USA

To PAC or not to PAC

campaign funding issues in the United States

The dome of the US Capitol building / Wikimedia by Diliff

The issue of political campaign funding has been a prominent one in policy discourse in the United States. The existence of campaign finance law goes back to 1907, and has changed throughout the 20th century, but this topic has truly grown in importance in the 21st century, especially since Supreme Court’s Citizen United ruling in 2010. In this article, we will cover the recent history of laws regarding campaign funding in the United States and the positions on the issue by looking at the current electoral race: the 2020 Democratic Party presidential primaries. 

Campaign finance law in the United States is divided into federal and state law. We will cover only the federal level, not only because it is the most prominent and internationally relevant, but also because state laws for campaign finance vary widely. On a federal level the law does not vary and it limits the amount of money an individual can donate is $2,800 to a candidate per election or $35,500 to a national party committee per year.

Not many individual Americans donate, though. Considering the 2016 election cycle during which around a total of 6.8 billion dollars was spent, a mere 0.52% of all American citizens (1.6 million out of 318 million) donated more than $200 to a political candidate. Out of those, 45,129 Americans donated a total of $2.6 billion through donations larger than $10,000. In this last group 3,030 Americans donated more than $100,000, accounting for $1.6 billion out of the previously mentioned $2.6 billion. In short:  0.014% of Americans donated 38.23% of the money spent in the 2016 election cycle. How is that possible? 

In 2002, a bill co-sponsored by the Republican Senator John McCain and Democratic Senator Russ Feingold passed into law. The Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold Act, sought to regulate the financing of political campaigns. Its two main goals were to ban “soft money“ (money not donated directly to a candidate), and to ban corporations and unions from producing “issue ads“ which do not advocate for or against a candidate, but for or against an issue within 30 days of a primary election and 60 days of a general election. 

The first serious challenge to BCRA came in 2007, when the US Supreme Court ruled in the Federal Election Commission (FEC) vs. ‘Wisconsin Right to Life, Inc.’ case, that if an ad could be reasonably interpreted as something other than an appeal to vote for or against a specific candidate, it should be allowed to air. The next US Supreme Court case that effectively killed the BCRA was the highly controversial, landmark 2010 Citizens United vs. FEC case. The US Supreme Court’s ruling in that case resulted in the allowance of unrestricted funding of independent expenditures (political campaign communications that advocate for or against specific candidates, without coordinating with the candidate’s campaigns) by ruling that the banning of political donations by corporations to those independent expenditures is a violation of their right to freedom of speech. The exploitation of that loophole effectively allowed the wealthiest citizens of the United States to give as much money as they wish towards a campaign, potentially tipping the scales of influence to their side. It also gave rise to Super PACs – Political Action Committees. Super PACs, unlike regular PACs which raise money from individuals, deal only with independent expenditures that, by law, do not have to disclose the identity of their donors.

United States Supreme Court building /Wikimedia Commons

A vast majority of the 2020 Democratic presidential candidates have, at least nominally, shown a surprising amount of awareness of the corruptive issue of big money on politics. They have made pledges regarding the type of financial support they would not be accepting in order to finance their campaigns. In June 2019, Vox asked every Democratic campaign to provide information on the promises made regarding which industries, groups and individuals they intend to renounce financial contributions from. The responses were then grouped into four types of donations deemed unacceptable to most candidates: those from corporate PACs, from all Super PACS, from federal lobbyists and from the fossil fuel industry. The tally was impressive: all of the 24 campaigns vowed to reject donations from corporate PACs, 19 of them from the fossil fuel industry, 13 from federal lobbyists and 9 from all Super PACs. 

However, despite this promising start to most democratic campaigns, there is sufficient amount of leeway to these pledges which enable the candidates to take advantage of affluent donors while still posturing as candidates opposed to big money having an undue influence in politics. For example, candidates can still accept money from private wealthy donors, overtures from unregistered lobbyists or participate in closed-door, high-dollar fundraisers which charge the maximum of $2,800 per seat; truly a modest amount granting one close access to their candidate of choice. Furthermore, some candidates have decided to take Super PAC money, although previously promising that they wouldn’t.

Overall, the field of Democratic presidential candidates (the ones left in the race, as well as previous prominent aspirants) could be divided into four categories: those who pledged not to take Super PAC money, those who were willing to take it, those who pledge not to take it but backtracked on their promise, and the self-financed candidates. 

The White House /Wikimedia Commons

Bernie Sanders is the most prominent example among the candidates who pledged not to take Super PAC money, and who managed to fulfill that pledge. Sanders even turned it into a crucial part of his campaign, claiming that he is “not taking a dime of PAC money” and that he is “not taking applications from billionaires who want to run a Super PAC” on his behalf. Meanwhile, a number of candidates have pledged not to take Super PAC money, including Elizabeth Warren, Joe Biden and Andrew Yang, but have since backed down on that promise, pressed by the demand for cash. Some candidates, such as Pete Buttigieg never shied away from getting Super PAC support, openly inviting Super PACs to support his campaign.  

Then there are the self-financiers such as billionaires Michael Bloomberg and Tom Steyer. While Steyer’s campaign, 99% financed through his own wealth, hasn’t managed to gain traction, Michael Bloomberg managed to set his foot on the debate stage, thanks in large part to the Democratic National Committee’s scraping of the grassroots funding threshold criterion which stipulated that a candidate needs to receive donations from at least 225,000 unique donors. 

In conclusion, it does not seem that “big money” will leave politics any time soon. Of the prominent candidates running for president, only Sanders was able to stay away from billionaire-funded Super PACs, relying mainly on grassroots donations below $200; while the rest of the candidates, whether they have started out with well-intentioned – but ultimately unsustainable – pledges of forsaking Super PAC money, or have not had an issue with it from the start, have succumbed to the overpowering influence of the wealthy elite on US politics.

Anja Victoria Biser & Demian Vokši

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