Largely disputed in the 2016 American Presidential Election and sure to be a headlining argument as the campaigning for the 2020 POTUS election starts to rev up, is the issue of campaign finance. The term “campaign finance,” although largely argued, is one that is often misunderstood by common Americans. Campaign finance refers to any or all funds raised so as to push candidates, political parties, or policies in elections, referendums, initiatives, party activities, and party organizations. Essentially, “campaign finance” is a blanket term that encompasses all of the money used for a politically argumentative purpose. That’s the easy part to understand. Then come all of the rules and regulations that currently exist–and are currently being pushed to exist–to moderate the amount of money that political figures can use, what they can use it for, and where they can get it from. This is where campaign finance gets a lot more complicated. Continue reading to discover the ambiguity that is campaign finance…
Photo by FEC.gov
The current legislation that exists is mainly encompassed in the Federal Election Campaign Act of 1971 (FECA) and the FECA Amendments that followed in 1974. These pieces of legislation form the fundamental basis of current federal campaign finance law. FECA’s main provisions embody limits on contributions to federal candidates and political parties and a system for the disclosure of all financial information relating to campaigning including the implementation of voluntary public finance for presidential candidates.
Another important term to understand when dealing with campaign finance is a Political Action Committee (PAC). PACs originated in 1944 when the Congress of Industrial Organizations (CIO) formed the very first PAC to raise money for the re-election of President Franklin Delano Roosevelt. The PAC’s money came from voluntary contributions from union members rather than union treasuries, so it did not violate the Smith Connally Act of 1943 which forbade unions from contributing to federal candidates. Although commonly called PACs, federal election law refers to these accounts as “separate segregated funds” because money contributed to a PAC is kept in a bank account separate from the general corporate or union treasury.
Photo by Courtney McDowell
PACs solely exist for the purpose of raising and spending money to elect and defeat candidates and other voted-upon items, and they are formed with the intention of representing particular businesses, labor, or ideological interests. Because PACs have the ability to raise large sums of funds, they have very strict regulations under which they must operate:
- PACs are permitted to give no more than $5,000 to a candidate committee per election (primary, general or special).
- PACs can give up to, but no more than, $15,000 to any particular national party committee annually.
- PACs can give $5,000 or less annually to another PAC.
- PACs may receive up to $5,000 from any one specific individual, PAC, or party committee per calendar year.
- PACs must register with the Federal Election Commission (FEC) within ten days of its formation. The PAC must provide a name and address for the PAC, its treasurer’s information, and any organizations that are affiliated with the PAC or its contributors.
- Affiliated PACs are treated as donors for the purpose of regulating contribution limits
Aside from standard PACs, there are two major additional forms of PACs that have specific regulations associated–Leadership PACs, those that can be formed by current and former Congresspeople and other political figures (politicians of this sort cannot otherwise be associated with PACs), and Super PACs, those that have no fundraising limit, but are not permitted to make contributions or coordinate with candidates or parties directly, only on their behalf.
Leadership PACs are the most effective way for political figures to raise money to assist in funding different candidates’ campaigns. Since June 2008, Leadership PACs reporting electronically must list the candidate sponsoring the PAC, as per the Honest Leadership and Open Government Act of 2007. Leadership PACs are typically indicative of a politician’s aspirations for leadership positions in Congress or for higher office.
Super PACs are the most effective way of raising money for political purposes in that there are no limits to the amount of funds that can be contributed to the PAC by individuals, corporations, and unions, but the funds that are collected cannot be given directly to candidates or parties–they must be wholly unaffiliated with them.
Aside from PACs, individual citizens, corporations, and unions do have the ability to contribute cash directly to parties and candidates as well, but those donations also have limits. Every calendar year, individuals can give a maximum of $33,900 to a national political party committee, such as the Republican National Committee, and the ceiling for individual contributions to a candidate is $2,700 per election.
Things have changed though. The effects of the emergence of Super PACs has the potential to fundamentally alter the landscape of money in politics, and also represents a sharp departure from previous restrictions on financial contributions. This is due to the fact that the FEC allowed for the formation of Super PACs in 2010–all but eliminating the previous individual financial donation limitations. Thanks to the FEC ruling, individuals, corporations, and unions can now contribute unlimited cash to Super PACs, which essentially means there is no ceiling to how much money is injected into elections.
The main prohibition placed on Super PACs, aside from having to report their expenditures and contributors to the FEC, is that they cannot coordinate directly with the campaign staff of individual candidates–regular PACs have to abide by these same mandates but are allowed to make direct contributions. The money Super PACs raise will solely be used for such things as making TV or radio ads supporting or excoriating particular candidates.
And so, despite all of the legal action that has been made in regards to campaign finance, its issue is still present, because there are those who want more reform, more regulation.
Comment your opinions below.
Over and Out.
-Courtney