Campaign Finance

Campaign finance has been regulated by federal laws for many years. In 1907, Congress took action against corporate scandals by prohibiting corporations and national banks from donating money to federal campaigns. Additional regulations emerged, but politicians and interest groups managed to exploit loopholes. In 1971, the Federal Election Campaign Act (FECA) was enacted, which mandated full disclosure of campaign contributions and spending for federal elections. Following the Watergate scandal in 1974, Congress revised FECA to impose limits on contributions to federal candidates and political committees involved in federal elections. These limited contributions are known as hard money. The law also created the Federal Election Commission (FEC) to oversee campaign finance regulations.

In the Supreme Court case Buckley v. Valeo in 1976, the justices affirmed the importance of contribution limits to prevent real or perceived bribery. However, the Court found some other provisions unconstitutional, stating they infringed on free speech. This included rules against limits on independent expenditures—spending that is not coordinated with a campaign—candidates using personal funds, and total campaign spending. FECA also established rules for political action committees (PACs), which support candidates and engage in various political activities. Corporations, labor unions, and other organizations can create PACs and cover their operational costs. Federal campaign contributions are regulated under these laws.

Funding for political campaigns cannot come from corporate or union funds. Instead, it relies on voluntary contributions from members, employees, or shareholders. In the late 1990s, advocates for new campaign finance regulations aimed to address significant loopholes. One major issue was “soft money,” which are political funds that fall outside the limits set by the Federal Election Campaign Act (FECA). Federal regulations permitted party committees to create separate "federal" and "nonfederal" bank accounts. The nonfederal accounts, or soft money accounts, were governed by state laws that were often less strict than federal laws. This allowed national party committees to collect corporate and union donations for soft money accounts, freeing up other funds for federal candidates. Following a series of corporate scandals in 2002, Congress enacted the Bipartisan Campaign Reform Act (BCRA), which banned soft-money contributions to political parties.

The BCRA also addressed another loophole concerning issue advocacy advertisements. The Supreme Court case Buckley v. Valeo established that federal limits on campaign financing did not apply to ads unless they explicitly promoted the election or defeat of federal candidates using specific phrases like “vote for” or “reject.” Therefore, an ad criticizing a candidate without using those phrases could avoid regulation. The BCRA prohibited corporations and unions from using their treasury funds for broadcast ads mentioning federal candidates within 60 days of a general election or 30 days before a primary election.

Justices John Paul Stevens and Sandra Day O’Connor noted in a 2003 case that BCRA would not be the final legislative effort on this issue, stating, “Money, like water, will always find an outlet.” This was evident as subsequent court decisions began to weaken the law. The most significant change came in 2010 with the controversial Supreme Court ruling in Citizens United v. FEC, which invalidated the BCRA’s blackout and the longstanding ban on independent campaign spending by corporations. The Court reasoned that these restrictions infringed upon free speech as protected by the First Amendment. Consequently, federal campaign finance laws no longer restrict corporations or unions from using their funds to support or oppose candidates, although they are still prohibited from making direct contributions to candidates and political parties due to concerns over corruption.

Instead, corporations and unions can either fund independent expenditures directly or contribute to new organizations that pool resources. The Federal Election Commission approved the creation of independent expenditure-only committees, known as Super PACs, in 2010. These Super PACs can receive unlimited contributions from unions, corporations, and individuals, allowing them to make unlimited expenditures in federal elections. While Super PACs cannot coordinate directly with candidates or parties, they have various legal methods to ascertain what candidates and parties prefer. Super PACs significantly aided Republican congressional candidates during the 2010 midterm elections, and in 2012, they played a role in supporting specific presidential candidates, like Mitt Romney and Barack Obama. Additional spending came from tax-exempt nonprofit groups formed under Section 501(c)(4) of the Internal Revenue Code. These groups can run campaign ads, as long as the cost does not exceed half of their total budgets. Unlike Super PACs, which must disclose their donors to the Federal Election Commission, 501(c)(4) groups do not face this requirement.

