Interest Group Regulation and Campaign Finance Law

Interest Group Regulation

• The Federal Election Campaign Act allowed the formation of political action committees (PACs) and created federal election committees.
• It placed limits on candidate spending. However, this aspect was later deemed unconstitutional.
• Hard money is directly contributed to a campaign, while soft money is donated for general purposes, not directly tied to a campaign.
• Hard money contributions were limited, but soft money limits were less stringent.
• The Bipartisan Campaign Reform Act was enacted.
  • It increased limits on hard money contributions.
  • Banned soft money contributions.
  • Restricted issue ads near elections.
  • This Act was later deemed unconstitutional by the Supreme Court, restricting free speech.

Citizens United v. Federal Election Commission (2010)

• The Supreme Court ruled that corporations and labor unions have the First Amendment right to spend unlimited funds from their general treasuries to support political candidates.

Types of PACs

• Political Action Committees (PACs): Allow corporations to fund and contribute on behalf of their groups.
  • Regulated by the Federal Election Commission (FEC).
  • Limits individual donations: $5000, donations to candidates: $5000, and donations to parties: $15000.
• 527 groups: cannot directly contribute to campaigns or candidates; not regulated by the FEC.
  • Can raise unlimited funds.
  • Donors must be disclosed to the IRS.
• Super PACs (outcome of Citizens United):
  • Independent expenditure-only committees.
  • Can raise unlimited funds from corporations, unions, associations, and individuals (including "dark money").
  • Report to the FEC.
  • Can spend unlimited sums to advocate for or against candidates, but cannot coordinate directly with them.

Money in Politics

• Interest groups donate to politicians who align with their interests.
• While politics may receive less funding compared to other sectors (e.g., housing) it is still a considerable factor.