Chapter Study Outline

  1. Introduction
    1. The 2008 presidential election has been the most expensive since the Federal Election Commission began documenting fund-raising in 1976, with the combined spending of all presidential candidates reaching $1.3 billion; furthermore, the American public agree that too much money is being spent on presidential campaigns.
    2. The reason campaigns cost what they do is mostly dictated by campaign finance rules. Like all rules, campaign finance rules reflect implicit or explicit endorsements of particular values and so can be both controversial and reflective of the political realities of American elections.
  2. Rules for Donors
    1. The identity of donors giving more than $200 must be disclosed according to the Federal Election Campaign Act (FECA) in 1971. There are two different types of donors: individuals and organized interest groups.
      1. Individual Americans can donate to candidates, political parties, or interest groups as long as they are either citizens or permanent residents. There is no age limit, though sometimes campaigns will put age limits on the donations that they will accept in order to allay public criticism
      2. Organized interest groups can donate as long as they are not tax-exempt groups. Corporations, membership organizations, and unions cannot donate either, but rather must establish PACs (political action committees), which are groups directly related to the election of a candidate or the advancement of a political agenda; the PAC can be established with a small sum of the corporation’s money, but then must continue fundraising independently afterwards.
    2. There are certain limitations on how much can be donated to campaigns, which affect individuals, political party committees, and PACs. Over time they have been increased and adjusted for inflation.
  3. Political Parties and Soft Money
    1. Soft money, or funds not subject to limitations and restrictions raised by party committees, could only be used for specific types of actions during a campaign, such as voter mobilization and ads that do not advocate for a specific candidate.
    2. Because of widespread criticism and accusations of corruption, the use of soft money by party committees has been recently banned by the Bipartisan Campaign Reform Act (BCRA), though it has had little effect on the fundraising ability of the national committees—in 2008, both parties were able to raise more than before the BCRA.
  4. Independent Groups
    1. Those groups unaffiliated with political parties or candidates are still able to raise soft money, but it is spent independent of the candidates or political parties on advertisements, which are obviously still meant to achieve certain political ends in the campaign.
    2. Because of the use of soft money as well as for tax purposes, the U.S. government has strict guidelines for what constitutes each type of independent group, and what they can and cannot do in affiliation with an election.
      1. Independent expenditure committees are PACs that pool donations from various sources that are not associated with any political party, interest group, or corporation, etc. They have been termed “super PACs” because they gather from multiple sources and are not restricted in the amount of donations they can receive. They are, however, required to disclose their donor list. They are a new innovation in fundraising, having appeared during the 2010 elections.
      2. 527 organizations are officially political organizations which played a significant role in the 2004 elections (after soft money raised by political parties was banned) and have no limitations on the amount of money they can raise. Well-known 527s include the Swift Boat Veterans for Truth, and Americans Coming Together (Act).
      3. Nonprofit organizations, or 501(c) organizations, are neither required to pay taxes nor to disclose their donors. Because of this, the different categories of 501(c)s are strictly designated. Some, such as those that include churches, known as such as 501(c)3s, are not allowed to participate in political campaigns at all, while others, like “social welfare organizations,” are able to participate as long as the primary purpose of the non-profit is not campaign-based.
  5. Rules for Spenders
    1. Contributions are limited but spending is not, and the federal government abides by this important principle by not limiting the amount of money a campaign can spend, nor limiting the amount of their own personal money a candidate could spend on the campaign.
      1. Public financing, or financing through federal taxes, can sometimes be used for campaign fundraising in order to match raised funds. In this case, candidates must mutually agree beforehand on a spending limit. If one of the candidates does not want to adhere to a spending limit, then they are also not allowed to accept public financing.
      2. Some states also having public financing systems, and six states have clean election systems, which are based on receiving a certain number of low-level (such as $5) donations to be eligible. Once eligible, they receive a grant from the state and may not use any further private donations to use during the campaign.
    2. Candidates and political parties have few restrictions on when and how they can campaign, but independent groups are much more restricted and have specific rules they must follow when running campaign events and ads.
      1. If independent groups want to use their resources to support a candidate or party, they cannot consult with, coordinate with, or receive help from the said candidate or party.
