Terms/Resources


There are so many different terms and ideas related to the issue of money in politics, that it can often get confusing (even for the experts). We thought it would be helpful to have a list of the definitions of just some of the primary terms related to our work.

Political Groups

501c4 Organizations: Also known as social welfare organizations, these tax-exempt organizations can participate in some political activities as long as it is not their primary focus. Many 501c4 groups engage in lobbying, or influencing specific legislation, as a way to further their cause. These groups are not required to disclose their donors and may contribute to super PACs.

527s: Tax-exempt organizations involved in political activities such as issue advocacy, getting out the vote, supporting candidates, etc. They are often political action committees (PACs) or political parties. Each 527 must file disclosure reports either with the Federal Election Commission, the Secretary of State in the state in which the organization is located, or the IRS, depending on the kinds of activities it engages in. Since the Citizens United decision, 527 political action committees can raise and spend unlimited amounts of money to expressly advocate for or oppose a specific candidate, whereas before 2010, this was not allowed.

Political Action Committee (PAC): A group formed (as by an industry or issue-oriented organization) to raise and contribute money to candidates likely to advance the group’s interests.  PACs often represent specific businesses (AT&T, for example) or special interests (the National Rifle Association, for example) that often can’t otherwise contribute directly to a candidate, and they typically raise money through their members or employees. Unlike super PACs, traditional PACs have spending and contribution limits. PACs can contribute up to $5,000 annually to any federal political campaign and $15,000 annually to a national political party. PACs can also accept up to $5,000 annually from any individual or committee donor.

Super PACs: Also known as independent expenditure committees, super PACs can raise and spend unlimited amounts of money for the sole purpose of supporting or opposing a specific candidate. They first came into existence after the 2010 Speechnow.org v. Federal Election Commission decision. Although PACs can donate directly to candidates, super PACs cannot. Super PACs can accept funding from anyone (unions, corporations, individuals, etc), and although they’re required to disclose their donors, they can accept donations from 501c4 groups (as an organizational donation) who are not required to disclose their donors.

Campaign Funding:

Bundlers: Typically, one person will collect large donations and group, or “bundle,” those donations into one very large donation. The person collecting the donations is credited with bringing in the contributions. The advantage is the bundler is able to contribute much more than the legal contribution limit for PACs and individuals, giving him or her more influence as a fundraiser, and giving the candidate more funds to work with.

General Election Public Funding: Public financing that is available to presidential candidates who meet certain eligibility requirements. Candidates who accept the funding are given a matching grant equal to a specific spending limit for that election year ($91.2 million for 2012), and they are not allowed to raise private funds during the general election. In 2008, Barack Obama became the first candidate to opt out of public funding.

Independent Expenditures: These are expenses incurred by outside groups that are not coordinated with any campaign. They refer only to the expense of advertisements that expressly support or oppose a specific candidate (i.e. mailed flyers, commercials, phone calls, etc.). Before the Citizens United decision, independent expenditures could only be made by unions and corporations through their PACs. Now, they can spend money on these items directly from their treasuries. All independent expenditures, including the name of the candidate being supported or opposed, must be disclosed to either the Federal Election Commission or the Secretary of State. 

Supreme Court Decisions:

Buckley v. Valeo: A 1976 Supreme Court decision which upheld a 1974 law requiring that candidates, parties, and committees disclose their fundraising and spending. It also upheld individual contribution limits and voluntary public financing. Importantly, the decision struck down limits on campaign spending and limits on contributions from the actual candidate as infringements on free speech (unless public financing is accepted), and it struck down limits on spending by outside political groups. This decision is credited with equating money with speech.

Citizens United v. Federal Election Commission: A January 2010 Supreme Court decision that allowed corporations and unions to use money from their general treasuries to expressly advocate or oppose a specific candidate. It also allowed nonprofit groups to use corporate and union funds to air electioneering communications (typically TV ads) within 30 days of a primary and 60 days of a general election, which was previously prohibited.

Speechnow.org v. Federal Election Commission: This Supreme Court decision in March 2010 found it unconstitutional to put contribution limits on groups funding independent expenditures. The decision allowed the creation of now-popular Super PACs.

Regulation:

Federal Election Commission: The independent agency responsible for enforcing campaign finance laws. Federal candidates, except for Senate candidates, file disclosure reports with the FEC. Senate candidates file with the Secretary of the Senate which forwards those reports to the FEC. They also monitor public financing and any fees administered to groups breaking campaign finance laws.

 

Online Resources:

Opensecrets.org (for information on just about all things related to money in politics)

Federal Election Commission (for donor and expenditure reports for all federal candidates and committees)

National Institute on Money in State Politics (for campaign finance data and reports from all 50 states, along with federal campaign finance data)

CO Secretary of State (TRACER) (for reports on CO statewide candidates and committees; see Secretary of state websites for information on other states)

IRS (for information on filing requirements for and definitions of political organizations and non-profits)

United Republic (for information on an Amendment solution to campaign finance reform)

Move to Amend (like-minded organization with information on an Amendment solution to campaign finance reform)

Common Cause (like-minded organization focused on holding the government accountable, campaign finance reform, and voting rights)

Political Activity Law (daily links to news stories around campaign finance)

Election Law Blog (information on campaign finance, voting rights, redistricting, and all other things “election”)

Vote Smart (information on candidates and politicians)

 

Reading list:

Anthony Corrado, et al. The New Campaign Finance Sourcebook (Brookings Institution, 2005). A  history of campaign finance in America, along with an overview of defining concepts and issues.

Elizabeth Drew. Whatever It Takes: The Real Struggle for Political Power in America. (Viking Books, 1997). Here, Elizabeth Drew looks at campaign spending in ’96, how parties and interest groups tried to control national agendas, and the way that many used loopholes and other shady strategies to get power.

Thomas Ferguson. Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems(University of Chicago Press, 1995). Ferguson offers a provocative argument, outlining what he calls an investment approach to American politics, in which powerful businesses “invest” in parties and candidates, controlling the political agenda.

Kurt Hohenstein. Coining Corruption: The Making of the American Campaign Finance System (Northern Illinois University Press, 2007). Hohenstein shows that there is a long record, dating back to the country’s founding, that legislators and the courts tightly regulated money in campaign finance, believing instead that “money=corruption” if that money overwhelmed other voices and curbed dialogue.

Greg Kubiak. The Gilded Dome: The U.S. Senate and Campaign Finance Reform. (University of Oklahoma Press, 1994). This is a look at attempts to reform campaign financing in the crucial years of the mid 1980s to early 1990s, when the current pace and style of fundraising was becoming more entrenched. Kubiak follows one Senator David Boren of Oklahoma, and his struggles to enact legislation, as well as the different roles played by media, lobbyists, and others.

Lawrence Lessig. Republic, Lost: How Money Corrupts Congress–and a Plan to Stop It (Twelve, 2011). Lessig’s book is probably the most engaging and accessible, if not most popular current work on money and American politics.

Adam Schrager and Rob Witwer. The Blueprint: How the Democrats Won Colorado (and Why Republicans Everywhere Should Care) (Speaker’s Corner: 2009). An inside look at Colorado’s change in majority leadership after the 2008 election and the role Big Money has played in that shift.

George Thayer. Who Shakes the Money Tree? American Campaign Financing Practices from 1789 to the Present. (Simon and Schuster, 1974). Thayer presents a long view of the practice of funding elections in America. His primary purpose is to demonstrate not only who gives and how it gets raised, but why people give, what they give, what they get in return.

 

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