Unit 7 SG 1. Campaign Finance

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1 Unit 7 SG 1 Campaign Finance

2 I. Campaign Finance Campaigning for political office is expensive.

3 2016 Election Individual Small Donors Clinton $105.5 million Trump 280 million ($200 or less) Individual Large Donors $300.1 million $41.9 million Super-PACS $217.5 million $82.3 million PACs 1.8 million $144,764 Bundlers & Other 573 million $176.5 Own Money 1.5 million $66 million Total $1.2 billion $646.8 million

4 A. Campaign Finance Regulations and Reforms 1970 s s 1. Prior to the 1970s candidates for public office received donations from businesses, labor organizations, and individuals to finance campaigns.

5 2. Congress passed the Federal Election Campaign Act (FECA) in 1971, restricting the amount of campaign funds that can be spent on advertising, requiring disclosure of campaign contributions and expenditures, and limiting the amounts candidates and their families can donate to their own campaigns. a. It also allowed taxpayers to designate a donation on their tax return to the major political party candidates, beginning in the 1976 presidential election. b. The last presidential candidate to use federal funding was John McCain in 2008.

6 3. In 1974, after the Watergate scandal, Congress amended the Federal Election Campaign Act (FECA) to establish a Federal Election Commission (FEC) to enforce the act, and established public financing for presidential candidates in primaries and the general election. a. The measure also restricted contributions by prohibiting foreign contributions, limiting individual contributions, and restricting the formation of political action committees (PACs) and their contributions. It was further amended in 1976 and 1979.

7 What is a PAC? PACS are formed by political parties, corporations, & interest groups. They tend to be tax-exempt, have limitations regarding contributions and expenditures. Donors must be disclosed to the FEC.

8 4. In 1976, the Supreme Court ruled in Buckley v. Valeo, that spending limits established by the FECA Amendments of 1974 were unconstitutional, ruling that those restrictions were in violation of the First Amendment's guarantees of freedom of expression. a. Buckley v. Valeo also declared that the FECA ban on self-financed campaigns was unconstitutional.

9 Hard vs. Soft Money Money raised & spent to elect candidates for Congress & the Presidency. Contributions are limited & must be fully disclosed. Money obtained by political parties to be spent of party activities, not on the behalf of candidates. Money obtained by interest groups through PACs, nonprofits, & super-pacs that using loopholes can be hidden.

10 5. In 1996 new questions arose over the use of "soft money," donations to political parties that could be used for general purposes. a. Originally, the money was supposed to be used for voter registration drives, national party conventions, and issue ads. Political parties were allowed to raise unlimited amounts of money because it was not to be used for campaigning. b. However, soft money has generally been spent in ways that ultimately help individual candidates. c. By the 2000 election, soft money donations had exceeded $400 million between the two major parties.

11 B. Campaign Finance Regulations and Reforms 2000s - present 1. Campaign finance reform has been a major issue in Congress. In 2002 Congress passed the Bipartisan Campaign Finance Reform Act (BCRA), a. It banned the use of soft money in federal campaigns. b. It increased the 1974 limits on individual and group contributions to candidates.

12 2. A result of the BCRA in the campaign of 2004 was the formation of "527" political organizations. a. A 527 political organization is a largely unregulated interest group that focuses on a single policy and attempts to influence voters.

13 What is a 527? A tax-exempt group that raises money for political activities such as voter mobilization & issue advocacy. Contributions - unlimited They cannot give money to a candidate or to a PAC & cannot coordinate with parties or candidates 527 s disclose donors to the I.R.S.

14 b. In 2003, provisions of the BRCA were upheld by the SCOTUS in McConnell vs. FEC. c. After the 2004 election, new rules governing 527 organizations regulated their use of soft money and allowed the FEC to examine their expenditures.

15 The SCOTUS in 2003 Conservatives CJ W. Rehnquist A. Scalia C. Thomas Liberals D. Souter S. Breyer R. Ginsburg Moderates S. O Connor A. Kennedy

16 d. In 2010, the SCOTUS ruled 5-4 in the case Citizens United v. FEC allowing corporations and unions to advocate for or against candidates at any time. The super-pac is born.

17 The SCOTUS in 2012 Conservatives CJ J. Roberts A. Scalia C. Thomas S. Alito Liberals S. Sotomayor R. Ginsburg E. Kagan Moderates A. Kennedy

18 What is a Super PAC? New type of PAC that mainly pays for ads for or against a candidate or issue. They cannot be affiliated with a candidate or party (non-coordination). Contributions - unlimited Donors must be disclosed to the FEC unless

19 What is a Nonprofit 501(c)(4)(5)(6)? Tax exempt groups that can engage in varying amounts of political activity. Politics cannot be its primary purpose. Contributions - unlimited They cannot give to a PAC or candidate & may not coordinate with parties or candidates. They do not have to disclose their donors.

20 What is non-coordination????

21 e. In 2014, the SCOTUS ruled 5 4 in the case McCutcheon v. FEC that the limits on the total amount an individual could contribute to federal campaigns & political parties, violated free speech protections. The limit had been a total of $48,600 every two years for all federal candidates and an aggregate of $74,600 to political parties and committees.

22 In Summary

LESSON Money and Politics

LESSON Money and Politics LESSON 22 157-168 Money and Politics 1 EFFORTS TO REFORM Strategies to prevent abuse in political contributions Imposing limitations on giving, receiving, and spending political money Requiring public