Presidential Primaries Part private, part public money

Federal matching funds for all individuals’ donations of $250 or less (incentive to raise money from small donors)

Governmental lump-sum grants to parties to help pay convention costs

Presidential General ElectionsAll public money (usually)

Nominee eligible for up to $74.4 million + the cost of living adjustment, and can spend $50,000 of his/her own personal funds

Barack Obama the first major candidate to drop out of the modern campaign financing system since its creation in 1976 (essentially had no spending limits)

Congressional ElectionsMostly private

money $2000 maximum for

individual donors $5000 limits for PACs

Oooo….Pretty!

PACs tend to view funds as a way to get access to candidates. (have access, but don’t “own them” because of small donation amounts)-give bulk of $ to incumbents or candidates with no opposition. -give $ to democrats and republicans in Congress since no way to predict who will have majority next

Watergate brought about the 1973 federal campaign reform law and the creation of the Federal Election Commission (FEC)

Soft Moneyunregulated contributions to national political

parties funds spent by independent organizations that

do not specifically advocate the election or defeat of candidates

funds which are not contributed directly to candidate campaigns.

Hard Moneycontributed directly to a candidate of a

political partyregulated by law in both source and amountmonitored by the Federal Election

Commission.

Limit individual donations to $1000 per candidate per elections

Reaffirmed ban on corporate and union donations in place since 1925

Allowed for creation of PACs to raise money for corporations, unions, etc. Need at least 50 voluntary membersHave to give to at least 5 federal candidates Limited to giving $5000 per election per

candidate, or no more than $15,000 per year to any political party

Created public funding for presidential campaigns

Challenged in the Supreme Court as a First Amendment violation, but mostly upheld in Buckley v. Valeo

Independent expenditures An organization or PAC can spend as

much as it wishes on advertising, so long as it is not coordinated with a candidate’s campaign.

Soft money Unlimited amounts of $ may be given

to a political party, so long as a candidate is not named; this $ can then be spent to help candidate with voting drives, etc.

Did the limits placed on electoral expenditures by the Federal Election Campaign Act of 1971 and related provisions of the Internal Revenue Code of 1954, violate the First Amendment’s freedom of speech and association clauses?NO: limits on contributions to campaigns and

candidates guards against corruption; doesn’t violate 1st amendment.

YES: limits on a candidate’s spending from personal accounts does violate 1st amendment; practice doesn’t prevent corruption and doesn’t serve a great enough government interest to curtail free speech.

Following 2000 election, there was a desire to reform the finance law

2002 - Bipartisan Campaign Finance Reform Act (McCain-Feingold Law)Banned soft money

contributionsRaised limit on individual

donations to $2000 per candidate per election

Restricted independent expenditures

“Stand by your ad” provision

Can’t use own $ to refer to a clearly identifiable candidate during 60 days before general election or 30 days before primary election (…but)

Challenged in court as restriction of free speech, but Supreme Court upheld almost the entire law (McConnell v. Federal Election Commission 2003)

527 Organizations (named after IRS code)Can spend money on politics as long as

they do not coordinate with a candidate or lobby directly for that person

Essentially the same effect as soft money

Partially overturned McConnell v. FEC McCain-Feingold law can’t restrict issue

ads in months preceding an election, BUT it still must be an issue ad Ads can’t explicitly or expressly advocate the election or defeat

of a candidate Ex. "Vote for Smith," "Elect Smith," "Vote Against Doe," or "Defeat

Doe"), but they Can use the names of candidates Ex. "Bill Smith is an honest man who stands up for the people;

John Doe is a chronic liar who's taken money from special interests and advocated cutting Social Security. Call John Doe and tell him how you feel about this

Buckley v. Valeo (1976) limits on donations was constitutional (to keep out corruption), but expenditures made independently of a candidate's campaign could not be limited (free speech). If expenditures are made in "coordination" with a campaign, however, they may be regulated as contributions.

McConnell v. Federal Election Commission (2003)- upheld BCRA ban on soft money and limit of electioneering ads 30/60 days before an election. (Partially overturned by case below)

FEC v. Wisconsin Right to Life, Inc. (2007) organizations engaged in genuine discussion of issues were entitled to a broad, "as applied" exemption from the electioneering communications provisions of BCRA

Citizens United v. FEC (2010) corporations and labor unions can use funds from their general treasuries to run ads for candidates in national elections.

Individual limits:$2500 to federal candidate$30,800 to national party$5000 to PAC

Total limits in 2010-11$46,200 limit to all fed candidates$70,800 to all PACs and parties

Shaun McCutcheon wanted to contribute more claiming 1st amend. violation.

The Supreme Court agreed!!Decision does not change individual limits, it

just gets rid of the total limit.

1. Presidential candidates have similar funds because of federal funding

2. During peacetime, presidential elections are usually decided on the basis of:a. Political party affiliation b. The state of the economy --“pocketbook voting”c. Character

3. Other factors whose influence on the presidential campaign is usually overstated:a. Vice presidential nomineeb. Political reporting c. Religion of the candidated. Abortion as a single issue

4. Congressional races – money has a decisive effect

a. Challenger must spend to be recognizedb. Big spending incumbents also do better

and higher spending has become the norm 5. Advantages of incumbency in fundraising

Is there a better way to reform campaign finance?Voting with DollarsMatching FundsClean Money – Clean ElectionsOCCUPIED amendment