Campaigns and Elections Campaign Financing Getting elected to public office has never been more expensive. The need to employ staffs, consultants, pollsters, and spend enormous sums on mail, print ads, radio spots, and television ads relentlessly drives the fund-raising process. It is rare that a candidate feels fully secure in the amount of money he or she has raised. So candidates attempt to amass a financial war chest, which they can use in the next electoral contest if they do not spend it all in the present one. Presidential campaigns are only the most expensive campaigns in a very large field of expensive campaigns for federal office. The 2010 congressional campaign was by far the most expensive midterm election in history. Spending estimates put the price tag at roughly $4 billion more than what was spent in the 2004 presidential election. Total spending by candidates Mitt Romney and Barack Obama in the 2012 presidential election topped $2 billion, the most expensive campaign in US history. Campaigns are expensive and getting more expensive with each passing election cycle. Growth in the size of the electorate and changes in technology, such as television, have increased the costs of mounting a successful congressional campaign. Unlike many democracies, the United States does not have a system of public financing for campaigns (with the exception of presidential campaigns). While particularly well-to-do candidates may supplement their campaign finances with their own money, most candidates in congressional races cannot afford or do not wish to fund their campaigns out of their own pockets. Instead they turn to individual and organizational donors for money. Raising Money While millions of American make small donations of $200 or less, mostly during presidential elections, such donors make up a relatively minor percentage of donors in congressional campaigns. Congressional candidates therefore turn to large individual donors, political action committees (PACs), and their respective political parties for financial support. Critics of the current state of campaign finance in the United States point to the inequality it introduces into the political system. Donors are disproportionately wealthy individuals and organizations, often with special agenda. Critics further claim that money in our political system corrupts the
democratic process. At the very least, wealthy campaign contributors buy special access to lawmakers unavailable to ordinary citizens and create an appearance of impropriety. At the worst, campaign contributions may buy, even if only indirectly, legislative outcomes and votes in Congress. Defenders of privately financed campaigns argue that campaign contributions are a form of political speech protected by the First Amendment. Revelations concerning particularly large donations to President Nixon's reelection campaign, along with public pressure, moved Congress in the 1970s to pass the most extensive campaign finance regulations to date, and initiated a debate over money in politics that continues today. Regulating Campaign Financing Federal Elections Campaign Act (FECA) Congress passed the Federal Elections Campaign Act (known as FECA) in the early 1970s. Key provisions in this law required disclosure of contributions for federal elections, placed limits on direct contributions to candidates, and created the Federal Election Commission to enforce its provisions. It also provided for partial public funding of presidential campaigns. In a 1976 Supreme Court case, Buckley v. Valeo (1976), the Court upheld Congress' power to limit campaign contributions by individuals or organizations to other candidates' campaigns, holding that the government's interest in fighting corruption trumped free speech claims. However, the Court also ruled that Congress cannot place limits on an individual's right to use his own money to self-finance a campaign. In short, you can spend as much of your own money as you wish on your own campaign, but Congress can limit the amount you spend on another candidate's campaign. Far from slowing, let alone stopping, the growth of money in campaigns, the period following passage of the FECA witnessed an explosion in the level of money in the political system. FECA did place strict limits on hard money, or direct contributions to candidates' campaigns. However, FECA did not restrict the use of soft money, or unregulated donations to state and local parties which could be used on behalf of candidates for activities such as get-out-the-vote drives and campaign ads. Soft money contributions thus proved an effective loophole to federal campaign finance limits.
