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The financing of
electoral campaigns A political campaign is an organized effort which seeks to influence the decision making progress within a specific group. In democracies, political campaigns often refer to electoral campaigns, by which representatives are chosen or refere ...
in the United States happens at the federal,
state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * ''Our S ...
, and local levels by contributions from individuals, corporations, political action committees, and sometimes the government. Campaign spending has risen steadily at least since 1990 (for example the average campaign spending for a candidate who won an election to the House of Representatives in 1990 spent $407,600, while the average winner thirty years later spent $2.35 million (approximately $1 million adjusted for inflation); in the Senate, average spending for winning candidates went from $3.87 to $27.16 million (about $13.71 million adjusted for inflation)). In 2020, nearly $14 billion was spent on federal election campaigns in the United States -- "making it the most expensive campaign in U.S. history", "more than double" what was spent in the 2016 election. Critics complain that following a number of Supreme Court decisions -- ''Citizens United v. FEC (2010)'' in particular—the "very wealthy" are now allowed to spend unlimited amounts on campaigns (through "Super PACs"), and to prevent voters from knowing who is trying to influence them (contributing "dark money" that masks the donor's identity). Consequently, as of at least 2022, critics (such as the
Brennan Center for Justice The Brennan Center for Justice at New York University School of Law (NYU Law) is a nonprofit law and public policy institute. The organization is named after Supreme Court Justice William J. Brennan Jr. Generally considered liberal, the Brennan C ...
) allege "big money dominates U.S. political campaigns to a degree not seen in decades" and is "drowning out the voices of ordinary Americans." Public concern over the influence of large donors in political campaigns was reflected in a 2018 opinion poll which found that 74% of Americans surveyed thought it was "very" important that "people who give a lot of money to elected officials" "''not'' have more political influence than other people", but that 72% thought this was "not at all" or "not too" much the case. Another 65% of respondents agreed that it should not be impossible to change this and that "new laws could be written that would be effective in reducing the role of money in politics". Laws regulating campaign donations, spending and public funding have been enacted at the federal level by the
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...
and enforced by the
Federal Election Commission The Federal Election Commission (FEC) is an independent regulatory agency of the United States whose purpose is to enforce campaign finance law in United States federal elections. Created in 1974 through amendments to the Federal Election Cam ...
(FEC), an independent federal agency. Nonprofit, non-governmental grassroots organizations like the Center for Responsive Politics,
Consumer Watchdog Consumer Watchdog (formerly the Foundation for Taxpayer and Consumer Rights) is a non-profit, progressive organization which advocates for taxpayer and consumer interests, with a focus on insurance, health care, political reform, privacy and ener ...
and
Common Cause Common Cause is a watchdog group based in Washington, D.C., with chapters in 35 states. It was founded in 1970 by John W. Gardner, a Republican, who was the former Secretary of Health, Education, and Welfare in the administration of President ...
track how money is raised and spent. Although most campaign spending is privately financed (largely through donors that work in subsidized industries),
public financing Public finance is the study of the role of the government in the economy. It is the branch of economics that assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achie ...
is available for qualifying candidates for
President of the United States The president of the United States (POTUS) is the head of state and head of government of the United States of America. The president directs the Federal government of the United States#Executive branch, executive branch of the Federal gove ...
during both the
primaries Primary elections, or direct primary are a voting process by which voters can indicate their preference for their party's candidate, or a candidate in general, in an upcoming general election, local election, or by-election. Depending on the c ...
and the general election. Eligibility requirements must be fulfilled to qualify for a government subsidy, and those that do accept government funding are usually subject to spending limits on money. Races for non-federal offices are governed by state and local law. Over half the states allow some level of corporate and union contributions. , some states have stricter limits on contributions, while some states have no limits at all. Much information from campaign spending comes from the federal campaign database which does not include state and local campaign spending.


Terminology, definitions

According to the Federal Election Campaign Act, campaign funds may be "used for purposes in connection with the campaign to influence the federal election of the candidate".


Campaign spending

Money spent on campaigns in the 21st century has risen somewhat faster than inflation over time. :::;Total cost of Federal elections, Congressional and Presidential (1990-2022) ::::(In billions of dollars, adjusted for inflation. Source: OpenSecrets) Over the decades it has risen much faster.
Jane Mayer Jane Meredith Mayer (born 1955) is an American investigative journalist who has been a staff writer for ''The New Yorker'' since 1995. She has written for the publication about money in politics; government prosecution of whistleblowers; the Uni ...
notes that in 1972 a $2 million dollar political donation by an insurance magnate (by W. Clement Stone to Richard M. Nixon) in 1972 "caused public outrage and contributed to a movement that produced the post-
Watergate The Watergate scandal was a major political scandal in the United States involving the administration of President Richard Nixon from 1972 to 1974 that led to Nixon's resignation. The scandal stemmed from the Nixon administration's continu ...
reforms in campaign financing". But the sum that "was considered deeply corrupt during the Watergate days" was worth about $11 million adjusted for inflation by 2016, when the Koch brothers political network bundled $889 million for a "political war chest" for that year's election. ;2022 An estimated $16.7 billion was spent on the 2021 and 2022 election cycle, exceeding that of the last mid-term election. According to Open Secrets, of the 25 top donors for the 2021-2022 cycle, 18 are Republican, who have outspent Democrats by $200 million, and much of the Democrat's money was not disbursed. In the 2022 Congressional races, the sources of campaign contributions broke down as follows:


Impact of contributions


Impact on recipients

A 2016 experimental study in the ''
American Journal of Political Science The ''American Journal of Political Science'' is a journal published by the Midwest Political Science Association. It was formerly known as the ''Midwest Journal of Political Science''. According to the ''Journal Citation Reports'', the journal ...
'' found that politicians made themselves more available for meetings with individuals when they believed that the individuals had donated to their campaign. A 2011 study found that "even after controlling for past contracts and other factors, companies that contributed more money to federal candidates subsequently received more contracts." A 2016 study in the ''Journal of Politics'' found that industries overseen by committees decreased their contributions to congresspeople who recently departed from the committees and that they immediately increase their contributions to new members of the committees, which is "evidence that corporations and business PACs use donations to acquire immediate access and favor—suggesting they at least anticipate that the donations will influence policy." Research published in 2020 by University of Chicago political scientist Anthony Fowler and Northwestern University political scientists Haritz Garro and Jörg L. Spenkuch found no evidence that corporations that donated to a candidate received any monetary benefits from the candidate winning election. However, another study found that increasing lobbying reduces a corporation's effective tax rate, with an increase of 1% in lobbying expenditures expected to reduce a corporation's next-year tax rate between 0.5 and 1.6%. Another study based on data from 48 different states found that every $1 "invested" in corporate campaign contribution is worth $6.65 in lower state corporate taxes.


Impact on electoral success

At least according to one academic, (Geoffrey Cowan, Annenberg family chair for communication leadership at USC), campaign spending does not correlate with electoral victory. "You have to have enough, but it doesn't have to be the most." It has been suggested that Donald Trump's victory over well financed opponents was an example the limits of money in politics. However, comparing electoral success with who spent the most running for congress,
OpenSecrets OpenSecrets is a nonprofit organization based in Washington, D.C., that tracks data on campaign finance and lobbying. It was created from a merger of the Center for Responsive Politics (CRP) and the National Institute on Money in Politics (NIMP) ...
found that while "money doesn't always equal victory ... it usually does." ::::Percent of races won by top spending candidate for U.S. House and Senate This may be because donors give to candidates who are "already viewed as being much stronger" than their opponent to ingratiate themselves with what looks like the winner, but also because money going to a less well-known candidate has the intended effect and results in their winning. "Even in wave elections, the candidate who spends the most usually wins. This trend is stronger in the House than the Senate but applies in both chambers".


