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. Soft Money: Given to a political party for “party building activities” not directly related to the election of that specific candidate. Unlimited contributions to organizations and committees other than candidate campaigns and political parties (i.e. 527s). Ads—just can’t say "vote for," "vote against," "support," "defeat," or "elect“. They can pretty much say anything else though. Big loophole.

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…

Sources Individuals If you’re running for Senate or House If you’re running for President If you’re running for Senate or House Individuals Political Parties Your own funds PACs, 527s, Lobbyists Public Matching Funds Individuals Political Parties Your own funds PACs, 527s, Lobbyists

Individuals 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/Senat e committee PAC $15,000 $5,000 No limits

Your own funds You do not need to limit your own funds unless you are receiving matching funds Many have run on their own fortunes i.e. Trump, K. West

PACs 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. Affiliated PACs (Connected PACs) are most common (corporate, union PACs). As of January 2009, there were 1,598 registered corporate PACs, 272 related to labor unions and 995 to trade organizations. Obviously the real power is corporate. Independent (issue-oriented or non-connected) PACs less common, but some extremely powerful. As of January 2009, there were 1,594 non-connected PACs, the fastest-growing category. Direct result of Citizens United decision. These Super PACs directly attack candidates (previously not allowed); not allowed to coordinate directly with candidates or political parties and are required to disclose their donors. Both of these requirements are being breached.

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 The tax law is relatively clear about what a 501(c)(4) can and cannot do. The IRS defines these groups as “civic leagues, social welfare organizations, and local associations of employees.” Their net earnings are supposed to be used for charitable, educational, or recreational purposes. They may lobby and participate in political activities (unlike 501 (c)(3s) but campaigning must not be the group’s primary purpose. It is, of course, absurd to suggest that the main purpose of these groups is anything other than political activity. Indeed, they effectively function as arms of the Democratic and Republican parties. The biggest, such as Rove’s group, give 100 percent of their contributions to one party or the other.

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 not regulated under FEC law not limited to constraints as PACs or political parties.

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—Presidential 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 2012 General Election Limit: $91.2 million Overall Primary Limit: $45.6 million Part of 1970s reform efforts (1973 tax year)--public funding of elections to help remove influence of big money from process. Was supposed to reduce a candidate’s dependence on large contributions from individuals and special interests. Both the Republican and Democratic nominees in the general election receive a fixed amount of checkoff dollars. Nominees from other political parties may qualify for a smaller, proportionate amount of checkoff funds if they receive over 5% percent of the vote. The national parties also receive funds to cover the costs of their national conventions. Matching funds are also given for primary candidates for small contributions. To be eligible a candidate has to agree to an overall spending limit, abiding by spending limits in each state, use public funds only for legitimate campaign-related expenses, and have an FEC audit.

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.