Election Finance Rules

Election finance rules in the United States are complex and aim to regulate the raising and spending of money to influence elections. The primary goal is to ensure transparency, prevent corruption, and promote fairness in the political process. These rules are primarily governed by the Federal Election Campaign Act (FECA), as amended, and enforced by the Federal Election Commission (FEC).

Contribution Limits: A core aspect of election finance law involves limiting the amount of money individuals, political committees, and other entities can contribute to candidates and political parties. These limits are adjusted periodically for inflation. For example, there are limits on how much an individual can donate to a candidate’s campaign per election (primary, general, etc.) and to national party committees per year. Corporations and labor unions are generally prohibited from directly contributing to federal candidates.

Expenditure Regulations: While contribution limits restrict donations to candidates, expenditure regulations govern how money is spent on behalf of candidates. The Supreme Court case Buckley v. Valeo (1976) drew a distinction between contributions and independent expenditures, ruling that limits on independent expenditures (spending independently of a candidate’s campaign) violate the First Amendment’s guarantee of free speech. This decision paved the way for Super PACs and other independent expenditure committees that can raise and spend unlimited amounts of money to support or oppose candidates, as long as they do not coordinate with the candidate’s campaign.

Disclosure Requirements: Transparency is a cornerstone of election finance law. Candidates, political committees, and other groups spending money to influence elections are required to disclose their donors and expenditures to the FEC. This information is publicly available, allowing citizens to track the flow of money in politics and hold elected officials accountable. Disclosure requirements apply to both contributions and expenditures above certain thresholds.

Political Action Committees (PACs): PACs are organizations that raise and spend money to elect and defeat candidates. They can be affiliated with corporations, labor unions, or other groups. PACs are subject to contribution limits when donating to candidates and parties. There are also “Super PACs,” officially known as independent expenditure-only committees, which, as mentioned above, can raise and spend unlimited amounts of money, but cannot directly coordinate with candidates’ campaigns.

Soft Money vs. Hard Money: Historically, a distinction was made between “hard money,” which is subject to contribution limits and disclosure requirements, and “soft money,” which was unregulated money used for party-building activities. The Bipartisan Campaign Reform Act (BCRA), also known as McCain-Feingold, aimed to curtail the use of soft money in federal elections. However, the rise of Super PACs and other independent expenditure groups has effectively created new avenues for unregulated spending.

Challenges and Controversies: Election finance rules are constantly evolving and remain a subject of intense debate. Critics argue that the current system allows wealthy individuals and corporations to exert undue influence on politics, while supporters argue that campaign finance regulations infringe on free speech rights. The Supreme Court’s decisions, particularly Citizens United v. FEC (2010), have significantly reshaped the landscape of campaign finance, leading to increased spending by outside groups and further debate about the role of money in elections.