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Navigating the Complex Terrain of Campaign Finance

Pile of money chained with the stamps of "I voted" on an American flag

It’s no secret that politicians fundraise their way to power. But far less is known about how political fundraising actually works.

How do politicians raise money? What are the rules governing political campaigning? What roles do individuals, corporations, political action committees (PACs), and Super PACs play?

RSnake spoke with veteran political fundraiser Pasha Moore for help hacking through the knotty landscape that is political fundraising.

Fundraising: The Lifeblood of Political Campaigns

Political campaigns cost money. Each campaign has staff to pay, yard signs to put up and advertisements to buy. All this is accomplished through political fundraising.

Research in the area has found a strong link between the amount of money raised for a campaign and ultimate electoral success. This may be because candidates with more money can reach a larger audience. But, as Lynn Vavreck pointed out in a New York Times article, the amounts candidates can raise also signal the amount of support they have. It could also be that the act of fundraising introduces the candidate to more influential people, which in turn leads to more support.

Certainly, there are ethical issues that arise from fundraising in politics. Although there aren’t technically any strings attached to political donations, politicians may be indirectly influenced by their donors.

The Intricacies of Corporate vs Individual Donations

Different rules govern how individuals and organizations, including unions and for-profit companies, can donate to political parties or campaigns.

As of 2023, FEC rules state that individuals can contribute up to $3,300 per election to a candidate’s campaign. They can also donate up to $41,300 annually to a political party. In addition, donors may contribute up to $123,900 to “additional national party committee accounts, " including expenses for presidential nomination conventions, election recounts or other legal fees, and party headquarters.

Corporations and unions cannot contribute money directly to campaigns or political parties. But they can create or participate in PACs, which are permitted to donate. Donations through most traditional PACs have similar limits to individual contributions.

But there is one way for individuals and corporations to donate unlimited political funds – Super PACs. The FEC defines Super PACs as “independent-expenditure-only political committees.”

Super PACs are only allowed to spend money on communications (independent expenditures) that advocate for or against a specific candidate and are not coordinated with a candidate’s campaign. For example, the Super PAC America First ran this advertisement in 2020.

Since Super PACs technically operate separately from a candidate, they are legally viewed as being at low risk for corruption.

Deciphering the Impact of the Citizen United vs. FEC Case

In 2010, a landmark ruling by the Supreme Court was made. One that many people say changed election fundraising in America.

The ruling involved Citizens United, a right-leaning non-profit organization and the FEC. In 2008, Citizens United planned to release a documentary called Hillary: The Movie, which criticized then-presidential-candidate Hillary Rodham Clinton. Citizens United planned to release the film on cable television within 30 days before the Democratic primary elections. This violated a rule in place at the time that organizations and unions couldn’t spend money on “electioneering communications” within 30 days of a primary election.

Citizens United argued the rule shouldn’t apply in their case since the program technically didn’t argue in favor of or against Clinton as an advertisement would.

The district court in Washington, D.C. ruled against Citizens United, and the case was eventually brought to the Supreme Court. The Supreme Court ultimately ruled that a section of the law granting different free speech rights to individuals and corporations was unconstitutional. This gave organizations the same rights to free speech as individuals.

It also stated that since organizations like Citizens United weren’t directly connected to political parties or candidates, there was no risk of corruption in the form of politicians soliciting money for votes.

This decision paved the way for a later ruling that effectively legalized unlimited donations to independent PACs (now called Super PACs).

Many believe the case allowed wealthy individuals and organizations to exert excessive influence on the political process.

Others think the decision was a win for free speech.

Moore explained that since corporations pay taxes, in some cases contributing more to a government’s coffers than individuals, it could make sense for them to have the same rights to free speech.

She also stressed that since both political parties can use Super PACs, the consequences of the Citizen’s United ruling are equally distributed. “Everyone can have a Super PAC. No one’s being cut out from having that,” she said.

PACs: How They Shape American Politics

Although they are often in today’s headlines, PACs are not new. The first was formed in 1944 to support President Franklin D. Roosevelt’s re-election. The amount of influence PACs hold is still a matter of debate.

Some research published in 2000, before the Super PAC era, found that PACs helped challengers more than incumbents. It also found evidence that PACs align with a candidate’s position – they don’t change a politician’s views.

In her chat with RSnake, Moore explained that in her experience, people donate to politicians already aligned with their views. They donate “to make sure that somebody who agrees with you 80% of the time gets elected,” she said.