Critics argue that undisclosed funding reduces accountability and allows for corrupt political influence. On the other hand, supporters believe that keeping contributions private shields donors from harassment and intimidation. Both under the new and previous rules, incumbents find it easier to raise funds compared to their challengers. However, fundraising consumes valuable time that lawmakers could spend addressing important issues. Some contend that contribution limits have exacerbated this situation. For years, these limits remained unchanged despite rising living costs, forcing incumbents to seek more donors. The BCRA increased the individual contribution limit from $1,000 to $2,000 per candidate per election and adjusted it for inflation, while the PAC limit stayed at $5,000. According to the Buckley decision, the government cannot restrict candidates from using their personal funds for their campaigns, as the intent of these limits is to prevent corruption and candidates cannot bribe themselves. As a result, affluent candidates have financed their campaigns independently at various levels.



Campaign finance

Campaign finance refers to the funding of election campaigns. Expenditure can come from individuals, interest groups and businesses who are donating to campaigns, as well as the money spent by parties and candidates to try to ensure electoral victory. It can also include expenditure by other organisations (such as interest groups and corporations) that is not donated to a candidate but is spent, usually in the form of publicity, by that group to influence the outcome of elections.

In McCutcheon versus FEC 2014, the Supreme Court struck down limits on individual campaign contributions, ruling that federal limits on combined donations to candidates, parties and political action committees were an unconstitutional infringement on free speech. Chief Justice John Roberts ruled that Congress 'may not... regulate contributions simply to reduce the amount of money in politics, or to restrict the political participation of some in order to enhance the relative influence of others'.

Where campaign finance goes

Campaign donations can go to three different places:

There have been major concerns over the role of money in US elections. The three main concerns are:

Various laws called 'campaign finance regulations' have been passed to regulate money in elections. The two major regulations on presidential elections are the Federal Election Campaign Act (1974) and The Bipartisan Campaign Reform Act (known also by its sponsors, The McCain Feingold Act) 2002. This was followed by the Citizens United versus Federal Election Commission ruling in 2010.



FECA: the Federal Election Campaign Act (1974)

This law was introduced to regulate money in elections.



Main impacts of FECA

·    Places legal limits on campaign contributions — a private individual can only donate $2,700 and a group can only donate $5,000 to an individual candidate.

·    Creates a maximum expenditure limit for each candidate in the presidential election.

·    Requires candidates to disclose sources of campaign contributions and campaign expenditures.

·    Created federal funding of presidential and primary elections, which works on a matching funds basis (for every dollar a candidate raises, they are given a dollar by the federal government). To qualify, a party must receive 5 per cent or more of the vote in the previous election.

·    Created Political Action Committees. A PAC has to be created by any group wanting to donate money to a campaign. Businesses and interest groups create a PAC that is legally registered with the Federal Election Commission (FEC), a six-member bipartisan committee to oversee finance rules.

The law had many flaws, which severely reduced the effectiveness of the regulations.

·     Soft money

Soft money is money donated (by interest groups or individuals) or spent (by parties or candidates) that could not be regulated under the law. Loopholes allowed for continued donations or spending without regulations. Business or interest groups spend money on campaign advertising for or against a candidate, without directly donating money to a candidate's campaign, for example.

·     Supreme Court

Various Supreme Court rulings, often based on the 1st amendment, undermined legislation, making it harder to restrict donations and expenditure. For example, the restrictions cover funding of candidates, but not funding of parties. A party can spend money supposedly for the purposes of party building and voter education, but in fact use this to support a candidate. The Supreme Court also decided that the candidate's own money was exempt from restrictions.

·     The end of federal funding

Candidates became increasingly effective at raising money. In 2000 George W. Bush raised more than the campaign limit (approximately $120 million) without using federal funds. By rejecting federal funds he was not constrained by campaign expenditure limits. This made it much harder for Al Gore, who took matching funds, to compete. In 2004 Bush repeated the feat against Kerry, who took matching funds. 2012 was the first election when neither candidate accepted matching funds; this was repeated in 2016.

These failures led to the creation of the Bipartisan Campaign Reform Act 2002, which:

·    banned soft-money donations to national parties (all money raised or spent was now subject to federal limits)

·    said that soft-money donations to local parties could not be used to support federal candidates, but only for genuine party-building activities

·    said that issue adverts could not be funded directly by unions or corporations

·    said that issue adverts mentioning a candidate's name could not be shown within 60 days of an election, or 30 days of a primary, unless approved by one of the candidates, with money spent being covered by spending regulations.

