CAMPAIGN FINANCE

How to fund a race for government office

HARD MONEY V SOFT MONEY

Hard money is money given directly to a candidate’s “war chest” for his/her campaign. This money has limitations and must be reported to the FEC.

Soft money is money spent on behalf of the candidate without giving it directly to that candidate.

Euphemistically called “Issue Groups”

--Political Action Committees--527s--501(c)s--Super PACs result of Citizens United -get the benefits of tax exemption and other non-profit perks while serving as political vehicles

These are now the cash cows of soft money…

SourcesSourcesIf you’re running for President

If you’re running for Senate or House

IndividualsIndividuals

To an individual candidate

To a national party committee

To state/district party committee

Special limits

Individual may give

$2500 $30,800 $10,000 $117,000 biennial limit;

$65,500 to all PACs

National Party Committee

$5000 No limit $43,100 to Senate candidate--shared by the national/Senate committee

PAC $5000 $15,000 $5,000 No limits

Your own fundsYour own funds

PACsPACs

PACs Groups that raise $, then distribute it out to candidates for elections. $5000 maximum individual donations.

Affiliated PACs (Connected PACs) are most common (corporate, union PACs).

Independent (issue-oriented) PACs less common, but some extremely powerful.

Super PACs can raise unlimited sums from corporations, unions and other groups, as well as individuals.

Super PACs

• Example: American Crossroads

• Bundle contributions• Supposed to be “Civic

leagues, social welfare organizations, and local associations of employees”

• May directly lobby, but mainly uses the media to help/trash candidates

• American Crossroads attack ad

527s

• campaign finance ‘loophole” • ‘issue advocacy’ groups: tax-

exempt & attempts to influence elections

• often run “issue advocacy” ads to defeat candidates.

• Are NOT subject to contribution limits

• Swiftboat veterans for truth ad

501(c) non profits

• allowed “limited political activity.”

• Big issue—they don’t have to publicly disclose their donors. Example—US Chamber of Commerce.

• Can raise UNLIMITED amounts of $ from various individuals or groups.

Public Matching Funds—Public Matching Funds—Presidential Race OnlyPresidential Race Only

Provides for the financing of presidential primary and general election campaigns and national party conventions Only if:•Limit campaign spending for all primary elections to $10 million • Limit campaign spending in each state to $200,000 plus •Limit spending from personal funds to $50,000.

Public Funding Spending Limits in 2012Public Funding Spending Limits in 2012General Election Limit: $91.2 millionOverall Primary Limit: $45.6 million

Previous Court Cases

• Buckley v. Valeo (1976): --donation limits upheld but expenditures by candidates not

• Opened up soft money—money spent on behalf of candidate without giving directly to that candidate.

• Spending equated with speech. • Upheld public financing of

presidential campaigns.

Austin v. Michigan Chamber of Commerce (1990)

—upheld prohibition of corporations from using treasury money for support of candidates or campaigns. --This included non-profits like Chamber of Commerce because it was by and large made up of business members.

McConnell v. Federal Election Commission (2003)—upheld control of soft money and regulation of issue ads.

And now…Citizens United v. FEC (2010)

5-to-4 vote along ideological lines, First Amendment: corporate funding of independent

political broadcasts in candidate elections cannot be limited.

political speech is indispensable to a democracy, which is no less true because the speech comes from a corporation.

The Court also upheld the disclosure requirements for political advertising sponsors and it upheld the ban on direct contributions to candidates from corporations and unions.

Reforms

1. Clean Elections movement.– Candidates agree to set limits, agree to no outside

donations, agree to not spend their own money.– Candidates receive matching funds, up to a limit, when

they are outspent by privately-funded candidates, attacked by independent expenditures, or their opponent benefits from 527s. Used in AZ and ME.

2. Free air time for candidates another idea.

3. **Criticism of reforms say it goes against First Amendment rights.