PPA - Financing Elections Lesson

Political Parties

Financing Elections

Due to controversial campaign issues in our nation's history, namely Watergate, there have been some attempts by Congress to control the process by which money, known as "hard money" is donated to federal election campaigns. Once example was the Federal Election Campaign Act of 1974. The image below outlines the mandates of changes that were placed on federal election campaigns.

Federal Election Campaign Act of 1974 mandated a few changes: - Created the Federal Election Commission (FEC), an independent regulatory agency in charge of monitoring campaign contributions, who gave them, and where they could be spent. - Set a limit of $1,000 that individuals could donate to campaigns (called hard money). - Reinforced the ban of unions and corporations donating money to campaigns. - Allowed PACs but restricted them to a donation of $5,000 to campaigns. - Match Money: Presidential candidates can accept matching money from Congress for any money the campaign has raised. - Once a candidate accepts funds, they must limit the spending of personal money to $50,000, keep records of expenses, repay public funds if necessary, pay any penalties by the FEC, and cooperate with an audit.

Supreme Court Challenge

Through the court case Buckley v. Valeo, 1976, the Supreme Court case examined the issue of whether limits placed on campaign contributions were a violation of a person's right to free expression. In the decision, the Supreme Court agreed that campaign contributions are an expression of free speech, but also ruled that the federal government could place limits on these donations to protect the integrity of the electoral process.

McCain-Feingold

Various groups found ways around the limitations of the FEC law and instead of donating to individuals, they used "soft money" as donations to the party. This money eventually found its way into the campaign. Critics argued this was corrupt and as a result there was an amendment to the FEC law called McCain-Feingold, which added further restrictions on this loophole practice. The law did the following:

  1. Banned soft money contributions.
  2. Increased the amount of hard-money contributions from $1,000 to $2,000 dollars.
  3. Restricted the ability of groups to air advertisements 60 days before a primary and 30 days before a general election.

527's

A section of the IRS code that allows certain groups to support political candidates also became their known name, 527s.

Other Terms to Know

  • Bipartisan Campaign Reform Act of 2002: Also known as the McCain-Feingold Act, restricts the use of "soft money" for federal elections.
  • Citizens United v. Federal Election Commission (2010) : The Free Speech Clause of the First Amendment prohibits the government from restricting businesses, unions, and other groups from funding their own efforts to elect or defeat candidates.

IMAGES CREATED BY GAVS