State level

A 2012 study by Lynda Powell examined "subtle and not-so-subtle ways in which money buys influence" in state legislatures. They varied "from setting a party's agenda, to keeping bills off the floor, to adding earmarks and crafting key language in legislation", but did not often include voting yes or no on particular legislation. She found that political money "carries more weight" in states with "more highly compensated legislators, larger chambers, and more professionalized leadership structures", where the "majority party's advantage is tightly contested and whose legislators are more likely to hold hopes of running for higher office"; less weight where legislatures have term limits and voters are more highly educated. According to the ''
New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'' however, "several scholars" state that studies "comparing states like Virginia with scant regulation" on political contributions, against those like Wisconsin with "strict rules" have "not found much difference in levels of corruption or public trust".


Criticism

Reasons offered for why "big money" in politics (campaign contributions and high level lobbying from corporations and the wealthy) should be regulated include: it *"results in corruption"; (i.e., “quid pro quo corruption”, or bribery); *harms trust in government; *decreases public interest in public affairs and government; *gives powerful corporations and wealthy individuals leverage to not just express their political views or support for a candidate, but to "reshape the American economy in their favor", favoring lower taxes and smaller government over public spending to improve policing, public schools, environmental protection, employment opportunities, that very high income groups naturally have less interest in being protected by their own private security, their children attending private schools, enjoying scenic beauty and recreation on their country clubs and estates. *wastes economic resources on "
rent-seeking Rent-seeking is the act of growing one's existing wealth without creating new wealth by manipulating the social or political environment. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic effic ...
," as players in the private sector spend time and money "trying to get a bigger piece of the economic pie for themselves" (in the form of tax cuts, subsidies, cuts in regulation and other special favors that the elected officials they donate to can provide), instead of focusing on enlarging the pie itself (with "productive economic activity" such as new inventions and better, cheaper goods and services).


Solutions/Reforms

*Public financing. A traditional solution offered to dilute the power of a few donors giving large political contributions was to put limits on campaign spending. Following court rulings such as Citizens United v. FEC, putting an end to some of these limits, reformers such as
The Brennan Center for Justice The Brennan Center for Justice at New York University School of Law (NYU Law) is a nonprofit law and public policy institute. The organization is named after Supreme Court Justice William J. Brennan Jr. Generally considered liberal, the Brennan ...
have suggested encouraging "small donor public financing", by using public funds to match and multiply small donations" (see below). Other proposals for "fixing" the influence of money in politics in the United States made by at least one reform group (the Brennan Center) include *Fully Disclose All Political Spending. As of 2018, disclosure laws "fail to regulate political advertising on the internet create the potential for a massive increase in undisclosed online spending". In state and local elections, where there is much less political money, "a dark money expenditure as low as $100,000, or even $10,000 — pocket change for special interests — can easily dominate an election"."Secret Spending in the States", Chisun Lee, Katherine Valde, Benjamin T. Brickner, and Douglas Keith, p.17. *Close fundraising loopholes for candidates and officeholders. Super PACs, can raise and spend unlimited amounts of money in support of candidates, but are supposed to be “independent” of those candidates. In fact "many super PACs were run by candidates’ top aides" or close associates". "Politicians fundraised prominently for their “independent” groups and even appeared in their ads. In addition, "a new breed of tax-exempt nonprofits has proliferated, boosting politicians — and their policies — while in office." They "raise unlimited, undisclosed funds". Brennen suggests "no more appearances by candidates at 'independent' fundraisers", and "a cooling off period before advisers jump to super PAC staff, and so on". *Reform the Federal Election Commission. In 2016, panel votes on enforcement matters deadlocked roughly 1 time in 3, "according to former FEC Commissioner
Ann Ravel Ann Miller Ravel (born April 6, 1949) is an American attorney who was a Democratic Commissioner on the Federal Election Commission (FEC), an independent regulatory agency created by Congress to administer and enforce campaign finance law. Ravel ...
, "10 times more often than a decade ago. In 2016, the agency levied less than $600,000 in penalties, a 90 percent drop over the same time." Brennen suggests adding another (non-partisan) commissioner to end the evenly balanced bipartisan structure, and giving the commission a chief administrative officer for a fixed term of four to six years, etc.


Criticism of solutions

Contrarians (David Primo and Jeffrey Milyo) argue that the public has been deceived by "the incessant message" propagated by 'the media, politicians, reform groups, and scholars", that money in politics is bad. In fact this public disapproval comes from Americans being fed up with politics in general and money is actually "just a convenient bugaboo". Furthermore, many things the public believes about corruption in politics are not true. Experts on campaign finance are much less cynical than the public about the nefarious influence of money in politics. "Legal scholars and social scientists say the evidence is meager, at best, that the post-
Watergate The Watergate scandal was a major political scandal in the United States involving the administration of President Richard Nixon from 1972 to 1974 that led to Nixon's resignation. The scandal stemmed from the Nixon administration's continu ...
campaign finance system has accomplished the broad goals its supporters asserted." Political scientist Kenneth Mayer also agrees that looking at those 1970s reforms,
there is no evidence that stricter campaign finance rules reduce corruption or raise positive assessments of government. It seems like such an obvious relationship but it has proven impossible to prove.”
Conservatives such as James Bopp of the
Heritage Foundation The Heritage Foundation (abbreviated to Heritage) is an American conservative think tank based in Washington, D.C. that is primarily geared toward public policy. The foundation took a leading role in the conservative movement during the preside ...
, write that "there may be too little money spent during political campaigns, not too much", because government is larger and more powerful than it should be, and at least often agree that campaign finance reform limiting spending on political campaigns is an unconstitutionally limit on "citizens' freedom of speech and association".


Sources of campaign funding


Donor characteristics

The money for campaigns for federal office is divided into four broad categories of sources: # small individual contributors (defined by the government as being from individuals who contribute $200 or less), # large individual contributors (individuals who contribute more than $200), # political action committees, and # self-financing (the candidate's own money). Examining one slice of the campaigning season—Summer 2015 of the 2016 presidential campaign cycle—the donations of fewer than 400 super wealthy families comprised nearly half of all publicly disclosed presidential campaign financing, according to a New York Times analysis of FEC and
Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory t ...
(IRS) filings. These donors exploit the SuperPAC loophole, which bypasses the traditional donation maximum for an individual in any year. On the Republican side, just around 130 particularly rich families accounted for more than half of the publicly disclosed presidential candidate campaign financing. For several major Republican presidential candidates, a handful of donors and their businesses accounted for most of the donations to the candidate. A 2017 study found that "only a small portion of Americans make campaign donations" and that both Democratic and Republican donors "are more ideologically extreme than other partisans, including primary voters. With respect to why individuals contribute, we show that donors appear responsive to their perception of the stakes in the election." Another 2017 study found that relatively unpopular industries (which depending on the political situation may include fossil fuels, banking, etc.) provide larger contributions to candidates. The authors of the study argue that this is because candidates lose voter support when they are associated with unpopular industries and that the industries therefore provide larger contributions to compensate for this loss of support.


