Becoming an Expert

A BRIEF HISTORY OF CAMPAIGN FINANCE REFORM

 1.FEDERAL ELECTIONS

FECA – Congressional Federal Elections Campaign Act  1975

  • Established individual contribution limits to each federal candidate. Today these are $2,700 in primary; $2,700 in general; ($33,900 to Party).
  • Prohibited corporations and unions from giving.
  • Created PACs (political action committees); limited to give a candidate $5,000 limit in primary; $5,000 in general election.
  • Mandated public disclosure of all fundraising and spending.
  • Created FEC (Federal Elections Commission) to administer law.
  • Established spending limits for candidates.

BUCKLEY v. VALEO – Supreme Court Decision  1976

  • Struck down spending limits of FECA on grounds of limits on free speech (candidates spending money was exercise of their right to free speech).

BCRA  – Bi-Partisan Campaign Reform Act (McCain-Feingold)  2002

  • Doubled the limit on individual contributions to candidates.
  • Limited previously unlimited contributions to parties.

FOR THE PEOPLE ACT (House bill H.R.1 2019 passed by the House of Representatives January 2019)

  • Voluntary small donor public financing with $6-$1 match up to $200 for Congress and President campaigns
  • Prohibits coordination between candidates and SuperPacs
  • Pilot $25 voucher program
  • Voting Reform including automatic voter registration, election day holiday, restore full Civil Rights Act, same-day voter registration, early voting, pre-registration for 16 and 17 year-olds and more.
  •  Ethics Reform
  • , Non-Partisan Gerrymandering
  • Election Security

FOR THE PEOPLE ACT Introduced by Senator but not brough up for votes in the US Senate 2019.

STATE AND CITY PUBLIC FINANCING

  1. A) PARTIAL GRANTS
  • Candidates must show support in their own district by collecting a specified number of small contributions.
  • Candidates may not use any private funds.
  • Stringent reporting requirements on spending of public money.
  • Requirement to engage in debates.
  • No full public financing (Supreme Court decisions on triggers)
  1. B) VOLUNTARY SMALL DONOR, MATCHING SYSTEMS
  • Donations to candidates matched with public funds.
  • Limits on donations to candidates.
  • Provides $1-$8  or $1-$6 for every $1 raised by candidate.
  • Mandatory debates for publicly financed candidates.
  • Partial list includes: Connecticut, Maine, Arizona, Vermont, Hawaii, New York City, Los Angeles, Seattle WA, Berkeley CA, Albuquerque NM, New Haven CT, Denver CO, Montgomery & Howard County MD, Suffolk County NY and more…

III.   PRESIDENTIAL ELECTIONS

  • 1975 FECA passed public financing for Presidential races.
  • 1975 FECA passed public financing to support party nominating conventions.
  • All major presidential candidates from both parties accepted public funding in both primary and general elections until 2000.
  • Today all major candidates run with private money, and conventions are payed for by corporation donations.
  • 2019 H.R. 1 includes voluntary small donor $6-$1 matching system

SUPREME COURT ACTIONS

  • 2010 Citizens United repealed ban on unlimited corporate and union spending to influence political speech; resulting in large numbers of SuperPacs.
  • 2014 McCutchen increased total individual contributions to Congress to $3.5 million.

 Super PACS

  • Independent-expenditure political action committees (cannot donate directly to candidates; cannot coordinate with candidates).
  • Raise unlimited sums from corporations, unions, and individuals.
  • Required to disclose donors except in cases of “dark money.”
  • Dark Money is SuperPac giving that does not disclose donors because organizations are non-profits dedicated to “social welfare.” Cannot coordinate with candidates.

BUNDLING DEFINED

Individual donations (usually the maximum) to candidates solicited by an individual who then “bundles” them together to give to candidates, thus obtaining “credit” for large donations.

In depth reading…

  1. U.S. Campaign Finance Law History

The initial reform of the campaign financing system occurred between 1971 and 1974. It was largely a response to the Watergate scandal, but it was also an attempt to remedy the negative publicity about an individual donor who literally delivered a suitcase of cash to Richard Nixon’s re-election campaign. Members of Congress felt they needed to do something to restore the public’s dwindling faith in government. Their response was to pass a series of laws known as the Federal Election Campaign Act (FECA).

