Campaign Finance

Why is money necessary to political campaigns?

Why is money in campaigns problematic for representative democracy?

Can we restrict money in politics to create an equitable electoral process? Should we? In what ways should we restrict it?

Why is money necessary to political campaigns?

• Communicating with distracted voters isn’t free

• Communication key to translating voter preference into policy

• Voters won’t do all the research themselves

Costs of campaigns, 2008

• $5.3 billion– Presidential campaigns: 2.4 billion

(double 2004)

– All House and Senate campaigns: $2.9 billion• Average winning House race: $1.1 million• Average winning Senate race: $6.5 million

Why is money problematic for representative democracy?

• Unfair for rich to have more influence• Elite/class theory

Where might campaign money come from?

• The government• Parties• Interest Groups• A few wealthy people• Lots of different people• What are the pros and cons of each (for

democratic government)

Why do people give money?

Big donors (>$500) Small donors (<$100)

Middle aged Young & very old

Very wealthy More middle class

Solicited by friends, contacted in person

Give unsolicited $, solicited in direct mail

Give for social, ideological reasons AND consider likelihood of winning

Give for mostly expressive/ideological reasons

Much more likely to ask others to contribute

May be involved through internet or grassroots

What has Congress said about campaign spending?

• 1971 Federal Election Campaign Act (FECA)– First disclosure rules

• For candidates, parties, PACs

– Limits candidate self-contributions– Limits media expenditures

What else has Congress said?

• 1974 FECA Amendments– Presidential election public funding with

spending caps– Limits PAC and individual contributions

• “hard money”

– Limits independent expenditures– More disclosure requirements– Federal Election Commission (FEC)

• To enforce the law, facilitate disclosure, administer public funding

How Obama raised more campaign money by declining federal funds:

What has the Supreme Court said?• Buckley v. Valeo (1976)

• Struck down or narrowed parts of the FECA – Struck down limits on independent

expenditures because they interfere with first amendment freedoms

– Upheld:• disclosure requirements

• limits on contributions to candidates

• presidential public financing – expenditure limits are voluntary

Loopholes

• Bundling– People gather contributions from many

individuals and present the sum to the campaign

• Independent expenditures• Soft Money

– Political contributions to party, not candidate

• Issue advocacy• Millionaire candidates

Bipartisan Campaign Finance Reform Act of 2002 (BCRA)

• AKA – McCain-Feingold Act• Banned or limited soft money contributions• Raised hard money limits

– From $1K to $2K

• Ad limits– Groups can’t run “issue ads” within 60 days of general

election if they refer to a federal candidate and aren’t funded through a PAC

– This is the part struck down by the Citizens United case

Loopholes

• 527 groups– Not subject to contribution limits as long a

they don’t specifically endorse candidates– Swift Boat Veterans for Truth

• 501(c) groups– Similar to 527s but,

• Can remain anonymous• Can’t spend more than half their funds on political

activities

Political Action Committees (PACs)

• Created by interest groups• Contribute to candidates favorable to its goals• Must be registered with FEC• Can collect money from stockholders, members,

others• FEC monitors PAC expenditures

Super PAC

• A type of political action committee• Primary purpose is to influence elections• Can take unlimited amounts of money,

outside of federal contribution limits, and spend it to advocate for a candidate – from rich people, unions and corporations– pool it all together

• as long as they are independent and not coordinated with the candidate

Top 10 Super PAC donations 2012

Questions:

• What did the Citizens United decision say about super PACs?

• Why might super PACs be controversial organizations?

• Do you think that super PACs should be allowed to operate as they do? Why or why not?

Citizens United vs. FEC (2010)

Debate