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Campaign Finance: Regulations and Loopholes

Campaign Finance: Regulations and Loopholes. The Federal Election Commission [FEC] administers all federal law dealing with campaign finance. They enforce the following areas: 1- Require disclosure of campaign finance data. 2- Place limits on campaign contributions.

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Campaign Finance: Regulations and Loopholes

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  1. Campaign Finance: Regulations and Loopholes

  2. The Federal Election Commission [FEC] administers all federal law dealing with campaign finance. They enforce the following areas: 1-Require disclosure of campaign finance data. 2-Place limits on campaign contributions. 3-Place limits on campaign spending. 4-Provide public funding for parts of the presidential election process.

  3. The Presidential election spend the largest share of campaign dollars $2.5 Billion in 2012 All of Congress=$2 billion in 2012

  4. Why do people contribute money to political campaigns? • Form of political participation • Belief in a candidate • Access/influence government

  5. Most campaign funding comes from private, not public sources: • Small contributors • Wealthy individuals/families • Candidate’s and their families’ personal money • PACs [Political Action Committees] Restriction: One cannot make a campaign contribution in the name of another person

  6. PACs [Political Action Committees] The political arms of special-interest groups and other organizations with a stake in electoral politics

  7. subsidy A grant of money, for a political campaign, from the government [FEC]. It is a form of public funding

  8. 1-What is the difference between hard and soft money? Hard money:Contributions that are given directly to candidates for their campaigns for Congress or the presidency, are limited in amount and must be reported. Soft money: funds given to parties or to other political organizations [not individual candidates], in unlimited amounts. • to be used for such party-building activities as voter registration or get-out-the-vote drives for campaigns for or against particular public policies. .

  9.  2-What was the soft money loophole of the 1980s and 1990s? Both parties found it easy to filter these funds into their presidential and congressional campaigns. Went from $19 million in 1980 to $500 million in 2000. These amounts prompted Congress to enact the Bipartisan Campaign Reform Act [BCRA] of 2002. [aka McCain-Feingold Law]

  10. 3-What did the BCRA ban? What loophole remained? It banned soft money contributions to political parties. But the law does not say that other political organization cannot raise and spend those dollars. Parties found way around the ban: independent groups: “527s” after the section of the Internal Revenue code under which they operate as tax-free entities. Some $200 million dollars poured through this loophole in 2004 and more in subsequent elections.

  11. 4-Why do you think Congress made it illegal for any corporation to donate to candidates? So they would not unduly influence members of Congress.

  12. 5-In what ways are PACs like a “legal loophole”? Neither corporations nor labor unions can contribute directly to any candidate for federal office. Their political action committees can and do. PACS seek to affect the making of public policy and are interested in the outcome of elections.

  13. 6-What are the two kinds of PACs? How are they similar/different? 1-Political arms of special interest groups, esp. business associations, labor unions and professional organizations. They can only raise funds from their members: executives, employees and stockholders of a corporation, from members of labor unions They cannot seek contributions from the general public 2-Non-connected committees: established as an independent entity, not as a unit to some larger organization. Many ideologically based. Can raise money from public.

  14. 7-Do PACs give money to candidates to spend or do they spend the money themselves to aid candidates? They bundle the money they gather and pool into a single large fund. They distribute that money to those candidates who: 1-are sympathetic to the PACs policy goals, and 2-have a reasonable chance of winning the race.

  15. Citizens United v. F.E.C. [2010] In a 5-4 decision, the Supreme Court ruled: The FECs ban on political spending by corporations and unions is a violation of the 1st Amendment’s right to free speech. Money is Speech Led to the creation of Super PACS

  16. 8-Do Super PACs give money to candidates to spend or do they spend the money themselves to aid candidates? Super PACS are independent PACS, unaffiliated with any party. They are allowed to raise and spend unlimited amounts, although they must reveal their donors and cannot work directly with a candidate’s campaign. Their major donors are corporations and unions and spent $621 million in 2012.

  17. 9-How might money that is spent by Super PACs / 527s / 501c organizations help a candidate’s campaign -- even though it can’t be given directly to the candidate and their campaign? They can run positive/negative ads about a candidate.

  18. 10-Why do you think Obama declined public money? Candidates who accept FEC funds: *Are limited in what they can spend. *Cannot accept funds from any other source. President Obama could raise unlimited funds and not be limited by the FEC.

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