Omar Bennett
Campaign finance reform is a complex and continually evolving topic, with a long history of policy changes and reactions. The system of campaign finance has a significant impact on the democratic process, influencing the role of money in politics, the diversity of candidates, and the integrity of elections. In the United States, the landscape of campaign finance has undergone substantial changes since the 1970s, with landmark legislation such as the Federal Election Campaign Act (FECA) in 1971 and 1974, and the Bipartisan Campaign Reform Act (BCRA) in 2002, aiming to address issues of transparency, spending limits, and the influence of special interests. Despite these reforms, the role of big money in politics has continued to evolve, with the emergence of super PACs and the increasing nationalization of campaign fundraising, raising concerns about the influence of wealthy donors and the potential for conflicts of interest. As a result, campaign finance remains a highly debated topic, with ongoing efforts to improve transparency, reduce the influence of money in politics, and ensure fair and equitable elections.
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What You'll Learn
The Federal Election Campaign Act (FECA)
FECA also introduced outright bans on certain corporate and union contributions, expenditures, and speech. For example, it 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 that campaigns could spend on broadcast media to 60% of their total campaign spending limitation.
In 1974, FECA was amended to create the Federal Election Commission (FEC) and further regulate campaign spending. The amendments were fuelled by public reaction to the Watergate Scandal, and they established a comprehensive system of regulation and enforcement, including public financing of presidential campaigns and the creation of a central enforcement agency, the FEC. Other provisions included limits on contributions to campaigns and expenditures by campaigns, individuals, corporations, and other political groups.
FECA has been amended several times since its inception, including in 1976, 1979, and 2002. In 1976, the U.S. Supreme Court in Buckley v. Valeo struck down various FECA limits on spending as unconstitutional violations of free speech. This removed limits on candidate expenditures unless the candidate accepts public financing. In 1979, FECA was amended again to allow parties to spend unlimited amounts of hard money on activities like increasing voter turnout and registration.
In 2002, major revisions to FECA were made by the Bipartisan Campaign Reform Act, commonly referred to as "McCain–Feingold." However, major portions of McCain-Feingold were struck down by the Supreme Court on constitutional grounds in various cases between 2007 and 2010. The Citizens United ruling in 2010 also struck down FECA's complete ban on corporate and union independent spending.
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Bipartisan Campaign Reform Act (BCRA)
The Bipartisan Campaign Reform Act (BCRA) of 2002, also known as the McCain-Feingold Act, was a federal law in the United States that amended the Federal Election Campaign Act of 1971. The BCRA was designed to address the increased role of soft money in campaign financing and regulate the financing of political campaigns.
The Act prohibited national political party committees from raising or spending any funds not subject to federal limits, even for state and local races or issue discussions. It also included provisions for "electioneering communications", prohibiting federal candidates from using corporate and union funding for television ads within 30 days of a primary and 60 days of a general election.
The BCRA also included a provision known as "the Millionaire's Amendment", which permitted the opponents of self-financing candidates to receive triple the amount of personal contributions typically allowed and 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 impact of the BCRA was first felt nationally in the 2004 elections, with the "stand by your ad" provision requiring all campaign advertisements to include a verbal statement from the candidate approving the message. The constitutionality of the BCRA has been challenged in several court cases, with some provisions upheld and others overturned.
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Supreme Court rulings
The US Supreme Court's 2010 ruling in Citizens United v. Federal Election Commission is a landmark decision regarding campaign finance laws. The 5-4 ruling in favour of Citizens United reversed century-old campaign finance restrictions and allowed unlimited election spending by corporations and labour unions. The ruling also set the stage for Speechnow.org v. FEC (2010), which authorized the creation of super PACs, and McCutcheon v. FEC (2014), which struck down other campaign finance restrictions.
The Supreme Court decided that laws restricting the political spending of corporations and unions violated the Free Speech Clause of the First Amendment. This decision sparked significant controversy, with some viewing it as a defence of American principles of free speech and others criticizing it as granting disproportionate political power to large corporations and wealthy donors. The ruling also influenced the outcome of Arizona Free Enterprise Club's Freedom Club PAC v. Bennett (2011), in which the Supreme Court outlawed public funding by states for candidates who were unable to compete with corporate donations.
The Citizens United ruling arose in 2007 when a conservative non-profit organization challenged campaign finance rules that prevented it from promoting and airing a film criticizing then-presidential candidate Hillary Clinton. The Supreme Court decided that Citizens United was within its First Amendment rights to spend its money disseminating the film. The majority ruling also supported the disclosure of the sources of campaign contributions, arguing that this transparency would enable voters to appropriately evaluate the messages targeting them and hold corporations and elected officials accountable.
