Political action committee
In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, 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 matter of state and federal law. Under 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...

, an organization becomes a "political committee" by receiving contributions or making expenditures in excess of $1,000 for the purpose of influencing a federal election.

Use of PACs (before 2010)

When an interest group, union, or corporation wants to contribute to federal candidates or parties, it must do so through a PAC. These PACs receive and raise money from a "restricted class," generally consisting of managers and shareholders in the case of a corporation, and members in the case of funds to candidates for federal office. Contributions from corporate or labor union treasuries are illegal, though they may sponsor a PAC and provide financial support for its administration and fundraising. Overall, PACs account for less than thirty percent of total contributions in U.S. Congressional races, and considerably less in presidential races.

Contributions by individuals to federal PACs are limited to $5,000 per year. It is important to note, however, that as a result of the United States Court of Appeals for the District of Columbia Circuit decision in SpeechNow.org v. FEC, PACs which make only "independent expenditures" (that is, advertisements or other spending that calls for the election or defeat of a federal candidate but which is not coordinated with a federal candidate or political party) are not bound by this contribution limit.

Corporations and unions may not contribute directly to federal PACs, though they may pay for the administrative costs of a PAC affiliated with the specific corporation or union. Corporate-affiliated PACs may only solicit contributions from executives, shareholders, and their families, while union-affiliated PACs may only solicit contributions from members. "Independent" PACs not affiliated with a corporation, union, or trade or membership association may solicit contributions from the general public but must pay their operating costs from these regulated contributions.

Federal multi-candidate PACs are limited in the amount of money they can contribute to candidate campaigns or other organizations:
  • at most $5,000 per candidate per election. Elections such as primaries, general elections and special elections are counted separately.
  • at most $15,000 per political party per year.
  • at most $5,000 per PAC per year.

Under federal law, PACs are not limited in their ability to spend money independently of a candidate campaign. This may include expenditures on activities in support of (or against) a candidate, as long as they are not coordinated with the candidate.

If two or more PACs share the same sponsoring organization, they are considered to be "affiliated" and their total donations are counted under aggregate limits, i.e. the total donations from all may not exceed $5,000 for a specific candidate in a given election.

PACs must report all of the financial activities, including direct donations and other expenses, to the Federal Election Commission (FEC), which makes the reports available to the public.

Citizens United ruling

In 2010, the landmark case filed by Citizens United
Citizens United
Citizens United is a conservative non-profit organization in the United States. Its president and chairman is David Bossie.-Overview:Citizens United describes its mission as being dedicated to restoring the United States government to "citizens' control" and to "assert American values of limited...

 changed the rules regarding corporate campaign expenditures. This ruling made it legal for corporations and unions to spend from their general treasuries to finance independent expenditures. Contribution could be made indirectly such as through a 501(c)(4). Direct contributions are still prohibited.

Categorization of PACs

Federal law allows for two types of PACs, connected and non-connected.

Connected PACs

Most of the 4,600 active, registered PACs are "connected PACs" established by businesses, labor unions, trade groups, or health organizations. These PACs receive and raise money from a "restricted class," generally consisting of managers and shareholders in the case of a corporation and members in the case of a union or other interest group. As of January 2009, there were 1,598 registered corporate PACs, 272 related to labor unions and 995 to trade organizations.

Non-connected PACs

Groups with an ideological mission, single-issue groups, and members of Congress and other political leaders may form "non-connected PACs". These organizations may accept funds from any individual, business PAC or organization. As of January 2009, there were 1,594 non-connected PACs, the fastest-growing category.

Super PACs

The 2010 election marks the rise of a new political committee, dubbed "super PACs," and officially known as "independent-expenditure only committees," which can raise unlimited sums from corporations, unions and other groups, as well as individuals. The super PACs were made possible by two judicial decisions. First the 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...

 decision by the Supreme Court, which lifted spending limits. Second the Speechnow v. FEC decision by the D.C. Circuit Court, which invoked the logic of Citizens United to dispense with contribution limits on independent-expenditure committees. The groups can also mount the kind of direct attacks on candidates that were not allowed in the past. Super PACs are not allowed to coordinate directly with candidates or political parties and are not required to disclose their donors .

In summer 2011, comedian Stephen Colbert
Stephen Colbert
Stephen Tyrone Colbert is an American political satirist, writer, comedian, television host, and actor. He is the host of Comedy Central's The Colbert Report, a satirical news show in which Colbert portrays a caricatured version of conservative political pundits.Colbert originally studied to be an...

 brought attention to the issue of Super PACs by forming his own
Colbert Super PAC
Americans for a Better Tomorrow, Tomorrow is a United States political action committee established by Stephen Colbert, who portrays a conservative political pundit on the television series The Colbert Report...

 and a 501(c)(4). As of August 2011, 165,000 of his viewers had joined it.

