Campaign FinanceCampaign Finance

1974 Campaign Finance Reform1974 Campaign Finance Reform

1972: Watergate and illegal 1972: Watergate and illegal donations from corporation, donations from corporation, unions, and individuals unions, and individuals catalyzed changecatalyzed change

Brought about the 1974 Brought about the 1974 federal campaign reform federal campaign reform law and Federal Election law and Federal Election Commission (FEC)Commission (FEC)

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Buckley v. Valeo (1976)Buckley v. Valeo (1976)

The Supreme Court held that limitations The Supreme Court held that limitations on donations to candidates were on donations to candidates were constitutional because of the compelling constitutional because of the compelling state interest to prevent corruption or the state interest to prevent corruption or the appearance of corruptionappearance of corruption

Spending limits or caps on the amount a Spending limits or caps on the amount a candidate could spend are an candidate could spend are an unconstitutional abridgement of free unconstitutional abridgement of free speech under the First Amendmentspeech under the First Amendment

Buckley v. Valeo (1976)Buckley v. Valeo (1976)

Speech that expressly advocates the Speech that expressly advocates the election or the defeat of a candidate can be election or the defeat of a candidate can be regulatedregulated

Organizations could spend unregulated Organizations could spend unregulated “soft money” for a variety of activities, “soft money” for a variety of activities, including “issue advertising”including “issue advertising”

Any advertising that expressly stops short Any advertising that expressly stops short of advocating the election or defeat of a of advocating the election or defeat of a candidate does not have legal limitscandidate does not have legal limits

Hard MoneyHard Money

Money contributed directly to a Money contributed directly to a candidate or a political partycandidate or a political party

This money is regulated by law and This money is regulated by law and monitored by the Federal Election monitored by the Federal Election CommitteeCommittee

Table of Donation Limits Table of Donation Limits To EachTo Each

CandidateCandidate

To NationalTo National

Party Party CommitteeCommittee

To state, To state, district or district or local partylocal party

To any other To any other political political committeecommittee

IndividualIndividual $2500 $2500 (Inflation odd (Inflation odd years)years)

$30,400$30,400 $10,000$10,000 $5.000$5.000

National National Party Party CommitteeCommittee

$5,000$5,000 No limitNo limit No limitNo limit $5,000$5,000

State, State, district and district and local partylocal party

$5,000$5,000 No limitNo limit No limitNo limit $5,000$5,000

PAC PAC multicandidmulticandidateate

$5,000$5,000 $15,000$15,000 $5,000$5,000 $5,000$5,000

PAC notPAC not

multicandidmulticandidateate

$2,400$2,400

50 50 contributorscontributors

$30,400$30,400

Registered 6 Registered 6 monthsmonths

$10,000$10,000

5 or more 5 or more candidatescandidates

$5,000$5,000

Federal officeFederal office

AuthorizedAuthorized

Campaign Campaign CommitteeCommittee

$2,000$2,000

Federal Federal candidatecandidate

No limitNo limit

No more than No more than $2000$2000

No limitNo limit

Another Another candidatecandidate

$5,000$5,000

Political Action CommitteesPolitical Action Committees A political committee that raises and spends A political committee that raises and spends

limited “hard” money advocating the election limited “hard” money advocating the election or the defeat of a candidateor the defeat of a candidate

Organizations also can be established to raise Organizations also can be established to raise “soft” money which only is used for issue “soft” money which only is used for issue advocacyadvocacy

Collect money from the group’s employees or Collect money from the group’s employees or members and make contributions to candidates members and make contributions to candidates and partiesand parties

PAC’s are required to register with the FEC PAC’s are required to register with the FEC within 10 days of their formationwithin 10 days of their formation

Soft MoneySoft Money

Money contributed to organizations and Money contributed to organizations and committees other than candidate campaigns committees other than candidate campaigns and political parties (except where legal to state and political parties (except where legal to state and local parties for use solely in state and local and local parties for use solely in state and local races)races)

Bipartisan Campaign Finance Bipartisan Campaign Finance Reform ActReform Act

Banned soft money contributions to Banned soft money contributions to national parties from corporations and national parties from corporations and unions after the 2002 electionunions after the 2002 election

Raised the limit on individual donations Raised the limit on individual donations to $2,000 per candidate per electionto $2,000 per candidate per election

Bipartisan Campaign Finance Bipartisan Campaign Finance Reform Act (McCain – Feingold)Reform Act (McCain – Feingold)

