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Campaign Finance

Federal Election Campaign Act

Since 1905, people had been advocating for campaign finance reform. Even Teddy Roosevelt called for legislation banning corporate contributions for political purposes. 

In 1971, Congress passed legislation that combined earlier reform efforts- the Federal Election Campaign Act (FECA). They instituted more stringent disclosure requirements for candidates, parties and PACs. However, these laws were difficult to enforce.

In 1974, the Act was amended, and it did multiple things.

First, it created the Federal Election Commission (FEC), which administers campaign finance laws, and enforces adherence to their requirements.

Second, it created the Presidential Election Campaign Fund. This helps fund presidential candidates, so an equal amount goes to the Democratic Party nominee, the Republican Party nominee, and smaller party candidates may qualify for funding. 

When someone fills out their taxes, they can fill in a voluntary $3 check-off box on income tax returns which funds the Presidential Election Campaign Fund. This doesn't make the taxpayer pay $3 more, it makes that $3 go toward that fund, not another source. 

Third, it provided partial public financing for presidential primaries. So, candidates who raise $5,000 in at least 20 states can get individual contributions of up to $250 matched by the federal treasury, known as matching funds. If a candidate agrees to accept matching funds, they must limit their campaign expenditures to a specific amount. In addition, it provided full public financing for major party candidates. 

From 1976 to 1996, every Democratic and Republican nominee used matching funds. George Bush was the first candidate to elect not to use them, and now, most candidates elect not to receive matching funds.

Fourth, the act ensured that candidates must file periodic reports with the FEC, listing who contributed how much and how the campaign spent the money.

Finally, it limited individual contributions to $1000. The McCain-Feingold Act increased it to $2000, and let it grow along with inflation. The current individual limit is $2700. It also limited the amount an individual could contribute to their own campaign.

Buckley v. Valeo

This was a landmark court case that concerned FECA. This struck down limits on candidates funding their own campaigns, along with striking down limits on independent expenditures (by other groups or political parties). That court case made it possible for Ross Perot, Mitt Romney, and Donald Trump to spend millions of their own dollars funding their own campaigns.

Soft Money

A 1979 amendment to FECA said that corporations, unions, and individuals could contribute unlimited "nonfederal money" to parties for activities intended to influence state or local elections. Thus, soft money, or unregulated money, was born. The FEC later ruled that soft money could be used in advertising, even if a federal candidate was mentioned by name, as long as it doesn't advocate for the defeat or election of that candidate. So, soft money became more and more prevalent in elections. 

McCain-Feingold Act of 2002

Also known as the Bipartisan Campaign Reform Act (BCRA), this act sought to address the following:

The increasing role of Soft Money

How?

The BCRA wanted to prohibit national political parties from raising or spending any funds not subject to federal limits, even for state or local elections

The abundance of issue advocacy ads

How?

The BCRA wanted to prohibit any ad that names a federal candidate within 30 days of a primary or 60 days of a general election. Citizens United overturned this provision. The BCRA also had a "Stand by your Ad" provision, which stated that candidates for federal office, as well as interest groups supporting or opposing a candidate, must include a statement that identifies the candidate or and states that the candidate has approved the ad. The purpose of that was to limit attack ads, because the candidates had to stand by their ads. So, because of the BCRA, all campaign advertisements included a statement saying "I'm ____ and I approve this message."

527 Groups

With the soft money loophole now closed, another loophole opened up. People could now make unlimited contributions to what is known as a 527 group, which are not subject to contribution restrictions, as long as they don't make explicit endorsements of candidates.

Citizens United v. FEC

The non-profit organization Citizens United wanted to air a film critical of Hillary Clinton within 30 days of the 2008 Democratic primaries. They got in trouble for violating the BCRA, and they took it to the Supreme Court.

In Citizens United, the court ruled that that provision of the BCRA was unconstitutional, as it limited the organization's first amendment rights. The decision also says this

The First Amendment to the United States Constitution prohibits the government from restricting independent political expenditures by a nonprofit corporation.

That specific ruling created super PACs.

Super PACs

Super PACs, officially known as independent-expenditure only committees, can't contribute to a specific candidate, but can spend an unlimited amount of money independently of the campaigns. They can raise money from anyone without any legal limit on donation size. 

David Witten

Types of Committees

The Bureaucracy