidates and their campaigns.
During the 2008 campaign
the six leading primary candidates (three Democratic, three Republican) had listed a total of nearly two thousand bundlers.
Similar reporting requirements exist in many states for state and local candidates and for PACs and party committees.
Increasingly, political committees on all levels are required to electronically file campaign finance statements.
Most political advertising, including all advertising that specifically advocates the election or defeat of a candidate for federal office, is required to identify the source of its funding. In elections for national office (Congress and president/vice-president), television ads from a candidate must feature a shot of the candidate's face and have the candidate personally identify himself/herself, saying, "I approved this message." The Bipartisan Campaign Reform Act
added this rule in the belief that candidates would not engage in negative campaign advertising if they had to personally claim responsibility for the ad's content. As of 2007, little empirical research has been done on its effects, but no one has reported a noticeable effect on the tone of campaigning.
(1976) held that expenditures
made independently of a candidate's campaign could not be limited under the Constitution. If expenditures are made in "coordination" with a campaign, however, they may be regulated as contributions.
Because of the Supreme Court's decision in the case Citizens United v. Federal Election Commission
, corporations and labor unions can now use the funds from their general treasuries to run advertisements for candidates in national elections. The Supreme Court decided that any laws prohibiting corporations and labor unions from using these funds were prohibiting first amendment rights.
Additionally, over half the states allow some level of direct corporate contributions or spending in state and local races.
Party committees may contribute funds directly to candidates, subject to the contribution limits. National and state party committees may make additional "coordinated expenditures," subject to limits, to help their nominees in general elections. National party committees may also make unlimited "independent expenditures" to support or oppose federal candidates. However, since 2002, national parties have been prohibited from accepting any funds outside the limits established for elections in the Federal Election Campaign Act
. State party and local committees are also subject to restrictions on the funds they may spend in connection with an election in which a federal candidate is on the ballot.
Party committees must report with the FEC once their federal election activities exceed certain dollar thresholds specified in the law.
scheme.
Table footnotes
(Table taken from the FEC website on 02 April 2011.)
From the inception of this program in 1976 through 1992, almost all candidates who could qualify accepted matching funds in the primary. However, in 1996 Republican Steve Forbes
opted out of the program. In 2000, Forbes and George W. Bush
opted out. In 2004 Bush and Democrats John Kerry
and Howard Dean
chose not to take matching funds in the primary.
In 2008, Democrats Hillary Clinton and Barack Obama
, and Republicans John McCain
, Rudy Giuliani
, Mitt Romney
and Ron Paul
decided not to take primary matching funds. Republican Tom Tancredo
and Democrats Chris Dodd, Joe Biden
and John Edwards
elected to take public financing.
By refusing matching funds, candidates are free to spend as much money as they can raise privately. In 2008, Barack Obama pledged to seek public financing for the general election, but later reversed himself in order to avoid fundraising limits.
In addition to primary matching funds, the federal government subsidizes the presidential nominating conventions
of the major parties (the Democratic National Convention
and Republican National Convention
). Based on the performance of their party in past elections, candidates may be offered the opportunity to accept government funds for the general election. If they accept the government funds, they agree not to raise or spend private funds or to spend more than $50,000 of their personal resources. No major party nominee turned down government funds for the general election from 1976, when the program was launched, until Barack Obama
did so in 2008, or for General Election Legal and Accounting Compliance Funds (GELACs), which pay for attorneys and closeout costs but are not supposed to pay for campaigning or advertising. The only party other than the Republicans and Democrats to receive government funding in a general election was the Reform Party, which qualified for government subsidies in 1996 and 2000 on the basis of Ross Perot's strong showing in the 1992 and 1996 elections.
The presidential public financing system is funded by a $3 tax check-off
on individual tax returns (the check off does not increase the filer's taxes, but merely directs $3 of the government's general fund to the presidential fund). The number of taxpayers who use the check off has fallen steadily since the early 1980s, until by 2006 fewer than 8 percent of taxpayers were directing money to the fund, leaving the fund chronically short of cash.
A small number of states and cities have started to use broader programs for public financing of campaigns. One method, which its supporters call Clean Money, Clean Elections
, gives each candidate who chooses to participate a fixed amount of money. To qualify for this subsidy, the candidates must collect a specified number of signatures and small (usually $5) contributions. The candidates are not allowed to accept outside donations or to use their own personal money if they receive this public funding. Candidates who choose to raise money privately rather than accept the government subsidy are subject to significant administrative burdens and legal restrictions, with the result that most candidates accept the subsidy. This procedure has been in place in races for all statewide and legislative offices in Arizona
and Maine
since 2000, where a majority of officials were elected without spending any private contributions on their campaigns. Connecticut
passed a Clean Elections law in 2005, along with the cities of Portland, Oregon
and Albuquerque, New Mexico
.
A 2003 study by the GAO found that "It is too soon to determine the extent to which the goals of Maine’s and Arizona’s public financing programs are being met."
In recent years, the movement for "Clean Elections" appears to have stalled. Proposition 89
, a California ballot proposition
in November 2006, sponsored by the California Nurses Union, that would have provided for public financing of political campaigns and strict contribution limits on corporations, was defeated. In 2008, the non-partisan California Fair Elections Act passed the legislature and Governor Schwarzenegger signed it, but the law does not take effect unless approved by voters in a referendum in 2010. A proposal to implement Clean Elections in Alaska was voted down by a two-to-one margin in 2008., and a pilot program in New Jersey was terminated in 2008 amid concern about its constitutionality and that the law was ineffective in accomplishing its goals. In 2006, in Randall v. Sorrell
, the Supreme Court held that large parts of Vermont's Clean Elections law were unconstitutional. In 2008, the Supreme Court's decision in Davis v. Federal Election Commission
suggested that a key part of most Clean Election laws—a provision granting extra money (or "rescue funds") to participating candidates who are being outspent by non-participating candidates—is unconstitutional. On the basis of Davis v. Federal Election Commission, in late 2008 a federal court in Arizona found the "rescue funds" prosivions of Arizona's Clean Elections law unconstitutional in McCommish v. Brewer.
In a suit brought by the Green Party of Connecticut, a federal court ruled Connecticut's law was unconstitutional in August 2009. An appeal is pending as of October 2009.
