🔔United States Political Parties Unit 10 – Campaign Finance in US Political Parties

Key Concepts and Definitions

• Campaign finance involves the raising and spending of money to influence political campaigns and elections
• Hard money refers to funds raised directly by candidates or political parties, subject to contribution limits and disclosure requirements
• Soft money encompasses funds raised by political parties for party-building activities, not subject to the same regulations as hard money
• Independent expenditures are made by individuals or groups to support or oppose candidates without coordinating with campaigns
• Issue advocacy involves advertising that focuses on political issues rather than explicitly advocating for or against candidates
• Bundling is the practice of collecting multiple individual contributions and presenting them to a campaign as a single larger donation
• Dark money refers to political spending by organizations that are not required to disclose their donors, often through 501(c)(4) social welfare groups or 501(c)(6) trade associations

Historical Context

• Campaign finance laws in the United States have evolved over time in response to concerns about corruption and the influence of money in politics
• The Federal Election Campaign Act (FECA) of 1971 established the first comprehensive regulations on campaign financing, including contribution limits and disclosure requirements
• Watergate scandal in the 1970s revealed widespread campaign finance abuses and led to further reforms
• Bipartisan Campaign Reform Act (BCRA) of 2002, also known as the McCain-Feingold Act, banned soft money contributions to national political parties and restricted issue advocacy advertising close to elections
• Citizens United v. FEC Supreme Court decision in 2010 struck down key provisions of the BCRA, allowing unlimited independent expenditures by corporations and unions
• Rise of super PACs and dark money groups following the Citizens United decision has dramatically increased the amount of money in politics and raised concerns about transparency and accountability

Campaign Finance Laws and Regulations

• Federal Election Commission (FEC) is responsible for enforcing federal campaign finance laws and regulations
• Contribution limits restrict the amount individuals, political action committees (PACs), and political parties can donate directly to candidates and campaigns
  • As of 2021, individual contributions to candidates are limited to $2,900 per election cycle
  • PACs can contribute up to $5,000 per candidate per election
• Disclosure requirements mandate that campaigns, PACs, and political parties report their contributions and expenditures to the FEC
  • Donors who contribute more than $200 to a candidate or committee must be identified in FEC reports
• Coordination rules prohibit independent expenditure groups from coordinating their activities with candidates or campaigns to prevent circumvention of contribution limits
• State and local campaign finance laws vary widely, with some states imposing stricter regulations than federal law while others have more permissive rules

Sources of Campaign Funding

• Individual contributions from supporters are a significant source of funding for most campaigns, subject to contribution limits
• Political action committees (PACs) pool contributions from individuals and donate to candidates and parties that align with their interests
  • Connected PACs are affiliated with corporations, labor unions, or trade associations and can solicit contributions from their members
  • Non-connected PACs are independent committees that raise funds from the general public
• Self-financing by wealthy candidates who use their personal fortune to fund their campaigns has become more common in recent years
• Small-dollar donations from grassroots supporters have played an increasingly important role, particularly in insurgent campaigns (Bernie Sanders, 2016)
• Bundlers, often lobbyists or well-connected individuals, collect contributions from multiple donors and present them to campaigns as a single larger donation
• Political parties provide financial support to candidates through coordinated expenditures and independent expenditures

Role of Political Parties in Fundraising

• National party committees (DNC, RNC) raise funds to support their presidential nominees and down-ballot candidates
• State and local party committees focus on fundraising for state and local races, as well as grassroots organizing and voter mobilization efforts
• Parties can make coordinated expenditures in consultation with candidates, subject to limits based on the office sought and voting-age population
• Parties also engage in independent expenditures to support or oppose candidates without coordinating with campaigns
• Joint fundraising committees allow parties to collaborate with candidates and other committees to solicit larger donations and distribute funds among participants
• Parties often provide valuable infrastructure and support to candidates, including voter data, polling, and campaign staff

Super PACs and Dark Money

• Super PACs can raise and spend unlimited amounts to support or oppose candidates, as long as they do not coordinate with campaigns
  • Emerged in the wake of the Citizens United decision and the SpeechNow.org v. FEC ruling in 2010
  • Must disclose their donors and expenditures to the FEC
• Dark money refers to political spending by groups that are not required to disclose their donors, such as 501(c)(4) social welfare organizations and 501(c)(6) trade associations
  • These groups can engage in issue advocacy and political activities as long as it is not their primary purpose
  • Lack of transparency raises concerns about the influence of wealthy interests and foreign actors in U.S. elections
• Super PACs and dark money groups have dramatically increased the amount of outside spending in elections, often dwarfing the spending by candidates and parties
• Critics argue that the proliferation of super PACs and dark money undermines the integrity of the democratic process and gives undue influence to wealthy donors

Impact on Elections and Policy

• Campaign spending can influence voter behavior and electoral outcomes, particularly in close races or when there is a significant disparity in resources between candidates
• Candidates who raise more money are often able to run more extensive advertising campaigns, hire more staff, and build stronger grassroots organizations
• Elected officials may be more responsive to the interests of their donors, particularly those who provide substantial financial support
  • Studies have shown a correlation between the policy positions of members of Congress and the preferences of their donors
• The need for constant fundraising can distract elected officials from their legislative duties and make them more susceptible to lobbying by special interests
• The influence of money in politics can contribute to public cynicism and decreased trust in government institutions

Controversies and Reform Efforts

• Critics argue that the current campaign finance system gives too much influence to wealthy donors and special interests at the expense of ordinary citizens
• Efforts to reform campaign finance laws have been met with legal challenges and political opposition
  • Attempts to overturn the Citizens United decision through a constitutional amendment have gained support from some Democrats but face long odds
  • Proposals to establish public financing of elections, such as matching funds or vouchers, aim to reduce the influence of private money and level the playing field for candidates
• Disclosure requirements for dark money groups have been proposed to increase transparency and accountability in political spending
• Some states and localities have experimented with innovative campaign finance reforms, such as Seattle's democracy voucher program or Maine's clean elections system
• Ultimately, the debate over campaign finance reform reflects broader disagreements about the role of money in politics and the balance between free speech and democratic equality