CAMPAIGN FINANCE AND SPENDING

1974 – Federal Election Campaign Act is passed to reform campaign finances. Two main goals: (1) Tightening reporting requirements (2)

Limiting expenditures Few other effects

Created the FEC – 6 member bipartisan agency created to enforce campaign finance laws.

Created Presidential Election Campaign Fund - $3 voluntary tax donation

Presidential Public Financing for Primaries – candidates accept federal funds to run their Primary campaigns.

Full public funding of general elections up to a limited amount

Candidates must disclose all spending Limits individual contributions to political campaigns.

SOFT MONEY?

Soft Money: Campaign contributions that are for generic party

building, or advertisements at the grass roots level. Grass roots?

Meaning the local level. At one time, “soft money” contributions were unlimited.

2002 McCain-Feingold Act was passed which effectively banned the use of soft money in political campaigns

LOOP HOLE!! Due to tax codes, Wealthy individuals found a way around the

McCain-Feingold Act. 527 (c) Group: Independent groups that are not subject to

contribution restrictions as long as they do not seek the election of particular candidates. Cannot say “Vote for Joe Smith” Contribution records must be given to the IRS MoveOn.org

501 (c) Group: Exempt: groups that are exempt from reporting their contributions, can receive and give unlimited contributions. Can only spend half of their funds for politics Nonprofit organizations Examples: American Future Fund, American Justice

Partnership

POLITICAL ACTION COMMITTEES

https://www.youtube.com/watch?v=7PCuy8_M96M Political Action Committee (PAC): Funding vehicles

created by 1974 campaign finance reforms. Corporations, Unions or other organizations can create

these. Identified as a 527(c) Group

What are the effects of PACs? Influencing candidates through campaign

contributions

http://en.wikipedia.org/wiki/List_of_political_action_committees

IMPACTS OF PACS

In 2008 4,611 PACs were created and contributed a total of $412.8 million to House and Senate candidates.

Examples of effects: FTC made it mandatory for dealerships to post known mechanical

defects on the window stickers of cars. The National Association of Automobile Dealers became the largest

donor to congressional candidates 216 Representatives sponsored a bill to get rid of this mandate.

DISCUSSION

How do the PACs corrupt the Democratic process?

What has created the politicians needing PACs to be competitive?

Can the average citizen effect the course of a campaign through donations? Why or why not?

How do PACs effect legislation drafting?

COLBERT SLIDE