Money in US Elections

PART 1

Teapot Dome scandal (1925)Cabinet members illegally

leased federal lands in exchange for bribes from private oil development

Watergate scandal (1972)People from Nixon’s campaign

broke into the Democratic Party headquarters to steal campaign documents and install listening devices

1) Impose limits on giving, receiving, and spending political money

2) Require public disclosure of the sources and uses of political money

3) Give government subsidies to presidential candidates, campaigns, and parties to reduce their reliance on campaign contributors

Limited the amount that federal candidates could spend on advertising

Required disclosure of donor information

& how they are spent Required PACs to register with the

government and report all major contributions and expenditures PACS can contribute only $5,000 per election

Created the Federal Election Commission (FEC)

Administers new campaign spending laws Provides for partial public funding for presidential

primaries The FEC matches small individual contributions up

to $250 as long as the candidate agrees to remain within spending limits Not all candidates choose to do this (ex: George

W. Bush & John Kerry). Provides grants to major party presidential candidates

running in the general election, if they also stop their own fundraising Both 2004 presidential candidates got $75 million

from the FEC Even allowed grants to minor parties that polled 5% of

the total vote in a previous election And where did this money come from?

You! Taxpayers can choose to allocate $1-3 of their

income by checking off a box on their tax forms

The Supreme Court made a distinction between campaign spending and campaign contributions

Congress can limit how much people contribute to somebody else’s campaign Individual contributions:

to candidates per two year cycle = $2,000 to PACs per year = $5,000 to National Party Convention = $5,000

BUT, it cannot limit how much of their own money people spend on their own campaigns (1st Amendment) Thus, candidates can spend as much as they

want on advertising as long as the money is theirs (ex: wealthy Ross Perot can fund his own campaign with his own money without restrictions of FECA)

By placing limitations, it helped to de-emphasize the chances of winning based on money

All presidential candidates from 1974 to 2000 accepted the matching funds provided by the government

In the election of 2000, George W. Bush became the first to DECLINE the public funds for his campaign in the primary electionHowever, he accepted government funds

in the general election ($67.5 million)

Soft money are contributions to a state or local party for “party-building purposes.” By doing this, they avoided giving money directly

to candidate and gave it to political parties instead

“Hard money” thus became known as money that was given directly to candidates

“Soft money” was money donated to political parties. There was no limitation on how much soft money

could be raised at any given time. Soft money was not regulated by FECA.

Parties at first used it for voter registration drives, mailings, and generic party advertising

But then they began transferring funds to state parties, which then ran ads for or against candidates

In the 1996 election, the Democratic Party offered their donors “perks” for their soft money contributions The party offered donors free rides with

Clinton on Air Force One air plane & the chance to spend the night in the Lincoln Bedroom at the White House

It was hard to distinguish soft money from hard money when the parties purchased advertising

Aka McCain-Feingold bill, named after its two chief sponsors in the Senate

Banned soft money in federal campaigns completely It INCREASED the amount of hard money contributions

Individuals could give candidates $2,100 for each primary & general election

Individuals could give federal candidates up to $40,000, national party committees up to $23,900, and PACS up to $37,500

Contribution limits were indexed to inflation Prevented corporations and labor unions for using

general treasury funds for electoral purposes Provided an increase in contribution limits for

candidates running against an opponent who was spending substantial amounts of his own money

In the Supreme Court case McConnell v. FEC (2004), the BCRA was deemed constitutional

The Court felt that soft money should be banned because it purchased access to elected officials, and with that access came influence and the possibility or appearance of corruption

Limited amounts of soft money could still be raised in state and local party committees for voter registration and get-out-the vote efforts