Campaign Finance Chapter Notes | AP U.S Government and Politics - Grade 12 PDF Download

Introduction

Modern U.S. political campaigns rely extensively on financial resources to fund television advertisements, social media outreach, grassroots organizing, and fundraising events. This dependence on money allows candidates to remain competitive and visible but has fueled decades of legal and political controversy. Key questions persist: How much funding is excessive? Should financial contributions be considered a form of free speech? And how can Congress or the judiciary regulate campaign finance while respecting constitutional protections?

Campaign Finance Legislation and Judicial Rulings

Efforts to regulate campaign finance intensified in the 1970s as campaigns grew costlier and television ads gained prominence.

Federal Election Campaign Act (FECA, 1971/1974)

• The FECA established transparency requirements for federal candidates and imposed limits on contributions from individuals and Political Action Committees (PACs).
• In 1974, amendments to FECA led to the creation of the Federal Election Commission (FEC), an independent body responsible for overseeing and enforcing campaign finance regulations.

Buckley v. Valeo (1976)

• This pivotal case challenged the constitutionality of FECA’s spending restrictions. The Supreme Court upheld limits on contributions but overturned caps on candidates’ personal campaign expenditures.
• Consequently, money was increasingly viewed as a protected form of speech, giving wealthier candidates a significant advantage in elections.

Note: The Court reasoned that while contribution limits curb corruption, restricting personal spending infringes on the First Amendment’s guarantee of political expression.

The Bipartisan Campaign Reform Act (BCRA, 2002)

Known as the McCain-Feingold Act, the BCRA aimed to address loopholes in campaign finance and reduce the influence of “soft money” in federal elections.

Key provisions included:

• Prohibiting soft money contributions to national political parties.
• Restricting corporate and union-funded issue ads within 30 days of a primary or 60 days of a general election.
• Mandating the “I’m [name], and I approve this message” disclaimer for campaign-funded advertisements.

The BCRA sought to shift influence away from large donors and enhance transparency in campaign ads. However, its impact was diminished by subsequent court decisions.

Citizens United v. FEC (2010)

This landmark ruling fundamentally reshaped the landscape of U.S. campaign finance.

The Case

• Citizens United, a conservative nonprofit, sought to broadcast a film critical of Hillary Clinton near the 2008 Democratic primary.
• The FEC prohibited the film, citing BCRA’s restrictions on corporate-funded electioneering communications within 60 days of an election.
• Citizens United challenged the ban, arguing it violated their First Amendment rights.

The Ruling

In a 5-4 decision, the Supreme Court ruled in favor of Citizens United.

• It held that corporations, unions, and associations possess the same free speech rights as individuals.
• The government cannot restrict independent political expenditures by these entities, provided they do not coordinate directly with candidates.

This decision invalidated key BCRA provisions and redefined political spending as protected speech.

Note: Citizens United v. FEC paved the way for unlimited independent expenditures, spurring the creation of Super PACs, which can raise and spend unlimited funds to advocate for or against candidates, as long as they remain independent of campaigns.

The ruling dramatically altered elections, with independent spending surging from $574 million in 2008 (pre-Citizens United) to $1.3 billion in 2012, $3.3 billion in 2020, and $4.5 billion in 2024. Significant contributions from billionaires and corporations via Super PACs, such as Elon Musk’s $280 million in 2024, highlight how the decision shifted influence toward wealthy donors, reshaping campaigns and amplifying the role of financial resources in electoral outcomes.

PACs and Super PACs

Political Action Committees (PACs) are organizations that collect and distribute funds to support candidates or causes. Following Citizens United, Super PACs emerged as a powerful new entity.

Key Differences Between PACs and Super PACs

While PACs remain relevant, Super PACs have become the dominant force in campaign spending, particularly in presidential and Senate races.

Hard Money vs. Soft Money

Distinguishing between hard money and soft money is essential for understanding campaign finance regulations.

