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Campaign Laws


Federal Election Campaign Act 1971

  • Background

  • 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

  • Act

  • 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.

  • Background

  • Established after Buckley decision which ruled that the First Amendment protected individuals' right to spend unlimited amounts on political speech.

  • Definition

  • 527 groups are non-profit organizations (like political party committees [PACS]) that operate primarily to influence elections

  • Rules

  • They can attack or support candidates

  • No limits on spending

  • Have to disclose the donors.

  • But cannot coordinate their activities with any campaign

  • Examples

  • 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

  • Goals

  • Social conservative

  • Limited governemtn

  • Freedom of enterprise

  • Strong families

McCain-Feingold Act/Bipartisan Campaign Reform Act (BCRA) (2002)

  • Purpose

  • To remove loopholes by banning soft money contributions from wealthy people and corporations

  • Proposed by Senator John McCain (R) and Russell Feingold (D)

  • Act

  • 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)

  • Background

  • 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)

  • Background

  • 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.

  • Legal Consequence

  • 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

  • Critics

  • Like Barack Obama

  • Argued that the decision would open floodgates to special interest money (especially corporation money) to corrupt the electoral process

  • Consequence

  • 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.

  • Only restriction

  • 501 (c) groups cannot spend more than 1/2 their money on political activities


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