1. American Government and Organization PS1301 Wednesday, 24 March

2. Announcements Next midterm will be scheduled for Wednesday, April 7 th (not Friday April 9 th )

3. Attitudes about Campaign Finance

4. Campaign Money A good candidate and a good message are not enough. Without money, the voters do not see the candidate or hear the message. In contemporary candidate-centered campaigns, candidates (as opposed to the party organizations) must assemble their own campaign teams, raise their own money, hire consultants and technical specialists, and design and execute their own individual campaign strategies. Recent elections reflect the rise in cost.

5. Regulating Campaign Money Taxpayers partially finance presidential campaigns, but most of the money spent on congressional elections comes from private sources. But money is distributed very unequally, thus its role in electoral politics threatens democratic equality and raises the suspicion that elected officials will serve as the agents of their contributors rather than their constituents.

6. Efforts to Regulate Campaign Money Prior to the 1970s campaign money was effectively unregulated. Congress had passed some limits on contributions and spending. The Corrupt Practices Act of 1925, which placed unrealistically low limits on spending in congressional elections, was in force for more than four decades, but no one was prosecuted under the act.

7. Efforts to Regulate Campaign Money As campaigns became more candidate- centered and broadcast campaigning became the standard, costs increased the demand for money, but many began to fear that winners would favor contributors over constituents. The legal response to this situation was the Federal Election Campaign Act of 1971.

8. Federal Election Campaign Act of 1971 (FECA) Required candidates running for political office disclose an itemized accounting of all expenditures and donations of more than $100.

9. FECA 1974 Instituted a system for public financing of presidential elections. Limited individuals to $1,000 and $5,000 for groups. Created political action committees (PACs) Spending limits were also set for congressional races

10. Legal Challenges In Buckley v. Valeo (1976) the Supreme Court upheld the reporting requirements and contribution limits, but rejected spending limits on the grounds that they interfered with political speech.

11. Soft Money Concerned that spending limits were choking off traditional local party activity in federal elections, Congress liberalized FECA in 1979, amending the act to allow unrestricted contributions and spending for state and local party-building and get-out-the-vote activities. These monies are commonly called soft money. In March of 2002, Congress passed a law prohibiting parties from raising and spending soft party money for federal candidates.

12. Bipartisan Campaign Reform Act of 2002 Also know as McCain-Feingold (who sponsored the legislation). First, the law prohibits raising and spending of “soft money” for federal candidates. Second, the law redefines what constitutes a campaign advertisement, subject to the disclosure requirements and contribution limits and contribution source restrictions of federal law. Third, it raised the limits on "hard money." The limits on how much an individual can give to a federal candidate rose to $2,000 an election, from $1,000, with subsequent increases allowed for inflation. Upheld by the Supreme Court in 2003.

13. Regulation on Political Ads Advocacy vs. issue ads Does it include magic words such as “vote for” “elect” or “vote against”? Most “issue ads” avoid the words but are still advocacy ads "Last year, John McCain voted against solar and renewable energy. That means more use of coal-burning plants that pollute our air. Ohio Republicans care about clean air. So does Governor Bush. He led one of the first states in America to clamp down on old coal- burning electric power plants. Bush’s clean air laws will reduce air pollution more than a quarter million tons a year. That’s like taking 5 million cars off the road. Governor Bush, leading, for each day dawns brighter." The BCRA provides a better definition: Any broadcast advertisement that depicts a candidate within 30 days of a primary election or 60 days of a general election, and is targeted to the voting constituency of that candidate, constitutes an electioneering communication, subject to federal campaign laws.

14. Comparisons with Other Countries

15. Top Hard Money PAC contributors Democrats International Brotherhood of Electrical Workers $2,536,525 International Brotherhood of Electrical Workers $2,536,525 American Federation of St/Cnty/Mun Employees $2,457,974 American Federation of St/Cnty/Mun Employees $2,457,974 Teamsters Union $2,369,595 Teamsters Union $2,369,595 Association of Trial Lawyers of America $2,301,000 Association of Trial Lawyers of America $2,301,000Republicans National Association of Realtors $2,026,698 National Association of Realtors $2,026,698 National Auto Dealers Association $1,687,700 National Auto Dealers Association $1,687,700 National Beer Wholesalers Association $1,478,500 National Beer Wholesalers Association $1,478,500 National Rifle Association $1,333,074 National Rifle Association $1,333,074

16. Top Soft Money Contributors Am. Fed. St/Cnty/Mun Employees $5,949,000 AT&T $4,398,920 Service Employees Int. Union $4,288,096 Bank of America $3,147,824 Philip Morris $2,383,453 Microsoft $2,316,926 Enron $1,657,555

17. Hard Money Raised Over Time

18. Bribery? Money buys time not votes. PACs give money because they want access. Contributing money is seen as an important advantage in getting policymakers to pay attention to their problems rather than someone else’s. “Talking to politicians is fine, but with a little money they hear you better”.

19. Where does the money go? Money is used to buy access, so it goes to individuals who stand a good chance of getting elected. If the election is seen as a toss-up, then it goes to both parties. Usually, it goes to incumbents.

20. How money influences behavior Money flows to members who are either strongly in favor or strongly against. PACs through money to members who are against legislation to buy inactivity. “Why don’t you think of something else to do with your time”. Money just changes how people spend their time.

21. Criticisms of PAC money Operate primarily to protect incumbents Nationalizes campaign financing and weakens the link between the representative and his or her district. Accountability. Money comes from outside the district. Overrepresentation of business interests (rapid increase in bus. related PACs) Fragmentation of American politics by encouraging groups that focus on narrow interests. Weakens the role of the individual in politics ($1000 opposed to $5000) Undermines political parties

22. The Campaign Finance Regulation System Campaign finance operates through two parallel systems: Money going directly to candidates is subject to limits on the size of contributions and full disclosure of sources. Presidential candidates who accept public funds also must observe spending limits. But money raised and spent outside of the candidates’ campaigns (soft money, issue advocacy) is lightly regulated and not subject to limits.

23. The Flow of Campaign Money Critical to the recent reform was the fact that the unregulated campaign finance system (soft money) outpaced the regulated system. Spending in House and Senate campaigns also has continued to grow since FECA took effect, rising by an average of about 7 percent from one election year to the next. Much variation, however, exists among congressional candidates. Some raise and spend a great deal, others do not.

24. How Money is Spent