Political Campaigns and Elections

Elections and voting: Why should they matter to you?

10.5 Financing Election Campaigns

In the United States today, elections are centered more on candidates than on political parties. This

Many Americans find the Electoral College system confusing at best – and at worst, undemocratic. Some would like to replace it with a system based on the popular vote. However, many highlight the benefits of this system, such as protecting the interests of smaller states and less populated areas.

was not always the case. At one time, candidates relied heavily on their parties to help them win elections. Today, however, candidates behave more like independent political actors than party representatives. They depend mainly on their own political skills and the efforts of their campaign organizations to get elected.

The High Cost of Running for Office

Money has played a large part in this shift from party-centered to candidate-centered elections. As campaigns have grown more expensive, candidates have come to rely increasingly on their own fundraising abilities or personal fortunes to win public office. For example, about $6 billion was spent on the 2012 presidential election campaigns. On average, winning candidates for a seat in the House of Representatives spent $1.5 million each. Winners of each Senate seat spent an average of $9.7 million. In future elections, the cost will likely be even higher.

The high cost of running for office is a concern for various reasons. Candidates with limited resources may find it hard to compete with those who are well funded. This lack of a level playing field inevitably excludes some people from running for office. In addition, officeholders must spend considerable time and energy building up their war chests for the next race, rather than focusing on the work of governing.

The main issue, however, is whether campaign contributions corrupt elected officials. When candidates win public office, do they use their positions to benefit big campaign donors? In other words, do politicians always “dance with the ones who brung them,” as the old saying goes? Lawmakers generally say no, but the public is not so sure.

Two Strategies Guide Campaign Donations

Political scientists have observed that individuals and groups donating to campaigns choose from two basic strategies. The first is the electoral strategy. Donors that follow this strategy use their money to help elect candidates who support their views and to defeat those who do not. The goal is to increase the likelihood that Congress, their state legislature, or their city council will vote as the donor wishes it would vote.

The second is the access strategy. Donors following this approach give money to the most likely winner in a race, regardless of party. If the race looks close, the donor might even contribute to both campaigns. The goal is to gain access to whichever party wins the election. Donors using this strategy expect to be able to meet with the official they supported and present their views on issues of interest to them.

Political scientist Michael Smith points out that neither strategy involves trading money for a promise to vote a certain way on a piece of legislation. Indeed, offering money for votes is considered bribery and is clearly illegal. Donors found guilty of offering bribes – and lawmakers found guilty of accepting them – face prison sentences, not to mention ruined careers.

There have been well-publicized examples of such corruption. Nonetheless, political scientists find that most elected officials act according to their political principles, no matter who donates to their campaigns. Donors who make large contributions to campaigns might enjoy greater access to officeholders. But that access mayor may not translate into influence over the actions of those officials.

Where Campaign Money Comes From

Almost all of the money used to fund election campaigns comes from private sources. A few wealthy candidates have been able to fund some or all of their campaigns from their own assets. In 2010, for example, Linda McMahon of Connecticut spent $50 million of her own money on an unsuccessful bid for a seat in the U.S. Senate. The great majority of candidates, however, must reach out to their supporters for funding.

Most campaign funds come from individual citizens. These donations are often raised through direct-mail or Internet fundraising campaigns. And they are typically fairly small, in the $25 to $100 range. Candidates also host fundraisers to raise money from large donors. In 2011-2012, the amount of money an individual could donate to a Single candidate was limited by law to $2,500 for the primary campaign and another $2,500 for the general election. These figures are periodically adjusted for inflation.

In recent years, political action committees have become an important source of campaign funds. PACs are organizations formed by corporations, labor unions, or interest groups to channel funds into political campaigns. Similar to individual donations, PAC contributions to a single candidate are limited to $5,000 for the primary campaign and another $5,000 for the general election.

Public Funding of Campaigns

Another source of money for some candidates is public funds. A few states, such as Arizona and New Hampshire, use public money to finance campaigns for governor and state lawmakers. At the federal level, only presidential candidates receive public funding. This money comes from taxpayers who check a $3 donation box on their income tax forms. The money accumulates between elections and is made available for both primary and general election campaigns.

To qualify for public funds, a candidate must raise at least $5,000 in each of 20 states in small contributions of $250 or less. Once qualified, candidates can receive federal matching funds of up to $250 for each additional contribution they receive. The purpose of these provisions is to encourage candidates to rely mainly on small contributions from average voters.

Public funds come with a catch. Candidates who receive public money must agree to limit their campaign spending. As a result, politicians are often hesitant about accepting public funds.

