Political action committee
In the United States, a political action committee (PAC) is a type of organization that pools campaign contributions from members and donates those funds to campaign for or against candidates, ballot initiatives, or legislation. The legal term PAC has been created in pursuit of Campaign finance reform in the United States. This term is quite specific to all activities of Campaign finance in the United States. Democracies of foreign countries use different terms for the units of campaign spending or spending on political competition (see Political finance). At the U.S. federal level, an organization becomes a PAC when it receives or spends more than $2,600 for the purpose of influencing a federal election, according to the Federal Election Campaign Act. At the state level, an organization becomes a PAC according to the state's election laws.
In 1947, as part of the Taft–Hartley Act, the U.S. Congress prohibited labor unions or corporations from spending money to influence federal elections, and prohibited labor unions from contributing to candidate campaigns (an earlier law, the 1907 Tillman Act, had prohibited corporations from contributing to campaigns). In response to these limitations, the Congress of Industrial Organizations (CIO) created a separate political fund that it called the Political Action Committee. This was the first political action committee.
In 1971, United States Congress passed the Federal Election Campaign Act (FECA). In 1974, Amendments to FECA defined how a PAC could operate and established the Federal Election Commission (FEC) to enforce the nation's campaign finance laws. The 1974 amendments also restricted the amount of money that could be given directly to a Congressional campaign, spurring a boom in the creation of PACs as campaigns shifted how they raised money.
FECA and subsequent FEC rules provide a range of restrictions on PACs:
- Individuals are limited to contributing $5,000 per year to federal PACs;
- Corporations and unions may not contribute directly to federal PACs, but can pay for the administrative costs of a PAC affiliated with the specific corporation or union;
- Corporate-affiliated PACs may only solicit contributions from executives, shareholders, and their families;
- Contributions from corporate or labor union treasuries are illegal, though they may sponsor a PAC and provide financial support for its administration and fundraising;
- Union-affiliated PACs may only solicit contributions from members;
- Independent PACs may solicit contributions from the general public and must pay their own costs from those funds.
Federal multi-candidate PACs may contribute to candidates as follows:
- $5,000 to a candidate or candidate committee for each election (primary and general elections count as separate elections);
- $15,000 to a political party per year; and
- $5,000 to another PAC per year.
- PACs may make unlimited expenditures independently of a candidate or political party
In its 2010 case Citizens United v. Federal Election Commission, the United States Supreme Court overturned sections of the Campaign Reform Act of 2002 (also known as the McCain-Feingold Act) that had prohibited corporate and union political independent expenditures in political campaigns. Citizens United made it legal for corporations and unions to spend from their general treasuries to finance independent expenditures related to campaigns, but did not alter the prohibition on direct corporate or union contributions to federal campaigns. Organizations seeking to contribute directly to federal candidate campaigns must still rely on traditional PACs for that purpose.
Federal law formally allows for two types of PACs: connected and non-connected. Judicial decisions added a third classification, independent-expenditure only committees, which are colloquially known as "Super PACs".
Most of the 4,600 active, registered PACs are "connected PACs" established by businesses, labor unions, trade groups, or health organizations. These PACs receive and raise money from a "restricted class," generally consisting of managers and shareholders in the case of a corporation and members in the case of a union or other interest group. As of January 2009, there were 1,598 registered corporate PACs, 272 related to labor unions and 995 to trade organizations.
Groups with an ideological mission, single-issue groups, and members of Congress and other political leaders may form "non-connected PACs". These organizations may accept funds from any individual, connected PAC, or organization. As of January 2009, there were 1,594 non-connected PACs, the fastest-growing category.
Elected officials and political parties cannot give more than the federal limit directly to candidates. However, they can set up a Leadership PAC that makes independent expenditures. Provided the expenditure is not coordinated with the other candidate, this type of spending is not limited.
Under the FEC rules, leadership PACs are non-connected PACs, and can accept donations from individuals and other PACs. Since current officeholders have an easier time attracting contributions, Leadership PACs are a way dominant parties can capture seats from other parties. A leadership PAC sponsored by an elected official cannot use funds to support that official's own campaign. However, it may fund travel, administrative expenses, consultants, polling, and other non-campaign expenses.
Between 2008 and 2009, leadership PACs raised and spent more than $47 million.
Controversial use of leadership PACs
- Former Rep. John Doolittle's (R) leadership PAC paid 15% to a firm that only employed his wife. Payouts to his wife's firm were $68,630 in 2003 and 2004, and $224,000 in 2005 and 2006. The Doolittle home was raided in 2007. After years of investigation, the Justice Department dropped the case with no charges in June 2010.
- One Leadership PAC purchased $2,139 in gifts from Bose Corporation.
