1. Campaign Finance

2. Campaigns 1974 Federal Election Campaign Act Public financing of presidential elections Limits on spending if accept public finance Created Federal Election Commission Federal Election Commission Required candidates and donors to report donations to the FEC, with caps now on donations Required candidates and donors to establish Political Action Committees (PACs) to handle money end of the campaigns Limited amount of personal wealth candidates could spend

3. Campaigns Buckley vs. Valeo (1976) restrictions on personal spending violate the First Amendment caps on contributions, however, do not federal finance of campaign do not, as long as it is voluntary (that is, candidates can opt to accept the money -- and the limits -- or not)

4. Campaigns Loopholes within the FECA No limits on donations to party (“soft money”) No limits on party spending for “get out the vote” drives (“soft money”) No limits on number of political action committees “bundling”

5. Campaigns 2002 Bipartisan Campaign Reform Act (BCRA)BCRA Closed soft money loophole Raised the limits on PAC contributions and other donations Bans “group sponsored” ads 30 days prior to a primary and 60 days prior to general election

6. Campaigns Loopholes PACs can raise unlimited amounts of money 527 Organizations -- nonprofit issue advocacy groups

7. Campaigns Basics of Campaign Finance Law  2002 Bipartisan Campaign Reform Act 2002 Bipartisan Campaign Reform Act Campaign Finance and Electoral Success 2008 Campaign Finance and Electoral Success

8. Campaigns In 2008 House elections, in only 2% of the races did the candidate with lower campaign contributions win In 2008 Senate races, in only 6% of the races did the candidate with lower campaign contributions win.

9. Campaigns Better financed campaigns generally have a better chance of success They can hire better talent They can buy advertising to rebut or make charges They can extend the campaign longer and respond to changes in the election atmosphere Efforts to curtail influence of money in campaigns began in earnest with post-Watergate reforms and have met with limited success So, should we be concerned about the role of money in politics?

10. 10 Campaign Contribution Concern depends on why peopleof organizations contribute Do they contribute for policy/electoral reasons or for “service” reasons? When does it make sense to contribute?

11. Why Contribute? Assume two candidates: Democrat Don and Republican Ron Assume each has campaign contribution X D and X R, respectively, where “X” equals cash on hand Assume candidate with the most money is most likely to win, then...

12. Why Contribute We’ll define the probability that Demo Don wins as P D = X D (X D +X R ) And we’ll define the probability that Repub Ron wins as P D = X R (X R +X D )

13. Why Contribute? Further, if we assume if both X D and X R is 0, then P D = P R = 0.5 (50%) In other words, if the money is equal, the race is a toss-up And if either has more money, then they have a better chance of winning

14. Why Contribute? For example, if Demo Don has all the money then, using the formula we developed we get: P D = 1 D = 1 (1 D +0 R ) Likewise, if Repub Ron has all the money, then he has a 100% chance of winning

15. Why Contribute? Notice that: P D = 1 - P R In other words, if we will assume if candidates are trying to win, then they will try to maximize their campaign contributions

16. Why Contribute Turn to page 201 and the Sierra Club example

17. Why Contribute Next week finish chapters 6 and 7