The FECA legislation altered a number of aspects of the financing of election campaigns for federal office. For the first time, it established rules that limited contribution levels to candidates and parties. This regulated money came to be known as “hard money.” Individual contributions to any single candidate were limited to $1,000 in the primary campaign and $1,000 in the general election of any given year. The Supreme Court accepted these limits in order to, in their words, “avoid the appearance of corruption” of candidates by big-money donors.

Second, although corporations and unions were prohibited from giving money directly from their treasuries, FECA allowed Political Action Committees (PACS) to be organized by individuals, unions, organizations, or corporations. These PACS could collect voluntary contributions from individuals of up to $5,000 (often from members of the unions or employees of corporations that established the PAC). The PACS then were allowed to contribute directly to as many candidates as they wished. Their contributions too were regulated, however, with “hard money” limits to a single candidate of $5,000 in the primary and $5,000 in the general election.

FECA also created a mandatory reporting system for all contributions to and all expenditures made by campaigns. Money associated with election campaigns would now be “disclosed” and made public periodically, according to a schedule established by the newly organized Federal Election Commission. This Commission was created to oversee the implementation of the disclosure system, and to rule on any failures to comply by candidates. These folks now oversee the rules for money in campaigns and you can explore the Federal Election site – lots of interesting information – www.fec.gov

In another path-breaking move, FECA established a voluntary system of public financing for the Presidential primaries and general elections. From its inception through 1996, every single Presidential candidate voluntarily participated in this public financing system until 2000 when George W. Bush refused public money and financed his presidential primary bid exclusively with private money. Then in 2008, Barack Obama financed both his primary and general election with private money and the system was effectively dead. The main reason was that Congress refused to increase the public financing available to candidates, at the same time that the cost of election campaigns skyrocketed. So to win, candidates felt they needed to again rely on private money.

In January 2010, the Supreme Court reversed a decades old ban on spending for political speech by corporations and unions. Corporations and unions could now spend unlimited amounts of money from their treasuries to influence elections with ads, flyers etc. (though the money could not go directly to candidates). It meant that rich corporations could flood the airwaves with ads, thus dominating the political process and dialogue during an election, or threaten to do so in order to get politicians to vote in their interests rather than in the public interest.

  1. Reform Strategies

Since the middle 1970s, it has become increasingly clear that the laws are inadequate to deal with the growing problems of big donors – especially corporate-based contributors. Experts believe that the dominance of big money in politics is today worse than ever. Not only have the costs of elections escalated, but the number of competitive races is declining, as the advantages of incumbency fundraising overwhelm challengers.

In response both to these obvious problems and also to polling data indicating that a large majority of Americans favor reform of the financing system, a number of strategies have emerged to attempt to change the way election campaigns are financed.

  1. A) LOWER CONTIBUTION LIMITS: One strategy, adopted by many reform groups since the 1970s, has been to try to lower contribution limits at the federal, state, and/or local levels. Reformers have sought to lower the legal limits of individuals and PACS to candidates in order to make money a less important ingredient in political campaigns. Groups such asCommon Causeand the USPIRG have a long history of fighting for lower contribution limits. But very low limits at the state and local levels have often been struck down by the courts.
  2. B) BI-PARTISAN CAMPAIGN REFORM ACT: This is the only campaign finance reform victory since the ‘70s. In March 2002 Congress passed the Bi-Partisan Campaign Reform Act to curtail the growth of so-called “soft money” contributions. These were unlimited political contributions that were not “hard” – i.e. not regulated by law. This reform, also known as McCain-Feingold for its Senate sponsors, Senator John McCain (R-AZ) and Russ Feingold (D-WI) was passed with the help of national groups like Common Cause and the Sierra Club.

However, the effectiveness of this law in regulating big private money in election campaigns has proved to be ambiguous at best. On the one hand, the law included a doubling of the 1974 “hard money” limit that individuals could contribute to federal candidates. Now individuals could give $2,300 to as many candidates as they wished for a primary and then again for a general election. It did put limits on “soft” money contributions, but they were still extremely high.

