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Money and campaigning.

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Presentation on theme: "Money and campaigning."— Presentation transcript:

1 Money and campaigning

2 Sources of Funds Private Sources
Candidates fund campaign from their own pockets Private individuals donate to campaigns (limit of $2500 per person) Corporations and Unions Donate funds to campaigns through PACs (limit - $ 5000 per candidate) Give money to SuperPACs (unlimited) Most often given to incumbents and candidates who already agree with them

3 Public sources Public funding of presidential elections
(Public funding, Federal monies, Public monies, Federal funding, Federal matching funds) Presidential candidates receive federal government funds to pay for the valid expenses of their political campaigns in both the primary and general elections. National political parties also receive federal money for their national nominating conventions. In 2008, each major party received $16.3 million in public funds for their conventions, and the parties

4 Public Funding Primary Matching Funds General Election
The federal government will match up to $250 of an individual's total contributions to an eligible candidate. To be eligible a candidate must raise $5,000 in at least 20 states General Election Fund the major party nominees' general election campaigns and assist eligible minor party nominees, they had to receive 5% of the vote in previous election In 2008 the parties' general election nominees were eligible to receive $84.1 million in public funds

5 Reform Laws Congress has debated a variety of campaign finance reforms over the last decades in a way to control the amount of money being spent. However, Congressmen are reluctant to adopt new laws since they benefit from the money given to them

6 Federal Campaign Reform Law
Adopted in 1974 as a result of illegal donations during the Nixon Campaign. Created Federal Election Commission (FEC), charged with overseeing campaigns for all federal elections

7 Federal Election Campaign Act (FECA), 1974
Limit on individual and PAC donations per candidate per election PAC = political action committee created by interest groups Provided partial public financing for presidential primaries. Provided full public funding for presidential general campaigns for major party candidates; and partial funding for minor party candidates All candidates must file financial disclosure reports. No cash contributions may exceed $200 No foreign contributions

8 Hard Money Is strictly regulated by FEC Money given…
directly to candidates for federal elective office directly to political parties for the purpose of supporting candidates for federal office

9 As a result … Campaign spending increased dramatically due to the existence of several loopholes in the law Loopholes are found in every reform law. As soon as a law is adopted, people are immediately finding other ways to spend political money.

10 Ran as an independent in 1992 and for the Reform Party in 1996
Buckley v. Valeo (1976) The Supreme Court struck down a portion of the FECA that limited the amount individuals could contribute to their own campaigns WHY? Restrictions on individual contributions violates free speech in the First Amendment As a result, Ross Perot spent over $ 60 million of his own fortune on his independent presidential candidacy in 1992 Ran as an independent in 1992 and for the Reform Party in 1996

11 Meg Whitman, former eBay CEO, spent $160 million of her own $ (about $50/vote) to finance unsuccessful campaign for Governor of CA in 2010

12 Amendment to the FECA, 1979 This amendment allowed soft money contributions What is soft money? Money NOT regulated by federal law Hard money is regulated by the FEC Given to political parties for general party building and advertising expenses such as voter-registration campaigns, voter mobilization etc. Can’t be tied to supporting or opposing a particular candidate. No contribution limit

13 McCain-Feingold Act (2002) - also called Bipartisan Campaign Reform Act (BCRA)
Banned soft money Increased limits of “hard money” donations Money given directly to candidates for federal elective office or to political parties for the purpose of supporting candidates for federal office. Regulated by the FEC. Prohibited corporations and unions from running “issue ads” if they refer to a federal candidate within 30 days before a primary 60 days before a general election


15 Issue Ads Ads intended to educate the public on broader issues, they can’t use words such as “vote for”, “support” etc. supposed to discuss broad political issues rather than specific candidates

16 As a result…. The BCRA led to the creation of 527 organizations Tax-exempt organizations created to raise money for political activities Not regulated by FEC Can raise unlimited amounts of money and can spend unlimited money on issue ads as long as they do not coordinate their spending with any candidate or advocate for specific candidates they influence how you look at the candidates. they will try to shape your opinion of a political candidate or party in the context of a specific issue.

17 Example of 527s – Swift Boat Veterans for Truth
More examples: American Crossroads The Media Fund


19 McConnell v. FEC (2003) Money is property, NOT speech
Supreme Court ruling that upheld BCRA or McCain-Feingold ACT of 2002 Money is property, NOT speech Money can be regulated

20 Citizen United v. FEC (2010) Overturned important aspects of McCain-Feingold (02) Political spending can’t be restricted by the government It is protected speech under the 1st Amendment Money = speech Corporations, and unions may now spend unlimited amounts of money in supporting or denouncing candidates in elections No limits on issue ads by corporations prior to elections

21  Spending increased ($ 6 billion spent in 2012 election cycle)  Paved way for SuperPACs

22 Super PACS What is a Super PAC?
A non-profit group that can raise, and then spend, unlimited amounts money from corporations, unions, and individuals on political advertisements (openly advocate for or against political candidates) They do have to report their donors to the FEC Unlike traditional PACs, Super PACs are prohibited from donating money directly to political candidates.

23 Stephen Colbert’s SuperPAC

24 Impact of Super PACs on the 2012 Election
Over $1.3 billion spent by 629 outside groups Only 32% of money spent yielded intended result

25 Build your own SuperPAC


27 Super PACs

28 Other organizations 501(c)(4)
Non-profit, tax exempt interest group that can engage in varying levels of political activity Many corporations donate money for advertising through these organizations Don’t have to disclose their donors Example: Crossroad America GPS, Priorities USA

29 Unlimited to Super PACs
Who is giving Who is getting it Where is it going Corporations and Unions Unlimited to 527 Unlimited to Super PACs Unlimited and anonymous to Nonprofit groups Unlimited to Ads Unlimited to ads

30 Who is giving Who is getting it Where is it going Individuals Unlimited to 527 Unlimited to Super PACs Unlimited and anonymous to Nonprofit groups $ 5000/year to PACs $ 2500 $ 30,800 to national party committee Unlimited to ads    $5000/election to candidates Candidates and their committees $ 5000 for House/ $ 42, 600 for Senate

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