Campaign Finance

1. Campaign Finance History Limits Reform

3. Money is the “mother’s milk” of politics

4. Campaign Finance - History • 1907– Ban on Corporations contributing directly to political campaigns from corporate funds. • 1947 – Ban on Labor Unions contributing from union dues.

5. Campaign Finance - History • 1974 – aftermath of the Watergate Scandal • Federal Election Commission (FEC) created • Funds given to political candidates and political action committees must be reported. • $100 or more name, address, occupation • No cash contribution of over $100 • No foreign contributions • HARD MONEY • FEC monitors and enforces the law

6. Limits on Contributions & Spending • Primary, General (& Special) are separate elections • Private Citizens can give • $2,500 per election to a candidate • $30,800 per year to a national party • $10,000 per year to state & local party • $5,000 per year to other political committee • $117,000 limit on giving per election cycle • $46,200 to candidates • $70,800 to all PACs and Parties • Adjusted every election cycle

7. Political Action Committee (PAC)(Federal rules – States differ) • Any “Special Interest” group can form • Corporations, Labor Unions, Groups • Political Office holders – Leadership PACs • There are 4,622 PACs as of Jan 1 2009 • Need at least 50 donors • Must donate to at least 5 different candidates • Can do “issue advertising”

8. Limits on Contributions & Spending • Primary, Runoff & General are separate elections • PACs • $5000 per election to candidate • $15,000 per year to national party • $5,000 per year to state and local party • $5,000 per year to other political committee • Senate & House Candidates can self-finance their campaign • Presidential Candidate limited to $50,000 from personal funds if accepting matching federal funds

9. Limits on Contributions & Spending Presidential Campaigns • Federal Matching Funds if: • Party received 5% of vote in previous election • Candidate received donations • In/from 20 different states • First $250 of donation counted - $5,000 per state • Limits on total spending – set by FEC • 2008 (2011) 2012 limits not yet set • $42.05m for primaries (44.22m) • (total of specific state limits) • $84.1m for general election (88.45m) • Presidential Campaigns are the only office that can get federal funds for campaigning

10. Limits on Contributions & Spending Presidential Campaigns • Bush and Kerry both accepted Fed$ in 2004 for the November election – not primaries. • Neither Dems or Reps did in 2008 • Lump sum payment to party for convention

11. Limits on Contributions & Spending Senate & House Campaigns • No limit on candidate contribution to their own campaign. • Buckley v. Valeo (1976) No limit on spending • Original legislation had limits on spending. • 1st amendment – Freedom of Speech

12. Hard Money • Hard Money • Given to candidates & party by individuals • Subject to limits • Must be reported to FEC

13. Soft Money • Soft Money (1974 – 2002) • Individuals, Corporation, Unions give to party • No limits on size of contribution • Party Building & Get Out The Vote • Not for specific candidates • Reported to IRS • Banned by BCRA (McCain-Feingold)

14. Bipartisan Campaign Reform Act • McCain – Feingold (Senate)Shays – Meehan (House) • Passed in spring 2002 – took 7 years • Needed Discharge Petition in House • Effective the day after Nov. 2002 election • Increased limits on Hard Money – Banned Soft • Issue ads by 527 organization banned • 30 days before primary • 60 days before general election • If candidate is mentioned • Full disclosure of ad sponsor • “I’m Jilly Billy and I approve this ad” + picture (TV) • Hard money limits raised 3x if running against wealthy self-funded candidate • Survived challenge McConnell v FEC (2003)

15. BCRA prohibits the personal use of campaign funds • six specific permissible uses • Candidate’s campaign expenditures • Ordinary and necessary expenses incurred by a federal officeholder • Donations to charity • Unlimited transfers to a national, state or local political party • Donations to nonfederal candidates as permitted by state law • Any other lawful purpose other than personal use

16. Citizens United v FEC (2010) • Documentary that was to be offered on cable pay-per-view. • Hillary: The Movie • Critical of Sen. Clinton • Case ruling • Eliminates the 30 & 60 day ban on issues ads before elections • Allows unions & corporations to campaign • magic words “vote for . . . . .” • Cannot contribute directly to candidate

17. Key Terms • Independent Expenditures • Spending by a PAC, Corporation, Union that is done to help a candidate or party, but is done independently of them. (not coordinated with) now limited • Soft Money • Funds obtained by parties, spent on party building activities, get out the vote drives, not spent directly on candidates Banned by BCRA in 2002 • Hard Money • Individual donations & PAC money, limited by law • 527 organizations • Groups that raise and spend money to advance political causes (IRS code – section 527)

18. WASHINGTON, March 9, 2009 (UPI) -- The number of federally registered political action committees rose by 9 percent from Jan. 1, 2008, to Jan. 1 of this year, a U.S. election watchdog said. The Federal Elections Commission said in a news release that there were 4,622 PACs as of Jan. 1, up from 4,234 a year earlier. Over the past 20 years or so, the number of active PACs ranged from about 3,800 to about 4,600, the FEC said. The number of non-connected PACs -- those not associated with a corporation or labor organization, and not related to a candidate's campaign or a political party organization -- showed the biggest gain, up 23 percent from 2008 with 1,594 committees. Corporate committees increased by fewer than 1 percent, but make up the largest group of registered PACs at 1,598, the FEC said. As of Jan. 1, 103 committees sponsored by non-stock corporations registered with the FEC, as well as 272 labor, 995 trade-membership-health committees and 49 cooperative committees