1. Consider: Is money a necessary part of politics? The Last Word: Assignment 8 due Friday

2. Campaign Finance Law Unit 3: AP Government and Politics

3. Campaign Finance… Politics and money go together like… ◦ Why? Why regulate? ◦ Perceived corruption in government due to the influence of money Conflicting values

4. Early Campaign Finance Reform Tillman Act (1908) – banned corporate contributions to candidates Other laws sought to… ◦ Limit the influence of wealthy individuals and special interest groups on the outcome of federal elections; ◦ Regulate spending in campaigns for federal office; and ◦ Deter abuses by mandating public disclosure of campaign finances.

5. Campaign Finance Pendulum The major distinction that has been made by the courts and laws dealing with campaign finance has been between donations/contributions and expenditures. ◦ To put it simply, donations/contributions to candidates/players can be limited, but expenditures mostly cannot… FECA –towards limits Buckley – away from limits Austin – towards limits BCRA – continue with limits/new limits McConnell – continue with limits…mostly Citizens United – swing away from limits

6. FECA (1971 and 1974) Attempt to enact comprehensive regulations of the way American campaigns for Congress and President are conducted; in the wake of Watergate ◦ Dealt primarily with how money is raised and spent Created the FEC Requires every candidate to establish a committee to report contributions and expenditures ◦ Every donor or expenditure over $100 Continued pre-existing bans on contributions by corporations and labor unions to campaigns ◦ Created new limits on other sources of funding, including individual contributions to candidates (people, PAC’s, other groups)

7. Buckley vs. Valeo (1976) The first case to challenge virtually every part of FECA ◦ In order for government to limit the free speech that is campaign contributions and expenditures, it had to prove that:  Its actions are justified by a particularly compelling reason, and;  That the law is narrowly tailored to suit that purpose  The only government interest the Court has found acceptable is the “need to prevent actual or apparent corruption” in the political process Supreme Court struck down several parts of FECA  Upholds limits on contributions; strikes down expenditures limits  Narrowed the ban on corporations/unions by banning “express advocacy” only, but can still focus on “political and policy issues” so that they can remain part of the discussion  Prohibitions on corporate/union donations and spending remain ◦ This leaves open the door for parties to solicit and gather “soft money” contributions from any source  Used for “grassroots” and get-out-the-vote initiatives since these are not directed towards any particular candidate

8. Austin vs. Michigan Chamber of Commerce (1990) Case which tested the constitutionality of a Michigan campaign finance law that prohibited corporations from using treasury money for independent expenditures to support or oppose candidates in elections for state offices ◦ However, that law did permit a corporation to set up an independent fund designated solely for political purposes which could make such expenditures. The challenge to this law was based on the First and Fourteenth amendments The Court ruled that the Michigan law was constitutional ◦ It held that that “corporate wealth can unfairly influence elections”; ◦ and because of the fact that the law still permitted corporations to make contributions/expenditures from a separate fund it was constitutional

9. Consider: Is money a necessary part of politics? The Last Word: Assignment 8 due Friday

10. Consider: Is money a necessary part of politics? The Last Word: Assignment 8 due Monday

11. BCRA (2002) A campaign finance reform bill passed in 2002 ◦ Known as McCain-Feingold, or Shays-Meehan in the House Provisions ◦ Banned “soft money” – unlimited contributions made to parties for “party-building activities.” ◦ Redefined “express advocacy” to ban “electioneering communications” by corporations/labor unions  “electioneering communications” – ads that name a federal candidate within 30 days of primary or 60 days of general election ◦ Prohibited minors from making political contributions ◦ Raised individual contribution limits –  From $1000 to $2000, then adjusted for inflation.

12. Current Campaign Donation Limits TypeTo candidateTo PartyTo PACAggregate Total -- Individual$2,500 per Election to a Federal candidate -- primary, runoff, and general election counts as a separate election. $30,800 per calendar year $5000 per calendar year $117,000 per two-year election cycle as follows: $46,200 per two-year cycle to cand. $70,800 per two-year cycle to all national party committees and PACs PAC$5000; per election$15,000 per party per calendar year $5000 per calendar year No Limit Party$5000No Limit$5000No Limit, except for Senate candidate per campaign Contribution limits are adjusted for inflation each odd-numbered year

13. McConnell vs. FEC (2003) Challenge to the BCRA Supreme Court upholds most provisions of the BCRA ◦ “electioneering communications” provision ◦ “soft money” ban ◦ New limits on contributions Overturned the ban on minors contributions to candidates  “money, like water, will always find an outlet”; therefore, regulations will continue to be needed.

14. Text of Wisc. Right to Life Ad PASTOR: And who gives this woman to be married to this man? BRIDE'S FATHER: Well, as father of the bride, I certainly could. But instead, I'd like to share a few tips on how to properly install drywall. Now you put the drywall up... VOICE-OVER: Sometimes it's just not fair to delay an important decision. But in Washington, it's happening. A group of Senators is using the filibuster delay tactic to block federal judicial nominees from a simple "yes" or "no" vote. So qualified candidates don't get a chance to serve. It's politics at work, causing gridlock and backing up some of our courts to a state of emergency. Contact Senators Feingold and Kohl and tell them to oppose the filibuster. Visit: BeFair.org Paid for by Wisconsin Right to Life (befair.org), which is responsible for the content of this advertising and not authorized by any candidate or candidates committee.

