Eleanor Finch
Campaign finance laws in the United States govern the financing of electoral campaigns at the federal, state, and local levels, with contributions coming from individuals, corporations, political action committees, and sometimes the government. The first federal campaign finance law was passed after the Civil War, and since then, there have been four major periods of regulation. The most recent significant changes to campaign finance laws include the Bipartisan Campaign Reform Act (BCRA) of 2002, the Citizens United v. Federal Election Commission Supreme Court ruling in 2010, and the McCutcheon v. Federal Election Commission ruling in 2014. These laws and rulings have had a significant impact on the amount of money that can be contributed to political campaigns and have been both supported and criticised for their effects on free speech and corruption in politics.
| Characteristics | Values |
|---|---|
| First federal campaign finance law | Navy Appropriations Bill of 1867 |
| Purpose of first federal campaign finance law | Prohibit government employees from soliciting contributions from Navy yard workers |
| Financing of electoral campaigns | Contributions from individuals, corporations, political action committees, and sometimes the government |
| Level of financing of electoral campaigns | Federal, state, and local |
| Spending on campaigns | Rising steadily since 1990 |
| Campaign finance law requirements | Candidate committees, party committees, and PACs to file periodic reports disclosing money received |
| Soft money | Money donated to parties and committees for party building and not for specific candidates |
| Hard money | Money donated directly to a specific candidate |
| Super PACs | Can raise and spend unlimited sums of money from corporations, unions, associations, and individuals |
| Super PACs requirements | Must file regular reports with the Federal Election Commission |
| Federal Election Commission (FEC) | Federal regulatory agency charged with administering and enforcing the nation's campaign finance laws |
| Federal Election Campaign Act (FECA) | Established limits on candidate spending, contributions of individuals and PACs to candidates, parties, or political committees |
| Bipartisan Campaign Reform Act (BCRA) | Prohibited national political parties, federal candidates, and officeholders from soliciting soft money contributions in federal elections |
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What You'll Learn
The Federal Election Campaign Act of 1971
FECA was introduced to regulate the raising and spending of money in US federal elections. It imposed restrictions on the amounts of monetary or other contributions that could be made to federal candidates and parties, and mandated the disclosure of contributions and expenditures in campaigns for federal office. The Act also introduced outright bans on certain corporate and union contributions, speech, and expenditures.
The Act limited campaign expenditures for broadcast media, newspaper advertisements, and telephone calls to $0.10 per voter in the district they were running in when adjusted for inflation using the consumer price index. It also limited the amount campaigns could spend on broadcast media to 60% of their total campaign spending limitation. Additionally, the Act required broadcast and non-broadcast media to charge the lowest unit rate for advertisements for all candidates within 45 days of a primary election and 60 days of a general election.
FECA has been amended several times. In 1974, following the Watergate scandal, the Act was amended to create the Federal Election Commission (FEC) and to further regulate campaign spending. The FEC opened its doors in 1975. The Act was amended again in 1976, in response to the provisions ruled unconstitutional by Buckley v. Valeo, including the structure of the FEC and the limits on campaign expenditures. In 1979, the FEC ruled that political parties could spend unregulated or "soft" money for non-federal administrative and party-building activities. This led to a substantial increase in soft money contributions and expenditures in elections.
In 2002, major revisions to the FECA were made by the Bipartisan Campaign Reform Act, commonly referred to as "McCain-Feingold". This 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 affected federal elections.
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Bipartisan Campaign Reform Act of 2002
The Bipartisan Campaign Reform Act of 2002, also known as the McCain-Feingold Act, was a US federal law that amended the Federal Election Campaign Act of 1971, which regulates the financing of political campaigns. The Act was designed to address two issues: the increased role of soft money in campaign financing and the proliferation of issue advocacy ads by special interests that were not subject to federal limits.
The Act prohibited national political parties, federal candidates, and officeholders from soliciting soft money contributions in federal elections. Soft money refers to funding contributed to organizations that advocate issues and indirectly advocate candidates without specifically advocating for or against a particular candidate. These organizations are often known as "527s" as they are tax-exempt under 26 U.S.C. § 527. The Act also barred corporations and unions from using their treasury funds to finance electioneering communications, defined as "broadcast ads referring to clearly identified federal candidates within 60 days of a general election or 30 days of a primary election or caucus."
The Act also included a provision known as "the Millionaire's Amendment," which only affected candidates who had spent more than $350,000 in personal funds on their campaigns. The BCRA permitted the opponents of these candidates to receive triple the amount of personal contributions typically allowed and also permitted them to accept coordinated party contributions without limit. However, the Supreme Court struck down this provision in 2008, finding that it burdened free speech and associational rights.
The Bipartisan Campaign Reform Act of 2002 was sponsored by Senators John McCain (R-AZ) and Russ Feingold (D-WI) and was signed into law by President Bush in March 2002. The law became effective on November 6, 2002, and the new legal limits became effective on January 1, 2003.
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Campaign finance at state and local levels
Campaign finance laws at the federal level in the US have evolved significantly over the past century, with four distinct periods of regulation. These laws apply only to federal elections, and individual states have their own campaign finance laws for state and local elections.