• Hard Money: Regulated contributions given directly to candidates or political parties, subject to legal limits and mandatory disclosure to the Federal Election Commission (FEC).
• Soft Money: Unregulated donations to political parties for activities like voter registration or party-building, not directly supporting specific candidates. Before the BCRA, soft money was often used to indirectly influence elections.

Note: The Bipartisan Campaign Reform Act (2002) eliminated soft money contributions to national political parties to address this loophole.

The Debate Over Money in Politics

Arguments in Favor of Campaign Spending as Speech

• Financial contributions enable individuals and groups to express support for candidates and policies.
• Restricting spending could limit political expression, infringing on free speech rights.
• Independent expenditures, such as Super PAC advertisements, do not directly corrupt candidates if coordination is absent.

Arguments for Stricter Campaign Finance Laws

• Unlimited contributions allow wealthy individuals and corporations to exert disproportionate influence over elections.
• Super PACs often collaborate closely with campaigns in practice, undermining the “independence” requirement.
• The rise of dark money and lack of transparency erodes public confidence in the electoral system.

Note: The Citizens United ruling does not permit corporations or unions to donate directly to candidates; it only safeguards independent political expenditures, a critical distinction.

Conclusion

Campaign finance remains a deeply contentious issue in American politics. Balancing the protection of free speech with the need for equitable elections has resulted in a complex web of laws, court rulings, and workarounds. While the FEC, PACs, and campaign finance regulations attempt to manage political funding, decisions like Buckley v. Valeo and Citizens United v. FEC have affirmed that money constitutes protected speech—a form of expression that often comes at a high cost.

Key Terms

• Bipartisan Campaign Reform Act: The Bipartisan Campaign Reform Act (BCRA), also called the McCain-Feingold Act, is a 2002 federal law aimed at regulating campaign finance in U.S. elections. It banned soft money contributions to national parties and tightened limits on individual donations, promoting transparency and accountability in political funding.
• Buckley v. Valeo: Buckley v. Valeo, a 1976 Supreme Court case, examined the constitutionality of campaign finance restrictions. It upheld contribution limits but struck down caps on independent expenditures, reinforcing the notion that political spending is a form of protected free speech.
• Citizens United v. Federal Election Commission: Citizens United v. FEC, a 2010 Supreme Court decision, allowed corporations and unions to spend unlimited funds on independent political activities. It expanded First Amendment protections, equating spending with speech and reshaping campaign finance dynamics.
• Federal Election Commission (FEC): The FEC, established in 1975, is an independent agency that enforces U.S. campaign finance laws. It ensures transparency, regulates contributions and expenditures, and oversees public funding for presidential elections.
• Federal Election Campaign Act (FECA): The FECA, enacted in 1971, regulates campaign financing in federal elections. It sets contribution limits, mandates expenditure disclosures, and created the FEC, forming the foundation for modern campaign finance oversight.
• Hard Money: Hard money refers to regulated political donations given directly to candidates or parties, subject to FEC limits and disclosure requirements. It ensures transparency and accountability, unlike less-regulated soft money used for party activities.
• McCain-Feingold: The McCain-Feingold Act, officially the BCRA of 2002, addressed campaign finance by banning soft money and imposing stricter contribution limits. It aimed to reduce special interest influence and enhance electoral transparency.
• Political Action Committees (PACs): PACs are organizations that raise and spend funds to support or oppose political candidates. They play a significant role in elections, influencing outcomes through campaign contributions and shaping political dynamics.
• Soft Money: Soft money consists of unregulated donations to political parties for activities like voter registration, not directly supporting candidates. Its use raised transparency concerns, leading to its ban under the BCRA.
• Super PACs: Super PACs, or independent expenditure-only committees, can raise and spend unlimited funds to influence elections without coordinating with candidates. Emerging post-Citizens United, they amplify the impact of wealthy donors in campaigns.