Campaign finance
Campaign finance refers to all funds that are raised and spent in order to promote candidates, parties or policies in some sort of electoral contest. In modern democracies such funds are not necessarily devoted to election campaigns. Issue campaigns in referendums, party activities and party...
in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
is the financing of electoral campaigns
Elections in the United States
The United States has a federal government, with elected officials at the federal , state and local levels. On a national level, the head of state, the President, is elected indirectly by the people, through an Electoral College. In modern times, the electors virtually always vote with the popular...
at the federal
Federal government of the United States
The federal government of the United States is the national government of the constitutional republic of fifty states that is the United States of America. The federal government comprises three distinct branches of government: a legislative, an executive and a judiciary. These branches and...
, state
State government
A state government is the government of a subnational entity in a federal form of government, which shares political power with the federal or national government. A state government may have some level of political autonomy, or be subject to the direct control of the federal government...
, and local levels
Local government in the United States
Local government in the United States is generally structured in accordance with the laws of the various individual states. Typically each state has at least two separate tiers: counties and municipalities. Some states have their counties divided into townships...
.
At the federal level, the primary source of campaign funds is individuals; political action committee
Political action committee
In the United States, a political action committee, or PAC, is the name commonly given to a private group, regardless of size, organized to elect political candidates or to advance the outcome of a political issue or legislation. Legally, what constitutes a "PAC" for purposes of regulation is a...
s are a distant second. Contributions from both are limited, and direct contributions from corporations and labor unions are prohibited. On January 21, 2010, the Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
overturned a 20-year-old ruling that had previously permitted state laws that prohibit corporations and unions from using money from their general treasuries to produce and run their own campaign ads.
The Federal Election Commission
Federal Election Commission
The Federal Election Commission is an independent regulatory agency that was founded in 1975 by the United States Congress to regulate the campaign finance legislation in the United States. It was created in a provision of the 1975 amendment to the Federal Election Campaign Act...
(FEC) is an independent federal agency created in 1974 by amendments to the Federal Election Campaign Act
Federal Election Campaign Act
The Federal Election Campaign Act of 1971 is a United States federal law which increased disclosure of contributions for federal campaigns. It was amended in 1974 to place legal limits on the campaign contributions...
(FECA) to enforce FECA.
Public financing is available for qualifying candidates for President during both the primaries
Primary election
A primary election is an election in which party members or voters select candidates for a subsequent election. Primary elections are one means by which a political party nominates candidates for the next general election....
and the general election
General election
In a parliamentary political system, a general election is an election in which all or most members of a given political body are chosen. The term is usually used to refer to elections held for a nation's primary legislative body, as distinguished from by-elections and local elections.The term...
. Eligibility requirements must be fulfilled to qualify for a government subsidy and those that do accept government funding are usually subject to spending limits. The system is designed so that the Democratic
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
or Republican
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
candidates for President of the United States
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
routinely qualify for funds, while excluding most other party candidates.
Races for non-federal offices are governed by state and local law. Over half the states allow some level of corporate and union contributions. Some states have limits on contributions from individuals that are lower than the national limits, while six states (Illinois, Missouri, New Mexico, Oregon, Utah and Virginia) have no limits at all.
Campaign finance is a controversial issue, pitting concerns about free speech against concerns about corruption
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
and inequality on the part of those who favor existing or further restrictions.
Background to federal campaign finance reform
For most of the history of the United States, federal election campaigns were relatively unregulated. The first federal legislation dealing with campaign finance was the 1867 Naval Appropriations Bill which aimed to stop thepractice of shaking down naval yard workers for political donations. In 1883, the Civil Service Reform Act aka Pendleton Act applied the Naval Appropriation Act to all government workers. The Hatch Act
Hatch Act of 1939
The Hatch Act of 1939 is a United States federal law whose main provision is to prohibit federal employees in the executive branch of the federal government, except the President and the Vice President, from engaging in partisan political activity...
prohibited contributions to federal candidates from federal workers and contractors and limited individual contributions to $5,000 per year. The Tillman Act and Federal Corrupt Practices Act
Federal Corrupt Practices Act
The Federal Corrupt Practices Act was a federal law of the United States enacted in 1910 and amended in 1911 and 1925. It remained the nation's primary law regulating campaign finance in federal elections until the passage of the Federal Election Campaign Act in 1971. Created by President William H...
sought to limit more broadly the influence of money on the campaigns, but these were largely ignored. In 1971, Congress consolidated its earlier reform efforts in the Federal Election Campaign Act
Federal Election Campaign Act
The Federal Election Campaign Act of 1971 is a United States federal law which increased disclosure of contributions for federal campaigns. It was amended in 1974 to place legal limits on the campaign contributions...
(FECA), instituting more stringent disclosure requirements for federal candidates, political parties
Political Parties
Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy is a book by sociologist Robert Michels, published in 1911 , and first introducing the concept of iron law of oligarchy...
, and political action committees (PACs). Federal candidates include those running for the House
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
, the Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
, the President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
and the Vice President.
After the Watergate affair, Congress took action to specifically regulate federal campaigns. Amendments to the FECA in 1974 created an independent agency
Independent agencies of the United States government
Independent agencies of the United States federal government are those agencies that exist outside of the federal executive departments...
, the Federal Elections Commission (FEC), to monitor donations and spending on federal campaigns. It also created a
commission to enforce the Federal Election Campaign Act provisions. The limits included $1,000 individual contribution limit and a $5,000 PAC limit. FECA also placed limits on expenditures, which were invalidated on First Amendment grounds in the Supreme Court decision of Buckley v Valeo. In 1979, the FECA amendments package allowed the use of donations to political parties rather than candidates, the first time Congress enacted such reform.
In 1986, several bills were killed in the U.S. Senate by bipartisan maneuvering which did not allow the bills to come up for a vote. The bills would impose strict controls for campaign fund raising. Later in 1988, legislative and legal setbacks on proposals designed to limiting overall campaign spending by candidates were shelved after a Republican filibuster. In addition, a constitutional amendment to override the Supreme Court decision failed to get off the ground.
In 1994, Senate Democrats had more bills blocked by Republicans including a bill setting spending limits and authorizing partial public financing of congressional elections. In 1996, bipartisan legislation for voluntary spending limits which rewarded those who comply, and which banned soft money, was killed by a Republican filibuster.
