Political Campaign Finance
Federal campaign finance law applies to elections involving the president and vice president of the United States and members of the U.S. Senate and House of Representatives.
The Federal Election Campaign Act
(FECA) requires all candidates, committees of political parties, and political action committees (PACs) to file periodic reports on funding with the Federal Election Commission (FEC). Candidates, for example, must identify all party committees and PACs that give them contributions and all individuals who give them more than $200 in a single year. And they must disclose all payments that exceed $200 per year to an individual or vendor.
The law places limits on contributions by individuals and groups to candidates, political parties, and PACs. An individual may give $1,000 to a candidate per election, $20,000 to a national party committee per calendar year, and $5,000 to any other political committee per calendar year; an individual’s total contributions cannot exceed $25,000 per year. Groups that contribute to election campaigns also must abide by specific limits depending on the nature of their organization.
The FECA prohibits corporations, labor organizations, federal government contractors and foreign nationals from making contributions to election campaigns and from spending money directly — for example, on advertising — to influence federal elections. However, corporations and labor unions may form separate PACs that raise money and support federal candidates and political committees.
Qualified presidential candidates may receive public money for their campaigns from a special fund maintained by the U.S. Treasury. This fund is financed exclusively by voluntary contributions from U.S. taxpayers, who may choose to contribute $3 of their annual federal income tax to the fund. Candidates may accept public money for either their primary or general election campaign or for both. However, if they do accept public funds, they must comply with spending limits and other restrictions imposed by the FEC.
Candidates in the presidential primaries are eligible to receive public money to match the private contributions they raise from individuals; contributions from groups are not matched. While individuals may contribute up to $1,000, only the first $250 is “matchable.” To become eligible to receive public funds, candidates must raise $5,000 in matchable contributions in each of 20 different states.
The nominees of the Democratic and Republican parties are each eligible to receive a grant from the FEC to cover all the expenses of their general election campaign, and they may not spend more than the amount of the grant. In 1996, the grant was $61.82 million per candidate. A third party presidential candidate may qualify to receive some public funds after the general election if he or she receives at least 5 percent of the popular vote.
Each major political party also receives public funds to pay for its national convention. In 1996, the two major parties each received $12.36 million. Other parties may be eligible for partial public financing of their conventions if their nominees received at least 5 percent of the popular vote in the previous election.
Federal Election Campaign Act (FECA) of 1971
and its amendments cover three broad areas:
- public disclosure of funds raised and spent to influence federal elections
- restrictions on contributions and expenditures
- the public funding of presidential campaigns.