Sharply restricted independent Sharply restricted independent expenditures expenditures – Corporations, unions, trade associations, Corporations, unions, trade associations,

nonprofit organizations cannot use their own nonprofit organizations cannot use their own money for an advertisement referring to a money for an advertisement referring to a candidate by name 30 days before a primary candidate by name 30 days before a primary and 60 days before a general electionand 60 days before a general election

501 Groups501 Groups

Operate for religious, charitable, scientific Operate for religious, charitable, scientific or educational purposesor educational purposes

Non-profit and tax exemptNon-profit and tax exempt They are not supposed to engage in They are not supposed to engage in

political activities except for voter political activities except for voter registrationregistration

Social welfare, labor, agricultural, business Social welfare, labor, agricultural, business leagues, chambers of commerce etc. can leagues, chambers of commerce etc. can engage in political activities as long as it is engage in political activities as long as it is not their primary purposenot their primary purpose

Expansion of Soft MoneyExpansion of Soft Money

The Federal Election Commission has The Federal Election Commission has approved the spending of soft money on approved the spending of soft money on non-federal party building, non-federal party building, administrative costs, voter registration, administrative costs, voter registration, get out the vote, and issue advertisingget out the vote, and issue advertising

Cannot use the terms elect, send, vote Cannot use the terms elect, send, vote against or defeat—it is legal to use the against or defeat—it is legal to use the names of the candidatesnames of the candidates

Soft MoneySoft Money

Legal – John Smith is an honest man who Legal – John Smith is an honest man who stands up for the people. John Doe is a stands up for the people. John Doe is a chronic liar who is advocating cutting chronic liar who is advocating cutting Social SecuritySocial Security

Call John Doe and tell him who you feel Call John Doe and tell him who you feel about his candidacyabout his candidacy

Citizens United vs. Federal Citizens United vs. Federal Election CommissionElection Commission

Remove limits on independent campaign Remove limits on independent campaign expenditures by corporations and labor expenditures by corporations and labor unionsunions

Removed restrictions on calendar dates on Removed restrictions on calendar dates on campaign commercialscampaign commercials

Congress still can require corporations Congress still can require corporations and unions to disclose their spending and and unions to disclose their spending and to run disclaimers with their to run disclaimers with their advertisements (Legislation is pending)advertisements (Legislation is pending)

SUPERPACSSUPERPACS The 2010 election marked the rise of a new The 2010 election marked the rise of a new

political committee, dubbed the "super PAC," and political committee, dubbed the "super PAC," and officially known as "independent-expenditure officially known as "independent-expenditure only committees," which can raise unlimited sums only committees," which can raise unlimited sums from corporations, unions and other groups, as from corporations, unions and other groups, as well as individuals.well as individuals.

Super PACs are required to disclose their donors, Super PACs are required to disclose their donors, just like traditional PACs. However, many exploit just like traditional PACs. However, many exploit a technicality in the filing requirements in order to a technicality in the filing requirements in order to postpone disclosure until well after the elections postpone disclosure until well after the elections they participate in.they participate in.

SUPERPACSSUPERPACS

Restore Our Future Restore Our Future Mitt Romney Mitt Romney Winning Our Future Winning Our Future Newt Gingrich Newt Gingrich Endorse LibertyEndorse Liberty Ron Paul Red, Ron Paul Red, White, and BlueWhite, and Blue Rick Santorum Priorities Rick Santorum Priorities USA ActionUSA Action Barack ObamaBarack Obama

Comedians Stephen Colbert and Jon Comedians Stephen Colbert and Jon Stewart have created America for a Better Stewart have created America for a Better Tomorrow TomorrowTomorrow Tomorrowhttp://www.colbertsuperpac.com/http://www.colbertsuperpac.com/

SUPERPACSSUPERPACS Many of the Super PAC’s are run by former Many of the Super PAC’s are run by former

employees of the candidate it supported, and employees of the candidate it supported, and each has attracted money from that each has attracted money from that candidate's associatescandidate's associates

Super Pacs use soft money, or Super Pacs use soft money, or they do not have they do not have a limit to how much money they donate, a limit to how much money they donate, unlike unlike the traditional PAC's which use hard money the traditional PAC's which use hard money meaning that they are required under the meaning that they are required under the 503(c)(3) tax, to pay a basic tax and reduces 503(c)(3) tax, to pay a basic tax and reduces what they donate to.what they donate to.

