Presidential Campaign Finance
Federal Election Campaign Act of
1971 (FECA)
The Federal Election Campaign Act of 1971 (FECA) and as amended in 1974, placed limits on certain
political contributions and expenditures, required public disclosure of
contributions and expenditures above certain levels, created a system of public
funding of Presidential campaign activities under the Internal Revenue Code,
and established the Federal Election Commission (FEC).
Buckley v. Valeo
(1976)
Buckley v. Valeo, (1976), is a landmark
case in election law. In Buckley, the Supreme Court interpreted and ruled on the
constitutionality of the Federal Election Campaign Act of 1971 (FECA).
The Court upheld FECA’s campaign
disclosure requirements and contribution limits, finding that the accompanying
restriction on political free speech was justified by “serv[ing] the basic governmental interest in safeguarding the
integrity of the electoral process without directly impinging upon the rights
of individual citizens and candidates to engage in political debate and
discussion.” Also upheld were the provisions for public financing of the
president’s campaigns.
For communications to qualify as “express advocacy” and,
thus, be regulated, it must contain the so-called “magic words” which are
“explicit words of advocacy of election or defeat.” Examples of such “magic
words” are provided in famous footnote 52 of Buckley
v. Valeo, and include “vote for,”
“elect,” “support,” “cast your ballot for,” “Smith for Congress,” “vote
against,” “defeat,” and “reject.”
Other
provisions of FECA were struck down. The Court ruled that FECA’s
limits on independent expenditures, a candidate's personal expenditures, and
overall campaign expenditures violated the First Amendment by placing
“substantial and direct restrictions on the ability of candidates, citizens,
and associations to engage in protected political expression.”
The Bipartisan Campaign Reform Act of 2002 (also known as
McCain-Feingold)
Soft Money Ban
The chief component of the bill is its ban on soft
money—the term for donations made to national political party committees
(e.g., the Democratic National Committee, Republican National Committee, and
the Senatorial and Congressional campaign committees) in amounts and from
sources (corporations and unions) not permitted in federal elections. Under
previous law, parties could raise unlimited amounts of soft money, which they
were using not only for party-building activities such as get-out-the-vote
efforts, candidate recruitment, and administrative expenses, but also for
candidate-specific broadcast advertising. Under BCRA the parties can no longer
raise soft money.
Hard Money increases under BCRA (using amounts for 2009-10
election season – contribution limits
are increased for inflation in odd-numbered years)
Restrictions
on Electioneering Communications
The bill prohibited
corporations, trade associations, and labor organizations from financing
"electioneering communications" within 60 days of a general election
and 30 days of a primary election using "treasury money." An
electioneering communication is one that refers to a clearly identified federal
candidate and is targeted to the candidate's state or district. (A
corporation's, trade association's or union's PAC may still run or finance such
ads because its funds are, by definition, hard money). This provision
also would require non-corporate or non-union persons or entities that spend in
excess of $10,000 on electioneering communications during a calendar year to
file disclosure reports listing the person(s) making or controlling the
disbursements and the custodian of the records, all contributors who gave more
than $1,000 to finance the communications, and those to whom disbursements of
more than $200 have been made.
Primary
Candidates
For primary candidates there is a voluntary system of partial public
financing.
After
a candidate qualifies by meeting the $100,000 threshold--raising $5000 in 20
states in contributions of $250 or less--his or her campaign becomes eligible
to receive matching funds. Contributions from individuals of up to $250
are matched dollar for dollar with payments from the Presidential Election
Campaign Fund. They must agree to comply with spending limits, based on
the 1974 figure of $10 million, adjusted for inflation (in 2008 the limit was
$42,050,000)
A
candidate who chooses not to participate in the matching funds program can
spend as much as he or she wants, but contributions from individuals still may
not exceed $2,400. There is no limit to how much a candidate can spend of
his or her own money. In the 2000 Republican primary
campaign then Gov. George W. Bush declined matching funds and brought in more
than $90 million in individual contributions, a record. In 2004 President
Bush again declined matching funds and there were suggestions that he could
raise upwards of $200 million although he faced no credible Republican
challenger. Faced with this prospect, two of the Democratic candidates,
former Gov. Howard Dean (on
In
2008 John McCain, Tom Tancredo, John Edwards, Chris Dodd, and Joe Biden qualified for and accepted public funds throughout
the primary process. Hillary Clinton and
Barack Obama decided not to participate in the public financing system.
