Campaign Finance

The 2008 presidential election set records for campaign spending. Then-senator Barack Obama aggressively fundraised his way to new heights in campaign spending, calling upon a vast network of grassroots volunteers and donors largely through savvy use of the Internet. Mr. Obama’s challenger, Senator John McCain, a co-author of the McCain-Feingold Act of 2002, the first major reform for campaign financing in 30 years, was unable to match Obama’s populist momentum, and raised nearly half the money that his opponent did. However, both parties spent more on the 2008 election than in any previous election, and doubled the amount spent in the 2004 presidential race.

Candidates  raise money through private donations  via fundraisers and through individual contributions. These funds are sought out through direct mail or phone-based campaigns, as well as through stump speeches and other in-person appearances by the candidate. In order to maintain the transparency of these donations, the Federal Election Commission (FEC) enforces a number of regulatory limitations on campaign finance. Without these limitations, many worry that votes could be purchased by donors making significant contributions, especially wealthy contributors with private interests, non-profit organizations, private corporations, and unions. FEC regulations favor limits on individual donations and require disclosure. These measures require the names, employers, and contributions of individual donors giving over $200 to be logged into a database for public access.

Political Action Committees — known as PACs — have found ways to limit the effects of FEC regulations, however. Before 2010, PACs were funded in the same limited manner as individual, private donations. However, in 2010, the conservative PAC Citizens United sued the FEC, which resulted in a Supreme Court decision that essentially gave corporations and unions the right to spend unlimited funds on political advertisements, under the justification that spending money is a form of free speech. Since individual citizens have the right to speak freely about political matters, the Court asserted, corporations are allowed to do the same. After the decision, new organizations formed, called “Super PACs,” which raise and use large donations freely. The difference between donations from individuals and donations from Super PACs is the amount of money accessible to corporations, who are providing up to 23 percent of all Super PAC funds.


The development of Super PACs has blurred the lines between “hard” money (documented, regulated donations) and “soft” money (anonymous, unregulated donations). While the FEC was designed to limit soft money, Super PACs can use unlimited, undocumented funds to advance a particular cause. On the surface, they are not tied to one candidate or another, yet they can produce political advertisements advancing the cause of electing (or in many cases, not electing) a specific candidate.

PACs are not regulated as strictly as individual donations. Many PACs are funded through union dues or individual employee contributions to corporately owned PACs. Additionally, PACs formed around particular candidates are often funded through individual donations that far exceed FEC regulations. For example, Restore Our Future, a Super PAC supporting Governor Mitt Romney, was created by former aides from Romney’s 2008 presidential election committee. The largest single contribution was $4 million from Bob J. Perry, who funded Swift Boat Veterans for Truth, an organization that attacked Democratic candidate John Kerry’s military service and character in the 2004 election. Priorities USA Action, the leading Super PAC supporting reelection for President Obama, has received sizable donations from left-leaning people in the entertainment industry, notably comedian and television show host Bill Maher, who very publicly donated one million dollars.

While supporters argue that requiring Super PACs to disclose their donors may increase transparency in political contributions, it would do little to address discrepancies in donation amounts. When large corporations are funding political causes, the question is one of equality — without equal access to advertising, can there be a fair fight between the two candidates?


Both nominees certainly have much to gain from raising large sums of money and from ads put together and paid for by independent PACs. (These ads are the ones that attack one candidate but do not feature the spoken “I approve this message” disclaimer from the other.) Mr. Obama described the Citizens United decision as “a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.”

In a 2010 press statement, Mr. Romney supported the Supreme Court’s decision, responding that “the first amendment right of free speech should be guaranteed not just to labor union corporations and media corporations, but equally to all corporations, big and small.”

Campaign finance affects how a candidate deals with and is supported by corporations. PACs and Super PACs employ highly skilled strategists, analysts, and media specialists to constantly create and distribute  material,  most obviously television ads, that can efficiently inform, misinform, manipulate, or confuse voters, which can leave underfunded candidates unable to respond in a timely or effective manner. While both presidential candidates have spoken about the matter in terms of the Citizens United decision and its unprecedented effect on fundraising, Romney is clearly ahead of Obama in terms of Super PAC spending — his Restore Our Future PAC has raised more than quadruple the total collected by Priorities USA Action.  The 2012 election will be another record-breaking  year in campaign spending, and until the Supreme Court is inclined to reverse or amend its Citizens United decision, the sums spent on running for office will only continue to rise.

-This article was written by Andrew Howard and appears in full in The IDEA Guide to the 2012 U.S. Presidential Elections.