Federal contribution limits

Federal law does not allow corporations and labor unions to donate money directly to candidates (" hard money") or national party committees. It also limits how much money (a) individuals and (b) organizations involved in political action may contribute to political campaigns, political parties, and other FEC-regulated organizations. Table footnotes


State and local contribution regulations

Election campaigns for non-federal offices are governed by state and local law, and contributions for these campaigns are not found in the federal campaign database. , over half the states allow some level of corporate and union contributions, often the same as those for individual contributors, (i.e. lower than the national limits), while several states (Alabama, Indiana, Iowa, Nebraska, Oregon, Pennsylvania, Texas, Utah and Virginia) have no limits at all.


Bundling

One consequence of the limitation upon personal contributions from any one individual is that campaigns seek out "bundlers"—people who can gather contributions from many individuals in an organization or community and present the sum to the campaign. Campaigns often recognize these bundlers with honorary titles and, in some cases, exclusive events featuring the candidate. Although bundling existed in various forms since the enactment of the FECA, bundling became organized in a more structured way in the 2000s, spearheaded by the "
Bush Pioneer Bush Pioneers are people who gathered $100,000 for George W. Bush's 2000 or 2004 presidential campaign. Two new levels, Bush Rangers and Super Rangers, were bestowed upon supporters who gathered $200,000+ or $300,000+, respectively, for the 2004 ...
s" for George W. Bush's
2000 File:2000 Events Collage.png, From left, clockwise: Protests against Bush v. Gore after the 2000 United States presidential election; Heads of state meet for the Millennium Summit; The International Space Station in its infant form as seen from S ...
and 2004 presidential campaigns. During the 2008 campaign the six leading primary candidates (three Democratic, three Republican) listed a total of nearly two thousand bundlers.


Advocacy groups/interest groups

Lobbyists often assist congressional campaign finance by arranging fundraisers, assembling PACs, and seeking donations from other clients. Many lobbyists become campaign treasurers and fundraisers for congresspersons.


"Hard" and "soft" money

Contributions made directly to a specific candidate are called ''hard money'' and those made to parties and committees are called ''soft money''. Soft money constitutes an alternative form of financing campaigns that emerged in the last years. It "derives from a major loophole in federal campaign financing and spending law that exempts from regulation those contributions made for party building in general rather than for specific candidates". There are no limits on soft money and some examples are donations for stickers, posters, and television and radio spots supporting a particular party platform or idea but not a concrete candidate. More specifically, soft money contributions may be spent on registering and mobilizing voters, just not on expressed advocacy for a particular candidate. The key factor is whether an ad uses words like or similar to "vote for" or not. Most of such donations received by state party committees are then sent to the national party headquarters to spend as they please, including on political campaigns by candidates. Critics call this a legalized form of political "
money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdicti ...
".Politico, 4 August 2017
"Soft Money Is Back — And Both Parties Are Cashing In: Critics Deride The Practice as 'Legalized Money Laundering
/ref> Another form of soft money is political spending by "independent expenditure committees", commonly known as "super PACs," which are allowed to raise and spend unlimited amounts of money to advocate for or against any candidate(s) or issues, as long as there is no coordination, consultation or request by any campaign or candidate. Such donations in presidential elections amount to hundreds of millions of dollars. There are three main legal categories of independent groups: * independent expenditure committees, * 527 organizations, and * 501(c) organizations. These groups are more active in American politics than ever before, as in 2016, more than $2.3 billion was raised between the Democratic and Republican National Committees."Políticas Parties: Overview"
Opensecrets.org.
For the amounts of soft money contributed in recent years and the legislation that enabled this, see the section on the
Bipartisan Campaign Reform Act The Bipartisan Campaign Reform Act of 2002 (, ), commonly known as the McCain–Feingold Act or BCRA (pronounced "bik-ruh"), is a United States federal law that amended the Federal Election Campaign Act of 1971, which regulates the financing o ...
.


Spending by outside organizations/independent expenditures

Organizations other than individual candidates and their campaigns also contribute to election spending. These organizations can donate money to political campaigns (according to the limits described above), but in addition they can spend money directly to influence elections in what are known as "independent expenditures".
All outside groups that aren't political parties — except for a few traditional PACs that make independent expenditures — are allowed to accept unlimited sums of money from individuals, corporations or unions.


Political action committees

Federal law allows for multiple types of political action committees (PACs). * Connected PACs: The
Federal Election Campaign Act The Federal Election Campaign Act of 1971 (FECA, , ''et seq.'') is the primary United States federal law regulating political campaign fundraising and spending. The law originally focused on creating limits for campaign spending on communicati ...
prohibits
corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...
s and
labor unions A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits (su ...
from making direct contributions or expenditures in connection with federal elections. These organizations may, however, sponsor a "separate segregated fund" (SSF), known as a "connected PAC". These PACs may receive and raise money only from a "restricted class", generally consisting of managers and shareholders in the case of a corporation and members in the case of a union or other interest group. In exchange, the sponsor of the PAC may absorb all the administrative costs of operating the PAC and soliciting contributions. As of January 2009, there were 1,598 registered corporate PACs, 272 related to labor unions and 995 to trade organizations. * Nonconnected PACs: A nonconnected PAC is financially independent, meaning that it must pay for its own administrative expenses using the contributions it raises. Although an organization may financially support a nonconnected PAC, these expenditures are considered contributions to the PAC and are subject to the dollar limits and other requirements of the Act. * Leadership PACs: Elected officials and political parties cannot give more than the federal limit directly to candidates. However, they can set up a leadership PAC that makes
independent expenditure An independent expenditure, in elections in the United States, is a political campaign communication that expressly advocates for the election or defeat of a clearly identified candidate that is not made in cooperation, consultation or concert wit ...
s. Provided the expenditure is not coordinated with the other candidate, this type of spending is not limited. Under the FEC rules, leadership PACs are non-connected PACs, and can accept donations from individuals and other PACs. Since current officeholders have an easier time attracting contributions, leadership PACs are a way dominant parties can capture seats from other parties. A leadership PAC sponsored by an elected official cannot use funds to support that official's own campaign. However, it may fund travel, administrative expenses, consultants, polling, and other non-campaign expenses. * "Super PACs": Super Pacs are unlike other PACs, in that they have no legal limit to the funds they can raise from individuals, corporations, unions and other groups, provided they are operated correctly. They are officially known as " independent-expenditure only committees", because they may not make contributions to candidate campaigns or parties, but rather must do any political spending independently of the campaigns. While super PACs are legally required to disclose their donors, some of these groups are effectively dark money outlets when the bulk of their funding cannot be traced back to the original donor. In the 2019-2020 election cycle, there were 2,415 groups organized as super PACs; their receipts reportedly totaled a little over $2.5 billion and independent expenditures totaled of a little under $1.3 billion. "Super PACs" first arose in the 2010 election. Super PACs were made possible by two judicial decisions. First, in January 2010 the U.S. Supreme Court held in ''
Citizens United v. Federal Election Commission ''Citizens United v. Federal Election Commission'', 558 U.S. 310 (2010), was a landmark decision of the Supreme Court of the United States regarding campaign finance laws and free speech under the First Amendment to the U.S. Constitution. It wa ...
'' that government may not prohibit unions and corporations from making independent expenditure for political purposes. Two months later, in ''Speechnow.org v. FEC'', the Federal
Court of Appeals for the D.C. Circuit The United States Court of Appeals for the District of Columbia Circuit (in case citations, D.C. Cir.) is one of the thirteen United States Courts of Appeals. It has the smallest geographical jurisdiction of any of the U.S. federal appellate cou ...
held that contributions to groups that only make independent expenditures could not be limited in the size and source of contributions to the group. Independent expenditures continue to grow with $17 million spent in 2002 on congressional elections, $52 million in 2006, and $290 million in 2010. In 10 states independent spending amounted to 19% of the total amount of money contributed to candidates between 2005 and 2010. In three of those states independent spending was greater than 25% of the contributions given to candidates. Critics (such as journalist Matea Gold, Representative David E. Price) have complained that Super PACs have found "creative ways to work in concert" with the candidates and FEC regulation of them is nominal. *Hybrid PAC: A hybrid PAC (sometimes called a Carey Committee) is similar to a Super PAC, but can give limited amounts of money directly to campaigns and committees, while still making independent expenditures in unlimited amounts.


