1. MONEY AND CAMPAIGNING

2. REVIEW What do PACs do? Electioneering Give money to candidate, help get elected = Once elected, support policies or political ideology associated with Interest Groups’ goals/mission Who is “in charge” of PACs? Interest Groups

3. MONEY!! https://www.youtube.com/watch?v=-0kcet4aPpQ *Campaigns are expensive! *Wealthy campaign contributors buying special influence over public policy decisions? http://thecaucus.blogs.nytimes.com/2012/01/13/timescast- whats-a-super-pac/

4. WHAT IS A SUPER PAC?  Rewrite the definition of a Super PAC In your own words  What questions do you have about Super PACs?  How do you think they will affect the 2016 Presidential Race?  Can individuals, corporations, special interest groups, and labor unions give unlimited amounts of money to candidates?  Do you think money unfairly buys influence in our political system?  Should there be limits on the amount of money individuals, corporations, special interest groups, and labor unions can give to candidates running for office?

5. MONEY!!! Two ways to contribute: 1.Campaign contributions (AKA Hard Money) 1.Directly to candidates’ campaign, used in any way 2.Must be reported to FEC 3.Individuals can donate up to $2,500 per election to a candidate and up to $30,800 to a political party (as of 2012) 2.Independent expenditures 1.Expenses on behalf of a political message that are made by groups (PACs and SUPER PACs) that are uncoordinated with any candidate’s campaign Which of these is MORE controversial? Why?

6. MONEY!!! REGULATIONS 1970s, campaign finance reform 1974, Congress passed the Federal Election Campaign Act >to transform the secretive world of campaign finance into an open book for public scrutiny All candidates for federal office must: 1.Disclose who has contributed money to their campaign 2.Disclose how the campaign funds have been spent

7. HISTORIC LEGISLATION: FEC ACT Instituted limits on campaign contributions for the first time $1,000 to presidential and Congressional candidates Interest group donations to campaigns were also limited via regulations on PACs (which can channel contributions to candidates of up to $5,000 per election) Federal Election Commission was ALSO established 3 spots for Democrats, 3 for Republicans 4 votes for any action = partisan stalemate Goal: open up the details for all to see

8. FROM $1,000-$2,500 In 2002, the McCain-Feingold Act increased the limit to $2,000 and provided for it to be indexed to rise with inflation in the future In 2012, the limit was $2,500 More on McCain-Feingold later!

9. FEC CREATED TRANSPARENCY Candidates must file reports Posted online Easily searched through Opensecrets.org –searching candidates Fundrace.org –searching neighbors Additionally, taxpayers can agree to a $3 voluntary check-off box on federal income tax returns *Only 7% of taxpayers agree

10. CANDIDATES AND FEDERAL FUNDS If candidates agree to accept Federal funds, they are limited to spending $50 million in the nomination and 75 million in the general election Thus, many candidates refuse Federal funds See Figure 9.2 (pg. 303)

11. CFU 1.What are the two ways you could contribute to Mr. Watson’s presidential campaign? 2.What does the FEC Act stand for? 3.When was it created? 4.What did it establish (3 things)? 5.What was the original campaign contribution limit? 6.What is the current campaign contribution limit? 7.Why don’t candidates accept federal funds (collected from Federal Income Tax returns?)

12. LOOPHOLES Soooo….FEC set up limits. Buckley v. Valeo (1976) –Supreme Court struck down a portion of the FEC Act that had limited the amount individuals could contribute to their own campaigns. Reasoning: big campaign contributions could corrupt politicians, but you cannot corrupt yourself Effect: Ross Perot spent over $60 million of his own fortune (1992) and Romney spent $44 million out of his own pocket (2008) AFTERMATH -- contributions received can be restricted, but individuals can use their own wealth

14. MORE LOOPHOLES What limits did the FEC Act create? 1979 amendment to the Federal Election Campaign Act made it easier for political parties to raise money for voter registration drives, for distributing campaign material at the grassroots level, and for generic party advertising This is known as SOFT MONEY (separate from other contributions) No limits at one time In 2000, ½ billion dollars raised by national parties More examples of Soft Money?

15. RESPONSE TO SOFT MONEY McCain-Feingold Act: remove large soft money campaign contributions from the political system (2002) Limits on contributions to political parties were set at $25,000 (rise with inflation) Response? Does a ban on soft money and regulations on campaign advertising this limit free speech?

16. EFFECTS 2003 case McConnell v. Federal Election Commission Supreme Court upheld ban stating there was a legitimate interest in preventing “both the actual corruption threatened by large financial contributions and…the appearance of corruption.” More loopholes sought after: “Hydraulic theory of money and politics.” Money, like water, inevitably finds its way around any obstacle ==== INDEPENDENT POLITICAL EXPENDITURES Theme: Law, Court Case, Loophole!