Conventions
The major parties receive public funds to put on their national
nominating conventions, based on the 1974 figure of $4 million, adjusted for
inflation. In 2008, the two major parties each received $16,820,000 .(Third parties whose presidential nominees received
at least five percent of the vote in the previous election also can receive
funds toward their conventions; none meet this criterion for 2008).
Additionally, non-profit host committees are formed to defray expenses
connected with hosting conventions, and these can accept direct and in-kind
contributions from local businesses, unions and individuals.
General Election
The Democratic and Republican nominees receive grants to cover
all expenses in the general election campaign, based on the 1974 figure of $20
million, adjusted for inflation. In 2008, John McCain accepted public
funds of $84 million. Barack Obama
declined public financing and ultimately raised $778,642,047.
527s
BCRA stemmed the flow of soft
money to the parties, but those monies quickly found a new channel in the so
called "Section 527" political organizations. 527s can engage
in voter mobilization efforts, issue advocacy and other activity short of
expressly advocating the election or defeat of a federal candidate. There
are no limits to how much they can raise.
In
Spring 2004 liberal groups such as America Coming Together (ACT)
("mobilizing voters to defeat George W. Bush"), The Media Fund
("media buying organization supporting a progressive message and defending
Democrats from attack ads") and MoveOn.org Voter Fund, drawing backing
from billionaire George Soros and others, engaged in
a major campaign that paralleled that of the presumptive Democratic nominee
Sen. John Kerry. Republicans protested, but the FEC declined to stop such
expenditures. According to the Center for Public Integrity, 53
committees that focused “largely or exclusively on the presidential election”
raised $246 million in the 2003-4 cycle.
All told “527” committees raised and spent just over a half-billion dollars
during the 2003-4 election cycle.”
Supreme Court and BCRA
McConnell v. FEC - Summary of the Supreme
Court's decision
December 10, 2003 McConnell v. Federal
Election Commission is the landmark legal case challenging the
constitutionality of the new McCain-Feingold campaign finance law, formally
known as the Bipartisan
Campaign Reform Act of 2002 ("BCRA").
The table below
summarizes the Court's decisions on the constitutionality of the major
components of BCRA.
|
|
What BCRA does |
Supreme Court decision |
|
National party soft money |
Prohibits national
parties from raising or spending soft money |
Prohibition upheld |
|
State and local party "federal election activities" |
Requires state & local
parties to pay for federal election activities entirely with hard money or a
mix of hard money and "Levin funds." (donors can give up to $10,000
for party-building activities) |
Requirement upheld |
|
Soft money fundraising by federal candidates and officeholders |
Prohibits federal
candidates and officeholders from raising or spending soft money, with
certain exceptions. |
Prohibition upheld |
|
"Sham" |
Prohibits corporations
and labor unions from using soft money to pay for "electioneering
communications" -- broadcast ads that mention a federal candidate or
officeholder within 30 days of a primary or 60 days of a general election and
are targeted to that person's constitutuents |
Prohibition upheld |
|
Sham |
Requires disclosure of
"electioneering communications" (defined above) in excess of
$10,000 per year |
Disclosure requirement
upheld |
|
Contribution limits |
Increases the dollar
limits on contributions from individuals to candidates and political parties |
Increased limits
upheld |
|
Contributions by minors |
Prohibits minors from
making contributions to candidates and political parties |
Prohibition on
contributions by minors declared unconstitutional |
This case concerns the issue of whether the documentary Hillary: The Movie
could be banned from being shown on TV before the 2008 Democratic convention or
whether the ban on corporate spending on “electioneering communications” 30
days before primaries and 60 days before a general election should be lifted.
Adapted from
http://www.fec.gov/pages/brochures/contriblimits.shtml
http://www.fec.gov/pages/brochures/pubfund.shtml#8
http://www.fecwatch.org/law/court/mcconnelltable.asp
http://www.brook.edu/dybdocroot/gs/cf/headlines/FinalApproval.htm
http://www.gwu.edu/~action/2004/presfin04.html
http://moritzlaw.osu.edu/electionlaw/ebook/part3/campaign_finance_fed_glossary.html