501(c) organizations

501(c)(4) "social welfare", 501(c)(5) "labor unions", 501(c)(6) "chambers of commerce" unlike 501(c)(3) charitable organizations can participate in political campaigns and elections, as long as the organization's "primary purpose" is issue advocacy and not political advocacy and are not required to disclose their donors publicly. 1 This aspect of the law has led to extensive use of 501(c)(4) organizations in raising and donating money for political activity. 2The NAACP, Planned Parenthood, Sierra Club, and National Rifle Association are well known examples of organizations that operate 501(c)(4) social welfare organizations that engage in political advocacy.


527 organizations

A 527 organization or 527 group is a type of American
tax-exempt organization Tax exemption is the reduction or removal of a liability to make a compulsory payment that would otherwise be imposed by a ruling power upon persons, property, income, or transactions. Tax-exempt status may provide complete relief from taxes, redu ...
named after "Section 527" of the U.S.
Internal Revenue Code The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 2 ...
. Technically, almost all political committees, including state, local, and federal candidate committees, traditional political action committees, " Super PACs", and political parties are "527s." However, in common practice the term is usually applied only to such organizations that are not regulated under state or federal campaign finance laws because they do not "expressly advocate" for the election or defeat of a candidate or party. When operated within the law, there are no upper limits on contributions to 527s and no restrictions on who may contribute. There are no spending limits imposed on these organizations. However, they must register with the IRS, publicly disclose their donors and file periodic reports of contributions and expenditures.


Political parties

Political party committees may contribute funds directly to candidates, subject to the contribution limits listed above. National and state party committees may make additional "coordinated expenditures," subject to limits, to help their nominees in general elections. National party committees may also make unlimited "independent expenditures" to support or oppose federal candidates. However, since 2002, national parties have been prohibited from accepting any funds outside the limits established for elections in the FECA.


Disclosure rules

Current campaign finance law at the federal level requires candidate committees, party committees, and PACs to file periodic reports disclosing the money they raise and spend. Federal candidate committees must identify, for example, all PACs and party committees that give them contributions, and they must provide the names, occupations, employers and addresses of all individuals who give them more than $200 in an election cycle. Additionally, they must disclose expenditures to any individual or vendor. The Federal Election Commission maintains this database and publishes the information about campaigns and donors on its website. (Similar reporting requirements exist in many states for state and local candidates and for PACs and party committees.) There are extensive loopholes in campaign finance disclosure rules. Various organizations, including
OpenSecrets OpenSecrets is a nonprofit organization based in Washington, D.C., that tracks data on campaign finance and lobbying. It was created from a merger of the Center for Responsive Politics (CRP) and the National Institute on Money in Politics (NIMP) ...
, aggregate data on political contributions to provide insight into the influence of various groups. In August 2014, a new smartphone app called "Buypartisan" was released to allow consumers to scan the barcodes of items in grocery stores and see where that corporation and its leaders directed their political contributions.


"Dark money" exception

A major loophole to disclosure requirements is "
dark money In the politics of the United States, dark money refers to spending to influence elections where the source of the money is not disclosed to voters. In the United States, some types of nonprofit organizations may spend money on campaigns wi ...
," so named because while the recipient knows the identity of those giving them money, the public knows neither the identity of the campaigns, candidates nor other entities receiving the money, nor the amounts raised and spent, as these are exempt from disclosure requirements.Robert Maguire
How 2014 Is Shaping Up to be the Darkest Money Election to Date
OpenSecrets (April 30, 2014).
In the 2020 election, more than $1 billion in “dark money” was spent at the federal level: *$660 million came from "opaque political nonprofits and shell companies" and went to "outside" groups; *$170 million was spent on TV advertising; *132 million on digital advertising; *$88 million in direct election spending was reported to the Federal Election Commission by politically active nonprofits. (While for many years dark money "overwhelmingly boosting Republicans", in the 2020 presidential election cycle dark money benefited Democrats.) Money donated by trade association groups and not-for-profit corporations, which are allowed to raise unlimited amounts from corporations and individuals, and to spend unlimited amounts any way they wish. The amount of dark money raised and spent has been increasing very rapidly each election cycle in recent years in both state and federal elections, to the point that it now amounts to hundreds of millions of dollars in U.S. presidential elections.


History of campaign finance in the United States

Andrew Jackson Andrew Jackson (March 15, 1767 – June 8, 1845) was an American lawyer, planter, general, and statesman who served as the seventh president of the United States from 1829 to 1837. Before being elected to the presidency, he gained fame as ...
was one of the first American politicians to use what are now conventional campaign techniques of using campaign staffers to help him raise money and secure votes and campaign committees to organize rallies and parades. According to Bryant and McManus, the "first federal campaign finance law" came after the Civil War—the Navy Appropriations Bill of 1867, which prohibited government employees from soliciting contributions from Navy yard workers. Wealthy and notable families such as the Astors and Vanderbilts realized they had much to gain by supporting politicians election campaigns.


Early attempts at regulating money in campaigns

In 1905, Teddy Roosevelt unsuccessfully attempted to get Congress to outlaw all corporate political contributions .


