Campaign Finance and Rules

Background

The landscape of campaign finance has changed dramatically in the past decade. In 2010, the Supreme Court lifted longstanding restrictions on independent campaign spending. The Court’s landmark Citizens United v. Federal Election Commission decision allowed corporations and labor unions to make unrestricted donations to campaigns. It paved the way for the creation of a type of political action committee An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can… (PAC An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can…) known as a super PAC An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can…. Super PACs An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can… can raise and spend unlimited money. As a result, they allow candidates and their wealthiest supporters to avoid limits on direct contributions to candidates. Super PACs An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can… cannot donate directly to a campaign or political party. However, they can engage in “outside spending.” That is, they can spend money independently for (or against) a candidate.

A report from the Center for Responsive Politics (CRP) found an explosion in outside spending in the decade after the Citizens United ruling. Between the start of 2010 and the end of 2019, outside spending totaled $4.5 billion, compared with just $750 million over the prior two decades. The influence of top donors also went up in that time period. The top ten donor families gave $1.2 billion in federal elections. This represents 7 percent of total spending in that period (compared with less than 1 percent in the prior decade).

In the 2020 election, super PACs An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can… spent over $2 billion. This represented about 14 percent of total spending. However, because super PACs An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can… often maximize their influence by focusing only on competitive races, their influence on those races is considerably greater. Indeed, according to CRP, super PAC An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can… spending exceeded that of all candidates combined in 36 federal races. Further, super PACs An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can… raise more than two-thirds of their money from donations over $1 million.

Campaign funding has also become less transparent. In large part, this is due to the proliferation of dark money groups. These are groups that take advantage of loopholes to avoid disclosing their donors. According to the CRP, dark money groups spent about $1 billion between the start of 2010 and the end of 2019. And in the 2020 election, dark money spending went up dramatically, totaling more than $750 million. Of this money, $430 million was “gray money.” This refers to donations super PACs An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can… accept from other super PACs An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can….

The Citizens United decision approved the use of disclaimers in advertisements. The intent was to better inform the voting public. Nevertheless, advertisements often include misleading or benign-sounding names. To combat this vagueness, some states have required disclaimers to list the top five funders in each political advertisement. At the federal level, however, Congress has yet to modernize disclosure laws. In addition, attempts to enforce existing rules have left the Federal Election Commission largely deadlocked.

One encouraging trend in campaign finance is the success of public financing systems at the state and local levels. These programs match small individual contributions with public funds. In return, candidates promise to limit spending and private fundraising. Public financing systems increase the number of small donors and limit the influence of wealthy groups and individuals. They also allow candidates who are not independently wealthy to run for office. Public financing is available for presidential candidates as well. It is used in both primary and general elections. However, almost no major party candidates have taken it in recent years. This is because doing so limits fundraising ability. There is no such program for congressional candidates.

CAMPAIGN FINANCE AND RULES: Policy

CAMPAIGN FINANCE AND RULES: Policy

Public financing

Policymakers should enact and update public financing systems for elections. This includes increasing matching funds, particularly for small donations. Public financing programs should also be available in judicial elections.

Media and advertising

Qualified candidates should receive free or significantly discounted media advertisements. They should also receive reduced postage for mailings. Providing airtime should be a condition for the renewal of broadcasters’ television and radio licenses.

Policymakers should require greater transparency, clarity, and honesty in all election advertising. They should require more explicit disclaimers that reveal the true identity of an ad’s sponsor. The names of top donors should be provided. They should also put in place strict penalties for false advertising.

Campaign contributions

Governments should set and strictly enforce limits on individual donations to campaigns. These limits should also apply to joint fundraising and bundled contributions.

Contributions to political action committees (PACs An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can…), including super PACs An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can…, should face the same limits as individual contributions.

Congress and the Federal Election Commission (FEC) should tighten and enforce rules prohibiting coordination between candidates and super PACs An organization that raises and spends money to influence elections, ballot initiatives, or legislation. PACs can give $5,000 per candidate per election cycle as well as $15,000 to any national party committee and $5,000 to any other PAC. Individuals, PACs, and party committees can….

Enforcement

Federal, state, and local governments should maintain substantial penalties for violations of campaign finance laws. They should conduct audits, adjudicate and sanction cases, file injunctions, litigate independently, and respond to complaints promptly. They should have sufficient resources and authority to conduct these oversight measures.

The Internal Revenue Service and the FEC should enforce the laws mandating that political activities are not the primary function of 501(c)(4) social welfare organizations.

Independent, nonpartisan state commissions charged with enforcing state campaign finance and election laws should have greater funding and authority.

Disclosure requirements

Policymakers should expand disclosure requirements for all funds spent on elections or ballot initiatives. This includes identifying funders (direct and indirect) and the amounts they provide. Timely, consistent, and full disclosures should occur prior to the election. States should consider creating online public databases with information on campaign contributions. They should include funds spent on both candidates for state offices and ballot initiatives.

Corporations, unions, and other outside groups should be required to disclose their campaign-related expenditures. They should also be required to make their political spending records publicly available in a timely manner. States should require disclosure of independent expendituresMoney spent by a third party (such as a union or company) on political advertising that advocates for or against a particular candidate. in state elections.

Disclosure requirements should be imposed on joint fundraising and bundled campaign contributions.