1. Money and Elections
Chapter 7
Section 3

2. Key Terms Political Action Committee (PAC) Subsidy Hard Money
Soft Money

3. Campaign Spending
There are 500,000 elective offices in the United States
Presidential election s consume the largest share of campaign dollars
In 2008, $2.5 billion was spent for all major and minor party presidential efforts
Caucuses and primaries, conventions, general elections and campaigns

5. Spending has doubled in the last decade
Candidate must raise and spend 1 million dollars for a House seat
Senate campaigns spent 20 times that amount
1.5 billion was spent on House and Senate contests in 2008

6. Radio
Television
Consultants
Newspapers
Office rent
Polls
Web sites

9. Buttons
Posters
Bumper stickers
Data processing
Mass mailings
Web sites
Travel

12. How much is spent depends on
Office involved
Candidate (incumbent or challenger)
Nature of opposition
Availability of campaign funds

13. Sources of Funding Private and Public Sources
Small contributors $5 to $10 dollars
Only 10 percent of voting age people contribute
Wealthy individuals and families
“Fat cats” who make large donations in their best interest
Candidates
Incumbents, challengers
People who want tom hold appointive public offices

14. Various nonparty groups
Political Action Committees (PAC)- are political arms of special interest groups with a stake in the Election
Temporary organizations
Groups formed for the immediate purpose of the campaign
Hundreds of these are short lived
Hold luncheons, dinners, receptions for a fee
Some reach the $100,000 level

16. Subsidy- is a grant of money usually from a government
The Internet
State treasuries
Subsidy- is a grant of money usually from a government
Subsidies have been more important at the presidential level
Some state provide some form of public funding for parties and/or candidacies

17. Why people give They are a form of political participation
Some make small donations because they believe in the candidate
Many want something in return
Want access to government (friends)

18. Regulating Finance First began in 1907
Became unlawful for any corporation or bank to make money contributions
Congress has passed several laws regulating money in campaigns
1974 response to Watergate scandal
2002 closed the “soft money” loophole

19. Congress can not regulate use of money in state and local elections
Every state regulates campaign finance

20. Federal Election Commission
Set up in 1974
Handles all federal law dealing with campaign finance
Independent agency in the executive branch
Laws are not well enforced
Agency is underfunded and understaffed
Congress has made it almost impossible for them to do their job

22. FEC laws cover four areas
Require the timely disclosure of campaign finance data
Place limits on campaign contributions
Place limits on campaign expenditures
Provide public funding for several parts of the presidential election process

23. Disclosure Requirements
Started reporting in 1910
Intended to spotlight the place of money in a federal campaign
No one can make a gift in the name of another
Cash gifts over $ are prohibited
All contributions must be made through a single campaign committee

24. Any spending over $200.00 must be identified by name of the person or the firm who made it.
Any contribution of over $5, must be reported to the FEC
Any sum over $1, received in the last 20 days of the campaign

25. Limits on Contributions
First regulated in 1907
Outlawed donations by corporations or national banks
Today no person can giver more than $2, each in a federal primary and in general election
No one can give more than $5,000.oo to a PAC
FED adjusts every two years for inflation

26. PAC Contributions
Neither corporations and unions can contribute to candidate for a federal office
Their PAC can
There are 4,400 PACs active today

27. Limits on Expenditures
Began in 1925
Only to Presidential
Buckley v Valeo held “money is speech” contrary to 1st Amendment
One part held is cap on spending if candidate accepts FEC subsidies

28. Public Funding for Presidential Campaigns
1971 Presidential Campaign Revenue Act
Each person could donate $3.00 for individual and $6.00 for joint return
Will match the first $ up to the limit
Fec could give a contender $21 million.
In 2008 John McCain spent $100 million on the GOP nomination
$7million from the FEC

30. McCain raised $230 million in private contributions
Until 2008 both candidates took public money
Could spend no more than the general subsidy
Could not accept campaign funds from another source
Only McCain took money and could only spend $84.1 million for fall campaign

31. Barack Obama became the first in 32 years to reject public money
He raised and spent $500 million in the ten week post convention campaign
Many people believe this will lead to the collapse of public funding
$300 million was spent on television advertising

33. Are limited and must be reported
Hard Money, Soft Money
1970’s placed limits on hard money
Hard money- those contributions that are given directly to candidates for their campaign
Are limited and must be reported

34. Used for party building activities
Soft money-funds given to parties or to a political organization in unlimited amounts
Used for party building activities
Voter registration
Against a public policy
Amount of money through soft money loophole rose from $19 million 1980 to $500 million in 2000

35. McCain-Feingold Rule in 2002 Bans soft money contributions
Bipartisan Campaign Reform Act (BCRA)
Bans soft money contributions
But law does not say that political organizations can not raise and spend these dollars

36. Special interest groups popped up and $200 million poured through the loophole
Even more for congressional elections in 20008
Most are know as 527’s
Obama discouraged them and McCain accepted them