1. Money in US Elections PART 1

2.  Teapot Dome scandal (1925)  Cabinet members illegally leased federal lands in exchange for bribes from private oil development  Watergate scandal (1972)  People from Nixon’s campaign broke into the Democratic Party headquarters to steal campaign documents and install listening devices

3. 1) Impose limits on giving, receiving, and spending political money 2) Require public disclosure of the sources and uses of political money 3) Give government subsidies to presidential candidates, campaigns, and parties to reduce their reliance on campaign contributors

4.  Limited the amount that federal candidates could spend on advertising  Required disclosure of donor information & how they are spent  Required PACs to register with the government and report all major contributions and expenditures  PACS can contribute only $5,000 per election  Created the Federal Election Commission (FEC)

5.  Administers new campaign spending laws  Provides for partial public funding for presidential primaries  The FEC matches small individual contributions up to $250 as long as the candidate agrees to remain within spending limits Not all candidates choose to do this (ex: George W. Bush & John Kerry).  Provides grants to major party presidential candidates running in the general election, if they also stop their own fundraising  Both 2004 presidential candidates got $75 million from the FEC  Even allowed grants to minor parties that polled 5% of the total vote in a previous election  And where did this money come from?  You!  Taxpayers can choose to allocate $1-3 of their income by checking off a box on their tax forms

6.  The Supreme Court made a distinction between campaign spending and campaign contributions  Congress can limit how much people contribute to somebody else’s campaign  Individual contributions: to candidates per two year cycle = $2,000 to PACs per year = $5,000 to National Party Convention = $5,000  BUT, it cannot limit how much of their own money people spend on their own campaigns (1 st Amendment)  Thus, candidates can spend as much as they want on advertising as long as the money is theirs (ex: wealthy Ross Perot can fund his own campaign with his own money without restrictions of FECA)

7.  By placing limitations, it helped to de- emphasize the chances of winning based on money  All presidential candidates from 1974 to 2000 accepted the matching funds provided by the government  In the election of 2000, George W. Bush became the first to DECLINE the public funds for his campaign in the primary election  However, he accepted government funds in the general election ($67.5 million)

8.  Soft money are contributions to a state or local party for “party-building purposes.”  By doing this, they avoided giving money directly to candidate and gave it to political parties instead  “Hard money” thus became known as money that was given directly to candidates  “Soft money” was money donated to political parties.  There was no limitation on how much soft money could be raised at any given time. Soft money was not regulated by FECA.

9.  Parties at first used it for voter registration drives, mailings, and generic party advertising  But then they began transferring funds to state parties, which then ran ads for or against candidates  In the 1996 election, the Democratic Party offered their donors “perks” for their soft money contributions  The party offered donors free rides with Clinton on Air Force One air plane & the chance to spend the night in the Lincoln Bedroom at the White House  It was hard to distinguish soft money from hard money when the parties purchased advertising

10.  Aka McCain-Feingold bill, named after its two chief sponsors in the Senate  Banned soft money in federal campaigns completely  It INCREASED the amount of hard money contributions  Individuals could give candidates $2,100 for each primary & general election  Individuals could give federal candidates up to $40,000, national party committees up to $23,900, and PACS up to $37,500  Contribution limits were indexed to inflation  Prevented corporations and labor unions for using general treasury funds for electoral purposes  Provided an increase in contribution limits for candidates running against an opponent who was spending substantial amounts of his own money

11.  In the Supreme Court case McConnell v. FEC (2004), the BCRA was deemed constitutional  The Court felt that soft money should be banned because it purchased access to elected officials, and with that access came influence and the possibility or appearance of corruption  Limited amounts of soft money could still be raised in state and local party committees for voter registration and get-out-the vote efforts