The role of campaign finance

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:

      • national parties

  • · presidential candidates

  • · Super PACs.

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

· excessive influence of major donors

· secrecy surrounding who is donating and receiving cash

· inequality of expenditure between candidates or parties.

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 expenditure.

· 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.

Super PACs PACs and Super PACs

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. 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.