Money and the Election Process

Money and the Election Process


The great
paradox of
modern elections:
Money is a
corrupting
influence but
candidates can’t
do without it.

Section 1—The Nominating
Process


Campaign Spending Amounts
 In 2004 the cost of all elections was $2

Billion
 House and Senate Campaigns cost 1
billion in 2000
 Money is required for mailings, campaign
staff, radio ads, web sites, buttons, etc.
 Biggest single item?


TV advertising—Runs approximately
$150,000 for 30 seconds in prime time.
Section 1—The Nominating
Process

Sources of Campaign Funding


Private Givers—have always been the major
source of funding.
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Small Contributors
Wealthier persons
Candidates themselves
Special interest groups/Political Action Committees
(PACs).
Temporary organizations

Fund-raising activities by candidates and
parties
Public funding—State and Federal funds given
to candidates under certain circumstances.
Section 1—The Nominating
Process

Regulating Campaign Finance


Federal Election Campaign Act Prohibits:
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Donations directly from Corporations, Labor Organizations and National Banks
Donations from Government Contractors
Donations from Foreign Nationals
Cash Contributions over 100 Dollars
Contributions in the name of another ( straw donor schemes)

Federal Election Commission
Bi-Partisan Campaign Reform Act of 2002.
Section 1—The Nominating
Process


Federal Election Commission
 The agency set up in 1974 by Congress to

administer federal election laws.
 Is an independent agency in the executive
department.



President can’t fire members
Members appointed by president and
confirmed by congress.

Section 1—The Nominating
Process


Federal Election Commission


Laws overseen fall into four
areas:






Timely disclosure of campaign
finance data
limits on contributions
limits on expenditures
public funding for several parts of

the Presidential election process

Section 1—The Nominating
Process


Disclosure Requirements
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No gifts in the name of another.
Cash gifts limited to $100.
No gifts from foreign sources.
All advertising must bear the name of the candidate.
All contributions must be made through a single
committee.
Only the committee can spend the money.
All contributions above $200 must be identified by
source and accounted for.
All spending over $200 must be accounted for.
All contributes above $5000 must be reported to FEC

within 48 hours. Also contributions over $1000 in the
last 20 days of campaign.
Any independent committee spending more than $250
on behalf of a candidate
must
also file with FEC
Section 1—The
Nominating
Process


Limits on Contributions
 Individuals limited to

$2000 to any one
candidate in the primary and the same in
the general election.
 Limited to $5000 a year to single PAC and
$25,000 to a national party.
 Total contribution limit to candidates and
PACs is 95,000, during any election cycle
(the two years from one general election
to the next one).
Section 1—The Nominating
Process


The Role of PACs




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Neither corporations nor labor unions can
contribute to any candidate running for a federal
office.
PACs are the political arms of special-interest
groups—business, labor, professional, cause,
and other organizations that try to influence
government policies.
Clout of PACs comes primarily from their ability
to raise campaign money and their willingness to
give it out.
Are more than 4400 PACs today—
Section 1—The Nominating
Process


The Role of PACs
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PACs get money from contributors and

members of the sponsoring organization.
Are usually focused on narrow issues.
Distribute money to candidates
sympathetic to their views OR have a
good chance of winning.
Spent more than $600 Mil. in 2004.
PACs are limited to $5000 to any single
federal candidate in an election, but they
can contribute to as many candidates as
they want. $15000 limit to parties.
Section 1—The Nominating
Process


Limits on Expenditures



Buckley v. Valeo– stated that limits on
spending violate free speech.
Thus cannot limit:
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how much candidates spend
how much of their own money candidates spend
how much third parties spend to promote a candidate.

However, Presidential contenders who accept
federal subsidies ARE subject to limits on their
campaign spending. That is part of the deal.

Section 1—The Nominating
Process


Public Funding of Presidential
Campaigns
 Fed. Election Campaign Act set up the

Presidential Election Campaign Fund.
 Money is used every four years to finance
1) the preconvention campaigns, 2) the
national conventions and 3) the
presidential election campaigns.
 Money is administered by the FEC

Section 1—The Nominating
Process


Public Funding of Presidential
Campaigns


Pre-convention Period




Primaries are funded by money raised by candidates
plus money received from the FEC.
To be eligible for the public funds and candidate must
•
•
•

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raise at least $100,000 in contributions from INDIVIDUALS
In lots of $5000 in each of at least 20 states
Built from donations of not more than $250

If meet this test, FEC will match the first $250 of each
individual donation up to a total of half. Does not
match contributions from PACs or political
organizations.
Section 1—The Nominating
Process


Funding Presidential Campaigns
 Each major party nominee automatically

qualifies for a public subsidy-- 74.6 Mil. In
2004
 If the candidate accepts the money:





Can spend no more than the amount of the
subsidy
Can not accept campaign funds from any
other source.

Section 1—The Nominating
Process


Soft Money

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Nature of the problem
Bipartisan Campaign
Reform Act of 2002
Limits soft-money
donations to political
parties
Limits what parties
can spend on
campaigns
Section 1—The Nominating

Process