Follow the Money: Campaign Financing and the U.S. 2012 Elections
Q and A with political finance expert Anthony Corrado.
Anthony Corrado is a Nonresident Senior Fellow in Governance Studies at the Brookings Institution, one of the preeminent think tanks in Washington, D.C., and a professor of government at Colby College in Maine.
How much will be spent on the presidential and congressional elections in 2012? What will it cost to win a seat in the House of Representatives and Senate? Where do candidates get most of their money?
In 2012, candidates, parties, political committees and nongovernmental organizations will spend an estimated $6 billion on political activities associated with the congressional and presidential elections, as compared to $3 billion in 2000.
Winning House candidates in 2010 spent an average of $1.4 million. The cost of Senate races varies greatly depending on the size of the state in which the candidates are running. In 2010, the average cost was $9 million. Most of this money comes from donations made by individuals.
What are the basic rules governing what an individual U.S. citizen can give to candidates for the House of Representatives, Senate, or presidency in 2012?
An individual may contribute up to $2,500 per election (with primary and general elections considered separate elections with separate contribution limits) for a total of $5,000 to a candidate for House, Senate or president in 2012. The law also places an aggregate limit of $46,200 on the total amount an individual may contribute to all federal candidates during the election.
What are PACs and why are they important?
A political action committee (PAC) is an organization formed by an interest group, corporation or labor union to make contributions and spend money in support of federal candidates. A PAC may accept voluntary contributions from members of its group or other individuals of no more than $5,000 per year.
The principal purpose of a PAC is to make contributions to candidates, and they are an important source of funding for congressional candidates, with most PAC contributions going to incumbent members of Congress. A PAC may give $5,000 per election to a candidate for a total of $10,000 in a primary and general election combined.
A PAC may also spend unlimited amounts of money for advertising or other campaign activities, so long as it does not coordinate its efforts with the candidate it supports. In 2010, PACs contributed more than $400 million to congressional candidates, which represented more than 20 percent of the money raised by House and Senate candidates.
What about the political parties? What are the rules for the Republican and Democratic parties?
The national parties may only raise funds from limited contributions made by individuals and PACs, but the contribution limits are more generous than in the case of candidates or PACs. In 2012, an individual may give up to $30,800 a year to a national party committee, such as the Democratic National Committee or the Republican National Committee. A PAC may give up to $15,000 per year.
Parties support candidates financially in a variety of ways. A party committee may contribute $5,000 per election to a candidate. But the primary way they support candidates is by spending money directly in support of their election. They can do so either by coordinating the expenditures with a candidate, in which case they are limited in the amount they may spend on a candidate’s behalf, or by making spending decisions independent of a candidate, in which case there are no restrictions on the amount a party can spend.
Most party spending is devoted to advertising, voter registration and communication, and turning out the vote on Election Day.
In January 2010, the U.S. Supreme Court issued a decision in the case of Citizens United vs Federal Election Commission that has had a major impact on the financing of U.S. federal elections. Can you explain the significance of the Citizens United case?
The Supreme Court’s...decision is a landmark ruling that has major consequences for the financing of election activity. Prior to this decision, corporations and labor unions had long been banned from using their funds to make contributions to candidates. This prohibition on contributions was supported by a similar ban on expenditures in order to ensure that corporations or unions did not attempt to influence elections by spending money directly to promote the election of a federal candidate. This ban on corporate and labor spending had been in place since 1947.
In Citizens United, the court determined that corporations have a right to spend money to express their views about candidates under the First Amendment’s guarantee of freedom of speech. The court further contended that money spent independent of a candidate did not pose a risk of corruption since a candidate is not involved in the spending decision. A ban on spending was therefore not justified. The court thus struck down the prohibition on spending, although the ban on contributions remains in place.
It also overturned regulations that prohibited interest groups and political organizations from using monies from corporate or labor sources to pay for election advertisements broadcast in close proximity to an election.
The Court’s decision has freed corporations—and by extension, labor unions—to use their resources to pay for campaign advertisements and other election activities that advocate the election or defeat of candidates. Political groups may also use money from corporations or labor to pay for election activities in support of candidates.
Party committees, however, are still prohibited from receiving or using corporate or labor contributions. Many political observers are concerned that this will lead to an increase in corporate influence in American elections and give interest groups an advantage over political parties in the financing of election activity.
What are Super PACs and what role are they playing in the 2012 federal elections?
A Super PAC is a new form of political committee that has emerged after the Citizens United decision. A federal court, citing the Supreme Court’s analysis in Citizens United that independent expenditures do not pose a risk of corruption, determined that a PAC does not have to abide by contribution limits if it does not make contributions to candidates, but only spends money directly to support candidates. These “independent expenditure only” PACs came to be called Super PACs because they are allowed to accept unlimited contributions from any source and may spend unlimited sums of money in support of a candidate.
Super PACs began to form in the months before the 2010 election and spent $65 million in congressional elections. By July 2012, more than 600 Super PACs had formed and they had already raised more than $240 million. These committees will finance substantial amounts of campaign advertising in 2012, as has already been seen in the presidential race.
Super PACs supporting specific Republican presidential contenders in the primary campaign for the party’s nomination often outspent the candidates on television advertising. The Super PAC supporting Mitt Romney, for example, spent more than $39 million against his Republican opponents and helped Romney win the Republican nomination.
In all, Super PACs are expected to raise hundreds of millions of dollars and devote the largest share of their spending on advertisements criticizing candidates they oppose. Their influence will help the Republicans compete financially with President Obama and may decide the outcome of a number of important congressional races.
How transparent are the monies spent in election campaigns?
Candidates, parties, PACs, and Super PACs are required to register with the Federal Election Commission, the government agency responsible for administering and enforcing campaign finance regulations, and regularly file public disclosure reports of their contributions and expenditures.
These committees must report any contribution or expenditure of $200 or more. In addition, any organization that spends in aggregate more than $10,000 in a calendar year on “electioneering communications,” which are broadcast advertisements featuring a candidate that air within 30 days of a primary or 60 days of a general election, must report their expenditures and any donors of $1,000 or more.
How are nonprofit corporations and other kinds of NGOs involved in the congressional and presidential elections?
Nonprofit corporations, policy advocacy organizations and trade associations have been more actively involved in recent elections, typically by sponsoring advertising on issues they consider important, such as economic development or environmental policy, and by promoting voter participation.
Since Citizens United, they may also pay for advertisements that support specific candidates. But these organizations are granted tax-exempt status under the tax laws because their primary purpose is not to influence elections. Accordingly, they may only spend a minor share of their total funds on political activity.
In 2010, these nonprofit organizations spent an estimated $100 million on advertising and they are spending even larger sums in 2012. Their political activity has become a matter of major controversy, since current disclosure laws do not require them to report the sources of their funding or how they allocate their funds. This has led to a call for expanding disclosure rules, and legislation has been proposed to accomplish this purpose, but Congress, to date, has failed to adopt this reform.
Howard Cincotta is a U.S. State Department writer and editor.blog comments powered by Disqus