The Bipartisan Campaign Reform Act (BCRA) In 2002, a version of a bipartisan bill sponsored by Republican Senator John McCain and Democratic Senator Russ Feingold was passed by Congress and overhauled campaign finance law. The Bipartisan Campaign Reform Act (BCRA) raised limits on individual and organizational direct contributions but banned the practice of unlimited soft money contributions, thus attempting to close the most glaring loophole in previous federal law. The 2009-2010 BCRA limits on direct, or hard money, contributions include: 1. Individuals $2,400 per candidate per election 2. Political Action Committees $5,000 per candidate per election 3. Political Party Contributions $45,600 per candidate per election Note that primary elections are considered separate elections from general elections. These limits are adjusted every election cycle to keep up with inflation. Another striking provision of the BCRA was the limits it placed on individuals or groups prohibiting them from broadcasting television or radio ads referring to a specific candidate within 60 days prior to a general election or 30 days prior to a primary election. Such individuals and groups were also prohibited from coordinating television or radio ads with political parties or a candidate's campaign for the purpose of avoiding contribution limits. The BCRA immediately became the target of litigation. The Supreme Court upheld the law's limits on hard money and ban on soft money in McConnell v. Federal Election Commission (2003). However, the Court struck down Congress' ban on "authentic" issue ads (as opposed to election advocacy ads) in the 60 and 30 day periods before federal elections. The lines between issue ads and advocacy ads can be quite blurry, but as long as the ad doesn't say "vote for" or "vote against" a particular candidate it is probably an issue ad, and is permissible. A later decision by the Court further narrowed the BCRA's reach by ruling unconstitutional limits on electioneering ads by corporations and unions in the blackout periods before federal elections. Creative campaign contributors almost immediately discovered new loopholes to get around the BCRA. The most prominent of these are 527 groups and 501(c)(3) groups, both named after the relevant tax code provisions from which they are derived. These are both nonprofit organizations formed to advocate on specific political issues and are unregulated by the BCRA. The latter has the added appeal that it permits donors to conceal their identities until after the election. You could say that 527 and 501(c)(3) groups are the new soft money of American
politics. Those who are skeptical of the efficacy of campaign finance reform sometimes invoke these new loopholes as examples of the hydraulic theory of campaign finance. Like water flowing downhill, money will always find a way to its destination. In terms of limiting the overall amount of money in electoral politics, the BCRA has clearly been unsuccessful. The Debate Over Campaign Financing Critics of the current state of campaign finance in the United States point to the inequality it introduces into the political system. Donors are disproportionately wealthy individuals and organizations, often with special agenda. Critics further claim that money in our political system corrupts the democratic process. At the very least, wealthy campaign contributors buy special access to lawmakers unavailable to ordinary citizens and create an appearance of impropriety. At the worst, campaign contributions may buy, even if only indirectly, legislative outcomes and votes in Congress. Defenders of privately financed campaigns argue that campaign contributions are a form of political speech protected by the First Amendment. In Citizens United v. FEC (2010), the Supreme Court ruled that the government has no business regulating political speech and that corporations and labor organizations can directly advocate for the election or defeat of candidates for federal office (as long as they do not coordinate their efforts with campaigns or political parties). Video: Campaign Finance Reform Despite numerous attempts by Congress to reform and regulate campaign financing during the past forty years, glaring loopholes have continuously led to new explosions of money in the political system. With the cost of presidential elections now soaring past $2 billion, there is growing debate over what regulations, if any, should be placed on campaign financing. Courts have attempted to strike a fine balance between protecting individual rights to participate financially in campaigns against the government's need to prevent the possibility of corruption. This video explores the debate over the influence of money in presidential elections and attempts to impose limits on campaign contributions.
Video Focus Points Look for answers to these questions when watching the video: What is hard money? What is soft money? What is the Bipartisan Campaign Reform Act? What is the Supreme Court's position on campaign spending? Video script: Music introduction SFX: On-off switch and static buzz TV Jingle: Ike for president, Ike for president, Ike for president, Ike for president! TV Jingle: Kennedy Kennedy Kennedy Kennedy Kennedy Kennedy for me! TV Jingle: More than ever, Nixon now, for you and me! Music Narrator: It s been said that money makes the world go round, and it s always been a fact of life in presidential campaigns. Even George Washington once appealed to voters with free rum and roast pig that he paid for out of his own pocket. Over two hundred years later, huge campaign staffs and massive media advertising have driven the costs of campaigns into the billions of dollars. So where does all this money come from? Chris Fields, Director of Outreach Common Cause, Washington, D.C.: I think for everyday people, they see a person that has the same ideas and values that they have so they want to give money to that person. You and I, we are the political contributors. But what you re seeing a lot right now in the current electoral process is a lot of special interest money into the political system. There is this perception that money has the ability to influence policy decisions in Washington. Narrator: So, is the ever-increasing amount of money spent on political campaigns a concern? Should there be limits? For some, unlimited campaign contributions are corrosive to democracy, allowing wealthy individuals and special interest groups excessive influence on public policy.
