Hey y’all! For my first post, I decided to go through the most talked about terms in the campaign finance world and define them in one handy place for you. I will never be able to talk about every single component of campaign finance, but these are the most common ones and the ones that I will talk most about. I hope you enjoy!
I’ll start off simple – Candidates are the people running for office who usually represent some group, or a party. Now that I have that down, I’ll move on to the more serious stuff. Political Action Committees (PACs) are organizations that pool funds, or campaign contributions, and give them to: 1. campaigns for (or against) a certain candidate, 2. campaigns for ballot initiatives, or 3. campaigns for legislature. An organization becomes a full-fledged PAC when it either gives or receives at least $1,000 that is used to influence a federal election in one way or another. Laws concerning PACs at a state level vary, depending on the state.
In 2010, the Super PAC was born from two important Supreme Court decisions, Citizens United v. Federal Election Commission and Speechnow.org v. Federal Election Commission (don’t worry about these right now, I have a lot to say about them at a later time). These newfangled Super PACs have very few restrictions, as in, one restriction: they can’t give money to a specific candidate or party. The money can come from whoever wants to give it to them and can be however much said donors wish to fork over, but it cannot for whatever reason be given to a specific person or political party.
Next in the line up of campaign finance players is the 527 Organization. They get their name from the section of the Internal Revenue Service Code that outlines their guidelines. They, too, have very few guidelines. Just like Super PACs, they cannot expressly advocate for or against a campaign or party and they have no limits on the amount of money they can spend. The only things that they must do to keep out of trouble are register with the IRS, disclose their donors in some public form, and release reports of where the money is going every so often. They are more or less the influencers of elections; they are the groups who pick who should or should not run for office at the local, state and federal levels (I know that sounds kind of sketchy, but they do this through giving money to the people they like until their people have more money and a better campaign than the opponent).
Another group of tax-exempts that play a major role in the campaign finance world is the realm of 501(c)‘s. They are mainly social welfare organizations and local associations of employees (this can not include any national unions/organizations and the net earnings of the group must be devoted to social welfare). The 501 Category can be broken into many sub-categories of nonprofits.
As an aside, Hard Money is the money that is regulated by laws and rules. It has limits and regulations that make it so hard to raise. Soft Money is any kind of political contribution that is not regulated by law. They are supposed to be used for party building activities and general get out the vote drives, but they oftentimes find their ways into places that they shouldn’t be…like funding ads that advocate for the election of defeat of a person or party.
You may be asking yourself right now how all of this came about. Oh, I’m so glad you said something!
The Federal Election Campaign Act of 1971 is the official and what was once thought to be complete law that regulates how candidates for Congress and President can (and can’t) raise campaign cash. It has had to be amended and tweaked a few times, most notably in 1974, when the Federal Election Commission (FEC) was formed. The FEC is the agency that administers and enforces election laws. It is headed by six people, three Democrats and three Republicans, and in order for any action to take place at all, four of the six members must agree. The FEC stands deadlocked on many issues because most issues are partisan and they are an even three versus three.
In 1976, a very important Supreme Court case, Buckley v. Valeo, decided the constitutionality of key parts of The Federal Election Campaign Finance Act of 1971 and its amendments in 1974. The parts in question limited campaign expenditures as well as independent expenditures by individuals and groups. Long story short, the court decided that money counts as speech and the limits set out in the FECA were violations of the First Amendment.
Jump ahead to 2002, The Bipartisan Campaign Reform Act (BCRA), also called the McCain-Feingold Law, prohibited federal office holders, candidates and the parties from raising and spending soft money for federal elections. The law also covers things like redefining and regulating political advertising and increasing hard money limits for candidates and parties.
Phew! That should just about wrap up Super PAC Woman’s Hit-n-Run Guide to Campaign Finance. I hope that this makes the campaign finance world a little clearer for you because it is often pretty confusing. With that, I’ll leave you with a quote from Mark Twain:
“We have the best government that money can buy.”
-Super PAC Woman
Super PAC Woman 