Campaign Finance in US Politics

Introduction

Soft money is money not given directly to a candidate but spent on their behalf

Hard money is money given directly to a candidate

Why was campaign finance reform needed in the 1970's?

  • There was no limits on the money given directly to candidates and there were opportunities for corruption with 'fat cats' giving large sums of money in return for influence

Measures taken to control the amount of money spent on campaigns

Federal Election Campaign Act 1972

Contributions limited to $1000 per person and $5000 per corporation

Foreign donors banned

Provided matching funds - federal government matches what has been raised providing you can prove that it is from many small donors across a number of states. If accepted, the candidate has to comply with spending limits on their primary campaigns

Established the FEC (Federal Election Commission) post-watergate

McCain-Feingold reforms 2002

Bi-partisan campaign reform act

Parties banned from raising or spending soft money

Unions and corporation banned from funding issue advertisements

Why have these measures proved unsuccessful?

Federal Election Campaign Act

No limits on the amount of money that parties could receive (FECA didn’t consider impact of soft money)

Growth of issue advocacy where groups buy adverts on behalf of candidates (e.g. abortion groups)

Issue advocacy advertising: adverts paid for by supporters of the candidates, not the candidates themselves

The Supreme Court ruled individuals and PACs can spend whatever they like supporting a candidate (1st amendment rights)

  • PAC's function to raise money for candidate (6000 existed in 2000)

Allowed unlimited amounts of money to be used to fight elections

McCain Feingold

527s - groups that can still run issue advocacy ads so long as they don’t accept money from unions or corporations (e.g. swift boat veterans for truth attacked John Kerry's wary record in Vietnam). They allow rich individuals to continue to donate money (e.g. George Soros gave $1 million to the Kerry campaign via 527s)

Just shifted the way that money was raised from TV to mobilising core supporters

Citizens United vs. FEC 2010

A landmark carse on campaign finance

The court declared unconstitutional key elements of campaign finance regulation

  • The court said unlimited corporate spending was allowed on political advertising
  • This case has made money vastly more important in US elections

In McCutcheon vs. FEC 2014, the court ruled (5 – 4) in banning 'aggregate limits' on individual donations- I.e. allowing donors to give to multiple candidates

Enabled the creation of super PAC's

  • Super PACs may raise unlimited sums of money from corporations, unions, associations and individuals, then spend unlimited sums to overtly advocate for or against political candidates.

Dark Money

Dark money is money given by anonymous donors to charities, which are essentially 'front groups' for rich individuals who do not wish to disclose their political ties as they'd be required to do if donating to a PAC or directly to the candidate

Dark money was used in a campaign supporting Neil Gorsuch in his supreme court nomination

How influential was money in the 2016 campaign?

The two main Presidential candidates in the 2016 election were rich

  • Clinton relied on backing from rich donors, whereas Bernie was more focused on a wide range of small donations

Total raised was $1.3 billion, $600 million of which was super PACs

However, Trump raised and spent less than Clinton, and won

Both sides exploited the lax regulation

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