Senator John McCain (R-AZ): The cynicism and the alienation of the average American citizen about their government and about their ability to influence their government, in other words, their voice to be heard, is at an all-time high. And it s because they believe, and correctly so, that special interests have bought access and influence. Narrator: For others, campaign contributions represent political free speech and are constitutionally protected by the First Amendment. Senator Mitch McConnell (R-KY): The Supreme Court has made it quite clear that campaign spending is campaign speech and that it's impermissible to try to put the government in charge of how much we may speak. The courts are not going to allow that, no matter how much the socalled "good government reformers" try to put the government in charge. Narrator: Political pressures have led to repeated attempts to regulate the influence of money in elections. News Anchor: There was a major break in the Watergate trial today on this day of sentencing. Narrator: In the post-watergate days of 1974, Congress passed an amendment to the Federal Election Campaign Act. For the first time, limits were imposed on hard money contributions. But the new law did not restrict the use of soft money. Stephen Spaulding, Legal Fellow, Common Cause Washington, D.C.: Hard money is money that s given directly to candidates. Soft money is money that s then given to the parties or to other issue groups, to then influence the election. We had people giving money directly to candidates. Then we have lots of different interest groups popping up that then accept that money and re-channel that money to fund ads for or against candidates. We also saw political parties raising a lot of money. So if you can t give the money directly to the candidate, you could give the money to the party, to the Democratic or the Republican Party and the party could then go out and spend the money. Narrator: In 1976, the Supreme Court considered the question whether individuals and organizations could freely spend any amount to express their views and support their candidates. Stephen Spaulding: Is money speech or is money property? And the Court came down and said money equals speech. Now, if you re going out and just spending your own money, that s
an independent expenditure and the court said, "Well, you re free to do that." You can that s your speech and there s no limits on that. When it comes to giving money to a candidate, the court said, "All right, if Congress wants to prohibit and limit how much you can give directly to a candidate, that s okay because we want to make sure that there s no corruption there." Narrator: But loopholes in the new federal campaign limits were quickly exploited by skyrocketing soft money from political parties and from the explosion of contributions through political action committees, or PACs. Senator John McCain: Now, there s been this explosion of the so-called soft money. I m talking about the hundred thousand, two hundred five hundred thousand dollar contributions. This has been a result of exploitation of a loophole and a couple of Supreme Court decisions which made it more easily to do. And I believe that that s probably the most egregious aspect of the campaign finance abuses today. Narrator: In an effort spearheaded by Senators John McCain and Russ Feingold, Congress decided to close these loopholes in 2002 by passing the Bipartisan Campaign Reform Act, also known as the McCain-Feingold Act. Senator Russ Feingold (D-WI): When you have these kinds of unlimited contributions, I think it truly was threatening the very foundation of our system. Stephen Spaulding: BCRA, the Bipartisan Campaign Reform Act, basically put limits on the soft money that can be given to political parties. But it didn t shut off the flow of money from individuals, PACs, and corporations to other organizations that could then go out and advocate for the election or defeat of a candidate. Narrator: Before the ink was even dry on the bill, Senator Mitch McConnell challenged the new campaign finance laws in the Supreme Court. Senator Mitch McConnell: I oppose the McCain-Feingold campaign finance reform bill because it s a violation of the First Amendment to the United States Constitution and seeks to put the federal government in charge of the political speech of individuals, groups, candidates, and parties. There ought not to be any restrictions on what political parties can do for their own candidates, for goodness sake. Parties exist only for the purpose of helping their candidates and the good thing about parties is they ll support challengers, which frequently are at a great disadvantage in American politics.
