Soft Money Campaign Finance Reform

When Senators Russ Feingold and Senator McCain introduced the first version of the BCRA on September 7, 1995, soft money was still in the reform. “Soft money contributions, which were unregulated donations made to a political party, were not allowed under the law to influence individual candidates or campaigns. But in practice, soft money given to political parties was funneled to individual campaigns, or used to run phony "issue ads" that were actually advertisements for a candidate. As the parties collected more and more soft money, it became impossible to ignore at least the perception that large contributors, corporations, and labor unions were buying access to politicians. In the 1992 election cycle, the parties raised a total of $86 million in soft money. In 1996, that number more than tripled to $262 million. And in 2000, soft money receipts nearly doubled again to $495 million, nearly half a billion dollars. It was the equivalent of hanging a "For Sale" sign on our nation's capital (Feingold, 2004, p. 1). The McCain-Feingold-Shays-Meehan act bans these soft money contributions.

Campaign Finance reform has been a topic of interest throughout the history of the United States Government, especially in the more recent decades. There are arguments on both sides of the issue. Proponents of campaign finance limits argue that wealthy donors and corporations hold too much power in elections and as a result they can corrupt campaigns. Those who favor less regulation argue that campaign donations are a form of free speech. One case in particular, Citizens United vs. The Federal Election Commission has altered everything with pertaining to Campaign Finance.

The current network of campaign finance is a complicated web involving individual contributors, soft money and hard money, and political action committee influence. In the aftermath of the crooked Watergate scandal, anxiety over campaign finance led to the passage of two major reform bills—the Revenue Act of 1971 and the Federal Election Campaign Act of 1974—that have set the guidelines and regulations for campaign finance. Although many other laws and acts have been passed in effort to regulate campaign finance, these two acts set the main standards for campaign finance regulation. The main ideas of the acts stipulate that candidates for the two houses of Congress receive no public funding, candidates in the presidential primaries receive matching dollars, and candidates

There were several landmark supreme court cases and laws before Citizens United that attempted to regulate campaign contributions. Political corruption can easily be caused by increased amounts of funds going to a candidate. A candidate will be more likely to benefit corporate interests because that will allow them to get more money later to help in reelection efforts. This becomes problematic because average citizens do not have the ability to donate large sums of money to a candidate. This makes the speech of large corporations worth far more than the average citizen. This can have a drastic impact on the marketplace of ideas. John Stuart Mills in his book, On Liberty, creates the marketplace of ideas. This marketplace consists of all speech being able to have equal weight and face

Following the Watergate scandal, the Federal Elections Campaign Act of 1974 was amended to create the regulatory agency, known as the Federal Elections Commission, in 1975. The duties of the FEC consist largely of enforcing regulation, limitation, and prohibition on financial contributions to federal campaigns, candidates, political parties, and political action committees. The Act has thoroughly set limits on the amount of money a person or committee may donate to the previously mentioned situations. For example, an individual can donate no more than $2,600 to any federal campaign per election, and a combined limit of $10,000 to local and state parties every calendar year. The case at hand involves Shaun McCutcheon challenging the aggregate limits as a violation of the First Amendment right of expression. An Alabaman Conservative businessman, McCutcheon expressed that he wished to donate more than the contributions he was able to make in the last election cycle. He wanted to contribute an amount that would stay within base limits but surpass aggregate limits set by the FEC.

But assuming that campaign finance reform is the way to go, the First Amendment’s guarantee of free speech means any changes will need to be considered constitutional by the United States Supreme Court. Yale Law School professors Bruce Ackerman and Ian Ayres proposed “a system of modified public financing coupled with an anonymous campaign contribution process” as outlined in their 2004 book entitled Voting with Dollars: A new paradigm for campaign finance. This type of financing would involve two components: patriot dollars (federal funds) and secret donations. All voters would be given a $50 publicly-funded voucher (patriot dollars) to donate to the campaign(s) of their choice. Both

These laws were the perfect way for the state to make sure that the system is stable in the future. Just recently on April 2nd, the Supreme Court of the United States turned down the overall cap on monetary political donations. This is a classic case of the state adopting policies to ensure the stability of the system. Coping the scheme of citizens united the Supreme Court in a 5-4 decision allows an individual to donate as much money as they please to federal candidates in a two year election cycle. Although federal law bans direct contributions to campaigners by corporations and business, super pacs allow money to get to the politicians without direct contact. But this law still allows wealthy individuals to support the candidates that will represent their needs and wants in the national government. This creates an unfair system aimed at helping the elites because they will have more money to donate therefore will have more of the campaigners attention. Justice Breyer realized the importance of this decision being turned down and was recorded writing “Where enough money calls the tune,” he wrote, “the general public will not be heard.” (New York Times).