- Former Rep. Richard Pombo (R) used his leadership PAC to pay hotel bills ($22,896) and buy baseball tickets ($320) for donors.
- Former Speaker Nancy Pelosi's (D) leadership PAC, Team Majority, was fined $21,000 by federal election officials "for improperly accepting donations over federal limits."
Super PACs, officially known as "independent-expenditure only committees," may not make contributions to candidate campaigns or parties, but may engage in unlimited political spending independently of the campaigns. Unlike traditional PACs, they can raise funds from individuals, corporations, unions, and other groups without any legal limit on donation size.
Super PACs were made possible by two judicial decisions: the aforementioned Citizens United v. Federal Election Commission and, two months later, Speechnow.org v. FEC. In Speechnow.org, the federal Court of Appeals for the D.C. Circuit held that PACs that did not make contributions to candidates, parties, or other PACs could accept unlimited contributions from individuals, unions, and corporations (both for profit and not-for-profit) for the purpose of making independent expenditures. The result of the Citizens United and SpeechNow.org decisions was the rise of a new type of political action committee in 2010, popularly dubbed the "super PAC".
The term "Super PAC," was coined by reporter Eliza Newlin Carney. According to Politico, Carney, a staff writer covering lobbying and influence for CQ Roll Call, "made the first identifiable, published reference to 'super PAC' as it’s known today while working at National Journal, writing on June 26, 2010, of a group called Workers’ Voices, that it was a kind of '"super PAC" that could become increasingly popular in the post-Citizens United world.'"
According to FEC advisories, Super PACs are not allowed to coordinate directly with candidates or political parties. This restriction is intended to prevent them from operating campaigns that complement or parallel those of the candidates they support or engaging in negotiations that could result in quid pro quo bargaining between donors to the PAC and the candidate or officeholder. However, it is legal for candidates and Super PAC managers to discuss campaign strategy and tactics through the media.
Super PACs may support particular candidacies. In the 2012 presidential election, Super PACs played a major role, spending more than the candidates' election campaigns in the Republican primaries. As of early April 2012, Restore Our Future—a Super PAC usually described as having been created to help Mitt Romney's presidential campaign—had spent $40 million. Winning Our Future (a pro–Newt Gingrich group) spent $16 million. Some Super PACs are run or advised by a candidate's former staff or associates.
In the 2012 election campaign, most of the money given to super PACs came from wealthy individuals, not corporations. According to data from the Center for Responsive Politics, the top 100 individual super PAC donors in 2011–2012 made up just 3.7% of contributors, but accounted for more than 80% of the total money raised, while less than 0.5% of the money given to “the most active Super PACs” was donated by publicly traded corporations. Super PACs have been criticized for relying heavily on negative ads.
As of February 2012, according to Center for Responsive Politics, 313 groups organized as Super PACs had received $98,650,993 and spent $46,191,479. This means early in the 2012 election cycle, PACs had already greatly exceeded total receipts of 2008. The leading Super PAC on its own raised more money than the combined total spent by the top 9 PACS in the 2008 cycle.
The 2012 figures do not include funds raised by state level PACs.
By January 2010, at least 38 states and the federal government required disclosure for all or some independent expenditures or electioneering communications. These disclosures were intended to deter potentially or seemingly corrupting donations.
Yet despite disclosure rules, it is possible to spend money without voters knowing the identities of donors before the election. In federal elections, for example, political action committees have the option to choose to file reports on a "monthly" or "quarterly" basis. This allows funds raised by PACs in the final days of the election to be spent and votes cast before the report is due.
In one high-profile case, a donor to a super PAC kept his name hidden by using an LLC formed for the purpose of hiding their personal name. One super PAC, that originally listed a $250,000 donation from an LLC that no one could find, led to a subsequent filing where the previously "secret donors" were revealed. However, campaign finance experts have argued that this tactic is already illegal, since it would constitute a contribution in the name of another.
In the 2008 election, the top nine PACs spent a total of $25,794,807 (directly, and via their affiliates and subsidiaries) as follows:
- International Brotherhood of Electrical Workers PAC $3,344,650
- AT&T Federal PAC $3,108,200
- American Bankers Association (BANK PAC) $2,918,140
- National Beer Wholesalers Association PAC $2,869,000
- Dealers Election Action Committee of the National Automobile Dealers Association $2,860,000
- International Association of Fire Fighters $2,734,900
- International Union of Operating Engineers PAC $2,704,067
- American Association for Justice PAC $2,700,500
- Laborers' International Union of North America PAC $2,555,350
- 501(c)(4) organizations
- 527 group
- Campaign finance in the United States
- Issue advocacy ads
- Lobbying in the United States
- Money loop
- Politics of the United States
- Soft money
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