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1971: Federal Election Campaign Act (FECA)

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1971: Federal Election Campaign Act (FECA)

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The Federal Election Campaign Act (FECA) set the basic rules for money in elections:

Made candidates tell the public who gave them money and how they spent it

Put limits on how much money could be spent on ads

Stopped candidates from using too much of their own money to fund their campaigns

But FECA wasn’t perfect. There were loopholes, which meant rich people and big corporations still found ways to influence elections with money

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After the Watergate scandal, new laws were added to the Federal Election Campaign Act (FECA) to make campaign funding more fair. These changes:

Created the Federal Election Commission (FEC) to enforce rules

Set strict limits on how much money people can donate to campaigns

Placed limits on how much campaigns can spend

Started a public funding system to help pay for presidential elections

These changes helped manage money in politics and made elections more clear.

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This important Supreme Court case changed the rules about money in elections.

Restrictions on how much money people can give directly to candidates (hard money).

Got rid of limits on money spent by individuals or groups to support candidates on their own (independent expenditures).

Said that spending money on elections is a type of free speech therefore is protected by the First Amendment.

Made a clear difference between giving money to a candidate and spending money to support them, a rule that still affects campaign finance today.

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A big problem in campaign finance was “soft money”. This was money that people and businesses could give to political parties without limits. It was supposed to be used for general party activities, not directly for candidates. But in reality, it became a way for rich donors and big companies to secretly influence elections. Unlike “hard money” which had strict rules and limits, soft money had no rules, making it a big loophole in the system.

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The McCain-Feingold Act (BCRA) tried to fix problems with money in politics.

Stopped national political parties from using unlimited money (soft money)

Limited certain political ads close to elections

Raised the limit on how much money people could give directly to candidates (hard money)

BCRA still had problems. Some parts of the law were later removed by the courts, and money still plays a big role in elections.

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This Supreme Court decision changed how money is used in elections by:

Saying that companies and unions have the right to spend as much as they want on political ads because of free speech

Leading to the creation of Super PACs, which can raise and spend unlimited money to support candidates (but not directly give to them)

Allowing big businesses and organizations to spend huge amounts of money on elections

This decision made it much easier for wealthy groups to influence politics.

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This Supreme Court case made campaign finance rules even less strict.

Removed limits on how much total money a person could give across multiple candidates and committees

Allowed people to give unlimited money to as many candidates and committees as they wanted

Kept limits on how much money a person could give to each individual candidate

This decision made it easier for wealthy people to have more influence on elections.

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PACs and Super PACs are two ways money is raised for politics:

PACs:

Can give money directly to candidates, but only in limited amounts

Have strict donation limits

Are often connected to businesses or unions

Super PACs:

Cannot give money directly to candidates

Can raise and spend unlimited amounts

Must stay separate from the candidate’s campaign

Super PACs can spend as much as they want to support a candidate, as long as they don’t work directly with them.

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Independent Expenditures in Modern Campaigns

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Independent Expenditures in Modern Campaigns

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Independent expenditures play a big role in elections

Money spent to support or attack candidates but not coordinated with them

No spending limits after the Citizens United case

Mostly used for ads and reaching voters

Must be reported to the Federal Election Commission (FEC)

Spending on independent expenditures has increased in recent elections, giving outside groups more influence

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Incumbents (current officeholders) have big advantages when it comes to fundraising:

They already know lots of people who donate money

More people recognize their name, so it’s easier to get support

They get a lot of money from PACs

They can raise money early, giving them a head start

This incumbent advantage makes it tough for new candidates to compete in elections.

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Individual contributions are still regulated but have changed over time

Limits on donations go up every two years to keep up with inflation

People can give money directly to candidates, political parties, and PACs

There’s no total limit on how many candidates or committees a person can donate to

Donations over a certain amount must be reported for transparency

These rules try to allow political participation while also preventing corruption