At the state and local levels, campaign financing can get very complex, with contributions coming from individuals, corporations, and political action committees (PACs). In some states, like Arizona and Maine, most officials are elected without spending any private contributions, relying instead on government subsidies. This procedure has been in place for all statewide and legislative offices in these states since 2000. Other states, like Connecticut, have passed Clean Elections laws, which impose strict contribution limits.
State and local elections can also receive funding from Super PACs, which can raise and spend unlimited sums of money from corporations, unions, associations, and individuals. These Super PACs must file regular reports with the Federal Election Commission (FEC), disclosing their donors. However, social welfare groups, regulated under Section 501(c)(4) of the federal tax code, are not required to disclose their donors.
The lack of standardized campaign finance laws at the state and local levels can lead to varying levels of transparency and accountability in election funding. Some states may have stricter disclosure requirements and donation limits, while others may have more lenient regulations, allowing for greater participation but potentially increasing the influence of special interests.
Furthermore, the Supreme Court's rulings in cases like Citizens United v. Federal Election Commission (2010) and McCutcheon v. Federal Election Commission (2014) have had a significant impact on state and local elections. By striking down restrictions on political advertising and aggregate limits on monetary contributions, the Court has shaped the campaign finance landscape at all levels of government in the US.
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The role of the Federal Election Commission
The Federal Election Commission (FEC) is a federal regulatory agency that administers and enforces the nation's campaign finance laws. It was created in 1974 as an amendment to the Federal Election Campaign Act (FECA) of 1971 to enforce and clarify campaign finance laws. The FEC enforces limits on the amount of money individuals and political organizations can give to a candidate running for federal office. It also enforces rules on campaign financial reporting.
The FEC oversees the reporting of contributions and expenditures by candidates, political parties, and political action committees (PACs). This includes the disclosure of bundling by lobbyists and registrants, as well as contributions by persons other than multi-candidate political committees. The FEC also provides guidance on contribution limits and what constitutes a contribution. For example, gifts to a publicly funded presidential nominee's "General Election Legal and Compliance Fund (GELAC fund)" are considered contributions and are subject to per-candidate, per-election limits.
The FEC plays a crucial role in ensuring compliance with campaign finance laws. Campaigns are prohibited from retaining contributions that exceed the limits, and they must follow special procedures for handling excessive funds. The FEC also addresses issues related to independent expenditures and super PACs, which can accept unlimited contributions.
In addition to its regulatory role, the FEC also provides resources and guidance to candidates, campaigns, and the public on campaign finance matters. This includes information on contribution limits, rules for different types of contributions, and the establishment of recount funds. The FEC's website offers an overview of campaign finance laws and regulations, as well as access to reports and data on campaign contributions and expenditures.
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Limits on candidate spending
The Federal Election Campaign Act of 1971 (FECA) and its subsequent amendments have had a significant impact on campaign finance laws in the United States. FECA established limits on candidate spending, as well as contributions from individuals and Political Action Committees (PACs) to candidates, parties, or political committees.
While FECA initially imposed restrictions on candidate spending and self-financing, the Supreme Court ruled in Buckley v. Valeo (1976) that these restrictions violated the First Amendment's guarantee of freedom of speech. As a result, candidates can now spend unlimited amounts of their own money on their campaigns without legal restrictions. However, they must report the amount they spend to the Federal Election Commission (FEC).
The Bipartisan Campaign Reform Act (BCRA) of 2002, also known as the McCain-Feingold Act, addressed the issue of "soft money" donations. Soft money refers to contributions made to parties and committees for "party-building" rather than for specific candidates. BCRA prohibited national political parties, federal candidates, and officeholders from soliciting soft money contributions in federal elections. It also imposed severe restrictions on "electioneering communications," which are political advertisements that do not expressly advocate for a candidate but aim to influence the outcome of an election.
Despite these regulations, critics argue that federal campaign finance laws do not go far enough to mitigate corruption and the influence of undisclosed special interests. Additionally, some loopholes have been identified, such as the exemption of soft money political spending from federal limits following the Citizens United v. FEC court decision in 2010. This has led to concerns about the effectiveness of campaign finance laws in controlling the rising cost of electoral campaigns.
To comply with legal requirements, campaigns must follow specific procedures for handling contributions that exceed the limits. The FEC provides guidelines and regulations to ensure that campaigns operate within the framework of the law, promoting transparency and fairness in the political process.
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Frequently asked questions
Federal campaign finance laws in the US regulate the amounts of money political candidates or parties can receive from individuals or organizations and the cumulative amounts that individuals or organizations can donate. These laws also define who is eligible to make political contributions and what sorts of activities constitute in-kind contributions. The Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971 (FECA), which limits the amount of money individuals and political organizations can give to a candidate running for federal office.
Contributions made directly to a specific candidate are called hard money, while those made to parties and committees for party-building purposes are called soft money or independent spending. There are no legal limits on soft money spending.
A super PAC, or independent expenditure-only committee, can raise and spend unlimited sums of money from corporations, unions, associations, and individuals to advocate for or against political candidates. Super PACs must file regular reports with the FEC.
Critics of campaign finance laws argue that strict disclosure requirements and donation limits impede free expression and participation in the political process. They also point to the influence of undisclosed special interests and the increasing power of a few donors giving large contributions. On the other hand, some argue that current laws do not go far enough to address corruption and the influence of money in politics.
