CAMPAIGN AND ELECTION REFORM

Two major types of criticisms have emerged in recent years concerning U.S. campaigns and elections: campaign spending and local control of the voting process.

CAMPAIGN SPENDING Spending for campaigns and elections are criticized for many reasons. Major reforms were passed in 1974 largely as a result of abuses exposed by the Watergate scandal. Other important milestones have been the 1976 Amendments, Buckley v. Valeo, and the Bipartisan Campaign Reform Act of 2002. The Reform Act of 1974 has several important provisions:  A six-person Federal Election Commission was formed to oversee election contributions and expenditures and to investigate and prosecute violators.  All contributions over $100 must be disclosed, and no cash contributions over $100 are allowed.  No foreign contributions are allowed.  Individual contributions are limited to $1,000 per candidate, $20,000 to a national party committee, and $5,000 to a political action committee.  A corporation or other association is allowed to establish a PAC, which has to register six months in advance, have at least fifty contributors, and give to at least five candidates.  PAC contributions are limited to $5,000 per candidate and $15,000 to a national party.  Federal matching funds are provided for major candidates in primaries, and all campaign costs of major candidates in the general election were to be paid by the government.

RECENT TRENDS IN RAISING MONEY -- THE POST CITIZENS UNITED WORLD

* INDIVIDUALS FUNDING OUTSIDE SPENDING 2010 * http://www.opensecrets.org/outsidespending/summ.php?disp=D

TYPES OF ADVOCACY GROUPS OUTSIDE SPENDING (http://www.opensecrets.org/outsidespending/index.php)

* 501(c) Groups — Nonprofit, tax-exempt groups organized under section 501(c) of the Internal Revenue Code that can engage in varying amounts of political activity, depending on the type of group. * 501(c)(3) groups operate for religious, charitable, scientific or educational purposes. These groups are not supposed to engage in any political activities, though some voter registration activities are permitted.

* 501(c)(4) groups are commonly called "social welfare" organizations that may engage in political activities, as long as these activities do not become their primary purpose.

* Similar restrictions apply to Section 501(c)(5) labor and agricultural groups, and to

* Section 501(c)(6) business leagues, chambers of commerce, real estate boards and boards of trade.

EXECUTIVE ORDER AND 501’S

* CONGRESS CREATED 501’S IN 1954 TAX CODE, SIGNED BY IKE

* EISENHOWER ISSUED EXECUTIVE ORDER IN 1959 CHANGING THE EXEMPTION LANGUAGE TO READ EXCLUSIVELY TO PRIMARILY (51%) * NEVER TESTED IN COURT * NO ISSUES UNTIL CITIZENS UNITED * 6000 GROUPS PETITION EACH YEAR

527 (http://www.opensecrets.org/527s/index.php)

* A tax-exempt group organized under section 527 of the Internal Revenue Code to raise money for political activities including voter mobilization efforts, issue advocacy and the like. * The FEC only requires a 527 group to file regular disclosure reports if it is a political party or political action committee (PAC) that engages in either activities expressly advocating the election or defeat of a federal candidate, or in electioneering communications. Otherwise, it must file either with the government of the state in which it is located or the Internal Revenue Service. * Many 527s run by special interest groups raise unlimited "soft money," which they use for voter mobilization and certain types of issue advocacy, but not for efforts that expressly advocate the election or defeat of a federal candidate or amount to electioneering communications.

ISSUE ADS

* SUPPORT A POSITION ON A PUBLIC ISSUE

* INFER THEY SUPPORT OR OPPOSE A CANDIDATE BECAUSE OF THE ISSUE THE CANDIDATE SUPPORTS OR OPPOSES

SOFT MONEY * Non-Federal Group — A group set up to raise unlimited contributions called "soft money," which it spends on voter mobilization efforts and so-called issue ads that often criticize or tout a candidate's record just before an election in a not-so-subtle effort to influence the election's outcome. 501(c) groups and 527 groups may raise non-federal funds * MONEY GIVEN TO A PARTY TO SPEND ON ELECTIONEERING * NOT DIRECTLY GIVEN TO A CANDIDATE * DONATIONS LIMITS ARE UNREGULATED

HARD MONEY * MONEY GIVEN DIRECTLY TO A CANDIDATE TO GET THEM ELECTED * LIMITED BY CAMPAIGN FINANCE LAWS * LIMITED TO $5,000 BY INDIVIDUALS