Thus the reality is that the problem of private money in politics has not disappeared. One major problem is the ease with which wealthy donors circumvent the “hard” money contribution limits. They use a technique known as bundling. Bundling enables a single individual or group to take credit for raising large amounts of “hard dollars” that go directly to a particular candidate. Bundling means that an individual collects checks for the maximum “hard money” ($2,300) contribution written to a particular candidate from a large number of individuals (often family members, friends, or colleagues in a law firm or corporation). The money is then “bundled” together and then delivered to the candidate by that individual, thus indicating clearly who is responsible for the “bundle.” The candidate is then as beholden to the “bundler” as she/he would have been to an individual contributor who made a campaign donation of hundreds of thousands of dollars.

  1. C) PUBLIC FINANCING: Thus far, the most successful strategy has been the public financing of elections. Public financing is not a new model of campaign finance reform. It has been implemented in one form or another for decades at both the local and state levels (and of course in the Presidential primary). The system is voluntary; a candidate cannot be coerced into participating in a public financing system; there are caps put on the amount of public money a candidate can receive. There are three types of public financing: matching funds; full public financing grants; and hybrid models with features of both.

1) Matching grants: The most common form of public financing is a matching system. In a match, a candidate is offered public money that matches the dollars she/he has raised from individual donors. In existing systems the match ranges from one public dollar for every private dollar donated, to six to one as in New York City’s public financing system. In most matching systems, only smaller contributions are matched, thus raising the importance to candidates of smaller contributors. A significant number of states and cities have some public financing as part of their campaign financing system. By making some public money available, matching systems begin to erode the dominance of private funding, but it is also the case that, depending on the size of the match, private “hard money” can still play a significant role in campaigns run under this system.

2) Fair (or Clean) Elections or Voter-Owned Elections: A newer system of public financing that has been implemented at the state level is full public financing. This innovative model, often referred to as Fair Elections, eliminates private money from campaigns by offering candidates the full amount that can be legally spent on a race in return for their voluntary agreement to raise no private dollars and stay within the spending limits set. In the states of Maine, Massachusetts, and Arizona as well as the city of Albuquerque, NM, voters passed Clean Elections legislation by initiative; and in North Carolina, New Mexico, Vermont, Connecticut and the city of Portland, Oregon full public financing systems for specific races have been passed by the legislature. (The Massachusetts law was invalidated by an act of the legislature). Some of the positive results of Fair Elections systems that are in place have been to increase the diversity of candidates, especially with increased numbers of women and minority individuals running for office, to create more competitive elections, to make elected officials accountable to their constituents, to limit the amounts of money spent in campaigns, and to restore the faith of citizens in an open and fair political system. This has weakened or eliminated full public financing systems at the state and federal level. In their place have emerged laws that create public matching systems as described above. The New York City system, with a 6-1 match, is often the model for these new laws.

3) Constitutional Amendments:A number of Constitutional Amendments have been put forth in Congress and many states and cities have passed resolutions in support of such Amendments. Though they differ, the basic idea is that Congress would be enabled to enact legislation to reverse dangerous Supreme Court decisions like Buckley v. ,Valeo, Citizens United, and McCutcheon in order to rein in the unprecedented flood of secret money in the campaign finance system. Such an amendment would allow Congress to regulate the raising and spending of money, including so-called “Super PAC” independent expenditures, while giving states the same authority to regulate campaign finance at their level.

III. Conclusion

The fight for a system of financing elections that allows every citizen to have a voice in the decisions that affect us all is central to a democracy. Each person deserves equal respect in influencing laws and policy. As long as only a tiny fraction of individuals fund campaigns, our laws and policies will fail to reflect the will of all the people. There is widespread agreement that the campaign finance system is broken, and thousands are working hard to fix it. Grassroots groups in almost every state are fighting for more public financing reforms. Hundreds of state and national organizations including the Sierra Club, the Communication Workers of America, Every Voice, Common Cause, Public Citizen, and the NAACP and many others are joining together to change the funding that influences our election campaigns. These grassroots groups of concerned citizens are joined by legislators in Congress and state legislatures that also support these changes and want to create a real and inclusive democracy. Together we can begin to erode the poisonous effects of big money on our political system.