Unit II
Election Process
CAMPAIGN FINANCE REFORM
WHAT YOU NEED TO KNOW ABOUT
CAMPAIGN FINANCE
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FEC – Federal Election Commission
BCRA – Bipartisan Campaign Reform Act
Buckley vs. Valeo
Citizens United vs. FEC
PACS
 Political Action Committees
 Groups formed to push soft money and influence campaign
527’s and 501’s
 Groups created under specific tax codes that do not fall under FECA but engage in political activities
and attempt to influence elections
 A method to avoid regulation
 Target by BCRA
Hard money = Federal money
 Political donations raised from federally permissible sources within the limits established by BCRA
 Donated directly to candidates to support campaign
Soft money = Nonfederal money
 Political donations made in such a way as to avoid federal regulations.
 Unregulated money donated to political parties, not candidates, that go towards party building activities
,such as get out the vote campaigns, and “issue ads” or non-direct candidate ads
OVERVIEW HISTORY OF CAMPAIGN
FINANCE REGULATION
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Beginning of time—Civil War: No regulation
Civil War—1910
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Gilded Age
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Exceptionally scandalous politicians nationally
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1868: 75% of money used in congressional elections through party
assessments
1867: Naval Appropriations Bill
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Boss Tweed
First federal effort to regulate campaign finance
Aimed at stopping the political shakedown naval yard workers for
political contributions
Prohibits officers and employees of the fed. gov’t from soliciting
contributions
1883: Civil Service Reform Act (Pendleton Act) prohibits the same
solicitation of all federal workers
www.mit.edu/~17.251/finance.ppt
OVERVIEW HISTORY OF CAMPAIGN
FINANCE REGULATION
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Corrupt Practices Acts of 1911 and 1925
 Set
disclosure requirements for House and
Senate Elections
 Spending limits ($25k for Senate; $5k for
House)
 Ridiculously weak and regularly violated
1971 Federal Election Campaign Act (FECA)
 1976: Buckley v. Valeo (1976)
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www.mit.edu/~17.251/finance.ppt
BUCKLEY V. VALEO
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Buckley v. Valeo, (1976), was a case in which
the Supreme Court of the United States upheld
a federal law which set limits on campaign
contributions, but ruled that spending money to
influence elections is a form of constitutionally
protected free speech, and struck down
portions of the law. The court also stated
candidates can give unlimited amounts of
money to their own campaigns.
CAMPAIGN FINANCE REFORM AND
BUCKLEY I
Original Provision
Effect of Buckley v. Valeo
Expenditure limits
Overall spending limits (Congress and
president)
Struck down partially
(freedom of speech)
Limits on the use of candidates’ own resources
Struck down entirely
(freedom of speech)
Limits on media expenditures
Struck down entirely
(freedom of speech)
Independent expenditure limits
Struck down entirely
(freedom of speech)
www.mit.edu/~17.251/finance.ppt
CAMPAIGN FINANCE REFORM AND BUCKLEY
II
Original Provision
Effect of Buckley v. Valeo
Contribution limits
Individual limits: $1k/candidate/election
Affirmed
PAC limits: $5k/candidate/election
Affirmed
Party committee limits: $5k/candidate/election
Affirmed
Cap on total contributions individual can make to Struck down (freedom of
all candidates ($25k)
speech)
Cap on spending “on behalf of candidates” by
parties
Affirmed
www.mit.edu/~17.251/finance.ppt
FEDERAL ELECTION COMMISSION
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Purpose
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In 1975, Congress created the Federal Election Commission
(FEC) to administer and enforce the Federal Election
Campaign Act (FECA)
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the statute that governs the financing of federal elections.
The duties of the FEC, which is an independent regulatory
agency, are to
disclose campaign finance information
 enforce the provisions of the law such as the limits and prohibitions
on contributions,
 oversee the public funding of Presidential elections.
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VARIOUS ELECTION LAW
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Federal Election
Campaign Act (FECA)
1975
Bipartisan Campaign
Reform Act (BCRA)
2002
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Major changes under
BCRA
MCCAIN FEINGOLD 2002
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The Bipartisan Campaign Reform Act (BCRA) of 2002,
also known as "McCain-Feingold," after its sponsors, is
the most recent major federal law on campaign finance,
which revised some of the legal limits of expenditure set
in 1974, and prohibited unregulated contributions
(called "soft money") to national political parties. ‘Soft
money’ also refers to funds spent by independent
organizations that do not specifically advocate the
election or defeat of candidates, and are not contributed
directly to candidate campaigns.
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Limits PACS
Prohibits contributions made from Corporate/Union treasury
funds 60 days before an election
BIPARTISAN CAMPAIGN REFORM ACT
(MCCAIN-FEINGOLD 2002)
Meant to close loopholes that allowed soft
money to flow into campaign committees and
to control advertising said to be aimed at
issues but actually performing as campaign
promotion
 Challenged in McConnell vs FEC
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 BCRA
was confirmed by the S.C.
BCRA
Eliminated all soft money contributions to national party
committees
Increased individual limit from $1,000 to $2,000 with index
for inflation ($2,300 in 2008)
Banned the use of certain political communications by
corporate, union or incorporated non-profit committees within
30 days of primary or convention, or 60 days of general
(political communications)
Millionaire’s amendment
“Stand by your ad” (“I’m Bruce Lunsford and I endorsed this
message”)
WHAT DOES FEDERAL ELECTION LAW
REGULATE?
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In General
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The financing of federal
elections
Specifically
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Disclosure of financial
activity
Contributions
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Receiving and Giving
Expenditures
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Candidate support activities
Federal election activities
Soft Money more restricted:
PACS and
Corporations/Unions
CITIZENS UNITED VS. FEC
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Overrules MCConnell in part:
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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
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"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
WHERE DOES MY MONEY GO?
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It depends!
 Candidate
 Candidate specific activities
 Contributions to other
candidates, parties or causes
 DNC/RNC
 Federal candidates
 Allocated nationally
 State Party Committees
 Federal, state & local
candidates
 Allocated statewide
 PACs
 Support candidates, parties
that agree on specific issues
 527s
 Separate campaign