Tillman Act of 1907

Named for its sponsor,
South Carolina )''Animis opibusque parati'' ( for, , Latin, Prepared in mind and resources, links=no) , anthem = " Carolina";" South Carolina On My Mind" , Former = Province of South Carolina , seat = Columbia , LargestCity = Charleston , LargestMetro = ...
Senator
Ben Tillman Benjamin Ryan Tillman (August 11, 1847 – July 3, 1918) was an American politician of the Democratic Party who served as governor of South Carolina from 1890 to 1894, and as a United States Senator from 1895 until his death in 1918. A white ...
, the
Tillman Act of 1907 The Tillman Act of 1907 (34 Stat. 864) was the first campaign finance law in the United States. The Act prohibited monetary contributions to federal candidates by corporations and nationally chartered (interstate) banks. The Act was signed int ...
prohibited corporations and nationally chartered (interstate) banks from making direct financial contributions to federal candidates. However, weak enforcement mechanisms made the Act ineffective. Disclosure requirements and spending limits for
House A house is a single-unit residential building. It may range in complexity from a rudimentary hut to a complex structure of wood, masonry, concrete or other material, outfitted with plumbing, electrical, and heating, ventilation, and air cond ...
and
Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
candidates followed in 1910 and 1911. General contribution limits were enacted in the Federal Corrupt Practices Act (1925). An amendment to the
Hatch Act of 1939 The Hatch Act of 1939, An Act to Prevent Pernicious Political Activities, is a United States federal law. Its main provision prohibits civil service employees in the executive branch of the federal government, except the president and vice presi ...
set an annual ceiling of $3 million for political parties' campaign expenditures and $5,000 for individual campaign contributions. The Smith–Connally Act (1943) and
Taft–Hartley Act The Labor Management Relations Act of 1947, better known as the Taft–Hartley Act, is a Law of the United States, United States federal law that restricts the activities and power of trade union, labor unions. It was enacted by the 80th United S ...
(1947) extended the corporate ban to
labor unions A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits (su ...
.


Federal Election Campaign Act (1971)

In 1971, Congress passed the Federal Election Campaign Act (FECA), instituting various campaign finance disclosure requirements for federal candidates (those running for the
House A house is a single-unit residential building. It may range in complexity from a rudimentary hut to a complex structure of wood, masonry, concrete or other material, outfitted with plumbing, electrical, and heating, ventilation, and air cond ...
, the
Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
, the President and the
Vice President A vice president, also director in British English, is an officer in government or business who is below the president (chief executive officer) in rank. It can also refer to executive vice presidents, signifying that the vice president is on ...
),
political parties A political party is an organization that coordinates candidates to compete in a particular country's elections. It is common for the members of a party to hold similar ideas about politics, and parties may promote specific political ideology ...
, and political action committees. In 1974, Congress passed amendments to the FECA establishing a comprehensive system of regulation and enforcement, including public financing of presidential campaigns and the creation of a central enforcement agency, the
Federal Election Commission The Federal Election Commission (FEC) is an independent regulatory agency of the United States whose purpose is to enforce campaign finance law in United States federal elections. Created in 1974 through amendments to the Federal Election Cam ...
. The new regulations included limits on campaign finance, including caps on (1) individual contributions to candidates, (2) contributions to candidates by "political committees" (commonly known as Political Action Committees, or PACs), (3) total campaign expenditures, and (4) independent expenditures by individuals and groups "relative to a clearly identified candidate."


''Buckley v. Valeo (1976)''

The
constitutionality Constitutionality is said to be the condition of acting in accordance with an applicable constitution; "Webster On Line" the status of a law, a procedure, or an act's accordance with the laws or set forth in the applicable constitution. When l ...
of the FECA was challenged in the U.S. Supreme Court case ''
Buckley v. Valeo ''Buckley v. Valeo'', 424 U.S. 1 (1976), was a landmark decision of the US Supreme Court on campaign finance. A majority of justices held that, as provided by section 608 of the Federal Election Campaign Act of 1971, limits on election expenditur ...
'' (1976). In ''Buckley'', the Court upheld the Act's limits on individual contributions, as well as the disclosure and reporting provisions and the public financing scheme. The Court held that limitations on donations to candidates were constitutional because of the
compelling state interest Government or state interest is a concept in law that allows the state to regulate a given matter. The concept may apply differently in different countries, and the limitations of what should and should not be of government interest vary, and hav ...
in preventing corruption or the appearance of corruption. However, the Court also held that caps on the amount campaigns could spend and caps on independent expenditures were an unconstitutional abridgment of
free speech Freedom of speech is a principle that supports the freedom of an individual or a community to articulate their opinions and ideas without fear of retaliation, censorship, or legal sanction. The right to freedom of expression has been recog ...
under the
First Amendment First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...
. In addition, ''Buckley'' also held that the disclosure and reporting requirements of FECA could only apply to expenditures authorized or requested by a candidate or expenditures for communications that "expressly advocate the election or defeat of a clearly identified candidate." In conclusion, the arguments presented by the courts came to the decision in ''Buckley v. Valeo'' to limit donations in campaigns, not spending.


Eight magic words

It also showed the limited reach of campaign finance laws to candidate and party committees, and other committees with a major purpose of electing candidates, or to speech that "expressly advocated" election or defeat of candidates. In footnote 52 of that opinion, the Court listed eight words or phrases -- "vote for," "elect," "support", "cast your ballot for", "____ for Congress", "vote against", "defeat", "reject", or any variations thereof—as illustrative of speech that qualified as "express advocacy". The definition of express advocacy is what created dark money groups.


Random audits in the 1970s

In the 1970s, the FEC ran random audits into the campaign finances of House representatives. The audits revealed that nearly half of House members had campaign finance violations. Audited House members were more likely to retire. Among those that did not retire, their re-election races were more competitive.


Bipartisan Campaign Reform Act (2002)

Under FECA, corporations, unions, and individuals could contribute unlimited "nonfederal money"—also known as "
soft money The financing of electoral campaigns in the United States happens at the federal, state, and local levels by contributions from individuals, corporations, political action committees, and sometimes the government. Campaign spending has rise ...
"—to political parties for activities intended to influence state or local elections. In a series of advisory opinions between 1977 and 1995, the FEC ruled that political parties could fund "mixed-purpose" activities—including get-out-the-vote drives and generic party advertising—in part with soft money, and that parties could also use soft money to defray the costs of "legislative advocacy media advertisements," even if the ads mentioned the name of a federal candidate, so long as they did not expressly advocate the candidate's election or defeat. Furthermore, in 1996, the Supreme Court decided ''Colorado Republican Federal Campaign Committee v. FEC'', in which the Court ruled that Congress could not restrict the total amount of "independent expenditures" made by a political party without coordination with a candidate, invalidating a FECA provision that restricted how much a political party could spend in connection with a particular candidate. As a result of these rulings, soft money effectively enabled parties and candidates to circumvent FECA's limitations on federal election campaign contributions. Soft money raised from 1993 to 2002 In 2002, Congress further attempted to reform federal campaign financing with the
Bipartisan Campaign Reform Act The Bipartisan Campaign Reform Act of 2002 (, ), commonly known as the McCain–Feingold Act or BCRA (pronounced "bik-ruh"), is a United States federal law that amended the Federal Election Campaign Act of 1971, which regulates the financing o ...
. The BCRA, sometimes called the "McCain-Feingold" Act, amended the FECA in several respects. First, it prohibited national political party committees from soliciting or spending any soft money and prohibited state and local party committees from using soft money for activities that affect federal elections. Second, it prohibited the use of corporate and union treasury funds to pay for "electioneering communications"—broadcast or cable advertisements clearly identifying a federal candidate—within 30 days of a primary or 60 days of a general election. The law also included a "stand by your ad" provision requiring candidates to appear in campaign advertisements and claim responsibility for the ad (most commonly with a phrase similar to "I'm John Smith and I approve this message.") This law was also challenged in the Supreme Court, but its core provisions were upheld by the Supreme Court in '' McConnell v. Federal Election Commission''. However, in ''McConnell'', the Court also interpreted the "electioneering communications" provisions of BCRA to exempt "nonprofit corporations that were formed for the sole purpose of promoting political ideas, did not engage in business activities, and did not accept contributions from for-profit corporations or labor unions." Thus, non-business, non-profit political organizations could run electioneering advertisements provided that they did not accept corporate or union donations. Furthermore, the BCRA did not regulate "
527 organization A 527 organization or 527 group is a type of U.S. tax-exempt organization organized under Section 527 of the U.S. Internal Revenue Code (). A 527 group is created primarily to influence the selection, nomination, election, appointment or de ...
s" (named for the section of the tax code under which they operate). These nonprofit organizations are not regulated by the FEC, provided that they do not coordinate with candidates or expressly advocate for the election or defeat of a specific candidate. After the passage of the BCRA, many of the soft money-funded activities previously undertaken by political parties were taken over by various 527 groups, which funded many issue ads in the 2004 presidential election. The heavy spending of key 527 groups to attack presidential candidates brought complaints to the Federal Elections Commission of illegal coordination between the groups and rival political campaigns. (In 2006 and 2007 the FEC fined a number of organizations, including MoveOn.org and Swift Boat Veterans for Truth, for violations arising from the 2004 campaign. The FEC's rationale was that these groups had specifically advocated the election or defeat of candidates, thus making them subject to federal regulation and its limits on contributions to the organizations.)