Narrator: In a narrow 5 to 4 decision, the Supreme Court ruled that the government s interest in preventing corruption overrides free speech rights, essentially upholding the basic provisions of the Bipartisan Campaign Reform Act. Stephen Spaulding: There s this theory, the hydraulics theory of campaign finance reform, that if you shut off one flow of money, the money s just going to work its way into another avenue. Music Narrator: In the 2004 presidential election, big money contributors began building a network of nonprofit organizations into which they could funnel millions of unregulated dollars. These groups became known as 527s, in reference to the section of the U.S. Tax Code that created their legal status. Stephen Spaulding: That was the first presidential election after BCRA was passed and so we had all these we had piles and piles of cash that was no longer going to political parties, but it was going to these 527 groups. TV Narrator: 9/11, a planned terrorist attack. They targeted Wall Street, collapsed our financial markets, now our economy is in shambles. Narrator: According to federal law, 527 groups cannot advocate for or against a particular candidate, but can take positions on political issues. The weapons of choice for 527 groups are what opponents call sham issue ads. Stephen Spaulding: One of the most famous ones from 2004 is the Swift Boat Veterans for Truth. Senator John Edwards: If you have any question about what John Kerry is made of, just spend three minutes with the men who served with him thirty years Veteran #1: I served with John Kerry. Veteran #2: I served with John Kerry. George Elliot: John Kerry has not been honest about what happened in Vietnam. Stephen Spaulding: They had ample funding and they put ads out saying John Kerry was unfit
to serve. And there were really no limitations on that kind of advertising. That money was rechanneled to that 527. They were circumventing, sort of, the spirit of BCRA. Narrator: To curb the influence of soft money, there is growing interest in governmental financing of presidential elections. The Presidential Election Campaign Fund, supported by the $3 check box on individual tax returns, provides federal money to presidential candidates in primary and general elections. But the funds have strings attached. If a candidate accepts public money, it must be the sole source for financing the campaign. Martin Frost, Former Member (1979-2005) U.S. House of Representatives: Barack Obama rejected the federal limits and the federal spending because he could raise much more than was available through the federal system, through public financing. Obama actually outraised the Republicans and, he might have won the election anyway, but we have a system where candidates can raise whatever they want to and that s the way the system has evolved. Narrator: While Congress and the Supreme Court have struggled to define the limits of campaign financing, spending has increased with each election cycle. With hundreds of millions of dollars now needed to run for the White House, the question remains whether campaign finance regulations prevent political corruption or violate the right to free speech. Stephen Spaulding: The problem for democracy is, sort of drowning out the voices of American citizens and drowning out the people as sovereign, and allowing businesses to come in and compete on the same playing field when it comes to contributing to candidates. Senator John McCain: The only way we re going to change this system is if the American people demand it. If the American people demand change they ll get it. That s the nature of our democracy and the way our government functions. But, if they don t demand it and tell their elected representatives that it s a high priority, then we re going to have a system that further and further alienates the American voter from their elected representative. And I think that s very dangerous for the future of the country. Narrator: Despite all efforts by reformers, no legislation has been able to insulate elections from the influence of campaign money. To support their candidates, political parties and interest groups will continue to search for loopholes. Money, it seems, always finds a way. End of video.