Difficulty in achieving effective reform

Campaign finance laws have had limited effectiveness for a variety of reasons. In addition, it has proven difficult to overcome these limitations:

·    the ability of groups to find loopholes (soft money)   the 1st amendment and the ideological balance of the Supreme Court in striking down key provisions

·    the lack of legislation on the issue, which occurs both because it is difficult to pass legislation

through Congress and perhaps due to unwillingness for politicians to regulate themselves

·    the difficulty in amending the Constitution to regulate elections, such as Sanders's failed `Democracy for all' amendment.


The Bipartisan Campaign Reform Act 2002

Was dealt a major blow with the Citizens United versus Federal Election Commission ruling in 2010, which struck down key parts of the legislation. The 5-4 ruling declared that the BCRA infringed 1st amendment rights.

This gave rise to new organisations set up solely to influence electoral outcomes without directly working with or donating to a candidate. These 'Super PACs' raise funds from individual and group donors and spend this mainly on campaign advertising, without any campaign finance restrictions. Super PACs are typically created to support a particular presidential candidate.

Since the 2010 mid-term congressional elections, campaigns have been dominated by these organisations. Opensecrets.org reported that by 2016 there were 2,398 Super PACS, raising over $1.5 billion during that year's elections.

Right to Rise was actually created by Jeb Bush, who raised funds for it until he declared his candidacy, when control was passed to Mike Murphy, a former political adviser to Mitt Romney. The Super PAC was also criticised for focusing negative advertisements mainly on the perceived main rival, Marco Rubio, rather than on now-President Donald Trump.

There remains considerable debate over the extent to which US elections hold politicians to account. This has led to the passage of a number of reforms which have attempted to restrict funding or make the system fairer. The system of generating campaign finance, which tends to benefit incumbents or wealthy individuals, as well as the increasing cost of electoral campaigns, has led to calls for greater restrictions on campaign finance. The problem has been in securing reform which strikes a balance between creating a fair playing field and not impinging on democratic rights to freedom of expression.

Despite these reforms, the cost of elections continues to escalate, with the Centre for Responsive Politics estimating that over $2.6 billion was spent on the 2012 elections.

What is the money spent on?


The more costly the race, the more likely it is that the candidate will hire campaign consultants, and professional advisers who can run nearly every aspect of an election contest. The first professional campaign consultants started business during the 1930s, and by the end of the century, they had largely supplanted volunteers and party officials in the top posts of large campaigns. In addition to general consultants, there are also consultants for specific tasks, such as the following:

 •  Media production and placement—making print and broadcast advertisements and placing them where they will have the greatest effect. These expenditures tend to be high in presidential races (see Figure 10-5). Other, $17.4M Contributions and transfers, $30M Fundraising, $96.4M Campaign Expenses, $115.7M Figure 10-5 The bulk of Obama's re-election campaign war chest went to media. Note: Data cover expenditure reports through October 25, 2012. Source: Center for responsive politics, www.opensecrets.org/pres12/ expenditures.php.

 •  “New media”—developing Web sites and social networking groups, posting videos on sites such as YouTube. •  Polling—taking random samples of public opinion to find out how well the candidate is doing and reckon what approaches will gain more votes

. •  Direct mail and telephone voter contact—sending messages to individual voters.

 •  Press—writing news releases and handling questions from reporters. 

•  Fund-raising—gathering money by direct mail, the Internet, or solicitation of political action committees and other large givers. 

Field operations—engaging in the true hand-to-hand combat of campaigns, including rallies and door-to-door canvasses. 

• Get-out-the-vote (GOTV)—identifying supporters and making sure that they cast ballots either at the booth or by mail. 

• Research—gathering material on issues and gaining intelligence about the opposition, and studying the vulnerabilities of one’s candidate. 

Media in US Politics 

In recent presidential elections, campaigns have invested heavily in television ads, particularly in crucial battleground states. In 2016, both Clinton and Trump directed significant resources towards states like Florida, Ohio, Pennsylvania, Iowa, Wisconsin, and Colorado. For instance, over $110 million was spent on TV advertising in Florida alone. During election years, it's hard to watch TV without encountering a barrage of campaign ads. To view ads from 2016 and other elections, you can visit the Living Room Candidate website.

