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Campaign Financing

Campaign Financing. Ch. 7 Sec. 3 Stephanow, 2009. THE FEDERAL ELECTION COMMISSION:.

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Campaign Financing

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  1. Campaign Financing Ch. 7 Sec. 3 Stephanow, 2009

  2. THE FEDERAL ELECTION COMMISSION: The Federal Election Commission (FEC) is the independent regulatory agency charged withadministering and enforcing federal campaign finance law. The FEC has jurisdiction over the financing of campaigns for the U.S. House, the U.S. Senate, the Presidency and the Vice Presidency. • Federal campaign finance law covers three broad subjects: • Public disclosure of funds raised and spent to influence federal elections; • Restrictions on contributions and expenditures made to influence federal elections; and • Public financing of Presidential campaigns.  

  3. Types of Money Donations • HARD $: Actual money donations; regulated. • SOFT $: funds spent by organizations that are not contributed directly to candidate campaigns, and which do not "expressly advocate" the election or defeat of a candidate. • Bundling is the practice of one donor gathering donations from many different individuals in an organization or community and presenting the sum to a campaign.

  4. Political Action Committees (PACs) • Arms of labor unions, corporations, and interest groups that collect and donate money to political parties and candidates.

  5. 527’s • A527 group is a type of American tax-exempt organization named after a section of the United States tax code, 26 U.S.C. § 527. • A 527 group is created primarily to influence the nomination, election, appointment or defeat of candidates for public office. Although candidate committees and PACs are also created under Section 527, the term is generally used to refer to political organizations that are not regulated by the FEC or by a state elections commission, and are not subject to the same contribution limits as PACs. • And they bundle!!!

  6. On March 27, 2002, President Bush signed into law the Bipartisan Campaign Reform Act of 2002 (BCRA), Public Law No. 107-155*.  The BCRA contains many substantial and technical changes to the federal campaign finance law.  *Better known as the McCain-Feingold Act

  7. BCRA of 2002(McCain-Feingold Act) • Banned soft money • Raised the ceiling on individual donations from $1,000 to $2,000, and then indexed it for inflation. • This cycle’s limits…

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  9. Buckley v. Valeo, (1976)Buckley established most principles of the campaign finance legal framework, including the constitutionality of contribution limits and disclosure, the unconstitutionality of mandatory spending limits for candidates and independent expenditure groups, and the express advocacy test. McConnell v. FEC, (2003)McConnell upheld most provisions of the Bipartisan Campaign Reform Act of 2002. The Supreme Courtupheld as constitutional the law's ban on the raising and spending of soft money by national parties, federal officeholders, and federal candidates. Campaign Financing & The SCT

  10. Campaign Financing & The SCT • Davis v. FEC (2008) • The Supreme Court found Sections 319(a) and 319(b) of the Bipartisan Campaign Reform Act of 2002  — the so-called “Millionaires’ Amendment” unconstitutional because they violate the First Amendment to the U.S. Constitution.

  11. Campaign Financing & The SCT • Citizens United v. Federal Election Commission (2009) • Argued before the Court twice.  • The case originally focused on a movie that was critical of Hillary Clinton during the 2008 presidential election. But now, the Court is considering how corporate donations to political campaigns can be regulated. • Decision 1/21/09: http://www.cnn.com/2010/US/studentnews/01/21/transcript.fri/index.html

  12. John McCain & Russ Feingold’s reactions to the decision: I am disappointed by the decision of the Supreme Court and the lifting of the limits on corporate and union contributions.--John McCain This decision was a terrible mistake; presented with a relatively narrow legal issue, the Supreme Court chose to roll back laws that have limited the role of corporate money in federal elections since Teddy Roosevelt was president.--Russ Feingold

  13. Public Funding of Presidential Elections • This information is from www.fec.gov

  14. Public Funding of Pres. Elections • Primary $ • Must qualify for matching grants. • Raise $5,000 in each of at least 20 states, with only $250 from any individual donor counting. • Qualifying candidates can then receive public funds up to $250 per individual (matching $.) • Must agree to: • Not use more than $50,000 of own personal funds • Abide by a nationwide limit on primary election spending • Abide by state-specific primary spending limits. • $42 million in 2008. • Clinton & Obama did not take primary $ • McCain did at first, and then gave it back.

  15. Public Funding of Pres. Elections • Convention $ • Each major party got $16.4 million in 2008 to finance its presidential nominating convention. • Host city and local groups may provide supplemental services to the conventions. • Minor parties can qualify for a much smaller grant.

  16. Public Funding of Pres. Elections • General Election $ • Each major party candidate gets $84.1 million in 2008. • Can take limited $ from private donators for legal & accounting expenses. • Can use up to $50,000 in personal funds. • Barred from accepting private donations (individuals or PACs).

  17. Barack Obama did not accept public funding in 2008. • Why did he back out of an agreement he had made with John McCain and decided not to accept public funding? • This is why…

  18. Little donors add up! • Barack Obama (2008) • 3.5 million people made donations to him. • (1% of the total U.S. population!) • Average donation = $86 http://www.opensecrets.org/pres08/index.php

  19. Find out where the $ is coming from! • FEC Disclosure Map • www.opensecrets.org • 10/05/09: Fundraising By Lobbyists Heavily Favoring DemocratsUSA Today reports fundraising by Washington lobbyists "so far this year has chiefly benefited the Democratic Party, according to a USA TODAY analysis of campaign finance reports available for the first time under a new ethics law." Federal lobbyists "helped collect more than $3.7 million during the first six months of 2009, and nearly $2.3 million went to Democrats, the analysis shows." The Democratic Senatorial Campaign Committee "was the largest beneficiary of lobbyist bundling, reporting nearly $732,000 in such donations this year."

  20. Jay Leno:   "A lot of Americans say the financial crisis and healthcare debate has shown that when push comes to shove -- and I agree with this -- both Republicans and Democrats...always take the side of the corporations who give them the most money. Right? I'm not blaming these guys. Know what we should do? We should make politicians dress like race car drivers. When they get money, make them wear the company's logo on their suit."

  21. How to Fix a Rigged System • “If you aren’t an incumbent or you don’t have personal wealth, there’s almost no hope of winning.” ---Phillip Bradley, congressional candidate in 2002 • A House incumbent in 2002 raised, on average, nearly $900,000 to keep a seat, must of it from vested interests. • 98% of incumbents win re-election.

  22. Problems: • Challengers are at a great disadvantage when it comes to fund-raising. • Too much of an incumbent’s money comes from special interest groups. • This cuts out fresh blood and new thinking in Congress. No competitive races. • As races grow more expensive, the money gap between incumbents and challengers is widening.

  23. How to fix it: • Fix the public fund: • Needs to be indexed for inflation. • Increase amount from $3 to $6. • Needs a nationwide public relations campaign to explain to people why they should check the box on their tax form. • Broaden Public Financing • Extend it to congressional races to even the playing field.

  24. How to fix it: • Help Hill Challengers • Local stations should give free air time to challengers. • And air debates between candidates for Congressional seats. • Overhaul the FEC • Give it some realauthority to enforce the laws.

  25. How to fix it: • Encourage Small Donors • Small donors are the least corrupt source of campaign funds. • Give a tax credit to small donors. Let them get back up to $100 when they file their tax return.

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