Campaign Finance

1974 Campaign Finance Reform 1972: Watergate and illegal donations from corporation, unions, and individuals catalyzed change 1972: Watergate and illegal donations from corporation, unions, and individuals catalyzed change Brought about the 1974 federal campaign reform law and Federal Election Commission (FEC) Brought about the 1974 federal campaign reform law and Federal Election Commission (FEC) opensecrets.org

Buckley v. Valeo (1976) The Supreme Court held that limitations on donations to candidates were constitutional because of the compelling state interest to prevent corruption or the appearance of corruption The Supreme Court held that limitations on donations to candidates were constitutional because of the compelling state interest to prevent corruption or the appearance of corruption Spending limits or caps on the amount a candidate could spend are an unconstitutional abridgement of free speech under the First Amendment Spending limits or caps on the amount a candidate could spend are an unconstitutional abridgement of free speech under the First Amendment

Buckley v. Valeo (1976) Speech that expressly advocates the election or the defeat of a candidate can be regulated Speech that expressly advocates the election or the defeat of a candidate can be regulated Organizations could spend unregulated “soft money” for a variety of activities, including “issue advertising” Organizations could spend unregulated “soft money” for a variety of activities, including “issue advertising” Any advertising that expressly stops short of advocating the election or defeat of a candidate does not have legal limits Any advertising that expressly stops short of advocating the election or defeat of a candidate does not have legal limits

Hard Money Money contributed directly to a candidate or a political party Money contributed directly to a candidate or a political party This money is regulated by law and monitored by the Federal Election Committee This money is regulated by law and monitored by the Federal Election Committee

Table of Donation Limits To Each Candidate To National Party Committee To state, district or local party To any other political committee Individual $2500 (Inflation odd years) $30,400$10,000$5.000 National Party Committee $5,000 No limit $5,000 State, district and local party $5,000 No limit $5,000 PAC multicandid ate $5,000$15,000$5,000$5,000 PAC not multicandid ate $2, contributors $30,400 Registered 6 months $10,000 5 or more candidates $5,000 Federal office Authorized Campaign Committee $2,000 Federal candidate No limit No more than $2000 No limit Another candidate $5,000

Political Action Committees A political committee that raises and spends limited “hard” money advocating the election or the defeat of a candidate A political committee that raises and spends limited “hard” money advocating the election or the defeat of a candidate Organizations also can be established to raise “soft” money which only is used for issue advocacy Organizations also can be established to raise “soft” money which only is used for issue advocacy Collect money from the group’s employees or members and make contributions to candidates and parties Collect money from the group’s employees or members and make contributions to candidates and parties PAC’s are required to register with the FEC within 10 days of their formation PAC’s are required to register with the FEC within 10 days of their formation

Soft Money Money contributed to organizations and committees other than candidate campaigns and political parties (except where legal to state and local parties for use solely in state and local races) Money contributed to organizations and committees other than candidate campaigns and political parties (except where legal to state and local parties for use solely in state and local races)

Bipartisan Campaign Finance Reform Act Banned soft money contributions to national parties from corporations and unions after the 2002 election Banned soft money contributions to national parties from corporations and unions after the 2002 election Raised the limit on individual donations to $2,000 per candidate per election Raised the limit on individual donations to $2,000 per candidate per election

Bipartisan Campaign Finance Reform Act (McCain – Feingold) Sharply restricted independent expenditures Sharply restricted independent expenditures –Corporations, unions, trade associations, nonprofit organizations cannot use their own money for an advertisement referring to a candidate by name 30 days before a primary and 60 days before a general election

501 Groups Operate for religious, charitable, scientific or educational purposes Operate for religious, charitable, scientific or educational purposes Non-profit and tax exempt Non-profit and tax exempt They are not supposed to engage in political activities except for voter registration They are not supposed to engage in political activities except for voter registration Social welfare, labor, agricultural, business leagues, chambers of commerce etc. can engage in political activities as long as it is not their primary purpose Social welfare, labor, agricultural, business leagues, chambers of commerce etc. can engage in political activities as long as it is not their primary purpose

Expansion of Soft Money The Federal Election Commission has approved the spending of soft money on non-federal party building, administrative costs, voter registration, get out the vote, and issue advertising The Federal Election Commission has approved the spending of soft money on non-federal party building, administrative costs, voter registration, get out the vote, and issue advertising Cannot use the terms elect, send, vote against or defeat—it is legal to use the names of the candidates Cannot use the terms elect, send, vote against or defeat—it is legal to use the names of the candidates

Soft Money Legal – John Smith is an honest man who stands up for the people. John Doe is a chronic liar who is advocating cutting Social Security Legal – John Smith is an honest man who stands up for the people. John Doe is a chronic liar who is advocating cutting Social Security Call John Doe and tell him who you feel about his candidacy Call John Doe and tell him who you feel about his candidacy

Citizens United vs. Federal Election Commission Remove limits on independent campaign expenditures by corporations and labor unions Remove limits on independent campaign expenditures by corporations and labor unions Removed restrictions on calendar dates on campaign commercials Removed restrictions on calendar dates on campaign commercials Congress still can require corporations and unions to disclose their spending and to run disclaimers with their advertisements (Legislation is pending) Congress still can require corporations and unions to disclose their spending and to run disclaimers with their advertisements (Legislation is pending)

SUPERPACS The 2010 election marked the rise of a new political committee, dubbed the "super PAC," and officially known as "independent- expenditure only committees," which can raise unlimited sums from corporations, unions and other groups, as well as individuals. The 2010 election marked the rise of a new political committee, dubbed the "super PAC," and officially known as "independent- expenditure only committees," which can raise unlimited sums from corporations, unions and other groups, as well as individuals. Super PACs are required to disclose their donors, just like traditional PACs. However, many exploit a technicality in the filing requirements in order to postpone disclosure until well after the elections they participate in. Super PACs are required to disclose their donors, just like traditional PACs. However, many exploit a technicality in the filing requirements in order to postpone disclosure until well after the elections they participate in.

