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About the article
Raymond J. La Raja
Raymond J. La Raja is an Associate Professor in Political Science at the University of Massachusetts, Amherst, and co-editor of The Forum. He is the author of Small Change: Money, Political Parties and Campaign Finance Reform (University of Michigan Press, 2008), and a forthcoming book, Do Campaign Finance Laws Matter? Money and Politics in the American States (University of Michigan Press, 2013), and an edited volume, New Directions in American Politics (Routledge, 2013). He serves on the Academic Advisory Board of the Campaign Finance Institute in Washington, DC. He wishes to thank Jesse Rhodes and Maryann Barakso for helpful comments for this article.
Published Online: 2013-02-09
Editorial Board, “Hidden Campaign Cash,” Washington Post, December 5, 2012. Available at http://www.washingtonpost.com/ opinions/hidden-campaign-cash-through-social-welfare-groups/2012/ 12/05/565ee1dc-3974-11e2-b01f-5f55b193f58f_story.html.
Juliet Lapidos, “Saving Wealthy Donors from Themselves,” in Talking Note: The Editorial Page Editor’s Blog. The New York Times, November 7, 2012. Available at http://takingnote.blogs.nytimes.com/2012/11/07/saving-wealthy-donors-from-themselves/#more-10277.
The difference could very well be even less if one makes the reasonable assumption that inflation with respect to broadcast and cable rates has been higher than the average-CPI which is used here. Campaigns spend the majority of their funds for purchasing advertising time.
Meredith Shiner, “John Cornyn Open to Campaign Finance Reform,” Roll Call, Sept. 24, 2012. Available at http://www.rollcall.com/issues/58_24/John-Cornyn-Open-to-Finance-Reform-217768-1.html.
Democrats were concerned they could not keep pace with the Republican fundraising in presidential campaigns. President Nixon opposed the legislation but acquiesced once the Democrats agreed to implement public financing in 1976. See La Raja (2008). Small Change: money, political parties, and campaign finance reform. Ann Arbor, MI: University of Michigan Press.
In the 1968 campaign Nixon received what may have been the largest single campaign contribution of $2.8 million from Clement Stone ($18.5 million in 2012 dollars), the Chicago insurance executive [see (Sorauf 1992)]. This amount appears to have been exceeded by Sheldon Adelson who gave $20 million to Newt Gingrich’s Super PAC, Winning Our Future.
Republicans, generally, did not like most aspects of the 1974 FECA but had little choice given their diminished power after the 1974 elections and the dark stain of Watergate on the GOP. As the minority party, their objections were understandable. As much research suggests, limits on contributions and spending make it more difficult for challengers to unseat incumbents.
Campaign Finance Institute, “Campaign Funding Sources for House and Senate Candidates, 1984–2010,” visited on December 10, 2012. Available at http://www.cfinst.org/pdf/vital/VitalStats_t8.pdf.
Prior to the 1970s, most registered PACs were labor unions, which had organized these committees in the wake of the Smith-Connally Act in 1943, which banned direct contributions from labor union treasuries [see (La Raja 2008)].
Data from the Federal Election Commission, “Number of Federal PACs increases,” Press Release, March 9, 2009. Available at http://www.fec.gov/press/press2009/20090309PACcount.shtml
I have not read the transcripts of congressional hearings to see the reasons for the decision not to adjust contribution limits for inflation. The presidential public funding program included such adjustments so clearly there was some thought given to inflation. Of course, it is entirely possible that the designers wanted expressly to diminish the value of contributions over time as a means of gradually reducing the role of large donors.
Even this adjustment for presidential campaigns is probably insufficient because inflation associated with purchasing spots on broadcast/cable media is likely higher than the CPI.
This figure represents the rarified group of 870 active interests groups that also gave hard money to politicians. In fact the median hard money contributions they gave was much greater at $78,295. Among all other groups the median soft money contribution was only $375.
These changes have been discussed prolifically elsewhere. For a review of the literature see Layman, Carsey, and Horowitz (2006). “Party Polarization in American Politics: Characteristics, Causes, and Consequences." Annual Review of Political Science 9:83–110.