15. Decision in WRTL The Supreme Court, in a 5-4 decision, crafted a major exception to the limitations on broadcast ads within 30 days of a primary or 60 days of a general election. The court ruled that unless an ad could not reasonably be interpreted as anything other than an ad urging the support or defeat of a candidate (in other words, unless an ad expressly urges support or defeat of a candidate), it was eligible for an "as applied" exception to the McCain-Feingold limits on issue ads close to an election.

16. Citizens United vs. FEC (2010) Facts of the Case: Citizens United sought an injunction against the FEC in the US District Court to prevent the application of the BCRA to its film Hillary: The Movie. The Movie expressed opinions about whether Senator Hillary Rodham Clinton would make a good president. The BCRA applies a variety of restrictions to "electioneering communications." Section 203 prevents corporations or labor unions from funding such communication from their general treasuries. Question Presented: 1) If a communication lacks a clear plea to vote for or against a particular candidate, is it subject to regulation under the BCRA? **Should a feature length documentary about a candidate for political office be treated like the advertisements at issue in McConnell and therefore be subject to regulation under the BCRA?

18. Speechnow vs. FEC (US Court of Appeals) ◦ The five-justice majority in Citizens United ruled that corps/unions may spend their own money to support political candidates through things like TV ads.  But it did not address whether gov could regulate contributions to groups that make indie expenditures. This case, concerning 527s, was brought by SpeechNow.org, which said it wanted to raise money to produce ads to back candidates who supported the First Amendment. The group sued the FEC, saying that limits on annual contributions from individuals were unconstitutional. The FEC argued in this case that large contributions to groups that made indie expenditures could “lead to preferential access for donors and undue influence over officeholders.” ◦ In the 9-0 opinion, the US Court of Appeals cited the Supreme Court’s threshold for campaign finance regulation in ”preventing corruption or the appearance of corruption,” and noted that the Citizens United case had said that there is no corruption when the spending is not coordinated with a candidate. ◦ Indeed, Justice Anthony M. Kennedy, writing for the majority in Citizens United, said that “independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.” ◦ The Appeals Court said the FEC’s arguments “plainly have no merit after Citizens United.” http://www.nytimes.com/2010/03/27/us/politics/27campaign.html http://www.nytimes.com/2010/03/27/us/politics/27campaign.html

20. “Dark” Money Coined by Mother Jones magazine in 2010. ◦ Play on the former terms “hard” and “soft” money Refers to donations to nonprofit groups who do not have to disclose where the money came from ◦ Used for political action, including ads Not to be confused with “black money”, which is illegal bribe money given to elected officials

22. Sources of Campaign Finance Candidates, Parties, Individuals, PACs 527s Super PACs (Super 527s) Public Funds Bundling

23. Sources of Campaign Funding  Individuals $2,500 per election Small donations add up  Political parties Quasi-judicial process  Personal savings No limits  Political action committees (PACs) A political committee that raises and spends money to elect or defeat candidates. An organization's PAC will solicit money from the group's employees or members and make contributions in the name of the PAC to candidates and political parties. $5,000 per election 13.3

24. Sources of Campaign Funding  501(c) groups Not primarily political; 501(c) groups are not legally required to disclose any information about their donors. 501(c)(3) groups -- operate for religious, charitable, scientific or educational purposes. These groups are not supposed to engage in any political activities, though some voter registration activities are permitted. 501(c)(4) groups -- commonly called "social welfare" organizations. They may engage in political activities, so long as these activities do not become their primary purpose. 501(c)(5) labor and agricultural groups, and 501(c)(6) business leagues, chambers of commerce, real estate boards and boards of trade face restrictions similar to 501(c)(4) groups regarding political activities.  Super PACs No limits – See (Super) 527s 13.3

25. Sources of Campaign Funding  527 political committees Named for section of tax code; almost all political groups are technically these... However, in common practice the term is usually applied only to such organizations that are not regulated under state or federal campaign finance laws because they do not "expressly advocate" for the election or defeat of a candidate or party."expressly advocate" Raise money for political activities including voter mobilization efforts, issue advocacy ads. The FEC only requires a 527 group to file regular disclosure reports if it is a political party or political action committee (PAC) that engages in either activities expressly advocating the election or defeat of a federal candidate, or in electioneering communications. No limits - The Citizens United ruling allows 527 committees to raise unlimited funds from individuals, corporations and unions to expressly advocate for or against federal candidates, and since the controversial ruling, several so- called 527 groups have registered with the FEC as "super PACs." 13.3

26. Bundling Bundling: The practice through which multiple contributions from a single industry, interest group, company or group of individuals are delivered to a candidate. Bundling is a legal practice that can occur one of two ways: ◦ 1) an individual or group, known as a conduit or bundler, collects and delivers the contributions in a "bundle" to a candidate (in some cases, the conduit must report bundled contributions to the Federal Election Commission), or ◦ 2) individuals from the same industry, interest group or company send contributions that reach a candidate around the same time. In these cases, the person or group who solicited the contributions (the bundler) is often given an identification code that the contributors put on their checks so he gets the credit for bringing in the contributions. Companies, industries and interest groups organize "bundles" of contributions in order to take credit for a total amount greatly exceeding what could be given by an individual or PAC. This gives them much greater impact than a trickle of apparently unrelated individual checks.

27. Public Funds  Presidential candidates Few candidates accept them Must raise at least $5,000 to qualify for matching funds Third party candidates only get funds after election Presidential Election Campaign Fund $3 from each taxpayer who ticks box 20% of taxpayers participate 13.3