Campaign finance

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An infographic explaining the American system of campaign finance, by the Sunlight Foundation Campaign finance web final.png
An infographic explaining the American system of campaign finance, by the Sunlight Foundation

Campaign finance, also known as election finance, political donations or political finance, refers to the funds raised to promote candidates, political parties, or policy initiatives and referendums. Donors and recipients include individuals, corporations, political parties, and charitable organizations.

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Political campaigns usually involve considerable costs, travel, staff, political consulting, and advertising. Campaign spending depends on the region. For instance, in the United States, television advertising time must be purchased by campaigns, whereas in other countries, it is provided for free. [1] The need to raise money to maintain expensive political campaigns diminishes ties to a representative democracy because of the influence large contributors have over politicians. [2]

Although the political science literature indicates that most contributors give to support parties or candidates with whom they are already in agreement, [3] there is wide public perception that donors expect government favors in return [4] (such as specific legislation being enacted or defeated), so some have come to equate campaign finance with political corruption and bribery. [5] These views have led governments to reform campaign financing in the hope of eliminating big money influence.

The causes and effects of campaign finance rules are studied in political science, economics, and public policy, among other disciplines.[ citation needed ]

Private financing

Some countries rely heavily on private donors to finance political campaigns. These kinds of donations can come from private individuals, as well as groups such as trade unions and for-profit corporations. Tactics for raising money may include direct mail solicitation, attempts to encourage supporters to contribute via the Internet, direct solicitation from the candidate, and events specifically for the purpose of fundraising, or other activities.

Fundraising from private donors is often a significant activity for the campaign staff and the candidate, especially in larger and more prominent campaigns. For example, one survey in the United States found that 23% of candidates for statewide office surveyed say that they spent more than half of their scheduled time raising money. Over half of all candidates surveyed spent at least 1/4 of their time on fundraising. [6]

Supporters of private financing systems believe that, in addition to avoiding government limitations on speech, private financing fosters civic involvement, ensures that a diversity of views are heard, and prevents government from tilting the scales to favor those in power or with political influence. Critics of private campaign financing claim that it leads to votes being "bought" and producing large gaps between different parties in the money they have to campaign against. One study finds that political donations gives donors significantly greater access to policymakers. [7] Most countries that rely on private donations to fund campaigns require extensive disclosure of contributions, frequently including information such as the name, employer and address of donors. This is intended to allow for policing of undue donor influence by other campaigns or by good government groups, while preserving most benefits of private financing, including the right to make donations and to spend money for political speech, saving government the expense of funding campaigns, and keeping government from funding partisan speech that some citizens may find odious. [8] However, in countries such as the United States, "dark money" spent on political campaigns is exempt from disclosure, and dark money spending has mushroomed in recent years in US state and federal elections, amounting to hundreds of millions of dollars in each U.S. presidential election. [9]

Public financing

Other countries choose to use government funding to run campaigns. Funding campaigns from the government budget is widespread in South America and Europe. [10] The mechanisms for this can be quite varied, ranging from direct subsidy of political parties to government matching funds for certain types of private donations (often small donations) to exemption from fees of government services (e.g., postage) and many other systems as well. Supporters of government financing generally believe that the system decreases corruption; in addition, many proponents believe that government financing promotes other values, such as civic participation or greater faith in the political process. Not all government subsidies take the form of money; some systems require campaign materials (often air time on television) to be provided at very low rates to the candidates. Opponents sometimes criticize the expense of the government financing systems. Conservative and libertarian critics of the system argue that government should not subsidize political speech.[ citation needed ] Other critics argue that government financing, with its emphasis on equalizing money resources, merely exaggerates differences in non-monetary resources.

In many countries, such as Germany and the United States, campaigns can be funded by a combination of private and public money. In the United States, public financing systems include democracy vouchers, [11] matching funds, and lump sum grants, among other system types. Governments, international organizations and scholars are concerned about the funding of campaigns from foreign sources. [12]

In some electoral systems, candidates who win an election or secure a minimum number of ballots are allowed to apply for a rebate to the government. The candidate submits an audited report of the campaign expenses and the government issues a rebate to the candidate, subject to some caps such as the number of votes cast for the candidate or a blanket cap. For example, in the 2008 election, candidates for the Legislative Council of Hong Kong were entitled to a rebate up to HK$11 per vote.

