527s, PACs, and Super PACs Or, “How the billionaires are taking full control of our government”

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527s, PACs, and Super PACs Or, “How the billionaires are taking full control of our government”

 The term “soft money” generally refers to various types of political spending in which:  The money is intended to support a particular candidate or political party, OR  To advocate for one side of a particular issue;  BUT, the money is not given directly to a candidate or party  Most of the groups that accept “soft money” are classified as 527s, PACs, or Super PACs “Soft Money”

 Definition: A private group organized to elect political candidates or to affect the outcome of a political issue or legislation  Groups must apply for and receive PAC designation in order to receive and spend sums of $1000 or more  Necessary for corporations, unions, and interest groups to contribute to candidates or parties Political Action Committees (PACs)

 Individual contributions to any PAC are limited to $5000 per year  AFFILIATED PACs (corporations; unions) can only solicit contributions from their members  INDEPENDENT PACs can solicit from the general public PAC Contribution Limits

Types of PACs  Connected/Affiliated PACs:  Formed by corporations, unions, etc.  Can only receive money from “restricted class”  Non-connected/Independent PACs  Can receive money from any individual PAC, or organization  Include single-issue and ideological groups  Leadership PACs  Created by members of Congress to support other candidates  Cannot directly support campaigns, but can cover administrative costs such as travel, consultants, polling  Super PACs (More on these shortly)

 Named after Subsection 527 of the IRS tax code (defining tax exempt organizations)  Created to influence election of candidates at all levels of government  No contribution limits or restrictions on who can contribute  Must file with IRS, disclose donors, and file reports on contributions and expenditures  Cannot advocate for specific candidates or coordinate with campaigns 527 Groups

 Allows corporations and unions to contribute unlimited amounts to “independent expenditures” in support of candidates, parties, or issues  Includes advertisements that call for the election or defeat of particular candidates  As long as there is no coordination with the campaigns  Speechnow.org v. FEC  Used the Citizens United precedent to remove limits on “independent expenditure committees”  These become “Super PACs” Citizens United v. FEC

 Can raise unlimited funds from individuals, corporations or unions  Cannot coordinate EXPENDITURES with parties or campaigns  BUT: Can coordinate fundraising Super PACs

Super PAC donors

 Super PACs must disclose names of donors  But corporations can also donate to 501(c)4 and 501(c)6 organizations:  Which do not have to disclose THEIR donors,  And can then donate to Super PACs One more thing about Super PACs…

CORPORATE DONATIONS TO 501(C)4 & (C)6 ORGANIZATIONS

THESE GROUPS DO NOT HAVE TO DISCLOSE DONORS  They can also contribute to super PACs  Businesses look for anonymity  Work through largest group possible  Chamber of Commerce, industry associations  Don’t want to alienate customers