* PAC’S * Political Action Committee (PAC) — A political committee that raises and spends limited "hard" money contributions for the express purpose of electing or defeating candidates. Organizations that raise soft money for issue advocacy may also set up a PAC. Most PACs represent business, such as the Microsoft PAC; labor, such as the Teamsters PAC; or ideological interests, such as the EMILY's List PAC or the National Rifle Association PAC. An organization's PAC will collect money from the group's employees or members and make contributions in the name of the PAC to candidates and political parties. Individuals contributing to a PAC may also contribute directly to candidates and political parties, even those also supported by the PAC. A PAC can give $5,000 to a candidate per election (primary, general or special) and up to $15,000 annually to a national political party. PACs may receive up to $5,000 each from individuals, other PACs and party committees per year. A PAC must register with the Federal Election Commission within 10 days of its formation, providing the name and address of the PAC, its treasurer and any affiliated organizations.

* http://www.opensecrets.org/news/2011/05/attack-ads-fly-new-york- special-election.html

EXAMPLES

* 60 PLUS * http://www.60plus.org/

* AMERICANS FOR PROSPERITY * http://www.americansforprosperity.org/about

* AMERICAN CROSSROADS * FOUNDED BY ROVE & GILLESPIE AS A NON-PROFIT (501C4) NO LIMITS ON DONATIONS AND EXPENDITURES AS A NON-PROFIT * http://www.americansforprosperity.org/about

* 527 ISSUE ADVOCACY GROUPS

* NO LIMITS ON SPENDING AND DONATIONS ON BEHALF OF A CANDIDATE (PAC, BUCKLEY V VALEO)

* CROSSROADS GPS 501(C)(4)

* Non-profit * No donor disclosure

* FROM AMERICAN CROSSROADS:

* Conservative group enters special election for U.S. House in upstate New York

FREEDOM WORKS (527)

* http://www.freedomworks.org/ * ORIGINALLY FOUNDED BY DAVID KOCH (CITIZENS FOR A SOUND ECONOMY) IN 1984 AND RENAMED IN 2004, NOW CHAIRED BY DICK ARMEY * HELPED ORGANIZE THE TEA PARTY MOVEMENT * LOWER TAXES, SMALLER GOVERNMENT, FLAT TAX (FORBES), SCHOOL CHOICE

AMERICAN ACTION NETWORK 501(c)(4)

* Independent, nonprofit organization, and it is not affiliated with or controlled by any political group. The Network welcomes supporters of its center-right values and policy proposals regardless of party affiliation, and looks forward to working with legislators, government officials, and advocates of either party who are willing to advance policies consistent with the Network's principles.

* The network will create, encourage and promote center-right policies based on the principles of freedom, limited government, American exceptionalism, and strong national security.

* ISSUE ADVOCACY CAMPAIGN 2011. “A big spending agenda that produced the government takeover of healthcare, a bottomless pit of bailouts, and uncertainty on tax breaks has failed to jumpstart the economy and put Americans back to work,” said Coleman, chairman, “There are a number of important items Congress must address during the upcoming lame duck session and I encourage members to support center-right solutions to protect American families and small businesses.”

HERITAGE ACTION GROUP 527 * A GRASSROOTS GROUP FOR CONSERVATIVE FREE MARKETS, & LIMITED GOVERNMENT POLICIES

* CREATED OUT OF THE HERITAGE FOUNDATION

GEORGE SORROS

* RAISES AND CONTRIBUTES MONEY TO LIBERAL CAUSES * PRE COLLAPSE OF COMMUNIST HUNGARIAN REFUGEE * WORTH $13 BILLIONS

* HAS BEEN A CONTRIBUTOR TO DEMOCRATIC CAUSES IN EASTERN EUROPE AFTER THE FALL OF COMMUNISM

* FOUNDED AND HEADS THE OPEN SOCIETY INSTITUTE

* HAS FUNDED: * ABA * AIR AMERICA * ACLU * AFT * BILL OF RIGHT DEFENSE COMMITTEE * AMERICAN LIBRARY ASSOCIATION * AMNESTY INTERNATIONAL * BROOKINGS INSTITUTION * CENTER FOR AMERICAN PROGRESS…….