Before 1971, political figures still had leeway in the financing of their campaigns. However, Congress tightened down on campaign financing, and began to restrict the permissible activities candidates could expedite in, beginning in 1971. The first component of the bill demanded that all candidates running to fully disclose their full campaign finance report (Appendix 4). Before this, candidates could, for the most part, receive and spend contributed campaign money any way they seemed fit for the success of their campaigns, though previous acts had heightened the stipulations of this money. Furthermore, this act enacted restrictions on the permissible amounts of money candidates could spend on advertisements (appendix 4). Although advertisements had not

The Federal Election Campaign Act of 1971 is a "law that requires all candidates to fully disclose all contributions and expenditures in excess of $100." (pg.161) This law proved very helpful because in 1968, before they really started pushing disclosure, candidates would report spending $8.5 million but four years later candidates were reporting that they had spent about $88.9 million. It was a giant leap in what they were spending, over ten times the said amount. The FECA also made it to where "it was permissible for corporations and labor unions to set up separate, segregated funds that could be used for a political purpose." (pg.161) Having this created a lot of PACs that would give political parties and interest groups money to running

Campaign finance has been plagued by continued deregulation. The system has long been anything but perfect,

The Supreme Court also sited in that same ruling that, “In a free society by our Constitution, it is not the government, but the people-individually as citizens and candidates and collectively as associations and political committees-who must retain control over the quantity and range of debate on public issues in a political campaign” (Keena 6). While it may be a violation of freedom of speech to limit television ads, many of today’s candidates have made a mockery of the existing legislature regarding campaign financing. Ex-president Bill Clinton bent the rules and laws more than possibly any elected official ever, and certainly farther than anyone since Richard Nixon. Thad Cochran, a veteran Republican senator from Mississippi, stated, “Clinton used his own party and had it operated out of the campaign office, which was the White House, to coordinate expenditures by the Democratic Party and his election campaign in an unlimited amount, using soft money to pay for the ads, with his own chief-of-staff making the decisions about the kind of advertising, and Clinton himself was involved in writing some of the ads that were actually run by the Democratic Party using soft money” (Williams 10). No elected official had ever gone so far as to run soft money ads out of his own office, let alone rewrite the ads himself. It is cases such as this one that are prime examples for why there is such a need for new laws to govern campaign financing.

The Federal Election Campaign Act (FECA) was first signed into law in 1971. Under FECA, the Federal Election Commission (FEC) was established in order to enforce the laws dictated within this legislation (Federal Election Commission 2015). This organization was created as a means of checking monetary contributions: it monitors soft money contributions, sources of donation, and audits publicly funded committees (Beneson and Tarr 2012). This commission serves an essential purpose of checking campaign finances and prevents mass corruption within campaigns. The Bipartisan Campaign Reform Act of 2002, also known as the McCain-Feingold bill, “…Overhauled key features of the campaign finance system, raising individual contribution limits, eliminating soft money, and regulating electioneering communications and other forms of federal election activity” (Panagopoulos 2007). This law placed more stringent regulations on the types of contributions that organizations could make to campaigns, with particular controversy of the elimination of soft money. Although the individual was permitted to increase donations, the principles of the McCain-Feingold bill and the FECA sparked a nation-wide debate about the limits on First Amendment rights

Campaign finance reform is a movement in the United States to help change the involvement of money in American political campaigns (Boundless, 2015). “ Throughout the history of campaign finance reform, three main areas have consistently been the target of regulation: contributions, expenditures, and advertising. Over the years Congress has instituted limits on how much individuals or organizations may contribute to federal campaign committees and political groups, how much campaign committees may spend during the course of an election, and how much money might be used for advertising expenses during a campaign” (Smith, 2010). To help limit contributions, expenditures, and advertising Congress has passed laws which are known as campaign finance

The debate would make it all the way to the Supreme Court, who would uphold the law saying the law maintained campaign integrity and prevented corruption. The Supreme Court did, however, remove spending limits as long as the money was spent to expressly endorse a candidate. In 1979, FECA is further amended to allow individuals, unions, and corporations to give unlimited funds for “party building.” The amendment created what was called “soft money” donations and was a large loophole in the system. In 2002, the Bipartisan Campaign Reform Act banned soft money, unlimited contributions, and prohibited political ads made by unions and corporations from airing within 30 days of a primary and 60 days of a general election. The law would be taken to the Supreme Court twice in 2003 and 2007. Despite both times resulting in a 5-4 vote in favor of the law, the 2007 case would remove the political ad ban. Finally, the 2010 Citizens United v. Federal Election Commission Supreme Court case would not only dismantle the Bipartisan Campaign Reform Act but allow for the formation of Super PACs which they stated did not promote corruption (Rowen, n.d.). SuperPACs have launched campaign finance reform back into the spotlight and are crucial to any discussion on the subject today.

Another aspect of FECA was to limit hard money. The philosophy behind this was to restrict the amount of money one individual could give directly to a PAC so they would not have too much influence in the outcome of an election. As a reaction, the PACs started investing into media outlets and began creating commercials. By doing this PACs were able to maintain their influence while still obeying the campaign laws (Hughes 4:30-5:00).