FEC v. Wisconsin Right to Life (2007)

The reach of the "electioneering communications" provisions of the BCRA was also limited in the 2007 Supreme Court ruling ''Federal Election Commission v. Wisconsin Right to Life, Inc.'' In ''Wisconsin Right to Life'', the Supreme Court stated that the restrictions on "electioneering communications" applied only to advertisements that "can only reasonably be viewed as advocating or opposing a candidate." Thus, if there was any reasonable way to view an advertisement as an "issue ad," it would be exempt from the BCRA's restrictions.


''Citizens United v. FEC (2010)'' and ''SpeechNOW.org v. FEC (2010)''

Campaign finance law in the United States changed drastically in the wake of two 2010 judicial opinions: the Supreme Court's decision in '' Citizens United v. FEC'' and the D.C. Circuit Court of Appeals decision in ''SpeechNow.org v. FEC''. According to a 2011
Congressional Research Service The Congressional Research Service (CRS) is a public policy research institute of the United States Congress. Operating within the Library of Congress, it works primarily and directly for members of Congress and their committees and staff on a ...
report, these two decisions constitute "the most fundamental changes to campaign finance law in decades." ''Citizens United'' struck down, on free speech grounds, the limits on the ability of organizations that accepted corporate or union money from running electioneering communications. The Court reasoned that the restrictions permitted by ''Buckley'' were justified based on avoiding corruption or the appearance of corruption, and that this rationale did not apply to corporate donations to independent organizations. ''Citizens United'' overruled the 1990 case ''
Austin v. Michigan Chamber of Commerce ''Austin v. Michigan Chamber of Commerce'', 494 U.S. 652 (1990), is a United States corporate law case of the Supreme Court of the United States holding that the Michigan Campaign Finance Act, which prohibited corporations from using treasury mon ...
'', in which the Supreme Court upheld the Michigan Campaign Finance Act, which prohibited corporations from using treasury money to support or oppose candidates in elections. Two months later, a unanimous nine-judge panel of the U.S. Court of Appeals for the D.C. Circuit decided ''SpeechNow'', which relied on ''Citizens United'' to hold that Congress could not limit donations to organizations that only made independent expenditures, that is, expenditures that were "uncoordinated" with a candidate's campaign. These decisions led to the rise of "independent-expenditure only" PACs, commonly known as "Super PACs." Super PACs, under ''Citizens United'' and ''SpeechNow'', can raise unlimited funds from individual and corporate donors and use those funds for electioneering advertisements, provided that the Super PAC does not coordinate with a candidate.


''McCutcheon v. Federal Election Commission (2014)''

On February 19, 2013, the Supreme Court announced it would hear ''
McCutcheon v. Federal Election Commission ''McCutcheon v. Federal Election Commission'', 572 U.S. 185 (2014), was a landmark decision of the US Supreme Court on campaign finance. The decision held that Section 441 of the Federal Election Campaign Act of 1971, which imposed a limit on co ...
'', a case challenging the limit on how much individuals can donate directly to political parties and federal candidates. On April 2, 2014, the Court announced its opinion and maintained aggregate limits on campaign contributions were unconstitutional under the First Amendment.


Public financing of campaigns

After Citizens United v. FEC "and other court rulings" ended limits on some campaign spending, reformers concerned about the political deck being unfairly stacked "in favor of the few donors able to give large contributions" concentrated on public finance of political campaigns. The
Brennan Center for Justice The Brennan Center for Justice at New York University School of Law (NYU Law) is a nonprofit law and public policy institute. The organization is named after Supreme Court Justice William J. Brennan Jr. Generally considered liberal, the Brennan C ...
, for example, promotes "small donor public financing", i.e. a system where "public funds match and multiply small donations", the idea being candidates would be incentivized "to seek out many supporters, not just a few big donors".