However, critics argue that the ruling has led to a fusion of private wealth and political power, with the influence of wealthy donors and corporations on political campaigns unprecedented. The ruling has resulted in massive increases in political spending from outside groups, dramatically expanding the political influence of ultra-wealthy donors, corporations, and special interest groups. Some have also argued that the Supreme Court's narrow definition of corruption as quid pro quo corruption fails to recognize the potential for large donations to influence elected officials.
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Lobbyists and conflict of interest laws
The role of lobbyists in politics has been a topic of interest and concern for many years, with a focus on how lobbying activities may influence political decision-making and the potential for conflicts of interest. Lobbying activities are regulated through laws and ethical guidelines to ensure transparency and mitigate potential conflicts.
In the United States, the Lobbying Disclosure Act (LDA) requires lobbyists to register and disclose their activities. This includes reporting specific lobbying issues and the clients they represent. The LDA also stipulates that listed lobbyists with convictions for certain offences, such as bribery, fraud, or conflict of interest, must disclose this information. Additionally, the LDA prohibits false statements and omissions in filings.
At the state level, there are also regulations in place. For example, in Los Angeles County, an ordinance mandates that lobbyists who are compensated for communicating with county officials to influence official action must register with the county. This ordinance is enforced by the Conflict of Interest/Lobbyist Division, which also oversees the filing of Statement of Economic Interest (Form 700) by government officials, disclosing their personal assets and income that may be influenced by their official actions.
The U.S. Senate Select Committee on Ethics addresses conflicts of interest involving lobbyists. It advises on situations where a lobbyist spouse of a Senator's staff member should not lobby the supervising Senator or their employees. Senate Rule 37.5 also imposes restrictions on outside activities involving "professional services," which may create conflicts between Senate duties and outside responsibilities.
In terms of campaign finance reform, there have been efforts to restrict lobbyists' influence. The Political Reform Act, for instance, prohibited lobbyists from donating to political campaigns and imposed a $10 gift limit. It also established strict conflict of interest laws, requiring government officials who frequently donate to campaigns to disclose their personal financial information.
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Nationalization of campaign fundraising
The campaign finance system in the United States has undergone significant changes since the 1970s, with landmark legislation such as the Federal Election Campaign Act (FECA) in 1971 and its subsequent amendments in 1974, which established comprehensive regulations and enforcement mechanisms. The Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold bill, was passed in 2002 and aimed to address the role of soft money and TV advertising expenditures. Despite these reforms, the system continues to evolve, with a growing trend towards the nationalization of campaign fundraising.
The nationalization of campaign fundraising refers to the increasing reliance of candidates on financial contributions from donors across the country, rather than just their home states. This trend has been influenced by the emergence of super PACs and other outside groups, as well as the rise of online fundraising through social media platforms and websites like ActBlue and WinRed. In 1998, House candidates primarily relied on their home states for campaign funds, with over 80% of their money coming from within their state borders. However, by 2022, this number had dropped to just over 60%, excluding nationalized super PAC spending.
This shift has had a significant impact on the dynamics of political campaigns. Candidates are now incentivized to appeal to a more partisan national donor base, which can lead to more extreme positions and norm-breaking behavior to gain notoriety and secure financial support. The nationalization of campaign fundraising has also contributed to the increasing influence of a small handful of very wealthy donors, who can exert significant power through their financial contributions.
To address these concerns, various proposals for campaign finance reform have been put forward. These include increasing the role of political parties in congressional campaign finance, tightening rules for super PACs, boosting campaign transparency, and encouraging small donor matching programs. By matching small private contributions with public funds, candidates can reduce their dependence on large donors and encourage greater participation from everyday citizens.
While the nationalization of campaign fundraising has had some positive effects, such as increasing the accessibility of political participation for candidates outside of traditional fundraising networks, it has also introduced new challenges. The influence of large donors and the pressure to appeal to a national donor base can distort the political process and lead to a disconnect between elected officials and their constituents. As such, ongoing reforms and regulatory efforts are crucial to ensuring a balanced and transparent campaign finance system that serves the interests of all citizens.
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Frequently asked questions
Passed by Congress in 1971, FECA mandated extensive disclosure of campaign finance. Amendments to the Act were made in 1974, creating a system of regulation and enforcement, including public financing of presidential campaigns, and the establishment of the Federal Election Commission.
Since 2010, campaign finance has been significantly deregulated, with the Supreme Court's Citizens United decision removing over a century of law. This has resulted in a small number of wealthy donors having a much larger influence.
Passed in 2002, the BCRA was sponsored by Senators McCain and Feingold. It was an attempt to remedy the damage done to the FECA laws of 1971 and 1974. The BCRA aimed to increase transparency in campaign finances, reduce the influence of soft money, and limit the role of large corporations, unions, and wealthy individuals.