In 1997, the McCain-Feingold bipartisan bill sought to close soft money and TV advertising expenditures but the legislation was defeated by a Republican filibuster. Several different proposals were made in 1999 by both parties. The Campaign Integrity Act (H.R. 1867) proposed by Asa Hutchinson (R - Arkansas) put a ban on soft money and raised hard money limits. The Citizen Legislature & Political ACT (H.R. 1922) sponsored by Rep. John Doolittle (R - CA) would repeal all federal freedom ACT election contribution limits and expedite and expand disclosure. H.R. 417 Campaign Reform Act Shays-Meehan Bill, sponsored by Christopher Shays (R - CT) and Martin Meehan (D - MA), banned soft money and limited types of campaign advertising.
In 2002, Congress further attempted to reform federal campaign financing with the Bipartisan Campaign Reform Act
Bipartisan Campaign Reform Act
The Bipartisan Campaign Reform Act of 2002 is a United States federal law that amended the Federal Election Campaign Act of 1971, which regulates the financing of political campaigns. Its chief sponsors were Senators Russell Feingold and John McCain...
. This law was also challenged in the Supreme Court, but its core provisions, including restrictions on "soft money" donations to political parties and restrictions on "electioneering communications" (broadcast ads mentioning a candidate within 30 days of a primary or 60 days of a general election) were upheld by the Supreme Court in McConnell v. Federal Election Commission
McConnell v. Federal Election Commission
McConnell v. Federal Election Commission, 540 U.S. 93 , is a case in which the United States Supreme Court upheld the constitutionality of most of the Bipartisan Campaign Reform Act of 2002 , often referred to as the McCain–Feingold Act....
.
The DISCLOSE Act (S. 3628) was proposed in July of 2010. The bill would have amended the Federal Election Campaign Act of 1971 to prohibit foreign influence in Federal elections, prohibit government contractors from making expenditures with respect to such elections, and establish additional disclosure requirements with respect to spending in such elections. The bill would also impose new donor and contribution disclosure requirements on nearly all organizations that air political ads independently of candidates or the political parties. The legislation would require the sponsor of the ad to appear in it and take responsibility for it. Obama argued that the bill would also reduce foreign influence over American elections. Democrats needed at least one Republican to support the measure in order to get the 60 votes to overcome GOP procedural delays, but were unsuccessful.
Effects of Citizens United, SpeechNow.org Cases and the 2012 Election Cycle
The Supreme Court’s 2010 decision in Citizens United v. FEC and a lower court’s decision in SpeechNow.org v. FEC constitute “the most fundamental changes to campaign finance law in decades,” according to a 2011 Congressional Research Service report. The report notes the following changes, and the rules that remain in place, that are shaping the 2012 election landscape: 1) “As a consequence of Citizens United, corporations and unions are now free to use their treasury funds to air political advertisements explicitly calling for election or defeat of federal or state candidates (independent expenditures) or advertisements that refer to those candidates during pre-election periods, but do not necessarily explicitly call for their election or defeat (electioneering communications). Previously, such advertising would generally have had to be financed through voluntary contributions raised by PACs affiliated with unions or corporations"; 2) The 2010 U.S. Court of Appeals decision in SpeechNow.org means that “contributions to PACs that make only independent expenditures—but not contributions—could not be constitutionally limited. As a result, these entities, commonly called super PACs, may accept previously prohibited amounts and sources of funds, including large corporate, union, or individual contributions used to advocate for election or defeat of federal candidates"; 3) Despite these changes, it should be noted that “pre-existing limits on contributions to campaigns, parties, and PACs generally remain in effect. Despite Citizens United’s implications for independent expenditures and electioneering communications, the ruling did not affect the prohibition on corporate and union treasury contributions in federal campaigns"; 4)“Corporations and unions are still banned from making contributions in federal elections. PACs affiliated with, but legally separate from, those corporations and unions may continue to contribute to candidates, parties, and other PACs"; and 5), “[U]nless meeting [certain] criteria for disclosure, corporate or union funds given to an intermediary (such as a trade association) do not have to be publicly reported. Accordingly, the total sources or amounts of corporate or union funds in federal elections remains unknown.”
Hard money and soft money
Political money in the United States is often divided into two categories, "hard" money and "soft" money."Hard" money is contributed directly to a candidate of a political party. It is regulated by law in both source and amount, and monitored by the Federal Election Commission (maximum $2500).
"Soft" money is contributed to the political party as a whole. Historically, "soft money" referred to contributions made to political parties for purposes of party building and other activities not directly related to the election of specific candidates. Because these contributions were not used for specific candidate advocacy, they were not regulated by the Federal Election Campaign Act, as interpreted by the Supreme Court in Buckley v. Valeo. The Bipartisan Campaign Reform Act of 2002 (also known as McCain-Feingold) prohibited unregulated contributions to national party committees. "Soft money" also refers to unlimited contributions to organizations and committees other than candidate campaigns and political parties (except, where legal, to state and local parties for use solely in state and local races). Organizations which receive "Soft money" contributions are often called "527s", for the section of the tax code under which they operate. The term is generally used to refer to independent, nonprofit political organizations that are not regulated by the Federal Election Commission
Federal Election Commission
The Federal Election Commission is an independent regulatory agency that was founded in 1975 by the United States Congress to regulate the campaign finance legislation in the United States. It was created in a provision of the 1975 amendment to the Federal Election Campaign Act...
or by a state elections commission, and are not subject to the same contribution limits as PACs. Such organizations can legally engage in political activity, but funds from "soft money" contributions may not be spent on ads promoting the election or defeat of a specific candidate.
The U.S. Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
decision Buckley v. Valeo
Buckley v. Valeo
Buckley v. Valeo, 424 U.S. 1 , was a case in which the Supreme Court of the United States upheld a federal law which set limits on campaign contributions, but ruled that spending money to influence elections is a form of constitutionally protected free speech, and struck down portions of the law...
(1976) held that limitations on donations to candidates were constitutional
Constitutionality
Constitutionality is the condition of acting in accordance with an applicable constitution. Acts that are not in accordance with the rules laid down in the constitution are deemed to be ultra vires.-See also:*ultra vires*Company law*Constitutional law...