Public financing of presidential campaigns

At the federal level, public funding is limited to subsidies for presidential campaigns. This includes (1) a matching program for the first $250 of each individual contribution during the primary campaign and (2) funding the major party nominees' general election campaigns. Through the 2012 campaign, public funding was also available to finance the major parties' national nominating conventions. To receive subsidies in the primary, candidates must qualify by privately raising $5000 each in at least 20 states. During the primaries, in exchange for agreeing to limit their spending according to a statutory formula, eligible candidates receive matching payments for the first $250 of each individual contribution (up to half of the spending limit). However, candidates who decline matching funds are free to spend as much money as they can raise privately. From the inception of this program in 1976 through 1992, almost all candidates who could qualify accepted matching funds in the primary. In 1996 Republican
Steve Forbes Malcolm Stevenson Forbes Jr. (; born July 18, 1947) is an American publishing executive and politician who is the editor-in-chief of ''Forbes'', a business magazine. He is the son of longtime ''Forbes'' publisher Malcolm Forbes and the grandso ...
opted out of the program. In 2000, Forbes and George W. Bush opted out. In 2004 Bush and Democrats
John Kerry John Forbes Kerry (born December 11, 1943) is an American attorney, politician and diplomat who currently serves as the first United States special presidential envoy for climate. A member of the Forbes family and the Democratic Party, he ...
and
Howard Dean Howard Brush Dean III (born November 17, 1948) is an American physician, author, lobbyist, and retired politician who served as the 79th governor of Vermont from 1991 to 2003 and chair of the Democratic National Committee (DNC) from 2005 to 2009 ...
chose not to take matching funds in the primary. In 2008, Democrats
Hillary Clinton Hillary Diane Rodham Clinton ( Rodham; born October 26, 1947) is an American politician, diplomat, and former lawyer who served as the 67th United States Secretary of State for President Barack Obama from 2009 to 2013, as a United States sen ...
and
Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party (United States), Democratic Party, Obama was the first Af ...
, and Republicans
John McCain John Sidney McCain III (August 29, 1936 – August 25, 2018) was an American politician and United States Navy officer who served as a United States senator from Arizona from 1987 until his death in 2018. He previously served two te ...
,
Rudy Giuliani Rudolph William Louis Giuliani (, ; born May 28, 1944) is an American politician and lawyer who served as the 107th Mayor of New York City from 1994 to 2001. He previously served as the United States Associate Attorney General from 1981 to 19 ...
,
Mitt Romney Willard Mitt Romney (born March 12, 1947) is an American politician, businessman, and lawyer serving as the junior United States senator from Utah since January 2019, succeeding Orrin Hatch. He served as the 70th governor of Massachusetts ...
and
Ron Paul Ronald Ernest Paul (born August 20, 1935) is an American author, activist, physician and retired politician who served as the U.S. representative for Texas's 22nd congressional district from 1976 to 1977 and again from 1979 to 1985, as we ...
decided not to take primary matching funds. Republican
Tom Tancredo Thomas Gerard Tancredo (; born December 20, 1945) is an American politician from Colorado, who represented the state's sixth congressional district in the United States House of Representatives from 1999 to 2009 as a Republican. He ran for Pres ...
and Democrats
Chris Dodd Christopher John Dodd (born May 27, 1944) is an American lobbyist, lawyer, and Democratic Party (United States), Democratic Party politician who served as a United States senator from Connecticut from 1981 to 2011. Dodd is the List of United Sta ...
, Joe Biden and
John Edwards Johnny Reid Edwards (born June 10, 1953) is an American lawyer and former politician who served as a U.S. senator from North Carolina. He was the Democratic nominee for vice president in 2004 alongside John Kerry, losing to incumbents George ...
elected to take public financing. Since the 2012 primary campaign, few candidates have chosen to accept matching funds. In 2012, only
Buddy Roemer Charles Elson "Buddy" Roemer III (October 4, 1943 – May 17, 2021) was an American politician, investor, and banker who served as the 52nd Governor of Louisiana from 1988 to 1992, and as a member of the United States House of Representatives f ...
(who ran unsuccessfully for the
Americans Elect Americans Elect was a political organization in the United States known primarily for its efforts to stage a national online primary for the 2012 US Presidential Election. Although it was successful in obtaining signatures to get on the ballot in ...
and Reform Party nominations),
Gary Johnson Gary Earl Johnson (born January 1, 1953) is an American businessman, author, and politician. He served as the 29th governor of New Mexico from 1995 to 2003 as a member of the Republican Party. He was the Libertarian Party nominee for Presid ...
(the eventual
Libertarian Libertarianism (from french: libertaire, "libertarian"; from la, libertas, "freedom") is a political philosophy that upholds liberty as a core value. Libertarians seek to maximize autonomy and political freedom, and minimize the state's en ...
nominee), and Jill Stein (the eventual
Green Party A green party is a formally organized political party based on the principles of green politics, such as social justice, environmentalism and nonviolence. Greens believe that these issues are inherently related to one another as a foundation f ...
nominee) received matching funds in the primaries. (Primary season matching funds are not limited to major party candidates.) In 2016, only
Martin O'Malley Martin Joseph O'Malley (born January 18, 1963) is an American lawyer and former politician who served as the 61st Governor of Maryland from 2007 to 2015. A member of the Democratic Party, he was Mayor of Baltimore from 1999 to 2007. O'Malley ...
(Democrat) and Jill Stein (Green) received matching funds in the primaries. For the 2020 campaign, only
Steve Bullock Steve, Steven, or Stephen Bullock may refer to: *Steve Bullock (British politician) (born 1953), first directly elected mayor of the London Borough of Lewisham *Steve Bullock (American politician) Stephen Clark Bullock (born April 11, 1966) is ...
(Democrat) has announced plans to apply for matching funds by September 2019. In addition to primary matching funds, the public funding program also assists with funding the major party (and eligible minor party) nominees' general election campaigns. The grants for the major parties' general election nominees are adjusted each Presidential election year to account for increases in the cost of living. In 2012, the parties' general election nominees were eligible to receive $91.2 million in public funds, although neither the Democratic or Republican campaigns chose to accept those funds. If general election candidates accept public funds, they agree not to raise or spend private funds or to spend more than $50,000 of their personal resources. Hence, general election candidates who have the ability to raise more than the amount of public funds offered may decline the offer of public funds in favor of privately raising and spending a larger sum of money. No major party nominee turned down government funds for the general election from 1976, when the program was launched, until
Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party (United States), Democratic Party, Obama was the first Af ...
did so in 2008. Obama again declined government funds for the 2012 campaign, as did Republican nominee
Mitt Romney Willard Mitt Romney (born March 12, 1947) is an American politician, businessman, and lawyer serving as the junior United States senator from Utah since January 2019, succeeding Orrin Hatch. He served as the 70th governor of Massachusetts ...
, setting up the first election since the program's launch in which neither major party nominee accepted federal funding. Nor did either Donald Trump or Hillary Clinton accept federal funding for the 2016 general election. Public funding was formerly available to finance the major parties' (and eligible minor parties') presidential nominating conventions. In 2012, each major party was entitled to $18.2 million in public funds for their conventions. However, the provisions for public funding of nominating conventions were eliminated in 2014. Eligibility of minor parties for public funds is based on showing in the previous election, with 5% of the popular vote needed to qualify. The only party other than the Republicans and Democrats to receive government funding in a general election was the Reform Party, which qualified for public funding in 1996 and 2000 on the basis of Ross Perot's strong showing in the 1992 and 1996 elections. In addition,
John B. Anderson John Bayard Anderson (February 15, 1922 – December 3, 2017) was an American lawyer and politician who served in the United States House of Representatives, representing Illinois's 16th congressional district from 1961 to 1981. A member ...
's 1980 campaign received payments of public funds after the election because he had attained more than 5% of the popular vote. The presidential public financing system is funded by a $3 tax check-off on individual tax returns (the check off does not increase the filer's taxes, but merely directs $3 of the government's general fund to the presidential fund). The number of taxpayers who use the check off has fallen steadily since the early 1980s, until by 2006 fewer than 8 percent of taxpayers were directing money to the fund, leaving the fund chronically short of cash. However, the fact that fewer candidates have chosen to apply for public funding has alleviated the fund's former monetary shortages.


