1. Money and Campaigning: FEC and ‘74 The Maze of Campaign Finance Reforms –Federal Election Campaign Act (1974) Why The Need? –Cost of campaigning and tv spots grew –Watergate scandal- tricky dicky! 2 main goals: –Transparency –Limit overall expenditures Created the Federal Election Commission (FEC) to administer campaign finance laws for federal elections (6 members) Created the Presidential Election Campaign Fund –Provided partial public financing for presidential primaries –Matching funds: Contributions of up to $250 are matched for candidates who meet conditions, such as limiting spending. Required full disclosure and limited contributions: –Where did the money come from and where did it go? –Contribution capped at $1g –Mc&Fin changed to $2g

2. Problems with the FEC ’74 Law Limited amount small donors could give directly to a candidate (called hard money) Did not allow for individual money to be spent Allowed for PAC’s “independent expenditures” Under the law corporations and unions could give as much “soft money” to back the party not a specific candidate (cant give directly) but indirectly. (In 2000 AT&T gave over $3m in soft money donations!)

3. “Bucking” the FEC of ’74 1976: SC case Buckley v. Valeo: –The SC struck down as a violation of free speech the portion of the act that limited the amount individuals could contribute to their own campaigns. Ross Perot -$60 m Romney-$44 m

4. “Reforming” the FEC of ‘74 Reform is a tricky word… BCFRA of 2002 (McCain-Feingold) –Banned soft money contributions. –Prohibited corporations and unions from using their general treasury funds to pay for “electioneering” communications. “the hydraulic theory of money and politics” and 527 Groups: –Money, like water, inevitably finds its way around any obstacle –527 Groups: a loophole in the federal tax code (#527) which allows independent groups of citizens the ability to donate unlimited amounts of money as long as those contributions are to the “group” and not to a specific candidate or political party. Examples: Swift Vote Veterans, MoveOn.org

5. Money and Campaigning: PAC’s The Proliferation of PACs –Political Action Committees (PACs): created by law in 1974 to allow corporations, labor unions and other interest groups to donate money to campaigns; PACs are registered with and monitored by the FEC. –As of 2006 there were 4,217 PACs. –PACs contributed over $372.1 million to congressional candidates in 2006. –Each PAC can only contribute $5 g’s directly to any candidate*

6. Money and Campaigning

7. The SC Case that changed everything… Citizens United v. FEC –Changed the rules of the game (again) –Opened the door some say for a free for all –Corporations are people! –The invention of the Super PAC! Article Assignment