SUPERPACS Restore Our Future Mitt Romney Winning Our Future Newt Gingrich Endorse LibertyRon Paul Red, White, and BlueRick Santorum Priorities USA ActionBarack Obama Restore Our Future Mitt Romney Winning Our Future Newt Gingrich Endorse LibertyRon Paul Red, White, and BlueRick Santorum Priorities USA ActionBarack Obama Comedians Stephen Colbert and Jon Stewart have created America for a Better Tomorrow Tomorrow Comedians Stephen Colbert and Jon Stewart have created America for a Better Tomorrow Tomorrow

SUPERPACS Many of the Super PAC’s are run by former employees of the candidate it supported, and each has attracted money from that candidate's associates Many of the Super PAC’s are run by former employees of the candidate it supported, and each has attracted money from that candidate's associates Super Pacs use soft money, or they do not have a limit to how much money they donate, unlike the traditional PAC's which use hard money meaning that they are required under the 503(c)(3) tax, to pay a basic tax and reduces what they donate to. Super Pacs use soft money, or they do not have a limit to how much money they donate, unlike the traditional PAC's which use hard money meaning that they are required under the 503(c)(3) tax, to pay a basic tax and reduces what they donate to.

Public Financing - Primaries At the Federal level it is limited to subsidies for Presidential candidates At the Federal level it is limited to subsidies for Presidential candidates Primary – Candidates qualify by raising $5000 each in 20 states Primary – Candidates qualify by raising $5000 each in 20 states Federal government matches dollar for dollar for every contribution to a campaign up to $250 per contribution Federal government matches dollar for dollar for every contribution to a campaign up to $250 per contribution Candidates agree to limit their spending according to a statutory formula Candidates agree to limit their spending according to a statutory formula

Public Financing - Primaries 2008 Primaries – Clinton, Obama, Giuliani, Romney and Paul refused the matching funds Tancredo, and Edwards elected to take the financing 2008 Primaries – Clinton, Obama, Giuliani, Romney and Paul refused the matching funds Tancredo, and Edwards elected to take the financing By refusing to take the matching funds, candidates can spend as much money as they can raise privately By refusing to take the matching funds, candidates can spend as much money as they can raise privately McCain, Biden, Dodd, McCain, Biden, Dodd,

Public Financing – General Election In addition to primary funding, the federal government subsidizes the presidential nominating conventions of the major parties In addition to primary funding, the federal government subsidizes the presidential nominating conventions of the major parties Nominees are offered government funds for the general election Nominees are offered government funds for the general election If they accept, they agree not to raise or spend private funds or to spend more than $50,000 of their personal resources If they accept, they agree not to raise or spend private funds or to spend more than $50,000 of their personal resources

Public Financing The presidential public financing system is funded by a $3 tax check-off on the individual income tax return The presidential public financing system is funded by a $3 tax check-off on the individual income tax return In 2006 fewer than 8% of taxpayers were directing money to that fund In 2006 fewer than 8% of taxpayers were directing money to that fund Barack Obama was the first Presidential candidate to refuse public money in the general campaign Barack Obama was the first Presidential candidate to refuse public money in the general campaign

Campaign Finance John McCain - Individual contributions $199,883,256 54% PAC contributions $1,422,709 0% Candidate self-financing $0 0% Federal Funds $84,103,800 23% Other $81,670,905 22% John McCain - Individual contributions $199,883,256 54% PAC contributions $1,422,709 0% Candidate self-financing $0 0% Federal Funds $84,103,800 23% Other $81,670,905 22% Barack Obama - Individual contributions $656,610,810 89% PAC contributions $1,580 0% Candidate self-financing $0 0% Federal Funds $0 0% Other $85,041,518 11% Barack Obama - Individual contributions $656,610,810 89% PAC contributions $1,580 0% Candidate self-financing $0 0% Federal Funds $0 0% Other $85,041,518 11%

Campaign Financing 2008 Largest Campaign Contributors Largest Campaign Contributors Barack Obama Barack Obama Barack Obama Barack Obama University of California $1,069,898 (The organizations University of California $1,069,898 (The organizations Goldman Sachs $884,907did not donate Goldman Sachs $884,907did not donate Harvard University $732,150the money, their Harvard University $732,150the money, their Microsoft Corp $714,358PAC’s did. The funds Microsoft Corp $714,358PAC’s did. The funds Google Inc $704,649were collected from the Google Inc $704,649were collected from the John McCaininstitutions from John McCaininstitutions from John McCain John McCain Merrill Lynch $361,620individuals.) Merrill Lynch $361,620individuals.) Citigroup Inc $304,051 Citigroup Inc $304,051 Morgan Stanley $263,277 Morgan Stanley $263,277 Goldman Sachs $229,695 Goldman Sachs $229,695 JPMorgan Chase & Co $216,057 JPMorgan Chase & Co $216,057

Campaign Spending ( Oct 20 th, 2008) Total Spending by Presidential Candidates* Total Spending by Presidential Candidates* Total Spent Year Total Spent Year $1, $1, $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $66.91

Campaign Finance Proposals Raising the limits on hard money Raising the limits on hard money Favor/Against Favor/Against Limiting the use of soft money Limiting the use of soft money Favor/Against Favor/Against Limiting the use of personal candidate funds Limiting the use of personal candidate funds Favor/Against Favor/Against Require corporations and unions to disclose their spending Require corporations and unions to disclose their spending

OPEN SECRETS php?cycle= php?cycle= php?cycle= php?cycle=2012