Consider: Is money a necessary part of politics?

The Last Word: Assignment 6 due Friday

Campaign Finance LawUnit 3: AP Government and Politics

Campaign Finance…Politics and money

go together like…◦Why?

Why regulate?◦Perceived corruption

in government due to the influence of money

Conflicting values◦1st amendment vs…

Sources of Campaign FundingCandidates, Parties, Individuals,

PACs527sSuper PACs (Super 527s)Public FundsBundling

Sources of Campaign Funding Individuals

$2,500 per election Small donations add up

Political parties $5000 per election to House, $43,000 to Senate

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

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 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 on expenditures – See (Super) 527s Cannot contribute to candidates

13.3

Sources of Campaign Funding 527 political committees

Named for section of tax code; 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.

Super 527s- 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

BundlingBundling: 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.

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

“Dark” MoneyCoined by Mother Jones magazine in

2010.◦Play on the former terms “hard” and “soft”

moneyRefers 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 an illegal bribe given to elected officials

The Last Word: Assignment 6 due Friday – Unit 3b Test next Thursday

Consider: What are the conflicting values in the campaign finance debate?

Early Campaign Finance Reform

First tried in late 1800s; ◦Prohibit solicitation of funds from federal

workers for campaign fundsTillman Act (1908) – banned corporate

contributions to candidatesOther 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.

Campaign Finance Pendulum

During the 20th century, and beyond, campaign finance regulations have been enacted, repealed, upheld and struck down several times (regulation seems to go back and forth)◦FECAct (1974)◦Buckley vs. Valeo (1976)◦Bipartisan Campaign Reform Act (“BCRA,” 2002)◦McConnell vs. FEC (2002)◦Wisconsin RTL vs. FEC (2007)◦Citizens United vs. FEC (2010)

The major distinction that has been made by the courts and laws dealing with campaign finance has been between donations/contributions and expenditures.

Current Campaign Donation Limits

***Contribution limits are adjusted for inflation each odd-numbered year

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 FECRequires 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)

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 interest;

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 limits on

expenditures 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

BCRA (2002)◦A bipartisan campaign finance reform bill passed in

2002◦Known as “McCain-Feingold”, or “Shays-Meehan” in

the HouseProvisions

◦Banned “soft money” – unlimited contributions made to parties for “party-building activities.”

◦Banned “electioneering communications” (express advocacy) 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.

McConnell vs. FEC (2003)Challenge to the BCRASupreme Court upholds most

provisions of the BCRA ◦“electioneering communications” provision◦“soft money” ban◦New limits on contributions

Overturned the ban on minor’s contributions to candidates

“money, like water, will always find an outlet”; therefore, regulations will continue to be needed.

FEC vs. Wisconsin RTL (2007)

Wisconsin Right to Life (WRTL), a nonprofit political advocacy corporation, ran three advertisements encouraging viewers to contact two U.S. Senators and tell them to oppose filibusters of judicial nominees.

WRTL intended to keep running the ads through the 2004 election, but the Bipartisan Campaign Reform Act of 2002 (BCRA) prohibits corporate funds from being used for certain political advertisements in the 60-day period prior to an election.

Text of Wisc. Right to Life AdPASTOR: 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 candidate’s committee.

Decision in WRTLThe 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 expressly urges support or

defeat of a candidate), it was eligible for an exception to the McCain-Feingold limits on issue ads close to an election.

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.

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?

The decision in Citizens UnitedThe Supreme Court overruled

portions of McConnell v. FEC. ◦In prior cases, the Court had held that

political speech may be banned based on the speaker's corporate identity.

By a 5-to-4 vote along ideological lines, the majority held that corporate funding of independent political broadcasts in candidate elections cannot be limited.

Speechnow vs. FEC (US Court of Appeals)

The five-justice majority in Citizens United did not address whether gov could regulate individual contribs to groups that make indie expenditures.

This case, concerning 527s, was brought by SpeechNow.org, ◦ The group sued the FEC, saying that limits on annual contributions

from individuals were unconstitutional. The FEC argued that large contributions to groups that made indie expenditures could “lead to preferential access for donors and undue influence over officeholders.” In May of 2010, a U.S. Court of Appeals ruled in favor of

SpeechNow.org, meaning the FEC could not longer enforce the individual contribution limits to independent groups. 

The court noted that the Citizens United case said that there is no corruption when the spending is not coordinated with a candidate. ◦ The Appeals Court said the FEC’s arguments “plainly have no

merit after Citizens United.”

And yet one more…McCutcheon vs. FEC

◦April 2014 decision◦Court strikes down BCRA limit on

how much an individual could give overall in an election cycle.

◦There is no longer a limit on this.

What will be the next move?New legislation?Challenge to existing rules?Spending bill of 2014