Those who have seen campaign ads on TV notice that many focus on two main strategies: emotional appeals and negative portrayals. Emotional tactics have become common, with studies showing that a large number of political ads are designed to evoke voter fears, such as potential job loss or war. A smaller portion seeks to invoke positive feelings, such as patriotism. Interestingly, these ads impact not just the uninformed electorate but also those who are politically savvy, demonstrating that even informed voters can be influenced by emotional appeals.

Most political advertisements are negative, meaning they emphasize a candidate's flaws rather than their strengths. For example, in 2016, Clinton's ads questioned Trump's qualifications by highlighting his character through his controversial statements, while Trump’s ads depicted Clinton as disconnected from average citizens. Negative ads dominated the media landscape, making up nearly 80 percent of all ads in 2016, a figure slightly lower than in 2012 but much higher than in earlier years like 2000 and 2004.

Are negative ads detrimental? Many people think so, but this assumption might overlook important distinctions. A negative ad can focus on a candidate's shortcomings related to issues without being deceptive or personal. Just because an ad takes a negative tone doesn't mean it lacks truth or fairness; it can provide valuable critiques on an opponent's views or past performance. While personal attacks are counterproductive, ads that clarify candidates' positions can be beneficial.

Negative ads, when they focus on issues, often offer more informative content than positive ads, which may rely on vague, feel-good messages without substantive information. Negative advertisements can effectively convey critical information about issues.

The essential question is whether these advertisements are effective. Specifically, we should consider three aspects: Do they influence voter turnout? Do they educate voters? Do they alter perceptions of candidates? First, evidence suggests that advertisements have a limited effect on increasing voter turnout. Many other factors play a more significant role in determining whether individuals choose to vote.

Advertising does not decide election results for two main reasons. First, the impact of ads is limited; research shows they only shift outcomes by a few percentage points at most, and their influence diminishes quickly. Experts can observe the effects of an advertisement for a day or two after it airs, but it soon fades. Even repeated ads tend to have minor overall effects. Simply increasing the number of ads will not fundamentally change an election. Second, in presidential races, the campaigns are typically well-matched, which means the influence of one campaign’s ads often cancels out the effect of the other’s. Candidates spend millions on ads partly to keep pace with their opponents. This leads to escalating costs without significantly altering the election results, as the advertisements neutralize each other. Neither side can afford to reduce spending, as this would give the opponent an advantage; ads that go unanswered could have a greater impact. Consequently, there is a lot of expenditure with little effect on the final outcome.



Over time, advertisements became increasingly negative and manipulative. In response, the Bipartisan Campaign Reform Act of 2002, known as McCain-Feingold, mandated that candidates declare their approval of the ads they run by including a recorded message stating so. While negative advertising, especially from super PACs, persists, candidates can no longer evade accountability for these ads. Many candidates now utilize late-night television interviews to convey their messages. This style of news, often referred to as soft news or infotainment, blends entertainment with information. Programs like The Daily Show and Last Week Tonight present news in a humorous or satirical manner, helping viewers become more informed about national and global events. In 2008, candidates Huckabee, Obama, and McCain appeared on popular shows like The Daily Show and Late Night with Conan O’Brien to connect with informed voters under 45, showcasing their more relatable sides while discussing their policy views. By the fall of 2015, The Late Show with Stephen Colbert had featured most potential presidential candidates, including Hillary Clinton, Bernie Sanders, Jeb Bush, Ted Cruz, and Donald Trump.

The Internet has provided a new platform for candidates to reach voters. In the 2000 election, campaigns started to establish websites to share information and used search engine results to target ads to voters. During the 2004 election, Democratic candidate Howard Dean leveraged the Internet for fundraising. Instead of organizing costly dinners, his campaign shared a video on his website of him eating a turkey sandwich, which attracted over $200,000 in donations and highlighted his image as an approachable candidate.


Why Social Media is ruining political discourse 

Candidates increasingly use social media platforms like Facebook, Twitter, and YouTube to engage with supporters and attract younger voters. While political campaign websites continue to grow, social media has significantly enhanced the impact of online communication. It has also become a vital platform for citizens to discuss politics, sharing views, memes, and jokes within their networks. Concerns about misinformation and bias on these platforms led Facebook and Twitter to monitor for false information, sometimes resulting in the deletion of accounts, including that of President Trump.