(because of the compelling state interest in preventing corruption or the appearance of corruption), but limitations on the amount campaigns could spend (spending limits or caps) were an unconstitutional abridgment of free speech under the First Amendment
First Amendment to the United States Constitution
The First Amendment to the United States Constitution is part of the Bill of Rights. The amendment prohibits the making of any law respecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing on the freedom of the press, interfering...
. Buckley v. Valeo also held that only speech that expressly advocated the election or defeat of a candidate could be regulated. Thus organizations could spend unregulated "soft money" for a variety of activities, including "issue advertising," a broad term that included any advertising that stopped short of expressly advocating the election or defeat of a candidate through words and phrases such as "vote for," "vote against," "support," "defeat," or "elect".
Beginning in the late 1970s, parties successfully petitioned the Federal Election Commission
Federal Election Commission
The Federal Election Commission is an independent regulatory agency that was founded in 1975 by the United States Congress to regulate the campaign finance legislation in the United States. It was created in a provision of the 1975 amendment to the Federal Election Campaign Act...
to be allowed to spend soft money on non-federal party building and administrative costs. Soon, this use of soft money expanded to voter registration
Voter registration
Voter registration is the requirement in some democracies for citizens and residents to check in with some central registry specifically for the purpose of being allowed to vote in elections. An effort to get people to register is known as a voter registration drive.-Centralized/compulsory vs...
, get out the vote
Get out the vote
"Get out the vote" are terms used to describe two categories of political activity, both aimed at increasing the number of votes cast in one or more elections.- Non-partisan contexts :...
, and issue advertising. For example, a wealthy individual could give a large contribution in soft money to a political party. The party could then spend this money on political ads. These ads could not explicitly or expressly advocate the election or defeat of a candidate (such as "Vote for Smith," "Elect Smith," "Send Smith to Congress," "Vote Against Doe," or "Defeat Doe"), but they could use the names of candidates ("Bill Smith is an honest man who stands up for the people; John Doe is a chronic liar who's taken money from special interests and advocated cutting Social Security
Social Security (United States)
In the United States, Social Security refers to the federal Old-Age, Survivors, and Disability Insurance program.The original Social Security Act and the current version of the Act, as amended encompass several social welfare and social insurance programs...
. Call John Doe and tell him how you feel about this.")
The Reform Party, founded by Ross Perot
Ross Perot
Henry Ross Perot is a U.S. businessman best known for running for President of the United States in 1992 and 1996. Perot founded Electronic Data Systems in 1962, sold the company to General Motors in 1984, and founded Perot Systems in 1988...
, made campaign finance reform a central issue in its platform
Party platform
A party platform, or platform sometimes also referred to as a manifesto, is a list of the actions which a political party, individual candidate, or other organization supports in order to appeal to the general public for the purpose of having said peoples' candidates voted into political office or...
, and when Perot ran for president in 1992
United States presidential election, 1992
The United States presidential election of 1992 had three major candidates: Incumbent Republican President George Bush; Democratic Arkansas Governor Bill Clinton, and independent Texas businessman Ross Perot....
and 1996
United States presidential election, 1996
The United States presidential election of 1996 was a contest between the Democratic national ticket of President Bill Clinton of Arkansas and Vice President Al Gore of Tennessee and the Republican national ticket of former Senator Bob Dole of Kansas for President and former Housing Secretary Jack...
he strongly argued for it. Oddly enough, most political scientists believe that campaign finance laws hindered Perot's efforts to establish the Reform Party on a permanent basis. It again became a major issue in the 2000 U.S. presidential election
United States presidential election, 2000
The United States presidential election of 2000 was a contest between Republican candidate George W. Bush, then-governor of Texas and son of former president George H. W. Bush , and Democratic candidate Al Gore, then-Vice President....
, especially with candidates John McCain
John McCain
John Sidney McCain III is the senior United States Senator from Arizona. He was the Republican nominee for president in the 2008 United States election....
and Ralph Nader
Ralph Nader
Ralph Nader is an American political activist, as well as an author, lecturer, and attorney. Areas of particular concern to Nader include consumer protection, humanitarianism, environmentalism, and democratic government....
. Organizations in favor of campaign finance reform included many public interest
Public interest
The public interest refers to the "common well-being" or "general welfare." The public interest is central to policy debates, politics, democracy and the nature of government itself...
groups, such as Common Cause
Common Cause
Common Cause is a self-described nonpartisan, nonprofit lobby and advocacy organization. It was founded in 1970 by John W. Gardner, a Republican former cabinet secretary under Lyndon Johnson, as a "citizens' lobby" with a mission focused on making U.S. political institutions more open and...
, Democracy 21
Democracy 21
Democracy 21 is a non-profit organization in the United States that works to remove the influence of private money from politics . It was founded in 1997 by longtime activist Fred Wertheimer, and is based in Washington, DC...
, the Campaign Legal Center
Campaign Legal Center
Campaign Legal Center is a nonpartisan group that promotes greater transparency in election laws...
, and Democracy Matters
Democracy Matters
Democracy Matters is a non-profit, non-partisan grassroots student political organization that is dedicated to deepening democracy. Democracy Matters advocates for public financing of election campaigns and other pro-democracy reforms in order to get big private and corporate money out of elections...
. Opposition came from a coalition of organizations such as the American Civil Liberties Union
American Civil Liberties Union
The American Civil Liberties Union is a U.S. non-profit organization whose stated mission is "to defend and preserve the individual rights and liberties guaranteed to every person in this country by the Constitution and laws of the United States." It works through litigation, legislation, and...
and the Center for Competitive Politics
Center for Competitive Politics
The Center for Competitive Politics is a Section 501 non-profit organization headquartered in Alexandria, Virginia. The CCP's mission statement is "through legal briefs, studies, historical and constitutional analyses, and media communication, to educate the public on the actual effects of money...
(both of which argue that campaign finance reform would harm free speech) and the National Rifle Association
National Rifle Association
The National Rifle Association of America is an American non-profit 501 civil rights organization which advocates for the protection of the Second Amendment of the United States Bill of Rights and the promotion of firearm ownership rights as well as marksmanship, firearm safety, and the protection...
, National Right to Life Committee
National Right to Life Committee
The National Right to Life Committee is the oldest and largest pro-life organization in the United States with affiliates in all 50 states and over 3,000 local chapters nationwide. The group works through legislation and education to work against abortion, infanticide, euthanasia and assisted...
, and other organizations.