However, it could be said that party priorities may be set with donors (who are also voters) in mind. For example, if the Democratic party has the support of specific unions, it likely wouldn’t endorse policies that would alienate the members of those organizations.

The influence of Super PACs has been much discussed. However, since they are still relatively new to the political landscape, it is difficult to pinpoint their impact. Although donations to Super PACs are unlimited, they are constrained to spending the money on political communications.

However, political communications, especially during elections, can be powerful.

Nathan Katz of the University of Pittsburgh explained that Super PACs have the advantage of running commercials a candidate couldn’t. For example, a candidate may not want to be connected with an attack ad, but a Super PAC could run one without making the candidate look bad.

There is also a lack of transparency in Super PACs that some find disturbing. Although donations to Super PACs must be reported, they are often difficult to trace. When organizations, for example, donate to a Super PAC, only the organization’s name shows on the list. PACs can also contribute to Super PACs.

Critics also point out that although Super PACs legally operate separately from campaigns, in reality, the line is very blurred.

For example, according to the American Bar Association, the FEC interprets evidence of coordination between Super PACs and candidates as involving private communication. But if a candidate were to post a message publicly, this wouldn’t be considered coordination. As a result, a technique called “red-boxing” is often used. To “red-box” something, a particular communication is put on a candidate’s website in a red box – meant for those (like Super PAC directors) who understand the implications of the text inside.

However, voters ultimately make their own decisions. As Moore pointed out, election results are never a sure thing, no matter how much money is spent on advertisements.

One thing is certain: election spending has risen significantly in recent times. The 2020 presidential campaign was the most expensive in history, with over $20 billion spent by presidential, congressional campaigns, and PACs in the 2019-2020 election cycle.

Video Thumbnail of "Exposed: money in Politics"

Campaign Expenditures: Where Does the Money Go?

Those billions of dollars are spent on more than advertisements, of course. But where does it all go?

Moore explained money may be spent on any number of items, including “keeping the lights on” at campaign headquarters. Parties and candidates must pay for staff, including campaign managers, political consultants, field directors, communications managers, fundraisers, and more.

During a campaign, candidates must cover travel expenses for themselves and their teams.

Money may also be spent on speaking and fundraising events.

These expenditures must be reported to the FEC and are public information.

Unpacking the Mystery: Why Do Good Candidates Lose?

There are as many theories on why a good candidate might lose as there are yard signs during election season. There is always an element of unpredictability in elections.

Moore explained, “Sometimes it’s just not meant to be. You can do everything right, and for whatever reason, the middle of the electorate isn’t buying what you’re selling.”

However, Moore went on to explain that hard work is an essential ingredient of success on the campaign trail.

According to Campaigns and Elections, one common issue is low voter turnout. This is why politicians are always encouraging people to head to the polls. Messaging is another issue. If good candidates can’t communicate their values and vision effectively, people won’t pay them any attention.

The Role of Cybersecurity in Election Campaigns

Today, elections are increasingly fought and won in the digital arena. Voters’ private information is housed online, and votes are tallied on computers. This makes cybersecurity of utmost importance in elections.

Ever since evidence of Russian hackers stealing voter information and hacking into Hillary Clinton’s emails surfaced in 2017, cybersecurity has been of utmost importance.

Trump’s assertions that Dominion voting machines deleted votes in his favor also raised questions about the integrity of computerized voting systems.

With hackers becoming ever more sophisticated, there’s a genuine possibility that election results could be rigged or voter information held hostage.

In 2017, the Cybersecurity and Infrastructure Security Agency (CISA) prioritized election infrastructure. The agency has several initiatives to prevent elections from being compromised due to hacking.

Moore discussed her involvement in cybersecurity initiatives with RSnake. In 2020, she helped spearhead a campaign to educate staff and volunteers working on the election on cybersecurity risks. She said, “It ended up being a really good program, and we trained over 4,000 people.”

The Takeaway

Although the role of fundraising is often scrutinized, it remains a necessary form of political engagement. It pays for buildings, staff, and advertising that helps candidates reach their voters.

While some ethical issues are associated with fundraising in politics, laws do exist to minimize corruption. However, many Americans are becoming critical of the amount of money raised during campaigns. In a 2018 Pew Research poll, almost 80% of participants said they believed there should be limits on campaign spending.

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