Campaign Finance I

1. Campaign Finance I

2. Freewrite Why is money necessary to political campaigns? Why is money in campaigns problematic for representative democracy? Can we restrict money in politics to create an equitable electoral process? Should we? In what ways should we restrict it? As usual, you will turn in this freewrite for participation credit.

3. Freewrite Why is money necessary to political campaigns? Why is money in campaigns problematic for representative democracy? Can we restrict money in politics to create an equitable electoral process? Should we? In what ways should we restrict it? As usual, you will turn in this freewrite for participation credit.

4. Why is money necessary to political campaigns? • Communication is key to: • Solving principle-agent problem • Translating voter preference into policy • Voters won’t do all the research themselves • Communicating with distracted voters isn’t free

5. Costs of campaigns, 2000 • All House and Senate campaigns: $1 billion • Average winning House race: $847,000 • Average winning Senate race: $7.2 million

6. Freewrite Why is money necessary to political campaigns? Why is money in campaigns problematic for representative democracy? Can we restrict money in politics to create an equitable electoral process? Should we? In what ways should we restrict it? As usual, you will turn in this freewrite for participation credit.

7. Why is money problematic for representative democracy? • Unfair for rich to have more influence • Principle-agent problem • Although little evidence of money buying votes

8. Why do people give money?Why do their motives matter?

9. Why do people give money?

10. How does money affect election outcomes? • The effect money has on election outcomes varies by candidate and by race. How? • When candidates raise really different amounts of money, the one who raises more wins • This is the TYPICAL election! • Because of the money itself??? • When an incumbent spends a large amount of money, s/he tends to lose. • Why??

11. Where might campaign money come from? • The government • Pros? Cons? • Parties • Pros? Cons? • Interest Groups • Pros? Cons? • A few wealthy people • Pros? Cons? • Lots of different people • Pros? Cons?

12. What has Congress said? • 1971 FECA • First disclosure rules • Limits candidate self-contributions • Limits media expenditures • 1974 FECA Amendments • Presidential election public funding with spending caps • Limits independent expenditures • PAC and individual contribution limits (Hard Money) • More disclosure requirements • Creates Federal Election Commission

13. Buckley v. Valeo • Upholds disclosure requirements • Strikes down spending limits because they interfere with first amendment freedoms

14. Buckley on spending limits • “In a republic where the people are sovereign, the ability of the citizenry to make informed choices among candidates for office is essential, for the identities of those who are elected will inevitably shape the course that we follow as a nation….A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached. This is because virtually every means of communicating ideas in today’s mass society requires the expenditure of money…”

15. Buckley on spending limits • Can’t limit Independent Expenditures • “The concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment.” • Can’t limit Candidate Personal expenditures • “The candidate, no less than any other person, has a First Amendment right to engage in the discussion of public issues and vigorously and tirelessly to advocate his own election and the election of other candidates.” • Can’t limit Overall Campaign expenditures • “The major evil associated with rapidly increasing campaign expenditures is the danger of candidate dependence on large contributions. The interest in alleviating the corrupting influence of large contributions is served by the act’s contribution limitations and disclosure provisions rather than by campaign expenditure ceilings.”

16. Buckley v. Valeo • Upholds disclosure requirements • Strikes down spending limits because they interfere with first amendment freedoms • Upholds contribution limits

17. Buckley on contribution limits “A limitation upon the amount that any one person or group may contribute to a candidate or political committee entails only a marginal restriction upon the contributor’s ability to engage in free communication….It is unnecessary to look beyond the Act’s primary purpose to limit the actuality and appearance of corruption resulting from large financial contributions in order to find a constitutionally sufficient justification for the $1000 contribution limit.”

18. Buckley v. Valeo • Upholds disclosure requirements • Strikes down spending limits because they interfere with first amendment freedoms • Upholds contribution limits • Upholds presidential public financing because expenditure limits are voluntary

19. Loopholes under FECA as governed by Buckley • Bundling • Independent expenditures • Soft Money • Issue Advocacy • Millionaire candidates

20. Bipartisan Campaign Finance Reform Act of 2002 (BCRA) • Bans national party soft money • Limits state party soft money • Raises hard money limits

21. Hard Money limits under BCRA • Individuals: • Can give $2,000 per candidate per campaign • Can give $25,000 to a party, per year • Can give a maximum of $95,000 to candidates, parties, and PACs • PACs: • Still can give $5,000 to each candidate • Still can give $15,000 to each party • No limit on overall contributions

22. Bipartisan Campaign Finance Reform Act of 2002 (BCRA) • Bans national party soft money • Limits state party soft money • Raises hard money limits • Millionaire amendment • Ad limits

23. McConnell v. FEC • Upholds soft money ban. The governmental interest underlying §323(a).preventing • “The actual or apparent corruption of federal candidates and officeholders constitutes a sufficiently important interest to justify contribution limits. …The idea that large contributions to a national party can corrupt or create the appearance of corruption of federal candidates and officeholders is neither novel nor implausible.” • Upholds hard money restrictions on issue ads. • “Although the . . . advertisements do not urge the viewer to vote for or against a candidate in so many words, they are no less clearly intended to influence the election."

24. Loopholes under BCRA • “527” and 501(c)(3) organizations • Disclosure requirements • No contribution limits

25. Top Ten Democratic 527s in 2004

26. Top Ten Republican 527s, 2004

27. Citizens United vs. FEC • Overrules McConnell in part: • Overrules the ban on independent expenditures paid for by corporations or unions out of their treasuries 60 days before an election • Overturns ban on independent expenditures from corporate and union treasuries • "If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech," - Justice Kennedy

28. Consequences?Problems?