The Bipartisan Campaign Reform Act of 2002, sometimes called McCain-Feingold, amended the Federal Election Campaign Act
Federal Election Campaign Act
The Federal Election Campaign Act of 1971 is a United States federal law which increased disclosure of contributions for federal campaigns. It was amended in 1974 to place legal limits on the campaign contributions...
(1971) to ban national political party committees
Political party committee
In the United States, a political party committee is an organization, officially affiliated with a political party and registered with the Federal Elections Commission , which raises and spends money for political campaigning...
(most prominently the Democratic National Committee
Democratic National Committee
The Democratic National Committee is the principal organization governing the United States Democratic Party on a day to day basis. While it is responsible for overseeing the process of writing a platform every four years, the DNC's central focus is on campaign and political activity in support...
and Republican National Committee
Republican National Committee
The Republican National Committee is an American political committee that provides national leadership for the Republican Party of the United States. It is responsible for developing and promoting the Republican political platform, as well as coordinating fundraising and election strategy. It is...
) from accepting or spending soft money contributions. It also included a "stand by your ad" provision
I approve this message
In American politics, "I approve this message" is a phrase said by candidates for federal office in political advertisements on television and radio in order to comply with the so-called Stand By Your Ad provision of the Bipartisan Campaign Reform Act , enacted in 2002, that...
requiring candidates to appear in campaign advertisements and claim responsibility for the ad (most commonly with a phrase similar to "I'm John Smith and I approve this message.")
The legislation was challenged in McConnell v. Federal Election Commission
McConnell v. Federal Election Commission
McConnell v. Federal Election Commission, 540 U.S. 93 , is a case in which the United States Supreme Court upheld the constitutionality of most of the Bipartisan Campaign Reform Act of 2002 , often referred to as the McCain–Feingold Act....
(2003), but most of the act was upheld by the Supreme Court. However, a further challenge in Federal Election Commission v. Wisconsin Right to Life, Inc.
Federal Election Commission v. Wisconsin Right to Life, Inc.
Federal Election Commission v. Wisconsin Right to Life, Inc., 551 U.S. 449 , was a case in which the Supreme Court of the United States held that issue ads may not be banned from the months preceding a primary or general election.-Background:...
(2007), with new justices on the Supreme Court, resulted in parts of McConnell being effectively, though not formally, reversed.
After the passage of the Bipartisan Campaign Reform Act, many of the soft money-funded activities previously undertaken by political parties were taken over by various 527 group
527 group
A 527 organization or 527 group is a type of American tax-exempt organization named after "Section 527" of the U.S. Internal Revenue Code...
s, which funded many issue ads in the 2004 presidential election
United States presidential election, 2004
The United States presidential election of 2004 was the United States' 55th quadrennial presidential election. It was held on Tuesday, November 2, 2004. Republican Party candidate and incumbent President George W. Bush defeated Democratic Party candidate John Kerry, the then-junior U.S. Senator...
. The heavy spending of key 527 groups to attack presidential candidates brought complaints to the Federal Elections Commission of illegal coordination between the groups and rival political campaigns. In 2006 and 2007 the FEC fined a number of organizations, including MoveOn.org and Swift Boat Veterans for Truth, for violations arising from the 2004 campaign. The FEC's rationale was that these groups had specifically advocated the election or defeat of candidates, thus making them subject to federal regulation and its limits on contributions to the organizations. In 2006 the Campaign Finance Institute
Campaign Finance Institute
The Campaign Finance Institute, affiliated with George Washington University, is a non-partisan, non-profit institute that conducts objective research and education, empanels task forces and makes recommendations for policy change in the field of campaign finance in the United States.-Michael J...
issued a study on 527 groups. The study shows that many advocacy groups deploy three different types of organization—political action committees (PACs), 527 groups, and 501(c) advocacy entities—in their efforts to influence federal elections and public policy. These cumulative, coordinated efforts increase the groups' financial influence in elections. The CFI analysis presents much new information about the major role played by 501(c)(4) social welfare, (c)(5) labor union and (c)(6) trade association
Trade association
A trade association, also known as an industry trade group, business association or sector association, is an organization founded and funded by businesses that operate in a specific industry...
organizations in elections, and the different ways in which they and related 527 organizations are used by Republican and Democratic-oriented groups.
Bundling
Another consequence of the limitation upon personal contributions from any one individual ($2400 for each election, with a total of $4800 for a primaryPrimary election
A primary election is an election in which party members or voters select candidates for a subsequent election. Primary elections are one means by which a political party nominates candidates for the next general election....
and general election
General election
In a parliamentary political system, a general election is an election in which all or most members of a given political body are chosen. The term is usually used to refer to elections held for a nation's primary legislative body, as distinguished from by-elections and local elections.The term...
as of 2009) is that campaigns seek out "bundlers," people who can gather contributions from many individuals in an organization or community, and present the sum to the campaign. Campaigns often recognize these bundlers with honorary titles and, in some cases, exclusive events featuring the candidate.
Bundling has always existed in various forms, but has become more important with the enactment of limits on contributions at the federal level and in most states in the 1970s. EMILY's List
EMILY's List
EMILY's List is a political action committee in the United States that aims to help elect female candidates to office. It was founded by Ellen Malcolm in 1984....
, for example, was involved in early bundling-like activities. Bundlers grew in importance again after the Bipartisan Campaign Reform Act of 2002 prohibited soft money contributions to political parties.
Bundling became organized in a more structured way in the 2000s, spearheaded by the "Bush Pioneer
Bush Pioneer
Bush Pioneers are people who gathered $100,000 for George W. Bush's 2000 or 2004 presidential campaign. Two new levels, Bush Rangers and Super Rangers, were bestowed upon supporters who gathered $200,000+ or $300,000+, respectively, for the 2004 campaign, after the 2002 McCain–Feingold campaign...
s" for George W. Bush's
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
2000
George W. Bush presidential campaign, 2000
This article is about the 2000 presidential campaign of George W. Bush, winner of the 2000 presidential election and re-elected in the 2004 election.See George W. Bush for a detailed biography and information about his presidency, and George W...
and 2004 presidential campaigns
George W. Bush presidential campaign, 2004
This article is about the presidential campaign of George W. Bush, the former President of the United States and winner of the 2004 Presidential Election. See George W. Bush for a detailed biography and information about his full presidency, and George W. Bush presidential campaign, 2000 for a...