The future of public funding for presidential elections looks uncertain for two reasons. One is a drop-off in taxpayer donations for this purpose. The other is a growing reluctance among presidential hopefuls to accept public funds and to limit their campaign spending.

Reining in Soft Money and Issue Ads

In 1974, Congress created the Federal Election Commission to enforce laws that limit campaign contributions. The FEC requires candidates to keep accurate records of donations to their campaigns and to make those records available to the public. This public disclosure allows voters to see the names of all donors who contribute $200 or more to any candidate running for office.

Some Americans question if campaign contributions give some individuals and groups more influence than others. Research has failed to prove that members of Congress sell their votes in exchange for campaign contributions. However, despite this lack of evidence, the potential influence of campaign contributions has led to some regulation.

Despite FEC oversight, campaign spending spiraled upward during the 1980s and 1990s. Much of the money came from interest groups who had found loop-holes in existing campaign finance laws. Calls for reform led to the passage of the Bipartisan Campaign Reform Act in 2002, also known as the McCain-Feingold Act.

The new law attempted to solve two problems. The first was the use of soft money to fund election campaigns. Soft money is unregulated money donated to a political party for such purposes as voter education. In theory, soft money was not to be used to support campaigns. For this reason, it was not limited by campaign funding laws. In practice, however, parties used soft money to help candidates fund their election bids, thus boosting campaign spending.

The Bipartisan Campaign Reform Act bans the use of soft money in individual election campaigns. It also limits how much soft money an individual can contribute to a party. Furthermore, parties can use soft money only to encourage voter registration and voter turnout.

The second problem was the use of issue ads in campaigns. Issue ads are political ads that are funded and produced by interest groups rather than by election campaigns. In theory, these ads focus on issues rather than on candidates. Thus, like soft money, they were not regulated by campaign finance laws. In practice, however, many issue ads were barely disguised campaign ads. For example, such an ad might discuss a pollution problem and then suggest that “Bill Jones,” a lawmaker up for reelection, is “a friend of polluters.” Even though the ad did not say, “Vote against Bill Jones,” its intention would be to influence how voters viewed the lawmaker.

The Bipartisan Campaign Reform Act bans the broadcast of such thinly disguised campaign ads in the 60 days leading up to an election. This part of the law has been challenged in court, however, by groups that see the ban as an unconstitutional limit on their First Amendment right to free speech. In 2007, the Supreme Court ruled in Federal Election Commission v. Wisconsin Right to Life that such ads could be banned “only if the ad is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate.’

Finally, the act contains a “stand by your ad” rule that requires candidates to take responsibility for their campaign commercials. Beginning in the 2004 elections, candidates were required to appear in their own ads and explicitly endorse the content.

One side effect of the reform act has been the growth of groups known as 527 committees. These organizations are formed under Section 527 of the tax code. Because they are not tied to a political party or candidate, they are allowed to raise and spend unlimited amounts to support or oppose candidates. In effect, 527 committees and their donors have found a loophole that allows the continued use of unregulated soft money in political campaigns. As Senator John McCain, one of the sponsors of the 2002 reform law, pointed out, “Money, like water, will look for ways to leak back into the system.’

Super P ACs have also emerged as significant backers of political candidates. Unlike PACs, Super P ACs may accept unlimited donations for political spending. However, they cannot coordinate with candidates or directly fund campaigns.

In 2010, two federal court cases paved the way for Super PACs. The first was Citizens United v. Federal Election Commission. In 2008, Citizens United, a conservative group, created a documentary of democratic candidate Hillary Clinton after FEC advertised a documentary that criticized the Bush Administration. FEC prevented Citizens United from running ads promoting the film in 2009. The case came to the Supreme Court that same year. In 2010, the Court held that under the First Amendment, the Government cannot limit corporate political spending in candidate elections.

The second case is Speechnow.org v. FEC. The 527 committee Speechnow gathered funds from individuals, not corporations, to endorse the election or defeat of federal candidates. In 2007, FEC informed Speechnow that it must register as a PAC if within one year it raised or spent over $1,000 for federal elections. As a result, Speechnow and other individuals disputed the constitutionality of the FEC Act. They argued that by requiring a group to register as a PAC and limiting the amount an individual could donate to a PAC, it violated a person’s freedom of speech. The case reached the U.S. Court of Appeals. In 2010, the court ruled that the government cannot limit contributions ofgroups that do not directly contribute to candidates.


Next Section: 10.6 (Voter Behavior)