17. CFU At your table, write a CFU question to pose to your peers

18. REGULATIONS ON INDEPENDENT POLITICAL EXPENDITURES Soooooo, I can’t contribute my millions of dollars to the XXXXXX Party, but I can give large sums to groups that are INDEPENDENT of a candidate or party?? Unlimited contributions made to 527 groups (federal tax code governing these political groups) 2004: FEC declined to subject 527 groups to contribution restrictions as long as their political messages did not make explicit endorsements “Vote For” or “Vote Against” Defintion: Advocacy groups trying to influence federal elections through voter registration efforts and issue ads

19. TRANSFORMATION “I use to give big soft money donations, but now I give big donations to 527 groups.” These donations are unlimited but still have to be disclosed to the FEC. McCain-Feingold partially restricted independent expenditures by 527 groups for about 8 years A provision prohibited corporations and unions from using their general treasury funds to pay for electioneering communications in the last 60 days of federal campaigns HOWEVER……

20. CITIZENS UNITED What do we already know about Citizens United v. FEC?

21. CITIZENS UNITED V. FEC (2010) The Supreme Court (5-4) ruled the provision to be an unconstitutional restriction on free speech. Now, corporations and unions can spend as much as they like to promote their political views, as long as they do so without coordinating their message with any candidate’s campaign https://www.youtube.com/watch?v=kcnkgDHU9I8

22. EFFECTS 501(c) groups emerged as vehicles for unlimited political donations that could remain anonymous Regulated by IRS rather than the FEC, donations do not have to be reported unless a donor gives money specifically for a SPECIFIC political ad Corporations and unions can now give big sums to 501(c) groups without having any public disclose of these donations More than half of their funds cannot be spent on political activities Congress would like to change the law to require donations of $10,000 or more to be disclosed

23. HUH????? PACs –must report all receipts and spending in regular reports to the FEC *Express advocacy ads and electioneering communications 527s –unlimited independent spending on election ads *Must register with the FEC but if it engages ONLY in independent spending (SUPER PAC) it no longer has to comply with the federal contribution restrictions *Must disclose SUPER PACS- (organized under Section 527) make only independent expenditures (independent of candidates and parties) *no contribution limit *ISSUE ADVOCACY not advocating the election or defeat of candidates 501(c) –not required to publicly disclose their donors even if the group engages in explicit election advocacy *some are tax deductible

24. CRITICISMS What are the criticisms? President Obama argued that the SCOTUS had opened up the floodgates to special interest money (especially corporations) to corrupt the electoral process

25. SCOTUS REASONING No evidence of votes being exchanged for independent expenditures…not leading to corruption Protected under free speech –HOW?

26. MORE EFFECTS Creation of Super PACs Because of Citizens United… SpeechNow.org v. FEC: Donations to a PAC that makes only independent expenditures could not be limited Regular PACs vs. Super Pacs…???

27. DIFFERENCE REGULAR PACS Accept donations of no more than $5,000 per year for each individual Can donate no more than $5,000 per election to a candidate SUPER PACS Just expressing their views… Collect and spend whatever they want Journalists soon realized the explosive impact these independent expenditure-only PACs could have…SUPER PACS

28. EFFECT IN 2012 Super PACs for both Obama and Romney Americans (the wealthiest) could now send $2,500 to their candidate of their choice and then a million dollar check to a Super PAC that would run ads on behalf of this candidate See Table 9.1 on page 305 Criticisms… Minimizing corruption? Independent relationship between candidate and Super PAC? Freedom of expression? Informing the public about political issues? (through ads)

30. According to the text, the main benefit of campaign finance laws has been to… provide for full disclosure of who gives money to campaigns and how it is spent Donations to Super PACs can be unlimited as long as they are disclosed to the FEC. TRUE

31. CAMPAIGNS TOO EXPENSIVE Center for Responsive Politics estimates that in 2008 the contests for President and Congress = over $5 billion FEC states that the proportion of the nation’s GDP on political activity is a mere.05% Fundraising takes up so much of the candidates’ time: the need for continuous fundraising distracts them from their jobs as legislators Possible solution: public financing of federal campaigns How do you think Congressional incumbents feel about this public financing reform?

32. DOES $$$ BUY V-I-C-T-O-R-Y? Direct link between dollars spent and votes received?? Research: The more congressional incumbents spend, the worse they do. Why is this?? Throwing money at a decent challenger More important than having “more” money, is having “enough” money. = “Doctrine of Sufficiency” “enough money must be spent to get a message across to compete effectively but outspending one’s opponent is not always necessary –even an incumbent with a massive ratio of higher spending”

33. $$$$$$$ “Money is the mother’s milk of politics” The amount of money raised is one indicator of support Media uses it to judge who the leading candidates are Money provides campaigns with the ability to hire sufficient staff and advertising time to get its message out

34. CITIZENS UNITED T-CHART #1 OPPONENTS What is the Citizens United decision about? Who has undue influence in our political system? What is the best way to finance campaigns? Why should Americans oppose the Citizens United decision? #2 SUPPORTERS What is the Citizens United decision about? Who has undue influence in our political system? What is the best way to finance campaigns? Why should Americans support the Citizens United decision?