. One infamous former "bundler" was Democratic Party supporter and apparel manufacturer
Textile industry
The textile industry is primarily concerned with the production of yarn, and cloth and the subsequent design or manufacture of clothing and their distribution. The raw material may be natural, or synthetic using products of the chemical industry....
Norman Hsu
Norman Hsu
Norman Yung Yuen Hsu , born October 1951, is a convicted pyramid investment promoter who associated himself with the apparel industry. His business activities were intertwined with his role as a major fundraiser for the Democratic Party, and he gained notoriety after suspicious patterns of bundled...
, who achieved a prominent role as one of Hillary Rodham Clinton's
Hillary Rodham Clinton
Hillary Diane Rodham Clinton is the 67th United States Secretary of State, serving in the administration of President Barack Obama. She was a United States Senator for New York from 2001 to 2009. As the wife of the 42nd President of the United States, Bill Clinton, she was the First Lady of the...
"HillRaisers" for her 2008 presidential campaign. Hsu was then found to be a fugitive from an early 1990s fraud charge; in such cases, campaigns usually return or donate to charity the contributions that the person in question gave, but are left with the thorny question of whether to return all the other contributions that bundler gave. In some cases, including Hsu's, bundlers are suspected of having donated their own money under others' names (to circumvent the individual contribution limit) or of having coerced
Coercion
Coercion is the practice of forcing another party to behave in an involuntary manner by use of threats or intimidation or some other form of pressure or force. In law, coercion is codified as the duress crime. Such actions are used as leverage, to force the victim to act in the desired way...
employees or others to make contributions with their own money, both of which are illegal. But most bundlers operate legally and help to reduce the time and cost of fundraising for the candidates and their campaigns.
During the 2008 campaign
United States presidential election, 2008
The United States presidential election of 2008 was the 56th quadrennial presidential election. It was held on November 4, 2008. Democrat Barack Obama, then the junior United States Senator from Illinois, defeated Republican John McCain, the senior U.S. Senator from Arizona. Obama received 365...
the six leading primary candidates (three Democratic, three Republican) had listed a total of nearly two thousand bundlers.
Disclosure
Current campaign finance law at the federal level requires candidate committees, party committees and PACs to file periodic reports disclosing the money they raise and spend. Federal candidate committees must identify, for example, all PACs and party committees that give them contributions, and they must provide the names, occupations, employers and addresses of all individuals who give them more than $200 in an election cycle. Additionally, they must disclose expenditures to any individual or vendor. The Federal Election Commission maintains this database and publishes the information about campaigns and donors on its web site.Similar reporting requirements exist in many states for state and local candidates and for PACs and party committees.
Increasingly, political committees on all levels are required to electronically file campaign finance statements.
Most political advertising, including all advertising that specifically advocates the election or defeat of a candidate for federal office, is required to identify the source of its funding. In elections for national office (Congress and president/vice-president), television ads from a candidate must feature a shot of the candidate's face and have the candidate personally identify himself/herself, saying, "I approved this message." The Bipartisan Campaign Reform Act
Bipartisan Campaign Reform Act
The Bipartisan Campaign Reform Act of 2002 is a United States federal law that amended the Federal Election Campaign Act of 1971, which regulates the financing of political campaigns. Its chief sponsors were Senators Russell Feingold and John McCain...
added this rule in the belief that candidates would not engage in negative campaign advertising if they had to personally claim responsibility for the ad's content. As of 2007, little empirical research has been done on its effects, but no one has reported a noticeable effect on the tone of campaigning.
Independent expenditures
The Supreme Court's ruling in Buckley v. ValeoBuckley v. Valeo
Buckley v. Valeo, 424 U.S. 1 , was a case in which the Supreme Court of the United States upheld a federal law which set limits on campaign contributions, but ruled that spending money to influence elections is a form of constitutionally protected free speech, and struck down portions of the law...
(1976) held that expenditures
Independent expenditure
-Definition:In elections in the United States, an independent expenditure is a political campaign communication which expressly advocates the election or defeat of a clearly identified candidate that is not made in cooperation, consultation or concert with or at the request or suggestion of a...
made independently of a candidate's campaign could not be limited under the Constitution. If expenditures are made in "coordination" with a campaign, however, they may be regulated as contributions.
Corporate and union activity
Corporate and labor PACs raise voluntary contributions from a restricted class of individuals. In the case of unions, this consists of union members and their families. For corporations, the restricted class consists of managerial employees and stockholders and their families. These funds may be used to support federal candidates and political committees, either through independent expenditures or through contributions to candidates. A PAC is limited to a maximum contribution of $5,000 to a candidate committee per election.Because of the Supreme Court's decision in the case Citizens United v. Federal Election Commission
Citizens United v. Federal Election Commission
Citizens United v. Federal Election Commission, , was a landmark decision by the United States Supreme Court holding that the First Amendment prohibits government from censoring political broadcasts in candidate elections when those broadcasts are funded by corporations or unions...
, corporations and labor unions can now use the funds from their general treasuries to run advertisements for candidates in national elections. The Supreme Court decided that any laws prohibiting corporations and labor unions from using these funds were prohibiting first amendment rights.
Additionally, over half the states allow some level of direct corporate contributions or spending in state and local races.
Political party activity
Political parties are active in federal elections at the local, state and national levels. Most party committees organized at the state and national levels as well as some committees organized at the local level are required to register with the FEC and file reports disclosing their federal campaign activities.Party committees may contribute funds directly to candidates, subject to the contribution limits. National and state party committees may make additional "coordinated expenditures," subject to limits, to help their nominees in general elections. National party committees may also make unlimited "independent expenditures" to support or oppose federal candidates. However, since 2002, national parties have been prohibited from accepting any funds outside the limits established for elections in the Federal Election Campaign Act
Federal Election Campaign Act
The Federal Election Campaign Act of 1971 is a United States federal law which increased disclosure of contributions for federal campaigns. It was amended in 1974 to place legal limits on the campaign contributions...
. State party and local committees are also subject to restrictions on the funds they may spend in connection with an election in which a federal candidate is on the ballot.
Party committees must report with the FEC once their federal election activities exceed certain dollar thresholds specified in the law.