Public Financing - PrimariesPublic Financing - Primaries

At the Federal level it is limited to At the Federal level it is limited to subsidies for Presidential candidatessubsidies for Presidential candidates

Primary – Candidates qualify by raising Primary – Candidates qualify by raising $5000 each in 20 states$5000 each in 20 states

Federal government matches dollar for Federal government matches dollar for dollar for every contribution to a dollar for every contribution to a campaign up to $250 per contributioncampaign up to $250 per contribution

Candidates agree to limit their spending Candidates agree to limit their spending according to a statutory formulaaccording to a statutory formula

Public Financing - PrimariesPublic Financing - Primaries

2008 Primaries – Clinton, Obama, 2008 Primaries – Clinton, Obama, Giuliani, Romney and Paul refused the Giuliani, Romney and Paul refused the matching funds Tancredo, and Edwards matching funds Tancredo, and Edwards elected to take the financingelected to take the financing

By refusing to take the matching funds, By refusing to take the matching funds, candidates can spend as much money as candidates can spend as much money as they can raise privatelythey can raise privately

McCain, Biden, Dodd, McCain, Biden, Dodd,

Public Financing – General Public Financing – General ElectionElection

In addition to primary funding, the In addition to primary funding, the federal government subsidizes the federal government subsidizes the presidential nominating conventions of the presidential nominating conventions of the major partiesmajor parties

Nominees are offered government funds Nominees are offered government funds for the general electionfor the general election

If they accept, they agree not to raise or If they accept, they agree not to raise or spend private funds or to spend more than spend private funds or to spend more than $50,000 of their personal resources$50,000 of their personal resources

Public FinancingPublic Financing

The presidential public financing system The presidential public financing system is funded by a $3 tax check-off on the is funded by a $3 tax check-off on the individual income tax returnindividual income tax return

In 2006 fewer than 8% of taxpayers were In 2006 fewer than 8% of taxpayers were directing money to that funddirecting money to that fund

Barack Obama was the first Presidential Barack Obama was the first Presidential candidate to refuse public money in the candidate to refuse public money in the general campaigngeneral campaign

Campaign Finance - 2008Campaign Finance - 2008

John McCain - Individual contributions John McCain - Individual contributions $199,883,256 54% PAC contributions $199,883,256 54% PAC contributions $1,422,709 0% Candidate self-financing $0 $1,422,709 0% Candidate self-financing $0 0% Federal Funds $84,103,800 23% Other 0% Federal Funds $84,103,800 23% Other $81,670,905 22% $81,670,905 22%

Barack Obama - Individual contributions Barack Obama - Individual contributions $656,610,810 89% PAC contributions $1,580 $656,610,810 89% PAC contributions $1,580 0% Candidate self-financing $0 0% Federal 0% Candidate self-financing $0 0% Federal Funds $0 0% Other $85,041,518 11% Funds $0 0% Other $85,041,518 11%

Campaign Financing 2008Campaign Financing 2008 Largest Campaign ContributorsLargest Campaign Contributors Barack ObamaBarack Obama University of California $1,069,898 (The organizationsUniversity of California $1,069,898 (The organizations Goldman Sachs $884,907Goldman Sachs $884,907 did not donatedid not donate Harvard University $732,150Harvard University $732,150 the money, their the money, their Microsoft Corp $714,358Microsoft Corp $714,358 PAC’s did. The fundsPAC’s did. The funds Google Inc $704,649Google Inc $704,649 were collected from the were collected from the John McCainJohn McCain institutions frominstitutions from Merrill Lynch $361,620Merrill Lynch $361,620 individuals.)individuals.) Citigroup Inc $304,051Citigroup Inc $304,051 Morgan Stanley $263,277Morgan Stanley $263,277 Goldman Sachs $229,695Goldman Sachs $229,695 JPMorgan Chase & Co $216,057JPMorgan Chase & Co $216,057

Campaign Spending (Campaign Spending (Oct 20Oct 20thth, 2008), 2008)

Total Spending by Total Spending by Presidential Candidates*Presidential Candidates*

Total SpentTotal Spent Year Year 2008200811 $1,324.7$1,324.7

20042004 $717.9$717.9

20002000 $343.1 $343.1

19961996 $239.9$239.9

19921992 $192.2$192.2

19881988 $210.7$210.7

19841984 $103.6$103.6

19801980 $92.3$92.3

19761976 $66.91$66.91

Campaign Finance ProposalsCampaign Finance Proposals Raising the limits on hard moneyRaising the limits on hard money Favor/AgainstFavor/Against Limiting the use of soft moneyLimiting the use of soft money Favor/AgainstFavor/Against Limiting the use of personal candidate Limiting the use of personal candidate

fundsfunds Favor/AgainstFavor/Against Require corporations and unions to Require corporations and unions to

disclose their spendingdisclose their spending

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