Campaign finance in the United States

From Freepedia

Campaign finance in the United States is the financing of electoral campaigns at the federal, state and local levels. There are many sources of finance: direct donations from individuals, organizations, especially Political Action Committee and political parties -- "hard money" -- and indirect, unregulated "soft money" donations to organizations that support a candidate but are not officially affiliated to his or her campaign. There are substantial differences in how campaigns are funded, depending on the type of election (e.g. for an executive or a legislator and whether it is at the federal, state or local level). Public funding is available for presidential candidates during the election campaigns during both the primaries and the general election. Eligibility requirements must be fulfilled in order to qualify for public funding and those that do accept public funding are subject to spending limits. Campaign finance is a controversial issue, with free speech cited as an argument against legal restrictions and allegations of corruption from those who favor existing or further restrictions.

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Hard money and soft money

Campaign money in the U.S. system comes in two forms: "hard money" and "soft money". "Hard money" refers to donations made directly to political candidates. These must be declared with the name of the donor, which becomes public knowledge, and are limited by legislation. "Soft money" is money that is not made directly to a candidate's campaign, but is spent on an activity, especially "issue advertising", which are advertisements for a candidate's positions or thinly veiled attacks on the opponent's positions, that obviously benefit the candidate. Since it is not actually received or spent by the candidate's campaign, there are no legal limits.

Before the Bipartisan Campaign Reform Act, soft money was mainly contributions made to political parties, under a 1979 amendment to the Federal Election Campaign Act which allowed party committees to accept and spend unlimited amounts of money during election campaigns. This Act intended the money to be spent on grassroots "getting out the vote" efforts or voter registration drives. After the Act was passed, political parties successfully requested to be allowed to spend soft money on non-federal party building and administrative costs. Soon, this use of soft money expanded to voter turnout and registration activities, and issue advertising. For example, a wealthy individual could give $5 million in soft money to the Democratic Party. The party could then spend this money on political ads. These ads could not tell you to "Vote for Smith", "Elect Smith", "Send Smith to Congress", "Vote Against Jones", "Defeat Jones", or anything of that sort. However, they could go something like this: "John Smith is an honest man who stands up for the people. Bill Jones is a chronic liar who's taken money from special interests and advocated cutting Social Security. Call Bill Jones and tell him how you feel about this." The use of the phrases "vote for", "elect", "defeat", etc. was ruled illegal in the 1976 U.S. Supreme Court decision Buckley v. Valeo. The decision also held that limitations on donations to candidates were acceptable (to limit the "appearance of corruption"). On the other hand, the Court said, limitations on campaign spending were unconstitutional.

Campaign finance reform had been debated for years without any major changes to campaign finance laws. The Reform Party, founded by Ross Perot, made it a central issue in its platform, and when Perot ran for president in 1992 and 1996 he strongly argued for it. It again became a major issue in the 2000 U.S. presidential election, especially with candidates John McCain and Ralph Nader. Organizations in favor of campaign finance reform include Common Cause, Democracy 21, and Democracy Matters. The Bipartisan Campaign Reform Act was passed in 2002, which banned national political party committees from accepting or spending soft money contributions. The decision was challenged in McConnell v. FEC

Many of the soft money-funded activities previously undertaken by political parties have been taken over by various 527 groups, which funded many issue ads in the last Presidential election.

Current provisions of campaign finance laws

Disclosure

Current campaign finance law requires candidate committees, party committees and PACs to file periodic reports disclosing the money they raise and spend. Federal candidate committees must identify, for example, all PACs and party committees that give them contributions, and they must provide the names, occupations, employers and addresses of all individuals who give them more than $200 in an election cycle. Additionally, they must disclose expenditures exceeding $200 per election cycle to any individual or vendor.

Similar reporting requirements exist for state and local candidate and for PACs and party committees.

Increasingly, political committees on all levels are required to electronically file campaign finance statements.


Independent Expenditures

Under federal election law, an individual or group (such as a PAC) may make unlimited "independent expenditures" in connection with federal elections.

An independent expenditure is an expenditure for a communication which expressly advocates the election or defeat of a clearly identified candidate and which is made independently from the candidate's campaign. To be considered independent, the communication may not be made with the cooperation, consultation or concert with, or at the request or suggestion of, any candidate or his/her authorized committees or a political party, or any of their agents. While there is no limit on how much anyone may spend on an independent expenditure, the law does require persons making independent expenditures to report them and to disclose the sources of the funds they used. The public can review these reports at the FEC's Public Records Office or online at the FEC's web site.

Corporate and Union Activity

Although corporations and labor organizations may not make contributions or expenditures in connection with federal elections, they may establish PACs. Corporate and labor PACs raise voluntary contributions from a restricted class of individuals and use those funds to support federal candidates and political committees.

Apart from supporting PACs, corporations and labor organizations may conduct other activities related to federal elections, within certain guidelines. Unions and corporations are prohibited from giving soft money to parties. They also cannot use soft money to pay for "electioneering communications"-those referring to candidates for federal election without expressly advocating their election or defeat -- in the 60 days prior to a general election, or 30 days prior to a primary election.

Political Party Activity

Political parties are active in federal elections at the local, state and national levels. Most party committees organized at the state and national levels as well as some committees organized at the local level are required to register with the FEC and file reports disclosing their federal campaign activities.

Party committees may contribute funds directly to federal candidates, subject to the contribution limits. National and state party committees may make additional "coordinated expenditures," subject to limits, to help their nominees in general elections. National party committees cannot make unlimited "independent expenditures" to support or oppose federal candidates using soft money. State party and local committees cannot use soft money either for this purpose, but may spend soft money limited to $10,000 per source on generic voter registration and get-out-the-vote efforts.

Party committees must register and file disclosure reports with the FEC once their federal election activities exceed certain dollar thresholds specified in the law.


See also

References

External links

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