Pressure Group Finance

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Federal Election Campaign Act 1971

Intorduces federal funding for presidential (but not congressional) elections, with matching funds provided for candidates in the primaries who raise lots of small contributions in at least 20 states.

All contributions to candidates must be disclosed and supervised by the Federal Election Commission - the process is open and transparent 

Limits are placed on all direct contributions to candidates (hard money - intended to prevent the buying of elections)

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The Bipartisan Campaign Reform Act 2002

(McCain v Feingold)

The main loophole in the funding of campaigns was in the form of soft money. This is unregulated money usually given to parties for general political activites.

Through soft money, money could also be given to the campaign to allow individuals to spend money on behalf of candidates.

The BCRA banned all soft money contributions to candidates op parties and increased the upper limit for hard money doinations from individuals to $2500

This meant candidates make internet appeals to large numbers of small donors, making greater use of grass-root funding.

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527s

The BCRA led to the growth of 527.

Named after a setion of the US tax code which allows organisations to raise and spend an unlimiter amount of money for general political activities such as tv adverts.

527s meant candidates don't always have to rely on PACs

Eg) The swift boat veteran for truth group- funded an advert attacking Kerry's war record on bravery in order to neutralise his advantage over Bush who was an alleged draft dodger (2004)

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PACs

An independant organisation that intrest groups, officeholders and political candidates can establish for the sole purpose of contributing money to the campaigns of candidates who symapthise with it's aim 

They are a result of federal laws that prohibit most interest groups from donating money to political campaigns.

They are the finiancial arms of pressure groups, set up to raise campaign fund and channel them to support or oppose candidates in electoral contests. 

They are limited by the amount of hard money they can donate to candidates ($5000)- but they can 'bundle' these contributions to increase the sum given

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FEC v Citizens United

2010 Supreme Court Ruiling.

Allows corporations, unions and individuals to make unlimited donations to partisan groups, now known as Super PACs.

These then campaign for or against electoral candidates (but can not directly donate any hard money)

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Super PACs

  • A PAC that is allowed to raise and spend unlimited amounts of money from corporations, unions, individuals and associations. Some non-profit groups are allowed to contribute to super PACs without disclosing where their money came from.
  • Super PACs have no limitations on who contributes or how much they contribute. They can raise as much money from corporations, unions and associations as they please and spend unlimited amounts on advocating for the election or defeat of the candidates of their choice.
  • There are restrictions prohibiting super PACs from working in conjunction with the candidates they're supporting. They can not co-ordinate their spending with either parties or candidate, but can spend on behalf of them using 'independant expenditure' for 'issue advocacy'
  • In 2010, the US Chamber of Commerce spent $75 million to target for defeat congressmen who had voted for healthcare reform (eg spending money on attacking advertising)
  • In 2010 mid-terms, the new super PAC American Crossroads spent $70 million supporting Republican candidates.
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Federal Regulation of Lobbying Act 1946

Required lobbyists to regsiter with the clerk of the HofR and the secretary of the Senate if they raised money to be used to help or hinder legislation.

However this has been largely ignored.

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1990s restrictions on PG

Congress passed further regulatory legislation by expanding the definition of what qualified as a pressure group - more groups therefore had to register.

Significant restrictions on lobbyists; eg) by banning of gifts to members of Congress

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2007 Honest Leadership and Open Government Act

  • Passed by the Democrats, but had bipartisan support. 
  • Prohibiting gifts by lobbyists
  • Closing the revolving door
    • Senators have to wait two years before they can lobby congress. Cabinet offices can not lobby the department they working in for 2 years. Senior Senate and House staff can not lobby contacts with the entire Senate for 1 year.
  • Full public disclosure of lobbying activity
    • disclosure filings to be filled quarterly rather than biannually. Increases civil penalty for knowing/wilful violations of the Lobby Disclosure Act, Increased to $200,000. Criminal penalty up to 5 years. Gov accountability office will audit annually lobbyists compliance
  • Congress Pensions Liability
    • anyone convicted of bribery or conspiracy will lose retirement benefits
  • Prohibited use of Private Aircraft
    • Candidates, other than those running for the House, to pay fair market rate for air fares when using non-commercial jets + house members have to use commercial aircraft
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527 Significance

They are significant:

  • impact on the electoral process can be vital in a close race, some people argue congressmen will not speak out against powerful interests because they are afriad of being targeted for defeat.
  • they bolster the rise of candidate-centered campaigns- they support candidates, not parties. Candidates feel more beholden to them than their party and this can affect their voting behaviour in Congress.
  • They encourage influencing peddling in Congress where is is alleged you have to 'pay to play' and they can deter challengers to incumbent members of Congress

They aren't significant:

  • Existance of 527s and no concrete proof of correlation between PAC funding and the way Congressmen vote on issues
  • The transparency of much PAC funding may also lessen their impact
  • PAC funding is much less signigicant for candidates who fund their own campaigns or receive money from other sources.
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