5.11 - Campaign Finance

Campaign Contributions and Spending

• Hard Money: direct contributions to a candidate, tightly regulated. An individual could give $3,300 per election in the 2024 cycle (a primary and a general election count separately) and can give $3,500 per election in 2025-2026. The limit rises with inflation every two years.

• Soft Money: unlimited contributions to political parties for party-building, historically used as a loophole to get around hard money limits.

• Independent Expenditures: spending to support a candidate without giving directly to them, like paying for ads. No limit on how much someone can spend this way.

• Where the rules come from: the Federal Election Campaign Act (1971, strengthened in 1974) set contribution limits, required campaigns to report their donors, and created the Federal Election Commission (FEC) to enforce the rules. In Buckley v. Valeo (1976), the Court upheld contribution limits but struck down limits on campaign spending, reasoning that spending money to spread a political message is a form of speech.

Bipartisan Campaign Reform Act (BCRA) of 2002

• Banned soft money to close the loophole.

• Required a "stand by your ad" disclaimer (candidates approving their own ads).

• Restricted the timing of independent political ads close to elections.

• Raised the individual hard money limit from $1,000 to $2,000 per election and tied it to inflation.

• Kept the older ban on corporations and unions giving money directly to candidates (corporate contributions have been illegal since the Tillman Act of 1907, and union contributions since the 1940s).

Citizens United v. F.E.C. (2010)

• The facts: Citizens United, a conservative nonprofit, made a film attacking Hillary Clinton (Hillary: The Movie) and wanted to air and advertise it during the 2008 Democratic primaries. BCRA banned corporate-funded election ads that close to an election, so the group sued the FEC.

• The ruling: political spending by corporations, associations, and unions counts as protected First Amendment speech.
• Decided 5-4 in January 2010, with Justice Kennedy writing for the majority. The Court reasoned that the First Amendment protects political speech no matter who the speaker is, and that independent spending (not coordinated with a candidate) doesn't create the kind of corruption the government is allowed to prevent.

• What got struck down: the ban on corporations and unions using their own money for independent election ads, including BCRA's rule against corporate and union ads within 30 days of a primary or 60 days of a general election. The soft money ban and BCRA's disclosure and "stand by your ad" rules were left in place.

• The debate: the majority saw it as protecting free speech from censorship; dissenters saw it as opening the door to corporate influence over elections.

• Key distinction preserved: corporations still can't give directly to candidates, but can spend unlimited amounts independently.

• Why it matters: it's the main case for this topic's debate, free speech vs. fair elections. Supporters say spending money to spread a political message is speech, and the government shouldn't pick who gets to speak. Critics say unlimited spending lets wealthy corporations and groups drown out ordinary voters and buy extra access to officials. It also connects to Federalist No. 10: Madison wanted many factions competing, while critics argue big money lets a few powerful ones dominate.

PACs and Super PACs

• PACs: raise money in limited amounts (an individual can give a PAC up to $5,000 a year) and can give a candidate up to $5,000 per election. Many are set up by corporations, unions, or trade groups, but the money has to come from voluntary donations by employees or members, not from the company's or union's own treasury. PACs can also spend their money independently on ads.

• Super PACs: officially "independent-expenditure-only committees." Can raise and spend unlimited money independently, including from corporations and unions, but can never give directly to a candidate.
• Super PACs must report their donors to the FEC. But some nonprofit groups (called 501(c)(4) groups) can spend on elections without naming their donors, and they can give to Super PACs. This hidden money is called dark money, and it's a big part of the debate over disclosure.

• Leadership PACs: PACs run by members of Congress, who use them to give money to other candidates in their party and build support for leadership jobs.

• How PACs influence policy: most PAC money goes to incumbents, especially members of the committees that write laws affecting the group, which helps the group get access to lawmakers after the election. Super PACs mostly try to win elections, pouring ads into a small number of close races.

Big picture