Campaign Finance Reform Unit II Election Process Campaign Finance Reform

What you need to know about campaign finance FEC – Federal Election Commission BCRA – Bipartisan Campaign Reform Act Hard money = Federal money Political donations raised from federally permissible sources within the limits established by BCRA Soft money = Nonfederal money Political donations made in such a way as to avoid federal regulations.

Overview History of Campaign Finance Regulation Beginning of time—Civil War: No regulation Civil War—1910 Gilded Age Exceptionally scandalous politicians nationally Boss Tweed 1868: 75% of money used in congressional elections through party assessments 1867: Naval Appropriations Bill First federal effort to regulate campaign finance Aimed at stopping the political shakedown naval yard workers for political contributions Prohibits officers and employees of the fed. gov’t from soliciting contributions 1883: Civil Service Reform Act (Pendleton Act) prohibits the same solicitation of all federal workers www.mit.edu/~17.251/finance.ppt

Overview History of Campaign Finance Regulation Corrupt Practices Acts of 1911 and 1925 Set disclosure requirements for House and Senate Elections Spending limits ($25k for Senate; $5k for House) Ridiculously weak and regularly violated 1971 Federal Election Campaign Act (FECA) 1976: Buckley v. Valeo (1976) www.mit.edu/~17.251/finance.ppt

Buckley v. Valeo Buckley v. Valeo, (1976), was a case in which the Supreme Court of the United States upheld a federal law which set limits on campaign contributions, but ruled that spending money to influence elections is a form of constitutionally protected free speech, and struck down portions of the law. The court also stated candidates can give unlimited amounts of money to their own campaigns.

Campaign Finance Reform and Buckley I Original Provision Effect of Buckley v. Valeo Expenditure limits Overall spending limits (Congress and president) Struck down partially (freedom of speech) Limits on the use of candidates’ own resources Struck down entirely (freedom of speech) Limits on media expenditures Independent expenditure limits www.mit.edu/~17.251/finance.ppt

Campaign Finance Reform and Buckley II Original Provision Effect of Buckley v. Valeo Contribution limits Individual limits: $1k/candidate/election Affirmed PAC limits: $5k/candidate/election Party committee limits: $5k/candidate/election Cap on total contributions individual can make to all candidates ($25k) Struck down (freedom of speech) Cap on spending “on behalf of candidates” by parties www.mit.edu/~17.251/finance.ppt

Federal Election Commission Purpose In 1975, Congress created the Federal Election Commission (FEC) to administer and enforce the Federal Election Campaign Act (FECA) the statute that governs the financing of federal elections. The duties of the FEC, which is an independent regulatory agency, are to disclose campaign finance information enforce the provisions of the law such as the limits and prohibitions on contributions, oversee the public funding of Presidential elections.

FEC Rules & Regulations The Players Government FEC – Federal Election Commission Campaign Committees Candidates National Party Committees State & Local Party Committees Separate Segregated Funds PACs connected to corporations, unions, etc. Nonconnected Committees All other PACs 527s Individuals

Various Election Law Federal Election Campaign Act (FECA) 1975 Bipartisan Campaign Reform Act (BCRA) 2002 Major changes under BCRA

McCain Feingold 2002 The Bipartisan Campaign Reform Act (BCRA) of 2002, also known as "McCain-Feingold," after its sponsors, is the most recent major federal law on campaign finance, which revised some of the legal limits of expenditure set in 1974, and prohibited unregulated contributions (called "soft money") to national political parties. ‘Soft money’ also refers to funds spent by independent organizations that do not specifically advocate the election or defeat of candidates, and are not contributed directly to candidate campaigns.

What does Federal Election Law Regulate? In General The financing of federal elections Specifically Disclosure of financial activity Contributions Receiving and Giving Expenditures Candidate support activities Federal election activities

Types of Money Federal Funds Levin Funds Nonfederal Funds Collected from permissible sources Subject to contribution limits Levin Funds For state and local party committees only Collected from any entity except fed cand. Only used for certain types of FEA Nonfederal Funds Subject to state law only May be used to pay for expenses related to not federal elections

Hierarchy of MONEY State Parties Federal “Hard Money” Levin Quasi-Fed $ State “Soft Money” Federal Money Most limitations Federal, state and local elections Levin Money Fewer limitations Some Federal election activities, state and local State Money Typically, fewest limitations State and local elections only

Where does my money go? It depends! Candidate Candidate specific activities Contributions to other candidates, parties or causes DNC/RNC Federal candidates Allocated nationally State Party Committees Federal, state & local candidates Allocated statewide PACs Support candidates, parties that agree on specific issues 527s Separate campaign