Federal Election Campaign Act 1971
Campaign costs soared in 1970s
The Watergate Scandal (Nixon) exposed illegal campaign contributions
Sparked a drive to reform campaign finance laws.
Purpose of the Act
To make campaign finances open to the public in order to prevent corruption
All candidates for federal office have to disclose who contributes to their campaign
And how those contributions were spent.
In 1974 the Act was amended
To impose contribution and spending limits on campaigns
Because wealthy people had contributed $1 million to Nixon's 1972 campaign
Individual contributors to presidential and congressional candidates limited to $1000/election (up to $2000 in 2002 and $2500 in 2012)
Candidates can choose between receiving federal, taxpayer funds or independent money.
And established the Federal Election Commission to administer the law.
Federal Election Commission (FEC) 1974
Three spots for Democrats, three for Republicans
Need four votes for any action - so often locked in stalemate
Candidates have to file detailed contribution and spending reports
FEC posts them on www.fec.gov.
Buckley v. Valeo 1976
Supreme Court ruled that campaign spending limits were unconstitutional
Supreme Court struck down a part of the 1971 FEC Act that limited the amount individual could contribute to their own campaigns
Ross Perot spent over $60 million on his own campaign
Trump spent $66 million of his own money
Hard money v. Soft Money
Hard money - money directed toward a candidate, restricted by FEC
Soft money - money donated to political parties (not candidates)
527 Groups 1976
Named after section of IRS code designated for nonprofit organizations.
Established after Buckley decision which ruled that the First Amendment protected individuals' right to spend unlimited amounts on political speech.
527 groups are non-profit organizations (like political party committees [PACS]) that operate primarily to influence elections
They can attack or support candidates
No limits on spending
Have to disclose the donors.
But cannot coordinate their activities with any campaign
Republican Governors Association
Citizens United (to reassert traditional American values, limit government etc.)
Emily's List (helping pro-choice Democratic female candidates)
Swift Boat Veterans for Truth (against John Kerry)
MoveOn.org (against George W. Bush)
2002 McCain-Feingold Act (see below)
Expenditures partially restricted
Prohibited corporations and unions from using their general treasury to pay for election communication 30 days before primaries and 60 days before general election
2004 FEC didn't impose contribution limits on 527 groups as long as they didn't explicitly endorse candidates (Example: Vote for..., vote agaisnt...)
People who had given to soft money to parties now gave 527 groups
2010 Citizens United v. FEC (see below)
Supreme Court ruled
Amendment to Federal Election Campaign Act 1979
Soft money not subject to contribution limits.
Caused huge flow of money to national parties from wealthy individuals and corporations (like ATT)
Citizens United 1988
A Political Action Committee (PAC) founded 1988 by Floyd Brown
With major funding from the Koch brothers
Promotes corporate interests
Freedom of enterprise
McCain-Feingold Act/Bipartisan Campaign Reform Act (BCRA) (2002)
To remove loopholes by banning soft money contributions from wealthy people and corporations
Proposed by Senator John McCain (R) and Russell Feingold (D)
Barred corporations and unions from paying for media that mentioned any candidate immediately before elections (30 days before primaries, 60 days before general elections)
Limited contributions to political parties to $25,000 (with inflation rise)
McConnell v. Federal Election Commission 2003
Supreme Court ruled 5-4 in favor of McCain-Feingold ban on unlimited contributions directly to political parties.
SpeechNow.org v. FEC 2008 (District Court Case)
PACs could accept donations of no more than $5,000/year from each individual
Could donate no more than $5,000 per election to a candidate
SpeechNow.org sued FEC
Claiming the $5,000 federal limit on how much individuals can give to a political committee was a violation of the First Amendment
District Court ruled in favor of SpeechNow.org
The FEC could not enforce contribution limits to independent groups
Citizens United v. Federal Election Committee (2010)
In 2008 Citizens United made a documentary, Hillary: The Movie, that criticized Democratic candidate Hillary Clinton during primary election against Barack Obama (D)
There was already a rule that non-profits could spend what they liked
As long as they didn't take money from corporations
Citizens United wanted to challenge the rule by deliberately taking donations from corporations
When FEC tried to stop them, they sued the FEC
Court Case decision
Supreme Court ruled 5 to 4 that governemtn restrictions on "independent" political spending by corporations and unions was unconstitutional.
Therefore, the anti-Clinton broadcast should have been allowed.
This overthrew precedents that allowed the government to regulate this kind of spending.
Majority argument (Kennedy, Alito, Scalia, Thomas)
Barring independent political spending was a violation of Free Speech
First Amendment protects not just a person's right to speak but the act of speech itself, regardless of the speaker
Therefore the First Amendment protects the speech of corporations and unions
Although the government has the authority to prevent corruption
It has no place in determining whether large expenditures are corrupt
So it may not impose spending limits on that basis.
Public has the right to hear all available information
Spending limits prevent information from reaching the public
Minority argument (Stevens, Ginsburg, Breyer, Sotomayor)
The first Amendment protects only individual speech
Governments may prevent corruption and campaign spending
Therefore government may impose spending limits on corporations and unions
The public does have the right to hear all available information
But when corporations can spend more than individuals, their message drowns out others
Like Barack Obama
Argued that the decision would open floodgates to special interest money (especially corporation money) to corrupt the electoral process
Campaign spending skyrocketed
There was twice the political spending in 2012 than other elections
Resulted in the creation of super PACS
501 (c) groups
Emerged as place for unlimited donations that would remain anonymous.
Regulated by IRS, not FEC
Donations don't have to be reported unless donor gives money specifically for a political ad.
Corporations and unions can give big amounts to 501 (c) groups without publicly disclosing their names.
501 (c) groups cannot spend more than 1/2 their money on political activities