Campaign Finance• Last time• History of campaign finance legislation• The dynamics of fundraising and campaigningLast time: elections• Constitution reserves selection procedures for electors to the state governments (most are winner-take-all)• majority rule (270+) in Electoral College, backed up by unit-rule majority election in House–see http://www.vote-smart.org/election_president_electoral_college.php• Electoral College is population-weighted, but with a small bias in favor of small states (one vote for each member in H or S, CA has 55)Last time, cont.• Selected elections with structural/institutional valence– 1796, 1800, 1940: constitutional changes– 1876, 2000: major disputes over counting votes– 1824: popularization of elector selection– 1976: first application of public financingNominations• Who chooses the choosers?– party elites acting in concert: the caucus system (up to 1820)– party elites via nominating conventions: brokering (1832-1968)– candidate-centric campaigns and the primary system (1972- )• public funding and beyond– era of government subsidies to primary and general-election candidates began in 1976– GW Bush: first major-party nominee to have opted out of matching fund system during the primariesEarly efforts at Regulating campaign money• Regulatory efforts go back to the 1867 Naval Appropriations bill – prohibited fed. officers/employees from soliciting donations from naval yardworkers• 1883: Pendleton Act, prohibited soliciting by fed. workers of fed. workers; prohibited “political” removals for largest classes of fed. employees• 1907: Tillman Act, prohibited corporations and banks from making direct donations to fed. candidates• 1939: Hatch Act, prohibited fed. employees from participating in campaigns or contributing• 1947: Taft-Hartley Act, prohibited labor unions from making contributionsModern regulations• 1971 FECA– disclosure requirements; self-financing limits; per-voter cap on TV advertising spending• Pipefitters Union v. U.S. (1972) clarified union rights to establish PACs• 1974 FECA Amendments– created FEC; contribution limits; spending limits; public financing of prez. elections for “major” parties only; enforcement teeth• Sun Oil case (1975) and Buckley v. Valeo (1976)• 2002 Bipartisan Campaign Reform ActThe basics• Hard money: donations by individuals, parties or PACs to candidates or parties or PACs (who then give to candidates or parties)– individuals now limited to $2,000 per candidate per election (primary, general, special) up to $37.5K per 2-year cycle; multi-candidate PACs limited to $5,000– individuals can give up to $25K to national party, $10K to each state/local party, $5K to each PAC; $95K aggregate limit (excludes state/local parties)– PACs raise money from individuals, who are capped in totals they can give to parties and PACs• Soft money: Independent expenditures and issue advocacy spending. Donations to and expenditures by “527” committees are unlimited. Can’t be “coordinated” with hard-money committees.The basics, cont.• Candidates get money from individuals, PACs, parties, self-contributions, and federal matching funds (primaries) or federal grants (convention and general election)• Corporations and labor unions can’t give money directly to candidates, but…– can give through PACS–can bundle individual donations informally– can make independent expenditures on behalf of candidates or spend on “issue advocacy” campaigns, limited only by shareholder/member oppositionspending constraints• Matching funds in the primaries:– Individuals’ donations UP to $250 each can be matched if candidate raises at least $5K in each of 20 states at $250 per or less– To retain eligibility once primaries begin, must get 10+ percent of vote in two consecutive primaries or 20 percent in one– Candidates’ personal contribs limited to $50K if accepting fed. dollars (see Perot)– Primary spending limited by state and overall (about $36.5 million this time)– A candidate who secures nomination early may be spent out well before the convention (Dole, 1996: only $1.5 million to spend between April and August)• Convention grant ~$15 million• General election limit ~$75 million (grant from feds)Out or In?• Federal law limits aggregate primary spending by a candidate to around $37 million if accepting matching funds– by Aug. 20, Bush had raised $338+ million ($264 million before the convention) and spent $222 million (compare to $186 million total in 2000)– Kerry raised $311+ million ($236.5 million before the convention) and spent $198 million. He reimbursed himself for some $6+ million of self-financing during the primaries and has received• General election funding limited to ~$75