      2. The Supreme Court recently overturned further restrictions on independent groups. Before 2010, when independent groups air an advertisement, any group accepting corporate or union donations could not air ads clearly identifying any candidate for federal office occurring in the 60 days before a general election, or the 30 days before a primary election. The 2010 Citizens United v Federal Elections Commission decision argued that this took away from the first amendment right to free speech, and overturned the regulations.
  6. Campaign Finance Rules and Political Strategy
    1. Citizens can both vote and donate time and money to a candidate, and their choice as to which candidate to support is usually based on who they agree with and who they believe will further their own values and goals. In part, this also means that they will donate to candidates that they believe will win or have chance of winning.
    2. Because of the limitations on contributions and the limitless nature of campaign spending, the importance of fundraising on a broad scale has led to candidates spending large amounts of their time engaged in fundraising. More efficient avenues of raising money from supporters have been ways in which candidates can spend more time on their campaign and less worrying about its financing.
      1. The Internet has been a helpful tool in which to garner support without spending time at events
      2. Candidates also hope to recruit bundlers, or wealthy supporters whose connections can enlist other well-off friends and acquaintances to donate as well.
      3. Self-financing by wealthy candidates also helps to bolster a campaign, and can sometimes discourage candidates from running against very wealthy opponents who will have to spend significantly less time raising funds. At the same, the use of a candidate’s personal wealth is sometimes seen as a sign of weakness in a campaign, which would be considered successful if it were supported mostly by private donations.
    3. Candidates are further pressured by the Citizens United decision, which has further enfranchised independent groups in their own campaigning. They also feel pressure both to keep private donors happy and to make the decision as to whether to accept public finances (and a spending cap) or to rely on their own popularity with the public.
    4. Though in many cases political parties and interest groups have the same goals as candidates, they remain very much out of the direct control of candidates, going as far in some elections to support candidates who align directly with their ideals rather than candidates who are considered “electable.” Interest groups and parties also tend to release more negative ads than candidates—which candidates usually tacitly support, but that can sometimes lead to bad press for the candidate themselves.
  7. The Debate over Campaign Finance Reform
    1. There has been significant criticism of the current status of campaign finance, especially since the Supreme Court’s decision supporting Citizens United. Criticisms of the system in place usually center around four possible negative consequences of the status quo.
      1. The constant necessity of fundraising for such large amounts of spending is hard on candidates, who could possibly be doing more beneficial activities for the public, such as implementing policy, informing the public, or becoming more informed themselves. The difficulty of the campaign schedule can also deter some potential candidates from running for office at all
      2. Fundraising disparities between incumbents and challengers, and even more so winners and losers in elections, has led to the conclusion that money can “buy” an election. Even if this is not true, the appearance can again deter potential candidates from running.
      3. The ability to donate money to campaigns can give wealthier citizens a voice, disenfranchising citizens who are not wealthy enough to donate to campaigns. On a larger scale, very wealthy donors and American businesses are given an even larger voice in politics for the same reason, and their ability to donate or procure large sums of money for candidates.
      4. The current system does not provide the government, the candidates, or citizens with the tools necessary to combat corruption in campaign finance. The amount of money donated and spent might not only have an effect on the election but also on the actions of the candidate once elected to office, detracting from citizens’ ability to be represented by their elected official
    2. Clean election systems, or, less radically, mandated public financing are both solutions to the system proposed by critics. These measures would detract from the inequalities and corruption caused by the ability of wealthy donors to provide so much financially to campaigns. However, there is little incentive for incumbent leaders to reform a system in which they proved successful.
    3. Empirically, criticisms of the current system are difficult to assess and even more difficult to prove.
      1. The idea that money buys elections might actually reflect the notion that popular (and ultimately successful candidates) will receive the most money as a show of support. Along the same lines, public financing and clean election systems seem to reduce the amount of time candidates spend fund-raising, but there is no evidence that it makes elections more competitive.
      2. Whether candidates are “bought” by donations also needs further examination. Limits upon individual donations, even from PACs, and the overall size of the number of donors to modern campaigns must limit the power of a singular individual or PAC. Furthermore, the causal mechanism of this assumption is still nebulous; it is difficult to prove whether candidates’ opinions can be changed by donors, or whether donors choose candidates who already support their ends. Some research however, has emphasized the increase in “access” and importance one receives as a large donor.
    4. The system of campaign finance has also been defended for further enfranchising citizens, promoting free speech, allowing for more campaign activity, and, theoretically, more dissemination of information about the candidates.