Political Action Committees
Overview
Political Action Committees
A political action committee is a political committee formed by a corporation,
union, or interest group to raise and spend money to elect or defeat candidates for
political office. The origins of PACs in the United States occurred during WWII when
the Congress of Industrial Organizations (CIO) created a separate political fund for
voluntary contributions to help reelect President Franklin D. Roosevelt (D, 1933-1945).
The PAC money did not violate the Smith Connally Act of 1943 because it did not come
from a union treasury; this law prohibited unions from contributing to federal candidates.
In 1955, the CIO merged with the American Federation of Labor (AFL) and created a
PAC called the Committee on Political Education (COPE), which still exists. The 1970s
saw the dramatic increase of PACs.
Campaign Finance Reform
The Federal Election Campaign Act of 1971 (Public Law 92-225), and subsequent
amendments, permitted corporations to use funds to set up PACs thus increasing their
role in election campaigns and changing the rules on how political money is raised. The
amendments to FECA also established the Federal Election Commission (FEC) to
monitor new campaign finance regulations and increase disclosure of funds raised in
federal elections. Also, the amendments placed a limit of $5,000 on the amount of money
PACs could contribute to individual candidates and campaigns per election. Currently,
PACs may also can contribute up to $15,000 annually to any national party committee,
and a maximum of $5,000 yearly to any other PAC. Debate over the increasing power of
PACs heated up during the 1970s and 1980s and led to new calls to eliminate PACs. The
ability to use soft money contributions to the major political parties and other
organizations not related to candidate campaigns allowed for ways to get around the
system. Much of this soft money was directed at creating candidate-related issue ads that
increased the overall amount of money spent in elections. The Bipartisan Campaign
Finance Reform Act of 2002 (Public Law 107-155), essentially banned soft money
expenditures by parties.
Political Action Committee Types
The Federal Election Commission recognizes two types of PACs, separate
segregated funds (SSFs) and nonconnected committees. SSFs are often referred to as
“connected PACs” and are established by corporations or unions that collect donations
from a “limited class of individuals” such as shareholders, managers, and union
members. The cost of establishing and operating the SSF is covered by the corporation
or union. Nonconnected PACs may solicit funds from the general public, unlike SSFs. A
nonconnected PAC must register with the FEC as a political committee within 10 days
after it has received donations or made expenditures of over $1000 and SSFs are required
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to register within 10 days after their creation by a connected organization. Nonconnected
PACs represent the fastest growing type of PAC.
Two categories of nonconnected PACs that have become increasingly influential
are leadership PACs and super PACs. A leadership PAC is a political committee
established by a Congress member to support or donate to other candidates and may
accept contributions from individuals or other PACs. Leadership PACs may not spend
money to support the campaign of the sponsor, but can pay for travel, consultants, and
other administrative expenses. According to the Center for Responsive Politics,
leadership PACs alone spent more than $47 million from 2008-2009. Super PACs, also
referred to as “independent-expenditure only committees,” may raise unlimited funds
from various sources and are not permitted to coordinate directly with candidates or
political parties. They are not required to disclose their donors. The Citizens’ United v.
FEC 558 U.S. 08-205 (2010) U.S. Supreme Court case determined that corporations and
unions could fund independent expenditures from their treasuries on First Amendment
grounds, thus paving the way for super PACs. Critics of the ruling cite the ability of
these groups to spend unlimited resources on “attack ads” against candidates without
having to report where their funds are coming from.
Conclusion
Although the Federal Election Campaign Act and subsequent amendments were
an attempt to place legal limits on campaign donations and increase disclosure, it also
expanded the number and influence of PACs in elections. Despite widespread criticism of
the role PACs play in elections from the 1970s forward, calls for reform and attempts to
eliminate PACs have gained little traction in Congress. Recent federal court rulings have
paved the way for an increase in the number of super PACs by decreasing limitations on
corporations with regard to independent expenditures. The debate over the positive and
negative consequences of PACs will continue between those who view PACs as a means
of exercising the First Amendment right to free speech and those who believe that PACs
represent too much money in politics.
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