Isabella Carter
Political campaigns are financed through a combination of private and public funds, with contributions from individuals, corporations, political action committees, and sometimes the government. Campaign spending has been steadily rising since 1990, with the 2020 US federal election campaigns costing nearly $14 billion, making it the most expensive campaign in US history. The financing of these campaigns is subject to federal, state, and local laws, with regulations on donations, spending, and public funding. Private entities can influence political campaigns through campaign contributions, outside spending, and lobbying. Outside spending groups, such as super PACs and dark money organizations, can spend unlimited sums of money to influence election outcomes without disclosing their donors. These groups have become increasingly influential, raising concerns about the role of money in politics and the potential for hidden interests to influence election results.
| Characteristics | Values |
|---|---|
| Campaign financing | Individuals, corporations, political action committees, and sometimes the government contribute to campaign financing. |
| Campaign spending | Campaign spending has been rising steadily since at least 1990, with nearly $14 billion spent on the 2020 federal election campaigns in the US. |
| Sources of funding | Funding sources include donations, outside spending/independent expenditures, and lobbying. |
| Donation limits | The Bipartisan Campaign Reform Act set limits on "soft money" contributions but did not ban them entirely. Hard money, on the other hand, has regulated contribution limits. |
| Disclosure requirements | Super PACs are required to disclose their donors, but dark money groups are not, allowing the source of their funding to remain hidden. |
| Tax requirements | Political parties, campaign committees, and political action committees are considered political organizations and are subject to taxation under IRC Section 527. |
| Communication regulations | The FEC considers paid internet communications on another person's website or platform as "public communications," subjecting them to contribution and expenditure rules. |
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Campaign finance law
The FEC has exclusive jurisdiction over the civil enforcement of federal campaign finance law, setting contribution limits for individuals and groups and overseeing public funding used in presidential elections. The Act limits the amount of money individuals and political organizations can give to a candidate running for federal office, and candidates must report the amount they spend to the FEC. However, candidates can spend their own personal funds on their campaigns without limits.
There are also different types of contributions and expenditures that fall under campaign finance law. Contributions made directly to a specific candidate are called "hard money," while those made to parties and committees for general party-building are called "soft money" or "independent expenditures." Soft money is not subject to federal limits and can be spent on things like stickers, posters, and television and radio spots that support a particular party platform but not a specific candidate.
Political parties, campaign committees for federal, state, or local offices, and political action committees (PACs) are considered political organizations under the Internal Revenue Code (IRC) Section 527 and are subject to specific tax and filing requirements. PACs can be connected, receiving funds from a restricted class of individuals associated with a corporation or union, or nonconnected, which are financially independent and must cover their administrative expenses with raised contributions.
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Campaign contributions
There are various ways individuals can contribute to political campaigns. These include direct monetary contributions, which are subject to limits outlined by the FEC. Individuals can also engage in uncompensated blogging, expressing their political views without any regulations, even if they receive a nominal fee. However, if individuals or groups pay for public communications to support or oppose a candidate, this falls under federal campaign finance law. Public communications include broadcasts, cable, satellite, newspapers, magazines, outdoor advertising, mass mailing, and other forms of general public political advertising.
Political action committees (PACs) are another significant contributor to political campaigns. These committees can make contributions to other federal political committees and are classified as either connected or independent. Connected PACs are affiliated with a specific organization, such as a corporation or union, while independent PACs, or Super PACs, can accept unlimited contributions from various sources, including corporations and labor organizations. Super PACs have become influential players in political funding, as they can significantly impact election outcomes.
To ensure compliance and transparency, political organizations are subject to tax regulations under IRC Section 527. They are required to file periodic reports, such as Form 8872, disclosing their contributions and expenditures. This helps track the flow of money in politics and identify any potential influences on policy decisions. Overall, campaign contributions are a complex and highly regulated aspect of political campaigns, with a range of entities contributing to support or oppose specific candidates and shape election outcomes.