Table of federal donation limits
It is a federal crime to evade the following donation limits through a straw donorStraw donor
A straw donor is a person who illegally uses another person's money to make a political contribution in their own name. In the United States, making a political contribution in another person's name is illegal, as is agreeing to be the named donor with someone else's money...
scheme.
| To each candidate1 | To national party committee2 | To state, district & local party committee2 | To any other political committee2 | Special Limits | |
|---|---|---|---|---|---|
| Individual may give | $2,500 | $30,800 | $10,000 | $5,000 | $117,000 overall biennial limit;
|
| National Party Committee may give | $5,000 | No limit | $5,000 | $43,100 to Senate candidate per campaign | |
| State, District and Local Party Committee may give | $5,000 | No limit | $5,000 | No limit | |
| $5,000 | $15,000 | $5,000 | $5,000 | No limit | |
| $2,500 | $30,800 | $10,000 | $5,000 | No limit | |
| Authorized Campaign Committee may give | $2,000 | No limit | No limit | $5,000 | No limit |
Table footnotes
(Table taken from the FEC website on 02 April 2011.)
Public financing of campaigns
At the federal level, public funding is limited to subsidies for presidential candidates. To receive subsidies in the primary, candidates must qualify by privately raising $5000 each in at least 20 states. For qualified candidates, the government provides a dollar for dollar "match" for each contribution to the campaign, up to a limit of $250 per contribution. In return, the candidate agrees to limit his or her spending according to a statutory formula.From the inception of this program in 1976 through 1992, almost all candidates who could qualify accepted matching funds in the primary. However, in 1996 Republican Steve Forbes
Steve Forbes
Malcolm Stevenson "Steve" Forbes, Jr. is an American editor, publisher, and businessman. He is the editor-in-chief of business magazine Forbes as well as president and chief executive officer of its publisher, Forbes Inc. He was a Republican candidate in the U.S. Presidential primaries in 1996...
opted out of the program. In 2000, Forbes and George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
opted out. In 2004 Bush and Democrats John Kerry
John Kerry
John Forbes Kerry is the senior United States Senator from Massachusetts, the 10th most senior U.S. Senator and chairman of the Senate Foreign Relations Committee. He was the presidential nominee of the Democratic Party in the 2004 presidential election, but lost to former President George W...
and Howard Dean
Howard Dean
Howard Brush Dean III is an American politician and physician from Vermont. He served six terms as the 79th Governor of Vermont and ran unsuccessfully for the 2004 Democratic presidential nomination. He was chairman of the Democratic National Committee from 2005 to 2009. Although his U.S...
chose not to take matching funds in the primary.
In 2008, Democrats Hillary Clinton and Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
, and Republicans John McCain
John McCain
John Sidney McCain III is the senior United States Senator from Arizona. He was the Republican nominee for president in the 2008 United States election....
, Rudy Giuliani
Rudy Giuliani
Rudolph William Louis "Rudy" Giuliani KBE is an American lawyer, businessman, and politician from New York. He served as Mayor of New York City from 1994 to 2001....
, Mitt Romney
Mitt Romney
Willard Mitt Romney is an American businessman and politician. He was the 70th Governor of Massachusetts from 2003 to 2007 and is a candidate for the 2012 Republican Party presidential nomination.The son of George W...
and Ron Paul
Ron Paul
Ronald Ernest "Ron" Paul is an American physician, author and United States Congressman who is seeking to be the Republican Party candidate in the 2012 presidential election. Paul represents Texas's 14th congressional district, which covers an area south and southwest of Houston that includes...
decided not to take primary matching funds. Republican Tom Tancredo
Tom Tancredo
Thomas Gerard "Tom" Tancredo is an American politician from Colorado, who represented the state's sixth congressional district in the United States House of Representatives from 1999 to 2009, as a Republican...
and Democrats Chris Dodd, Joe Biden
Joe Biden
Joseph Robinette "Joe" Biden, Jr. is the 47th and current Vice President of the United States, serving under President Barack Obama...
and John Edwards
John Edwards
Johnny Reid "John" Edwards is an American politician, who served as a U.S. Senator from North Carolina. He was the Democratic nominee for Vice President in 2004, and was a candidate for the Democratic presidential nomination in 2004 and 2008.He defeated incumbent Republican Lauch Faircloth in...
elected to take public financing.
By refusing matching funds, candidates are free to spend as much money as they can raise privately. In 2008, Barack Obama pledged to seek public financing for the general election, but later reversed himself in order to avoid fundraising limits.
In addition to primary matching funds, the federal government subsidizes the presidential nominating conventions
United States presidential nominating convention
A United States presidential nominating convention is a political convention held every four years in the United States by most of the political parties who will be fielding nominees in the upcoming U.S. presidential election...
of the major parties (the Democratic National Convention
Democratic National Convention
The Democratic National Convention is a series of presidential nominating conventions held every four years since 1832 by the United States Democratic Party. They have been administered by the Democratic National Committee since the 1852 national convention...
and Republican National Convention
Republican National Convention
The Republican National Convention is the presidential nominating convention of the Republican Party of the United States. Convened by the Republican National Committee, the stated purpose of the convocation is to nominate an official candidate in an upcoming U.S...
). Based on the performance of their party in past elections, candidates may be offered the opportunity to accept government funds for the general election. If they accept the government funds, they agree not to raise or spend private funds or to spend more than $50,000 of their personal resources. No major party nominee turned down government funds for the general election from 1976, when the program was launched, until Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
did so in 2008, or for General Election Legal and Accounting Compliance Funds (GELACs), which pay for attorneys and closeout costs but are not supposed to pay for campaigning or advertising. The only party other than the Republicans and Democrats to receive government funding in a general election was the Reform Party, which qualified for government subsidies in 1996 and 2000 on the basis of Ross Perot's strong showing in the 1992 and 1996 elections.
The presidential public financing system is funded by a $3 tax check-off
Presidential election campaign fund checkoff
The presidential election campaign fund checkoff appears on US income tax return forms as the question Do you want $3 of your federal tax to go to the Presidential Election Campaign Fund?...
on individual tax returns (the check off does not increase the filer's taxes, but merely directs $3 of the government's general fund to the presidential fund). The number of taxpayers who use the check off has fallen steadily since the early 1980s, until by 2006 fewer than 8 percent of taxpayers were directing money to the fund, leaving the fund chronically short of cash.
