Campaign Finance Terms

PAC

A Political Action Committee (PAC) is a committee organized to specifically spend money on an election. There are a lot of different types of PACs — super PACs and hybrid PACs, leadership PACs, candidate PACs and so on. Some PACs are formed by industries, corporations or labor organizations; others are formed on behalf of certain candidates

Bipartisan Campaign Reform Act (McCain-Feingold)

Abbreviated as BCRA, this legislation significantly amended the Federal Campaign Act of 1971, banning federal "soft money" to parties and candidates, money given outside contribution limits that was intended for general party-building activities. To compensate for this, the amount of "hard money" — money given directly to a federal candidate or committee — was increased

501(c)(4)

Also known as "dark money groups," these make up some of the most relevant political nonprofits today. Technically deemed "social welfare organizations," these groups can't have political activity — such as making ads advocating for or against candidates — as their "primary purpose"; this has unofficially been interpreted to mean they must spend less than 50 percent of their activities on politics or elections. But they can raise unlimited amounts of cash from individuals and organizations alike — without having to disclose who contributed that money.

Chilling Effect

Chilling effect refers to a phenomenon where individuals or groups refrain from engaging in expression for fear of running afoul of a law or regulation. Chilling effects generally occur when a law is either too broad or too vague. Individuals steer far clear from the reaches of the law for fear of retaliation, prosecution, or punitive governmental action.

Citizens United v. FEC

Citizens United was a landmark Supreme Court case that allowed corporations and unions to make unlimited independent expenditures on elections. This, combined with Speechnow.org v. FEC — which eliminated contribution limits from individuals to outside groups — created super PACs as we know them

Dark money

Dark money is money spent on political activity that comes from undisclosed donors. A huge source of dark money is 501(c)(4)s, which don't have to disclose their donors but often engage in political activity, but it can also come from 501(c)(6)s and shell LLCs. (An important point to note is that super PACs do disclose their donors, and are not considered to be dark money because of this.) The use of dark money has grown dramatically, from $5.2 million in 2006 to over $300 million in 2012. The amount of dark money spent on the 2016 race so far is dramatically outpacing the 2012 rate.

hard money

Hard money is cash contributed directly to a candidate, party committee or PAC. It is regulated by the FEC, meaning it is subject to certain prohibitions (like limits) and can only come from an individual or a PAC. This money can be used to directly on the support of candidates, such as advertising, yard signs and more

Independent expenditure

Independent expenditures (IEs) are communications — like TV or Internet ads, or direct mail — that expressly advocate for the election or defeat of a candidate. They're "independent" because they're supposed to be produced by outside groups without coordinating with a candidate or their campaign at all. If the organization spends more than $10,000 in total on IEs on one election, it has to start reporting each expenditure to the FEC within 48 hours.

Soft money

Soft money refers to cash contributed to a party, candidate or outside group without being subject to limits. Traditionally, these funds have been used for get-out-the-vote efforts, party building and similar activities, not the direct advocacy of specific politicians. Soft money can also come from corporations, unions and other entities that are either banned or restricted in their political giving.

Super PAC

Technically, these are "independent expenditure-only committees," organizations registered with the FEC that don't contribute to candidates but do make independent expenditures. They can take unlimited donations from individuals, other PACs, corporations and unions. They do have to disclose their donors, but they can take money from 501(c)(4)s and LLCs that don't disclose their donors. The amount of money super PACs spend on elections is truly enormous: For the 2016 election so far, super PACs have raised over $500 million and spent over 8$200 million. Some candidates have super PACs that are funded entirely by one large donor: Ted Cruz has several different super PACs, three of which are funded by distinct large donors from one individual or family.

The Federal Election Campaign Act

The Federal Election Campaign Act (FECA) is the primary federal law regulating political campaign spending and fundraising. First passed in 1971, FECA was amended in 1974 in response to Watergate and again in 1976 in response to Buckley v. Valeo. The act created the Federal Election Commission (FEC) — the agency tasked with monitoring and enforcing campaign finance rules — required campaigns to report contributions and expenditures, and enacted spending limits (which were overturned in Buckley). The 1974 amendments put the public financing and matching funds system into place, and permitted corporations and unions to form PACs. After Buckley, which overturned spending limits while upholding contribution limits and disclosure requirements, the law was amended again.

Buckley v. Valeo

This 1976 court case struck down limits on the total amount a campaign could spend, as well as limits on candidates using their own money for campaigns, but upheld individual contribution limits.

McCutcheon v. FEC

This 2014 Supreme Court case removed aggregate limits on contributions, meaning the overall amount a donor gives per election to all candidates and committees. Before McCutcheon, donors couldn't give more than $123,200 total per election cycle — after McCutcheon, they can give as much as they want, though individual contribution limits to candidates and committees still apply. This led to the creation of huge "super joint fundraising committees", which allowed wealthy donors to support multiple politicians with a single big check.

strict scrutiny

applies to laws that burden free speech; requires the Government to prove that the restriction "furthers a compelling interest and is narrowly tailored to achieve that interest."