Campaign Finance I
Freewrite
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?
As usual, you will turn in this freewrite for participation credit.
Freewrite
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?
As usual, you will turn in this freewrite for participation credit.
Why is money necessary to
political campaigns?
• Communication is key to:
– Solving principle-agent problem
– Translating voter preference into policy
• Voters won’t do all the research themselves
• Communicating with distracted voters isn’t free
Costs of campaigns, 2000
• All House and Senate campaigns: $1 billion
• Average winning House race: $847,000
• Average winning Senate race: $7.2 million
Freewrite
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?
As usual, you will turn in this freewrite for participation credit.
Why is money problematic for
representative democracy?
• Unfair for rich to have more influence
• Principle-agent problem
– Although little evidence of money buying
votes
Why do people give money?
Why do their motives matter?
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 for social, ideological
reasons AND consider
likelihood of winning
Much more likely to ask
others to contribute
Give unsolicited $, solicited
in direct mail
Give for mostly
expressive/ideological
reasons
May be involved through
internet or grassroots
How does money affect election
outcomes?
• The effect money has on election outcomes
varies by candidate and by race. How?
• When candidates raise really different amounts
of money, the one who raises more wins
– This is the TYPICAL election!
– Because of the money itself???
• When an incumbent spends a large amount of
money, s/he tends to lose.
– Why??
Where might campaign money
come from?
• The government
– Pros? Cons?
• Parties
– Pros? Cons?
• Interest Groups
– Pros? Cons?
• A few wealthy people
– Pros? Cons?
• Lots of different people
– Pros? Cons?
What has Congress said?
• 1971 FECA
– First disclosure rules
– Limits candidate self-contributions
– Limits media expenditures
• 1974 FECA Amendments
– Presidential election public funding with spending
caps
– Limits independent expenditures
– PAC and individual contribution limits (Hard Money)
– More disclosure requirements
– Creates Federal Election Commission
Buckley v. Valeo
• Upholds disclosure requirements
• Strikes down spending limits because they
interfere with first amendment freedoms
Buckley on spending limits
• “In a republic where the people are sovereign, the ability
of the citizenry to make informed choices among
candidates for office is essential, for the identities of
those who are elected will inevitably shape the course
that we follow as a nation….A restriction on the amount
of money a person or group can spend on political
communication during a campaign necessarily reduces
the quantity of expression by restricting the number of
issues discussed, the depth of their exploration, and the
size of the audience reached. This is because virtually
every means of communicating ideas in today’s mass
society requires the expenditure of money…”
Buckley on spending limits
• Can’t limit Independent Expenditures
– “The concept that government may restrict the speech of some
elements of our society in order to enhance the relative voice of
others is wholly foreign to the First Amendment.”
• Can’t limit Candidate Personal expenditures
– “The candidate, no less than any other person, has a First
Amendment right to engage in the discussion of public issues
and vigorously and tirelessly to advocate his own election and
the election of other candidates.”
• Can’t limit Overall Campaign expenditures
– “The major evil associated with rapidly increasing campaign
expenditures is the danger of candidate dependence on large
contributions. The interest in alleviating the corrupting influence
of large contributions is served by the act’s contribution
limitations and disclosure provisions rather than by campaign
expenditure ceilings.”
Buckley v. Valeo
• Upholds disclosure requirements
• Strikes down spending limits because they
interfere with first amendment freedoms
• Upholds contribution limits
Buckley on contribution limits
“A limitation upon the amount that any one
person or group may contribute to a candidate
or political committee entails only a marginal
restriction upon the contributor’s ability to
engage in free communication….It is
unnecessary to look beyond the Act’s primary
purpose to limit the actuality and appearance of
corruption resulting from large financial
contributions in order to find a constitutionally
sufficient justification for the $1000 contribution
limit.”
Buckley v. Valeo
• Upholds disclosure requirements
• Strikes down spending limits because they
interfere with first amendment freedoms
• Upholds contribution limits
• Upholds presidential public financing because
expenditure limits are voluntary
Loopholes under FECA as
governed by Buckley
•
•
•
•
•
Bundling
Independent expenditures
Soft Money
Issue Advocacy
Millionaire candidates
Bipartisan Campaign Finance
Reform Act of 2002 (BCRA)
• Bans national party soft money
• Limits state party soft money
• Raises hard money limits
Hard Money limits under BCRA
• Individuals:
– Can give $2,000 per candidate per campaign
– Can give $25,000 to a party, per year
– Can give a maximum of $95,000 to
candidates, parties, and PACs
• PACs:
– Still can give $5,000 to each candidate
– Still can give $15,000 to each party
– No limit on overall contributions
Bipartisan Campaign Finance
Reform Act of 2002 (BCRA)
•
•
•
•
•
Bans national party soft money
Limits state party soft money
Raises hard money limits
Millionaire amendment
Ad limits
McConnell v. FEC
• Upholds soft money ban. The governmental interest
underlying §323(a).preventing
– “The actual or apparent corruption of federal candidates and
officeholders constitutes a sufficiently important interest to justify
contribution limits. …The idea that large contributions to a
national party can corrupt or create the appearance of corruption
of federal candidates and officeholders is neither novel nor
implausible.”
• Upholds hard money restrictions on issue ads.
– “Although the . . . advertisements do not urge the viewer to vote
for or against a candidate in so many words, they are no less
clearly intended to influence the election."
Loopholes under BCRA
• “527” and 501(c)(3) organizations
• Disclosure requirements
• No contribution limits
Top Ten Democratic 527s in 2004
America Coming Together - NonFederal Account
79,795,487
Joint Victory Campaign 2004
71,811,666
The Media Fund
59,404,183
Service Employees International Union Political
Education & Action Fund
48,426,867
AFSCME Special Account
25,144,915
MoveOn.org Voter Fund
12,558,215
New Democrat Network Non Federal Account
12,726,158
Citizens for a Strong Senate
10,853,730
Sierra Club Voter Education Fund
87,271,27
EMILYS List Non Federal
77,399,46
Top Ten Republican 527s, 2004
Progress for America Voter Fund
44,929,178
Swift Boat Vets and POWs for Truth
25,758,413
Club for Growth
19,365,903
College Republican National Committee, Inc.
16,830,651
Club for Growth.net
4,115,037
National Association of Realtors 527 Fund
3,215,263
The November Fund
3,151,170
CA Republican National Convention Delegation 2004
Account
4,393,055
Republican Leadership Coalition, Inc.
2,365,550
National Federation of Republican Women
2,201,533
Citizens United vs. FEC
• Overrules McConnell in part:
– Overrules the ban on independent expenditures paid
for by corporations or unions out of their treasuries 60
days before an election
• Overturns ban on independent expenditures
from corporate and union treasuries
– "If the First Amendment has any force, it prohibits
Congress from fining or jailing citizens, or
associations of citizens, for simply engaging in
political speech," - Justice Kennedy
Consequences?
Problems?