Chapter 7.3Chapter 7.3

Money and the Election Money and the Election ProcessProcess

What Does it Cost?What Does it Cost? How does it all work?How does it all work? 1990-92: $1Billion1990-92: $1Billion 2000-02: $3.5 Billion2000-02: $3.5 Billion Radio and Television TimeRadio and Television Time

30 minutes of network time: 30 minutes of network time: $500,000$500,000

30-second prime-time spot: 30-second prime-time spot: $150,000$150,000

Professional campaign managers Professional campaign managers and consultantsand consultants

Newspaper advertisementsNewspaper advertisements Pamphlets, buttons, bumper Pamphlets, buttons, bumper

stickers, & postersstickers, & posters Office rentOffice rent Polls & data processingPolls & data processing Mass mailingsMass mailings Travel & FoodTravel & Food

Why People GiveWhy People Give

Belief in the party or candidateBelief in the party or candidate Access to government: making Access to government: making

friendsfriends Political appointmentsPolitical appointments Social recognitionSocial recognition Policy-making influencePolicy-making influence

Sources of FundingSources of Funding

Private and Public Sources Private and Public Sources (mostly private)(mostly private)

Only 10% of voters Only 10% of voters contribute money to finance contribute money to finance campaignscampaigns

Small contributors: $5 - $10Small contributors: $5 - $10 Wealthy Individuals and Wealthy Individuals and

FamiliesFamilies CandidatesCandidates

Ross Perot (1992): $65 Ross Perot (1992): $65 MillionMillion

Political Action Committees Political Action Committees (PACs)(PACs)

Temporary OrganizationsTemporary Organizations Government SubsidiesGovernment Subsidies

PAC ContributionsPAC Contributions

Corporations and unions cannot contributeCorporations and unions cannot contribute PAC’s – the political arm of special-interest PAC’s – the political arm of special-interest

groupsgroups 4,000 PAC’s today4,000 PAC’s today PAC members donate money to the PAC PAC members donate money to the PAC

treasury, which is used as campaign treasury, which is used as campaign contributionscontributions

No more than $5000 per election (to as No more than $5000 per election (to as many people as they choose)many people as they choose)

2000 Election: PAC’s gave $400 million2000 Election: PAC’s gave $400 million

Regulating CampaignsRegulating Campaigns

The Blur of Campaign The Blur of Campaign Financing (Financing (Super PACsSuper PACs))

Campaign finance lawsCampaign finance laws Disclosure RequirementsDisclosure Requirements Limits on ContributionsLimits on Contributions PAC ContributionsPAC Contributions Limits on ExpendituresLimits on Expenditures Public Funding Public Funding

(Subsidies)(Subsidies) The Federal Election The Federal Election

Commission (FEC)Commission (FEC)

Disclosure RequirementsDisclosure Requirements

Requirements are so detailed that Requirements are so detailed that candidates now have at least one CPAcandidates now have at least one CPA

No one can make a contribution in the No one can make a contribution in the name of anothername of another

No cash gifts of more than $100 and foreign No cash gifts of more than $100 and foreign sourcessources

All contributions must be made through a All contributions must be made through a single campaign committeesingle campaign committee

$200+ must be identified by source and $200+ must be identified by source and datedate

$5000+ must be reported within 48 hours$5000+ must be reported within 48 hours

Limits on ContributionsLimits on Contributions

No more than $2000 to any primary or No more than $2000 to any primary or general electiongeneral election

No more than $5000/year to any PAC No more than $5000/year to any PAC ($25,000 to any national party)($25,000 to any national party)

Before this law it was far more Before this law it was far more generousgenerous

Nixon Re-election (1970):Nixon Re-election (1970): W. Clement Stone - $2 million to NixonW. Clement Stone - $2 million to Nixon Richard Scaife - $1 millionRichard Scaife - $1 million

Limits on ExpendituresLimits on Expenditures

Buckley v. Valeo, 1976Buckley v. Valeo, 1976 ““Money is speech.”Money is speech.”

Spending limits only apply to those Spending limits only apply to those who accept government money (FEC who accept government money (FEC money)money)

Why is there a spending limit?Why is there a spending limit?

Public Funding of Presidential Public Funding of Presidential CampaignsCampaigns

$3 per tax return / $6 on a joint tax $3 per tax return / $6 on a joint tax returnreturn

Minor party candidates can receive Minor party candidates can receive public funding if:public funding if: They have won 5% of the popular vote in They have won 5% of the popular vote in

the last electionthe last election They win at least that much of the total They win at least that much of the total

vote in the current election (Ralph Nader, vote in the current election (Ralph Nader, 2004)2004)

Hard Money, Soft MoneyHard Money, Soft Money

Hard money – money raised and Hard money – money raised and spent to elect candidates for spent to elect candidates for Congress and the White HouseCongress and the White House

Soft money – funds given to party Soft money – funds given to party organizations for “party-building organizations for “party-building activities”activities”