Virtual Roundtable The increasing amount of money spent during presidential elections drives a contentious debate about regulating campaign contributions. While critics insist unregulated contributions lead to excessive influence for donors, opponents contend unlimited campaign contributions represent a basic right to express political preferences. Are campaign contributions a form of free speech protected by the First Amendment or are they corrosive to US democracy? Video: James Thurber, Center for Congressional & Presidential Studies, School of Public Affairs, American University Video script: First Amendment rights are freedom of speech, freedom of assembly, freedom to petition the government for grievances, freedom of the press, freedom of religion. That grows groups. Groups have the right to express themselves through speech, but they have the right and individuals do too to express themselves through money and campaign contributions, but as we ve seen, we can regulate that. Does the money undermine our democracy? No. You know when you look at the influence on healthcare and cap and trade, the environment energy bill, most of it has nothing to do with campaign contributions. It has to do with grassroots, top roots, AstroTurf, fake grassroots, coalition building, coalition maintenance, direct lobbying, TV advertising, print advertising, use of the internet. All of these things are part of a huge advocacy or lobbying campaign and only a little part are the campaign contributions. Let me tell you that if a member thinks that he s not going to get elected because he feels the heat from the grassroots, doesn t matter how much money he s got from the other side of that issue. He s going to go or she s going to go with the grassroots in most cases. End of video. Video: Stephen Spaulding, Legal Fellow, Common Cause, Washington, DC Video script: Common cause knows that we need money to run elections. Of course, we need money to run elections. The problem is access and influence. Money should not equal access to Capitol Hill
and it shouldn t equal influence. We have the healthcare industry spending 1.4 million dollars a day to lobby Congress. Imagine how much money they could spend on political campaigns if they could. The problem for democracy and the problem that common cause sees is sort of drowning out the voices of American citizens and drowning out the people as sovereign and allowing you know businesses to come in and compete on the same playing field when it comes to contributing to candidates. That s the problem. I might not have as much money as you know corporation X has to walk in and get my bill passed. That s the concern that common cause has with money and politics. End of video. Video: Sanford Levinson, Garwood Centennial Chair, Professor of Law, University of Texas School of Law Video script: There are Very interesting strange bedfellows in this issue. So the NRA and the ACLU and other groups from both the left and the right generally agree that campaign finance should be protected by the First Amendment, that money under some circumstances really is speech and I tend to agree with that. That being said, possibly the most important single case before the Supreme Court in 2010, involves whether it violates the first amendment to prevent corporations from using corporate funds to engage in campaign related speech. My own view is that one can distinguish corporations from ordinary people if for no other reason than Corporations are spending their shareholders money and not spending quote their own money, because there is no living, breathing person called a corporation. So that s one argument in favor of regulation of corporate spending. The argument against regulation is what do you do about the New York Times, which is a corporation and which regularly intervenes in elections on its editorial page. Could it possibly be constitutional to prevent newspapers from editorializing and the answer has to be no. So this is a really difficult issue in which there are just huge divisions of opinion, but with regard to the basic issue is campaign finance to some degree protected by the First Amendment, I think most people would say yes, to some degree. End of video.
Video: Chris M. Fields, Director of Outreach, Common Cause, Washington, DC Video script: Because of the Supreme Court decision, money is speech, but it s really about the perception of what money adds to the political system that s in question here. I don t think you re ever really going to take money out of politics but it s the type of money that goes into the system that really creates this corrosive atmosphere in our political system. While money is a part of the game, it s the type of money that is in the current system that we really need to we need to change. End of video. Video: Martin Frost, Former Member (1979-2005), US House of Representatives Video script: Candidates can raise whatever they want to and that s the way the system that s how system has evolved. The Congress in the in the early 1970s attempted to set limits on how much a candidate could spend for Congress running for the House and for the Senate and this was struck down by the U.S. Supreme court in the early 1970s and since then there has been no effective way to limit how much money can be spent in a federal race. I was one of a handful of members who voted to amend the Constitution on the subject, to give Congress the authority to set limits on what can be spent on races for the House and the Senate, but there were only four or five of us who voted for that. End of video. Additional Resource Websites Federal Elections Commission http://www.fec.gov/ The independent US regulatory agency created to administer and enforce the statute that governs the financing of federal elections. Includes campaign finance reports for the candidates and a database of major donors.
OpenSecrets.org http://www.opensecrets.org/ A project of the Center for Responsive Politics, the website OpenSecrets.org lists campaign contributions to Political Actions Committees (PACs) that support various politicians. Their mission is to help hold politicians accountable for their fund-raising efforts. Common Cause http://www.commoncause.org/site/pp.asp?c=dklnk1mqiwg&b=8281551 This nonprofit, nonpartisan citizens' lobbying organization promotes open, honest, and accountable government. Includes a searchable database of soft money donors who have made contributions to political parties.