2016 Is Coming: What Are PACs?
Money in politics is something that has been decried in politics today. It seems that politicians live by a credo a good friend of mine constantly reinforces, “never turn your back to the money”.
Political parties are the oldest advocacy groups funding political campaigns in the country. Political action committees (PACs) are next, when the Congress of Industrial Organizations (CIO) formed the first one to raise money for the re-election of President Franklin D. Roosevelt in 1944. The Smith Connally Act of 1943 forbade unions from contributing to federal candidates, so the PAC’s money came from voluntary contributions from union members rather than union treasuries.
The Federal Election Campaign Act (FECA) of 1971
The law allowed corporations to establish PACs and also revised financial disclosure requirements for candidates, PACs, and party committees active in federal elections requiring filing quarterly reports. Disclosure, including the name; occupation; address; and business of each contributor or spender, was required for all donations of $100 or more. In 1979, this increased to $200.
The McCain-Feingold Bipartisan Reform Act of 2002
This legislation attempted to end the use of “soft money” (raised outside the limits and prohibitions of federal campaign finance law) to influence federal elections. In addition, “issue ads” which do not specifically advocate for the election or defeat of a candidate were defined as “electioneering communications” meaning corporations or labor organizations can no longer produce these ads.
They are simply organizations that pool campaign contributions from members and donates those funds to campaign for or against candidates, ballot initiatives, or legislation. The term “political action committee” (PAC) refers to two distinct types of political committees registered with the Federal Election Commission (FEC).
Separate Segregated Funds (SSFs)
Most of the 4,600 active, registered PACs are “connected PACs” established by businesses, labor unions, trade groups, or health organizations. These PACs receive and raise money from a “restricted class,” generally consisting of managers and shareholders in the case of a corporation and members in the case of a union or other interest group. As of January 2009, there were 1,598 registered corporate PACs, 272 related to labor unions and 995 to trade organizations.
Groups with an ideological mission, single-issue groups, and members of Congress and other political leaders may form “non-connected PACs”. These organizations may accept funds from any individual, connected PAC, or organization. As of January 2009, there were 1,594 non-connected PACs, the fastest-growing category.
PACs can give $5,000 to a candidate committee per election (primary, general or special). They can also give up to $15,000 annually to any national party committee, and $5,000 annually to any other PAC. PACs may receive up to $5,000 from any one individual, PAC or party committee per calendar year.
Leadership PACs are a way of raising money to help fund other candidates’ campaigns. Since June 2008, Leadership PACs reporting electronically must list the candidate sponsoring the PAC, as per the Honest Leadership and Open Government Act of 2007.
Under the FEC rules, leadership PACs are non-connected PACs, and can accept donations from individuals and other PACs. Since current officeholders have an easier time attracting contributions, leadership PACs are a way dominant parties can capture seats from other parties.
A leadership PAC sponsored by an elected official cannot use funds to support that official’s own campaign. However, it may fund travel, administrative expenses, consultants, polling, and other non-campaign expenses. Between 2008 and 2009, leadership PACs raised and spent more than $47 million.
Citizens United and Speechnow Changed The Game
Citizens United v. FEC (2010) found the Supreme Court holding that the First Amendment prohibited the government from restricting independent political expenditures by a nonprofit corporation. Two months later, in Speechnow.org v. FEC (2010), a case involving another non-profit organization the Court again found that government attempts to regulate financing of political campaigns and express advocacy through contribution limits must have a countervailing interest that outweighs the limit’s burden on the exercise of First Amendment rights.
Citizens United and Speechnow gave us Super PACs, officially known as “independent-expenditure only committees,” that may not make contributions to candidate campaigns or parties, but may engage in unlimited political spending independently of the campaigns. Unlike traditional PACs, they can raise funds from individuals, corporations, unions, and other groups without any legal limit on donation size.
In other words, Super PACs may raise unlimited sums of money and then spend it to overtly advocate for or against political candidates. They still must report their donors to the Federal Election Commission on a monthly or quarterly basis, the Super PAC’s choice, as a traditional PAC would.
Note that other than filing the paperwork and meeting the necessary funding requirements, there are no impediments to starting a PAC. Along the lines of Killing The Breeze’s general view of a government of, by and for it’s citizens, they seem like a good way to organize and fundraise.