Jonah Patel
Political campaigns in the United States are largely funded by donations, with individuals, corporations, and other entities contributing money to support candidates and causes they believe in. However, not everyone is permitted to donate to political campaigns, and there are strict rules in place to prevent foreign interference in American elections. The question of whether out-of-state residents can donate to political campaigns is a complex one, with a variety of factors influencing the legality of such contributions. This includes the source of the funds, the type of campaign, and the rules and regulations governing campaign donations at the federal and state levels.
Characteristics and values of out-of-state donations
| Characteristics | Values |
|---|---|
| Out-of-state donations | On the rise |
| Reasons for the rise | Ease of donating online |
| Politics becoming more nationalized | |
| Donors see races outside their districts as important | |
| Supreme Court's 2010 Citizens United vs Federal Election Commission decision | |
| Outside spending groups spent over $2 billion in the 2022 election cycle | |
| Federal Election Campaign Act | Makes it illegal for foreign nationals to contribute to any American election |
| Imposes civil fines on people who violate the law | |
| May refer the case to the Department of Justice for criminal prosecution | |
| "Dark money" | Refers to undisclosed donations from "very wealthy" individuals and corporations |
| Used to prevent voters from knowing who is trying to influence them | |
| Used by "outside spending" groups | |
| Used by "Social Welfare Organizations" | |
| Used by "Super PACs" |
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What You'll Learn
- Foreign nationals and governments cannot contribute to US campaigns
- The rise of outside spending after the US Supreme Court's 2010 Citizens United vs Federal Election Commission decision
- Tracing donations to politicians and political committees
- The influence of large donors in political campaigns
- Federal law exempts Social Welfare Organizations from disclosing their donors
Foreign nationals and governments cannot contribute to US campaigns
Foreign nationals and foreign governments are prohibited by federal law from contributing to any federal, state, or local election in the US. This includes donations, expenditures, and disbursements. Foreign nationals are also prohibited from donating to an inaugural committee.
The Federal Election Campaign Act makes it illegal for foreign nationals to contribute to any American election, and American candidates can also be in violation of the statute by receiving, soliciting, or accepting foreign contributions. A foreign national, in this context, is any person who is not a US citizen and does not have a green card.
The Federal Election Commission (FEC) enforces this statute by imposing civil fines on those who violate the law, but criminal liability is also possible. If a person knowingly and willingly accepts foreign contributions, the FEC can refer the case to the Department of Justice (DOJ) for criminal prosecution.
One loophole in the law is the exemption of Social Welfare Organizations (SWOs) from disclosing their donors, as long as at least half of the SWO's activities are non-political. This means that a SWO could accept donations from foreign nationals and then donate to a political Super PAC, which would only have to disclose the SWO as a donor, not the foreign national. However, foreign nationals are violating the law if they donate to a SWO and earmark the donation for a specific candidate.
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The rise of outside spending after the US Supreme Court's 2010 Citizens United vs Federal Election Commission decision
Political donations from out-of-state residents are not prohibited by US federal law. However, federal law prohibits foreign nationals from contributing to federal, state, or local elections. Foreign nationals are defined as persons without US citizenship or a green card.
The US Supreme Court's 2010 Citizens United vs Federal Election Commission decision has had a profound impact on the rise of outside spending in political campaigns. The Court's ruling reversed long-standing campaign finance restrictions, allowing corporations and other outside groups to spend unlimited funds on elections. This decision has led to a significant increase in spending by "outside spending" groups, which are not affiliated with specific candidates but can raise large sums of money from a small number of donors. These groups spent over $2 billion on federal elections during the 2022 election cycle, outpacing the fundraising of federal political campaigns, which are still subject to contribution limits.
The Citizens United decision has been highly controversial, with critics arguing that it has enabled the dominance of big money in politics and a lack of transparency. This has resulted in a surge of "dark money," where the source of election spending is kept secret, often funnelled through non-profits and Super PACs. The lack of transparency makes it challenging to trace the origin of these funds, allowing special interests, corporations, and wealthy individuals to exert influence without accountability.
To address these concerns, some have called for stronger disclosure laws that require all large campaign donors to be disclosed. Additionally, stricter rules to prevent coordination between Super PACs and political candidates are necessary to uphold the integrity of the electoral process.
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Tracing donations to politicians and political committees
It is important to note that there are some limitations to tracing donations. For example, federal law prohibits the use of contributor information for soliciting contributions or for commercial purposes. Additionally, contributions to politicians can also be made through Political Action Committees (PACs), which may make it more difficult to trace the original source of the funds. Moreover, certain organizations, such as Social Welfare Organizations (SWOs), are exempt from disclosing their donors, which can make it challenging to trace the source of "dark money" contributions.
The nationalization of political contributions has also contributed to the complexity of tracing donations. With the increased cost of federal races, particularly Senate races, there has been a rise in outside spending. After the U.S. Supreme Court’s 2010 Citizens United vs. Federal Election Commission decision, political groups not affiliated with candidates could solicit unlimited donations from people and corporations, as long as they disclosed their donors. This has resulted in a significant increase in spending by outside groups, with billions of dollars being spent to lobby Congress and federal agencies.
