The Federal Election Campaign Act (FECA) and the Bipartisan Campaign Reform Act (BCRA) regulate political campaign spending in the US. Rules include contribution limits, disclosure requirements, and prohibitions on certain contributions. Independent spending is allowed with a disclosure requirement. Companies and unions can establish their own PACs and engage in other election-related activities. Groups must disclose their fundraising and spending efforts. The US Supreme Court’s Citizens United v. Federal Election Commission case allowed corporations and unions to fund independent political broadcasts.
The ground rules for political campaign spending in the United States are mostly drawn from the Federal Election Campaign Act (FECA). FECA dates back to the early 1970s. It was amended in 2002 with the passage of the Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold Act by its sponsors. For these statutes, the general rules for US campaign spending are divided into three categories: contributions, expenses, and disclosures.
The most commonly recognized rule concerns campaign contribution limits. FECA provides limits on what a person or group can contribute to a political candidate, political action committee (PAC), or party committee. These contribution ceilings are adjusted each election cycle to keep pace with inflation. For example, in the 2009-2010 election cycle, a person could legally give up to $2,400 US Dollars (USD) to a candidate or his committee of candidates. This person could also contribute up to $30,400 USD to his or her National Party Committee each calendar year.
National, state, and local party committees are authorized to contribute funds to the successful federal candidate, as long as they meet the FECA contribution limits. A national party committee can contribute up to $5,000 USD to each candidate or committee of candidates during an election. This particular contribution limit is not adjusted for inflation. No person or organization may make a contribution on behalf of another person. They also may not make a single cash contribution of $100 USD or more.
Under certain circumstances, the FECA completely prohibits contributions. The law prohibits any federal campaign contributions or spending by unions, corporations, US government contractors, and foreign nationals. Additionally, the FECA prohibits domestic banks, foreign nationals, and federally chartered corporations from making state or local campaign contributions or expenses. With the passage of the BCRA, monetary contributions to national political parties were banned. Soft money contributions are unregulated contributions from independent organizations that are not associated with any candidate’s campaign.
Different rules apply to independent expenses. Federal election law allows one person or group such as a PAC to make any independent spending that they want. Independent spending exists when organizations or individuals provide funding for campaign communications, such as television advertising, that calls for the election or defeat of a specific candidate and which is made independent of that candidate’s campaign. While there is no limit on this expense, there is a disclosure requirement. The entity or person must report the existence of the autonomous expenditure and the origin of the money.
In early 2010, the US Supreme Court heard Citizens United v. Federal Election Commission. In this case, the court held that, due to free speech considerations, campaign spending laws in effect at the time could not prevent a corporation or union from funding an independent political broadcast associated with a federal election . Also, as an example of another form of independent spending, state and local committees can pour unlimited amounts of money into grassroots activities such as campaigning in support of their candidate.
While companies and unions are prohibited from making contributions or expenses into a federal political campaign, they can establish their own PACs. These PACs can raise money from a limited group of people, then use the funds raised to support specific political campaigns or committees. In addition to supporting these PACs, businesses and unions are permitted other federal election-related activities, subject to certain restrictions.
Finally, under the FECA, groups including PACs; national, state and local political parties; and candidate committees are required to disclose the results of their federal campaign fundraising and campaign spending efforts. These organizations must disclose the names of any person who gives them more than $200 USD in any given election period. They must also disclose any spend to any person or vendor that exceeds $200 USD.
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