Public financing with matching funds and voluntary limits is unsuited to the new contours of the presidential election campaign. That is why no serious contender participates in public financing in the presidential elections. In primaries, candidates get $250 in public funds for each private contribution up to $250. (So a $1000 private contribution nets candidates an additional $250.) In the primary, candidates also have state-by-state limits on spending. In the general election, the candidates receive a lump sum of $95 million and must not raise or spend private funds.
The major donors typically give a contribution for both the nomination and the general election. Under BCRA, they can give $2000 in each election.
See the Wall Street Journal, “How Much Are Super PACs Spending?” visited on December 5, 2012. Available at http://projects.wsj.com/super-pacs/?mod=e2fb#/2012/candidates/P80003353.
The Obama campaign could also purchase ads at much lower rates than other organizations because, under federal law, candidates must be offered the lowest advertising rates by broadcasters.
Gerald F. Seib, “The Unsexy Secret Behind Obama’s Successful Ground Game,” Wall Street Journal, Dec. 7, 2012. Available at http://blogs.wsj.com/washwire/2012/12/07/the-unsexy-secret-behind-obamas-successful-ground-game/
Under the FECA of 1974 presidential campaigns discouraged participation by state and local parties, fearing that their in-kind efforts might violate contribution restrictions. The parties argued with the Federal Election Commission that their organizations served national and state elections. As such, they should be permitted to finance some activities with money they raised under state laws, which were often less restrictive than federal law, and these activities should not be counted against the presidential campaign. The FEC agreed and allow nonfederal (i.e., soft money) spending for “party-building” work.
These include Wisconsin Right to Life v. FEC (2006), EMILY’s List v. FEC (2009), SpeechNow.org v. FEC (2010) and Citizens United v. FEC (2010).
Center for Responsive Politics, “Spreading the Wealth.” Available at http://www.opensecrets.org/bigpicture/wealth.php?cycle=2000.
Nonparty groups have participated in campaigns throughout the history of the republic. In 1925 the laws putting in limits caused campaigns to set up candidate “voluntary” committees. Labor unions created political action committees in response to the Smith-Connally Act in 1943, which prohibited contributions and in-kind support that came from union treasuries.
In 2004, the most active organizations included America Coming Together (a coalition of liberal and labor groups doing mobilization activities), Joint Victory Campaign 2004 (an extension of the Kerry presidential campaign) and the Media Fund (which financed campaign ads from labor organizations).
In 2010, a group called Citizens United won an epic decision in the Supreme Court. Citizens United, an incorporated organization, argued that the FEC violated their First Amendment rights when it prohibited them from running ads to promote a scathing documentary about Hillary Clinton. The FEC claimed these ads, financed by corporate funds (i.e., soft money) violated the BCRA but the court ruled in favor of Citizens United.
Amy Gardner, “Newt Gingrich’s Super PAC receives another ‘substantial’ contribution from Sheldon Adelson,” Washington Post, February 2, 2012. Available at http://www.washingtonpost.com/ blogs/post-politics/post/newt-gingrichs-super-pac-receives-another- substantial-contribution-from-sheldon-adelson/2012/02/27/gIQA37VeeR_blog.html
In yet another court decision (again rooted in Buckley’s logic), the parties may spend as much money as they want in political campaigns so long as they do not coordinate with the candidate (Colorado Republican Federal Campaign Committee v. FEC, 1996).
Jessica Taylor, “Democratic Operatives Launch SuperPAC,” National Journal, April 14, 2011. Available at http://www.nationaljournal.com/blogs/hotlineoncall/2011/04/democratic-operatives-launch-superpac-13.
Michael Beckel and Reity O’Brien, “Mystery firm is election’s top corporate donor at $5.3 million,” Center for Public Integrity, Nov 5, 2012. Available at http://www.publicintegrity.org/2012/11/02/11689/mystery-firm-elections-top-corporate-donor-53-million.
For a comprehensive argument in support of a party-centered campaign finance system, see Wallison and Gora (2009). Better parties, better government: a realistic program for campaign finance reform. Washington, DC: AEI Press.