A small number of states and cities have started to use broader programs for public financing of campaigns. One method, which its supporters call Clean Money, Clean Elections
Clean elections
"Clean Elections" is a term used to describe a particular system of government financing of political campaigns, in which the government provides a grant to candidates who agree to limit their and private fundraising efforts and limit their campaign-spending.- In the United States :Clean Election...
, gives each candidate who chooses to participate a fixed amount of money. To qualify for this subsidy, the candidates must collect a specified number of signatures and small (usually $5) contributions. The candidates are not allowed to accept outside donations or to use their own personal money if they receive this public funding. Candidates who choose to raise money privately rather than accept the government subsidy are subject to significant administrative burdens and legal restrictions, with the result that most candidates accept the subsidy. This procedure has been in place in races for all statewide and legislative offices in Arizona
Arizona
Arizona ; is a state located in the southwestern region of the United States. It is also part of the western United States and the mountain west. The capital and largest city is Phoenix...
and Maine
Maine
Maine is a state in the New England region of the northeastern United States, bordered by the Atlantic Ocean to the east and south, New Hampshire to the west, and the Canadian provinces of Quebec to the northwest and New Brunswick to the northeast. Maine is both the northernmost and easternmost...
since 2000, where a majority of officials were elected without spending any private contributions on their campaigns. Connecticut
Connecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
passed a Clean Elections law in 2005, along with the cities of Portland, Oregon
Portland, Oregon
Portland is a city located in the Pacific Northwest, near the confluence of the Willamette and Columbia rivers in the U.S. state of Oregon. As of the 2010 Census, it had a population of 583,776, making it the 29th most populous city in the United States...
and Albuquerque, New Mexico
Albuquerque, New Mexico
Albuquerque is the largest city in the state of New Mexico, United States. It is the county seat of Bernalillo County and is situated in the central part of the state, straddling the Rio Grande. The city population was 545,852 as of the 2010 Census and ranks as the 32nd-largest city in the U.S. As...
.
A 2003 study by the GAO found that "It is too soon to determine the extent to which the goals of Maine’s and Arizona’s public financing programs are being met."
In recent years, the movement for "Clean Elections" appears to have stalled. Proposition 89
California Proposition 89 (2006)
Proposition 89 was a failed 2006 California ballot initiative that would have offered clean elections centered on campaign finance reform.-Main Points of Proposition 89:*Would levy a 0.2% tax on all businesses to help pay for clean money elections...
, a California ballot proposition
California ballot proposition
In California, a ballot proposition is a proposed law that is submitted to the electorate for approval in a direct vote . It may take the form of a constitutional amendment or an ordinary statute. A ballot proposition may be proposed by the State Legislature or by a petition signed by members of...
in November 2006, sponsored by the California Nurses Union, that would have provided for public financing of political campaigns and strict contribution limits on corporations, was defeated. In 2008, the non-partisan California Fair Elections Act passed the legislature and Governor Schwarzenegger signed it, but the law does not take effect unless approved by voters in a referendum in 2010. A proposal to implement Clean Elections in Alaska was voted down by a two-to-one margin in 2008., and a pilot program in New Jersey was terminated in 2008 amid concern about its constitutionality and that the law was ineffective in accomplishing its goals. In 2006, in Randall v. Sorrell
Randall v. Sorrell
Randall v. Sorrell, 548 U.S. 230 , is a decision by the Supreme Court of the United States involving a Vermont law which placed a cap on financial donations made to politicians. The court ruled that Vermont's law, the strictest in the nation, unconstitutionally hindered the citizens' First...
, the Supreme Court held that large parts of Vermont's Clean Elections law were unconstitutional. In 2008, the Supreme Court's decision in Davis v. Federal Election Commission
Davis v. Federal Election Commission
Davis v. Federal Election Commission, 554 U.S. 724 , is a decision by the United States Supreme Court, which held that Sections 319 and of the Bipartisan Campaign Reform Act of 2002 unconstitutionally infringed on a candidate's First Amendment rights.-Background:Section 319 of the Bipartisan...
suggested that a key part of most Clean Election laws—a provision granting extra money (or "rescue funds") to participating candidates who are being outspent by non-participating candidates—is unconstitutional. On the basis of Davis v. Federal Election Commission, in late 2008 a federal court in Arizona found the "rescue funds" prosivions of Arizona's Clean Elections law unconstitutional in McCommish v. Brewer.
In a suit brought by the Green Party of Connecticut, a federal court ruled Connecticut's law was unconstitutional in August 2009. An appeal is pending as of October 2009.
See also
- Campaign financeCampaign financeCampaign finance refers to all funds that are raised and spent in order to promote candidates, parties or policies in some sort of electoral contest. In modern democracies such funds are not necessarily devoted to election campaigns. Issue campaigns in referendums, party activities and party...
- Campaign finance reform in the United States
- Political financePolitical financePolitical finance covers all funds that are raised and spent for political purposes. Necessarily such purposes include all political contests for voting by citizens, especially the election campaigns for various public offices that are run by parties and candidates. Moreover all modern democracies...
- DISCLOSE ActDISCLOSE ActThe Democracy Is Strengthened by Casting Light On Spending in Elections Act, commonly known as the DISCLOSE Act and also known as H.R. 5175 , was a bill introduced in the U.S. House of Representatives by Chris Van Hollen on April 29, 2010 and in the U.S...
Further reading
- Ciara Torres-Spelliscy, ed., Writing Reform: A Guide to Drafting State & Local Campaign Finance Laws (2010 Revised Edition), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1729827
External links
- Federal Election Commission
- National Institute on Money in State Politics
- OpenSecrets.org
- CQ PoliticalMoneyLine
- Campaign Legal Center
- Campaign Finance Institute
- Public Campaign
- Common Cause
- Public Citizen
- Campaign Finance Amendment - proposed constitutional amendment
- Moneyed Politicians
- Center for Competitive Politics
- Campaign Cash Since Citizens United Ruling - video report by Democracy Now!Democracy Now!Democracy Now! and its staff have received several journalism awards, including the Gracie Award from American Women in Radio & Television; the George Polk Award for its 1998 radio documentary Drilling and Killing: Chevron and Nigeria's Oil Dictatorship, on the Chevron Corporation and the deaths of...
- Cash Attack 2010 at FactCheck.org