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Outside spending
There are various types of outside spending groups, ranging from traditional political action committees (PACs) to more controversial super PACs and 501(c) "dark money" organisations. These groups can legally raise and spend unlimited sums of money to influence election outcomes, although they are subject to certain reporting requirements. For instance, super PACs, as a result of the Citizens United v. Federal Election Commission ruling, can accept unlimited contributions from individuals and corporations, provided they do not donate directly to candidates. This ruling has been criticised for tilting political influence towards wealthy donors and corporations, and for enabling the rise of "dark money", where the sources of funding remain undisclosed.
The impact of outside spending is significant, with hundreds of millions of dollars spent by "dark money" organisations in recent elections, and over $1 billion in "dark money" spent at the federal level in the 2020 election. This has resulted in a fusion of private wealth and political power, with ultra-wealthy donors, corporations, and special interest groups exerting increased influence.
To address concerns over the influence of large donors, various laws and regulations have been enacted. For example, the Bipartisan Campaign Reform Act of 2002 set limits on "soft money" contributions and banned special interest groups from making issue ads. Additionally, groups like the Center for Responsive Politics, Consumer Watchdog, and Common Cause track how money is raised and spent in campaigns. Despite these efforts, outside spending continues to play a significant role in political campaigns, and it remains a challenge to effectively reduce the influence of money in politics.
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Lobbying
The relationship between lobbying and campaign finance is complex and evolving. Both activities involve the deployment of financial resources and influence-seeking, but they are generally governed by different regulatory regimes. In the United States, campaign finance practices are subject to the laws of the jurisdiction where the activity takes place, with federal races being regulated by the Federal Election Commission. Lobbying, on the other hand, is regulated separately and is subject to different statutory requirements.
The intersection between lobbying and campaign finance has gained increasing recognition. In 2007, Congress adopted legislation specifically regulating the campaign finance activities of lobbyists. The role of money in politics, including lobbying expenditures and campaign contributions, has been a subject of scholarly interest and regulatory focus. Studies have examined the effectiveness of lobbying, with some suggesting that lobbying can have significant political, policy, and financial impacts, while others argue that it has a limited influence on changing views.
The regulatory landscape surrounding lobbying and campaign finance is dynamic and subject to change. In California, for instance, the Political Reform Act of 1974 requires detailed disclosure of financial contributions and expenditures in campaigns and lobbying activities, with electronic filings available on the California Automated Lobbying and Campaign Contribution Electronic Search System (CAL-ACCESS). The act ensures that the activities of lobbyists and their finances are disclosed to maintain transparency and inform voters.
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Dark money
In the context of political campaigns, "dark money" refers to funds spent to influence elections, public policy, and political discourse, where the source of the money is not disclosed to the public. Dark money groups are outside spending organizations that are not required to coordinate their spending with specific political candidates or parties. They are distinct from traditional political action committees (PACs) and super PACs, which have disclosure requirements for their donors.
The term "dark money" became prominent after the 2010 Citizens United v. FEC case, which marked a turning point in the surge of dark money contributions. Since then, dark money has continued to increase in federal elections, with more than $1 billion spent in all the 2020 federal elections. In some cases, dark money groups have even surpassed traditional PACs and super PACs in spending volume.
To address the concerns surrounding dark money, organizations like the Brennan Center for Justice have proposed reforms to the Federal Elections Committee to improve campaign spending transparency and better enforce the law. These reforms aim to shed light on the sources of funding and ensure voters can make informed decisions without undue influence from undisclosed donors.
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Frequently asked questions
Super PACs, or Independent Expenditure-Only Committees, are political committees that may raise and spend unlimited sums of money from corporations, unions, associations, and individuals to advocate for or against political candidates. They are required to disclose their donors, but the ultimate source of their funding can be concealed behind contributions from shell companies or dark money groups.
Dark money refers to political spending meant to influence voters' decisions without disclosing the donor or the source of the money. Dark money groups can spend directly on elections and are only required to report their spending if they mention a candidate before an election or spend money on express advocacy supporting a candidate.
Private entities can influence politics through campaign contributions, outside spending, and lobbying. Campaign contributions are direct donations to a candidate's campaign fund, while outside spending is money spent by groups like super PACs and dark money organizations to influence elections without any official affiliation with candidates. Lobbying involves individuals or groups, often legal firms, attempting to influence politicians on behalf of their clients, who may be private corporations or unions.