Leadership PAC

A leadership PAC in U.S. politics is a political action committee established by a member of Congress to support other candidates. Under the FEC rules, leadership PACs are non-connected PACs, and can accept donations from an individual or other PACs. While a leadership PAC cannot spend funds to directly support the campaign of its sponsor (through mail or ads), it may fund travel, administrative expenses, consultants, polling, and other non-campaign expenses. It can also contribute to the campaigns of other candidates.

Between 2008 and 2009, leadership PACs raised and spent more than $47 million.

Controversial use of leadership PACs

  • Former Speaker Nancy Pelosi
    Nancy Pelosi
    Nancy Patricia D'Alesandro Pelosi is the Minority Leader of the United States House of Representatives and served as the 60th Speaker of the United States House of Representatives from 2007 to 2011...

    's (D) leadership PAC, Team Majority, was fined $21,000 by federal election officials "for improperly accepting donations over federal limits."
  • Former Rep. John Doolittle
    John Doolittle
    John Taylor Doolittle , American politician, was a Republican member of the United States House of Representatives from 1991 to 2009, representing . In the 109th Congress, he held a leadership role as the Deputy Whip for the Republican party in the House...

    's (R) leadership PAC, Superior California Federal Leadership Fund, paid his wife's single-person company, Sierra Dominion Financial Solutions, 15 percent of all money raised ($68,630 in 2003 and 2004, $224,000 in 2005 and 2006). A campaign committee report in February said Doolittle's campaign still owed Julie Doolittle $137,000. The PAC purchased $2,139 in gifts from Bose Corporation.
  • Former Rep. Richard Pombo
    Richard Pombo
    Richard William Pombo is a former Republican member of the United States House of Representatives, having represented California's 11th congressional district from 1993 to 2007...

     (R) used his leadership PAC to pay hotel bills ($22,896) and buy baseball tickets ($320) for donors.

2008 election

In the 2008 elections, the top nine PACs by money spent by themselves, their affiliates and subsidiaries were as follows:
  1. International Brotherhood of Electrical Workers
    International Brotherhood of Electrical Workers
    The International Brotherhood of Electrical Workers is a labor union which represents workers in the electrical industry in the United States, Canada, Panama and several Caribbean island nations; particularly electricians, or Inside Wiremen, in the construction industry and linemen and other...

     PAC $3,344,650
  2. AT&T
    AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...

     Federal PAC $3,108,200
  3. American Bankers Association
    American Bankers Association
    The American Bankers Association is an industry trade group and professional association representing the United States' banking industry...

     (BANK PAC) $2,918,140
  4. National Beer Wholesalers Association PAC $2,869,000
  5. Dealers Election Action Committee of the National Automobile Dealers Association
    National Automobile Dealers Association
    The National Automobile Dealers Association, founded in 1917, represents nearly 17,000 new-car and truck dealers, both domestic and international, with about 37,500 separate franchises...

  6. International Association of Fire Fighters
    International Association of Fire Fighters
    The International Association of Fire Fighters is a labor union representing professional firefighters in the United States and Canada. The IAFF was formed in 1918 and is affiliated with the AFL-CIO in the United States and the Canadian Labour Congress in Canada. The IAFF is headquartered in...

  7. International Union of Operating Engineers
    International Union of Operating Engineers
    The International Union of Operating Engineers is a trade union within the AFL-CIO representing primarily construction workers who work as heavy equipment operators, mechanics, surveyors, and stationary engineers who maintain heating and other systems in buildings and industrial complexes, in the...

     PAC $2,704,067
  8. American Association for Justice PAC $2,700,500
  9. Laborers' International Union of North America
    Laborers' International Union of North America
    The Laborers' International Union of North America is an American and Canadian labor union formed in 1903. As of March 31, 2010, they have about 632,000 members, members, about 80,000 of which are in Canada.The current general president is Terence M...

     PAC $2,555,350

See also

  • 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...

  • List of political action committees
  • Lobbying in the United States
    Lobbying in the United States
    Lobbying in the United States targets the United States Senate, the United States House of Representatives, and state legislatures. Lobbyists may also represent their clients' or organizations' interests in dealings with federal, state, or local executive branch agencies or the courts. Lobby...

  • Money loop
  • Politics of the United States
    Politics of the United States
    The United States is a federal constitutional republic, in which the President of the United States , Congress, and judiciary share powers reserved to the national government, and the federal government shares sovereignty with the state governments.The executive branch is headed by the President...

  • Soft money

External links

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