Public financing at the state and local level

A small number of states and cities have started to use broader programs for public financing of campaigns. One method, which its supporters call Clean Money, Clean Elections, gives each candidate who chooses to participate a fixed amount of money. To qualify for this subsidy, the candidates must collect a specified number of signatures and small (usually $5) contributions. The candidates are not allowed to accept outside donations or to use their own personal money if they receive this public funding. Candidates who choose to raise money privately rather than accept the government subsidy are subject to significant administrative burdens and legal restrictions, with the result that most candidates accept the subsidy. This procedure has been in place in races for all statewide and legislative offices in
Arizona Arizona ( ; nv, Hoozdo Hahoodzo ; ood, Alĭ ṣonak ) is a state in the Southwestern United States. It is the 6th largest and the 14th most populous of the 50 states. Its capital and largest city is Phoenix. Arizona is part of the Fou ...
and
Maine Maine () is a state in the New England and Northeastern regions of the United States. It borders New Hampshire to the west, the Gulf of Maine to the southeast, and the Canadian provinces of New Brunswick and Quebec to the northeast and nor ...
since 2000, where a majority of officials were elected without spending any private contributions on their campaigns.
Connecticut Connecticut () is the southernmost state in the New England region of the Northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, New York (state), New York to the west, and Long Island Sound to the ...
passed a Clean Elections law in 2005, along with the cities of
Portland, Oregon Portland (, ) is a port city in the Pacific Northwest and the largest city in the U.S. state of Oregon. Situated at the confluence of the Willamette and Columbia rivers, Portland is the county seat of Multnomah County, the most populous ...
and
Albuquerque, New Mexico Albuquerque ( ; ), ; kee, Arawageeki; tow, Vakêêke; zun, Alo:ke:k'ya; apj, Gołgéeki'yé. abbreviated ABQ, is the most populous city in the U.S. state of New Mexico. Its nicknames, The Duke City and Burque, both reference its founding i ...
. A 2003 study by GAO found, "It is too soon to determine the extent to which the goals of Maine's and Arizona's public financing programs are being met." The "Clean Elections" movement had several defeats in the 2000s and 2010s. Proposition 89, a
California ballot proposition In California, a ballot proposition is a referendum or an initiative measure that is submitted to the electorate for a direct decision or direct vote (or plebiscite). If passed, it can alter one or more of the articles of the Constitution of ...
in November 2006, sponsored by the California Nurses Union, that would have provided for public financing of political campaigns and strict contribution limits on corporations, was defeated. In 2008, the non-partisan California Fair Elections Act passed the legislature and Governor Schwarzenegger signed it, but the law did not take effect unless approved by voters in a referendum in 2010. In June 2010, voters soundly rejected the measure, 57% to 43%. A proposal to implement Clean Elections in Alaska was voted down by a two-to-one margin in 2008, and a pilot program in New Jersey was terminated in 2008 amid concern about its constitutionality and that the law was ineffective in accomplishing its goals. In 2010, Portland voters used a referendum to repeal the clean elections law, originally enacted by the city council. In 2006, in '' Randall v. Sorrell'', the Supreme Court held that large parts of Vermont's Clean Elections law were unconstitutional. In 2008, the Supreme Court's decision in ''
Davis v. Federal Election Commission ''Davis v. Federal Election Commission'', 554 U.S. 724 (2008), is a decision by the Supreme Court of the United States which held that section 319 (popularly known as the "Millionaire's Amendment") of the Bipartisan Campaign Reform Act of 2002 (po ...
'' suggested that a key part of most Clean Election laws—a provision granting extra money (or "rescue funds") to participating candidates who are being outspent by non-participating candidates—is unconstitutional. In 2011, in ''Arizona Free Enterprise Club's Freedom Club PAC v. Bennett'', the Supreme Court struck down the matching funds provision of Arizona's law on First Amendment grounds. Massachusetts has had a hybrid public funding system for statewide offices since 1978. Taxpayers are allowed to contribute $1 to the statewide election fund by checking a box on their annual income taxes. Candidates who agree to spending limits are eligible for money from this fund. Non-participating candidates are required to estimate spending, and this will raise the limit for participating opponents if higher than the agreed-to limit.
Seattle Seattle ( ) is a seaport city on the West Coast of the United States. It is the seat of King County, Washington. With a 2020 population of 737,015, it is the largest city in both the state of Washington and the Pacific Northwest region o ...
voters approved the Democracy voucher program in 2015, which gives city residents four $25 vouchers to donate to participating candidates. Vouchers have been proposed in other cities and states as a means to diversify the donor pool, help more candidates run for office, and boost political engagement.


Ethics of spending campaign funds

Politicians are sometimes tempted to spend campaign funds for personal purposes instead of their election campaign. One U.S. Representative, Duncan D. Hunter of California, for example, was sentenced to 11 months in prison in 2020 "for spending 2018 campaign donations on family trips to Hawaii and Italy and private school for his children." In other situations where the line between "legitimate campaign and officeholder expenses" and personal spending can be much finer, the Federal Election Commission uses what it calls an "irrespective test," whereby
personal use is any use of funds in a campaign account of a candidate (or former candidate) to fulfill a commitment, obligation or expense of any person that would exist irrespective of the candidate's campaign or responsibilities as a federal officeholder.


Sources of data

Many localities have their own reporting requirements that are not listed here.


See also

* ''
Buckley v. Valeo ''Buckley v. Valeo'', 424 U.S. 1 (1976), was a landmark decision of the US Supreme Court on campaign finance. A majority of justices held that, as provided by section 608 of the Federal Election Campaign Act of 1971, limits on election expenditur ...
'' *
Campaign finance Campaign finance, also known as election finance or political donations, refers to the funds raised to promote candidates, political parties, or policy initiatives and referendums. Political parties, charitable organizations, and political a ...
*
Campaign finance reform in the United States Campaign finance laws in the United States have been a contentious political issue since the early days of the union. The most recent major federal law affecting campaign finance was the Bipartisan Campaign Reform Act (BCRA) of 2002, also know ...
*
DISCLOSE Act The Democracy Is Strengthened by Casting Light On Spending in Elections Act or DISCLOSE Act is a federal campaign finance reform bill that has been introduced in the United States Congress since 2010. The bill would amend the Federal Election C ...
* Eight Magic Words * '' FEC v. Wisconsin Right to Life'' *
Money trail "Follow the money" is a catchphrase popularized by the 1976 docudrama film '' All the President's Men'', which suggests political corruption can be brought to light by examining money transfers between parties. Origin For the film, screenwriter ...
*
No corporate PAC pledge The no corporate PAC pledge is a pledge taken by some politicians in the United States to not accept political donations from corporate political action committees. The rejection of corporate PAC money can increase grassroots support for a candid ...
* Political action committee * Political corruption in the United States *
Political finance Political finance covers all funds that are raised and spent for political purposes. Such purposes include all political contests for voting by citizens, especially the election campaigns for various public offices that are run by parties and cand ...
*
Testing the waters ''Testing the Waters'' is the debut album by American rap group Thirsty Fish, released March 5, 2007 on Bell Rang Records in affiliation with Project Blowed. Release The water-themed album comes after Thirsty Fish member Dumbfoundead released a ...


Notes


References


Further reading

* * * * * * * * * Torres-Spelliscy, Ciara (ed.)
Writing Reform: A Guide to Drafting State & Local Campaign Finance Laws
(2010 Revised Edition).


External links


Federal Election Commission

OpenSecrets

OpenSecrets.org

RedBlue Tracker

CQ PoliticalMoneyLine

Campaign Legal Center

Campaign Finance Institute

Public Campaign

Common Cause

Public Citizen

Moneyed Politicians

Center for Competitive Politics

Campaign Cash Since Citizens United Ruling
��video report by ''
Democracy Now! ''Democracy Now!'' is an hour-long American TV, radio, and Internet news program hosted by journalists Amy Goodman (who also acts as the show's executive producer), Juan González, and Nermeen Shaikh. The show, which airs live each weekday at ...
''
Cash Attack 2010
at '' FactCheck.org'' * An in-depth look at American campaign finance from the viewpoints of both politicians and lobbyists.
Political Finance data for United States
(archive)
The Cost of Campaigns
by
Retro Report Retro Report is a non-profit news organization that produces short-form documentaries for historical context of current news stories. The organization describes itself as a counterweight to the 24-hour news cycle. They have covered topics inclu ...
looks at how campaign finance reform and how it has come full circle since the Watergate campaign finance scandals.
Move to Amend
{{Authority control Lobbying in the United States Political funding