Furthermore, the ease of donating online and the growing nationalization of politics have also contributed to the rise of out-of-state donations. Donors are becoming more aware of races outside of their own districts and are willing to contribute to candidates who do not directly represent them. This was particularly evident in the case of Collins' vote to confirm Brett Kavanagh to the Supreme Court, where out-of-state donors provided significant financial support to her opponent's campaign.
Overall, tracing donations to politicians and political committees can be a complex and challenging task due to various factors, including the involvement of PACs, the presence of "dark money" and SWOs, the nationalization of political contributions, and the increasing role of online donations.
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The influence of large donors in political campaigns
Political campaigns in the United States have seen a surge in outside spending and the influence of large donors, with the U.S. Supreme Court's 2010 Citizens United vs. Federal Election Commission decision playing a significant role. This decision allowed political groups unaffiliated with specific candidates to solicit unlimited donations from people and corporations, as long as they disclosed their donors. Consequently, these "outside spending" groups spent over $2 billion in the 2022 federal election cycle, outspending the candidates themselves.
The Citizens United decision has had a profound impact on political campaigns, tilting the influence towards wealthy donors and corporations. It has resulted in the emergence of Super PACs, which can accept unlimited amounts of money from billionaires, drowning out the voices of ordinary Americans. These Super PACs are often funded by "dark money" groups, which conceal their donors' identities, making it challenging for voters to know who is trying to influence them.
The influence of large donors is not limited to federal elections but also trickles down to state and local races. The nationalization of political contributions has led to an increase in out-of-state donations, with donors contributing to campaigns beyond their own districts. This trend suggests that donors are becoming more aware of races outside their immediate areas and consider them important, even if the candidates will not directly represent them.
While federal law prohibits foreign nationals and governments from contributing directly to U.S. political campaigns, loopholes exist. Social Welfare Organizations (SWOs), such as the NRA and AARP, are exempt from disclosing their donors as long as half of their activities are non-political. This allows SWOs to accept donations from foreign entities and then contribute to Super PACs, effectively hiding the identity of foreign donors.
The influence of large donors has not gone unnoticed by the American public, with a significant majority expressing support for limits on campaign spending. According to a Pew Research Center survey, 74% of respondents believe it is very important that major political donors not have more influence than others. However, there is a sense that this is not the case in reality, with 72% feeling that large donors have a greater influence than others.
To address these concerns, various reforms have been proposed, including the DISCLOSE Act, which aims to enhance transparency in political spending. Additionally, there are calls for tighter limits on direct contributions to candidates and stricter rules to ensure that unlimited political spending by non-candidates is truly independent of candidates.
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Federal law exempts Social Welfare Organizations from disclosing their donors
In the context of political campaigns, "out-of-state" can refer to donations from foreign nationals or governments. Foreign nationals are prohibited from contributing money directly to US political campaigns. The Federal Election Campaign Act makes it illegal for foreign nationals to contribute to a candidate's campaign in any American election, be it federal, state, or local. This also applies to American candidates, who are prohibited from receiving, soliciting, or accepting foreign contributions.
Federal law, however, exempts Social Welfare Organizations (SWOs) from disclosing their donors. This means that while SWOs like the NRA and AARP cannot accept donations earmarked as campaign contributions for specific candidates, they can accept donations from foreign nationals and governments and then donate to another organization, such as a political Super PAC. The Super PAC would have to disclose the SWO as a donor, but not the SWO's foreign donors. This loophole has led to concerns about "dark money," where the true source of campaign funds is difficult to trace.
In 2018, the Supreme Court declined to intervene in a lower court ruling that required the Federal Elections Commission (FEC) to eliminate a regulation that allowed nonprofit organizations to keep their donors secret. This closed a loophole that had allowed large donors to political campaigns through social welfare nonprofits to remain anonymous. Despite this ruling, certain states like Arizona, Mississippi, Utah, and Oklahoma have adopted donor disclosure bans, shielding the identities of nonprofit donors.
While the Federal Corrupt Practices Act of 1910 was the first federal law to require the disclosure of campaign contributions, loopholes and a lack of consistent enforcement have allowed the continued influence of "dark money" in US politics.
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Frequently asked questions
Yes, out-of-state residents are allowed to donate to political campaigns. However, federal law prohibits foreign nationals without a green card from contributing to any American election, be it federal, state, or local.
There are limits to how much an individual can donate to a political campaign, but these limits vary depending on the type of contribution and the level of the election. For example, a federal candidate's authorized committee can accept up to $2,000 per election from another federal candidate's authorized committee.
Yes, corporations can donate to political campaigns, but there are restrictions. For example, national banks and federally chartered corporations cannot make contributions to any election, and campaigns cannot accept donations from the treasury funds of corporations.
A Super PAC, or Independent-expenditure-only political committee, is a type of political committee that can accept unlimited contributions from individuals, corporations, and labor organizations. However, they are required to disclose their donors.
The cost of political campaigns, especially federal races, has been increasing over time. For example, in 1972, a $2 million political donation caused public outrage, but by 2016, this amount would have been worth about $11 million. In the 2021 and 2022 election cycle, an estimated $16.7 billion was spent, with the top 25 donors contributing a significant portion.