KOCH BROTHERS

* EARNED THEIR BACON FROM REFINING OIL AND OIL AND GAS PIPELINES * KOCH INDUSTRIES WORTH $100 BILLIONS

* KOCH FOUNDATION * Charles' and David's foundations have together provided millions of dollars to a variety of organizations, usually libertarian or conservative think tanks, such as * Americans for Prosperity Foundation * the Cato Institute * the Mercatus Center * the Institute for Humane Studies * Citizens for a Sound Economy * the Institute for Justice * the Alexis de Tocqueville Institution * the Institute for Energy Research * the Foundation for Research on Economics and the Environment * Heritage Foundation * the George C. Marshall Institute * the Reason Foundation * American Enterprise Institute

The 1976 Amendments allowed corporations, labor unions, and special interest groups to set up political action committees (PACs) to raise money for candidates. Each corporation or labor union is limited to one PAC.

Also in 1976 the Supreme Court ruled in Buckley v. Valeo that limiting the amount that a candidate could spend on his or her own campaign was unconstitutional. The candidate, no less than any other person, has a First Amendment right to engage in the discussion of public issues and vigorously and tirelessly to advocate his own election. After the election of 1996 criticisms of campaigns became so strong that special congressional hearings were called to investigate them. Among the criticisms was the overall expense of both Democratic and Republican campaigns, since more money was spent in 1996 than in any previous campaign. President Clinton and Vice-President Gore were criticized for soliciting campaign funds from their offices and the

White House, and Attorney General Janet Reno was called on to rule on the legality of their activities. Another major accusation was that contributions were accepted from foreigners, who were suspected of expecting favors for themselves or their countries in return. Election finance reform was the major theme of Senator John McCain’s campaign for the presidency in 2000. McCain particularly criticized soft money - funds not specified for candidates’ campaigns, but given to political parties for party building activities. McCain and many others claimed that this money made its way into campaigns anyway. Although McCain did not win the Republican nomination, he carried his cause back to the Senate where he had championed the cause for several years previous to the election. Partly as a result of the publicity during McCain’s campaign, a major reform bill passed in 2002. The Bipartisan Campaign Reform Act of 2002 banned soft money to national parties and placed curbs on the use of campaign ads by outside interest groups. The limit of $1000 per candidate contribution was lifted to $2000, and the maximum that an individual can give to all federal candidates was raised from $25,000 to $95,000 over a two-year election cycle. The act did not ban contributions to state and local parties, but limited this soft money to $10,000 per year per candidate.

ELECTION 2000: LOCAL CONTROL OF THE VOTING PROCESS The problems with counting the votes in Florida during the 2000 presidential election led to widespread criticism of a long accepted tradition in American politics: local control of the voting process. When Florida’s votes were first counted, Republican George W. Bush received only a few hundred more votes than did Democrat Al Gore. An automatic recount narrowed the margin of victory even further. Since the outcome of the election rested on Florida’s vote counts, the struggle to determine who actually won was carried out under a national spotlight. America watched as local officials tried to recount ballots in a system where local voting methods and regulations varied widely. Some precincts had electronic voting machines known for their accuracy and reliability. Others used paper punch ballots that often left hanging chads that meant that those ballots might not be counted by the machines that processed them. The recount process was governed by the broad principle of determining intent to vote that precincts interpreted in different ways. Important questions were raised. Are all votes counted? Are votes in poor precincts that cannot afford expensive voting machines less likely to be counted than are those in affluent areas? Do variations in voting processes subvert the most basic of all rights in a democracy ö the right to vote? The fact that these problems exist in most states across the country caused many to suggest national reform of the voting process. Some advocate nationalizing elections so that all voters use the same types of machines under the same uniform rules. Others have pressured Congress to provide funds for poor precincts to purchase new voting machines. Even the Supreme Court - in its Bush v. Gore decision that governed the outcome of the election - suggested that states rethink their voting processes.

THE 527s OF THE ELECTION OF 2004 The 2002 restrictions of contributions to parties led to the 527 phenomenon of the 2004 presidential campaign. These independent but heavily partisan groups gathered millions of dollars in campaign contributions for both Democratic and Republican candidates. So named because of the section of the tax code that makes them tax-exempt, the 527s tapped a long list of wealthy partisans for money, and so set off a debate as to their legality. The Democrats were the first to make use of the 527s, largely because George W. Bush had a much larger chest of hard money for his campaign. However, the Republicans eventually made use of the 527s too. The groups included America Coming Together and the Media Fund on the Democratic side, and Swift Vets and POWs for Truth and Progress for America Voter Fund for the Republicans.