Big QuestionWhat do you think might

be the impact of a campaign system based on private fundraising?

How do federal laws regulate campaign finance?

2012 Election• $4.2 billion

Total amount raised during the 2012 election, for the presidential, House, and Senate races

• $6 billion2012 election cost

• $3.8 billionTotal amount raised for the 2008 election, the previous record

• $931,471,420Total amount spent on the campaign to re-elect Obama

• $1,022,753,733Total amount spent on the campaign to elect Romney

• 599Obama campaign field offices

• 300Romney campaign field offices

• 1.1 millionTV political ads run since April, mostly in nine battleground states

$750 millionCost to run those ads100,674Ads Obama ran in Ohio41,162Ads Romney ran in Ohio219,414Total political ads run in Ohio, including those of outside groups50.1Percent of the vote Obama won in Ohio, versus 48.2 percent for Romney149Wealthy donors who each donated at least $500,000, for a total of at least $290 million$53.69 millionAmount donated by Las Vegas casino magnate Sheldon Adelson and his wife to defeat Obama and other Democrats4.2 millionIndividual donors to the Obama campaign

Source: The Week, November 2012

QUOTE OF THE DAY"Politics really understands a couple of things - votes and dollars. My father always used to tell me, 'No peso, no say-so.'"HENRY R. MUÑOZ III, the finance chairman of the Democratic National Committee, the first Latino to hold the job. March 2013 The Washington Post

* In millions of $

Campaign Finance Law

• Federal Election Campaign Acts (FECA) (1971, 1974)– Established Federal Election Commission (FEC) – Restricts contributions to election campaigns.– Candidates must report all the money they

receive and spend and where the money came from.

Campaign Finance Law

• Federal Election Campaign Acts (FECA) (1971, 1974)– Reasserted ban on direct donations from

corporations and labor unions (established in 1907 and 1947)

– No donations from foreign nationals.– No donations in the name of another.

Campaign Finance Law

• Federal Election Campaign Acts (FECA) (1971, 1974)– Formalized “political committees” or Political

Action Committees (PACs).

Top Political Action

Committees (PAC)

Contributors

(2011-2012)

PAC Name Total Amount Dem Pct Repub Pct

Honeywell International $1,644,563 35% 65%

National Assn of Realtors $1,628,900 45% 54%

National Beer Wholesalers Assn

$1,511,500 42% 58%

AT&T Inc $1,355,000 37% 64%

Intl Brotherhood of Electrical Workers

$1,319,150 98% 2%

American Assn for Justice $1,300,500 96% 4%

Lockheed Martin $1,163,000 39% 61%

American Bankers Assn $1,144,750 25% 75%

Every Republican is Crucial PAC

$1,101,000 0% 100%

Credit Union National Assn $1,069,900 49% 51%

Boeing Co $1,068,500 40% 60%

American Crystal Sugar $1,021,500 54% 46%

New York Life Insurance $991,500 44% 56%

National Auto Dealers Assn $985,000 28% 72%

Comcast Corp $956,000 48% 52%

United Parcel Service $917,290 31% 69%

Sheet Metal Workers Union $915,000 92% 6%

PricewaterhouseCoopers $872,250 30% 70%

Plumbers/Pipefitters Union $864,550 89% 10%

Machinists/Aerospace Workers Union $849,500 95% 3%

Campaign Finance Law

• Buckley v. Valeo (1976)– FECA contribution limits are constitutional.– Government could NOT limit the amount of

money an individual spends on his or her own campaign or to advocate for any other candidate.

Campaign Finance Law

• FECA and ensuing legislation restricts direct contributions to campaigns (aka “hard money”) from:– Individual donors– Party organizations– Political Action Committees (PAC)– “Bundlers” – persons who gather individual

donations from a number of people.

Campaign Finance Law

• “Soft money” – unrestricted sources of funds– Soft money contributions: Money given to

political parties and interest groups for party-building activities, get-out-the-vote drives, voter education, issue advocacy.

– Soft money spending: Money spent by issue advocacy groups and political parties on advertisements, etc. to promote an issue or on party-building activities, etc.

Campaign Finance Law

• Bi-Partisan Campaign Reform Act (aka McCain-Feingold Act) (2002)– “Electioneering communications”

• Corporations and labor unions are prohibited from running these kinds of ads and contributing money to groups that run those ads.

• Individuals and interest groups were prohibited from doing this as well.

• Only campaigns and PACs could produce ads that name a candidate within the above time limits.

Public Financing of Presidential Campaigns

• What is public funding of presidential campaigns, and when did it begin?

• What do you think is the purpose of public financing of presidential campaigns?

• Has the program met the objectives you’ve described above?

Top Twenty Self-Financed Candidates for Federal Office Since 1990 (Source: Center for Responsive Politics)

“I think publicly financed elections are the answer. Our tax money is being spent on so many ridiculous things as it is, that paying to finance elections hardly seems like a major

quibble. And we would be getting so much in return– politicians would no longer feel the

need to do the bidding of their most wealthy campaign contributors. Instead their focus

would be shifted to doing the bidding of the voters... exactly as it should be."

Recent Developments

• Citizens United v. Federal Election Commission (2010)– Corporations and unions, like persons, are entitled

to free speech as per 1st amendment.– Therefore, the government may not limit

independent spending on electioneering, even by corporations or labor unions.

Recent Developments

• Citizens United v. Federal Election Commission (2010)– Long-time ban on direct contributions by

corporations and labor unions to political candidates remains.

– Corporations and labor unions and other groups outside of candidate campaigns can now spend their own money on ads and campaigning for candidates. This has led to Super Pacs.

Citizen’s United Decision (cont.)• Corporations are legal “persons” and as such have

the same rights as individuals, including the freedom of speech. Do you agree or disagree? Why or why not?

• Even though corporations and labor unions can independently spend as much as they please now during an election, some have argued that they would be reluctant to spend vast sums for fear that American audiences might react negatively to overt corporate and union influence. Do you think this is true? Might requiring all ads to have source of funds listed be enough to curtail spending?

• http://www.washingtonpost.com/posttv/video/inplay/the-next-citizens-united/2013/10/08/1598d148-2c8b-11e3-b139-029811dbb57f_video.html

2012 Fundraising

• http://elections.nytimes.com/2012/campaign-finance

• http://www.washingtonpost.com/wp-srv/special/politics/track-presidential-campaign-ads-2012/?tid=rr_mod

• http://www.washingtonpost.com/wp-srv/special/politics/super-pacs-2012/

Super Pacs

http://www.opensecrets.org/pacs/superpacs.php?cycle=2012

What is the meaning of this cartoon? Do you agree or disagree with its message?

Campaign Finance

• Which is more important: free speech or fair elections?

• Can you have both? Explain

Congressional vs. Presidential Elections

• Congressional elections are privately funded (by candidates and from donations)—no federal funds are available

• No term limits• Incumbents are re-elected at a very high rate

—app. 95% in the House– Safe seat: a district in which an incumbent wins

by a margin of 55% or more– Open seat: no incumbent running

Incumbent Advantages

• Name recognition• Constituent services• PAC donations• Money savings through franking privileges• Free publicity through:

– Sponsoring legislation– Committee assignments– Media attention

PAC Contributions, 2002-2006Source: Federal Election Commission (FEC)

• Incumbents vs. challengers– 2002: $213.4 vs. $28.5– 2004: $246.8 vs. $22.3– 2006: $279.3 vs. $36.3

(millions of dollars)

Most Expensive Senate Races (2008)

Most Expensive House Races (2008)