Regulation

The concept of political finance can affect various parts of a society's institutions which support governmental and social success. [13] Correct handling of political finance impacts a country's ability to effectively maintain free and fair elections, effective governance, democratic government and regulation of corruption. [13] The United Nations convention against Corruption, recognizing this, encouraged its members to "enhance transparency in the funding of candidatures for elected public office and, when applicable, the funding of political parties." [14] In a study on Global Political Finance Regulation by the International Foundation for Electoral Systems (IFES), researchers Magnus Öhman, Hani Zainulbhai, Jack Santucci, and Marcin Welecki identified several common understandings on what international society has determined integral to the regulation of political finance: [15]

  1. Money is necessary for democratic politics, and political parties must have access to funds to play their part in the political process. Regulation must not curb healthy competition.
  2. Money is never an unproblematic part of the political system, and regulation is desirable.
  3. The context and political culture must be taken into account when devising strategies for controlling money in politics.
  4. Effective regulation and disclosure can help to control adverse effects of the role of money in politics, but only if well conceived and implemented.
  5. Effective oversight depends on activities in interaction by several stakeholders (such as regulators, civil society and the media) and based on transparency.

Their study also affirmed the perspective laid down by the Council of Europe, when discussing the concept of effective regulation of campaign financing: "[We are] convinced that raising public awareness on the issues of prevention and fight against corruption in the field of funding of political parties is essential to the good functioning of democratic institutions." [13]

See also

Related Research Articles

Campaign finance laws in the United States have been a contentious political issue since the early days of the union. The most recent major federal law affecting campaign finance was the Bipartisan Campaign Reform Act (BCRA) of 2002, also known as "McCain-Feingold". Key provisions of the law prohibited unregulated contributions to national political parties and limited the use of corporate and union money to fund ads discussing political issues within 60 days of a general election or 30 days of a primary election; However, provisions of BCRA limiting corporate and union expenditures for issue advertising were overturned by the Supreme Court in Federal Election Commission v. Wisconsin Right to Life.

In the United States, a political action committee (PAC) is a tax-exempt 527 organization that pools campaign contributions from members and donates those funds to campaigns for or against candidates, ballot initiatives, or legislation. The legal term PAC was created in pursuit of campaign finance reform in the United States. Democracies of other countries use different terms for the units of campaign spending or spending on political competition. At the U.S. federal level, an organization becomes a PAC when it receives or spends more than $1,000 for the purpose of influencing a federal election, and registers with the Federal Election Commission (FEC), according to the Federal Election Campaign Act as amended by the Bipartisan Campaign Reform Act of 2002. At the state level, an organization becomes a PAC according to the state's election laws.

The Federal Election Campaign Act of 1971 is the primary United States federal law regulating political campaign fundraising and spending. The law originally focused on creating limits for campaign spending on communication media, adding additional penalties to the criminal code for election law violations, and imposing disclosure requirements for federal political campaigns. The Act was signed into law by President Richard Nixon on February 7, 1972.

A publicly funded election is an election funded with money collected through income tax donations or taxes as opposed to private or corporate funded campaigns. It is a policy initially instituted after Nixon for candidates to opt into publicly funded presidential campaigns via optional donations from tax returns. It is an attempt to move toward a one voice, one vote democracy, and remove undue corporate and private entity dominance.

<span class="mw-page-title-main">OpenSecrets</span> Government watchdog group based in the US

OpenSecrets is a nonprofit organization based in Washington, D.C. that tracks and publishes data on campaign finance and lobbying, including a revolving door database which documents the individuals who have worked in both the public sector and lobbying firms and may have conflicts of interest. It was created from the 2021 merger of the Center for Responsive Politics (CRP) and the National Institute on Money in Politics (NIMP), both of which were organizations that tracked data on campaign finance in the United States and advocated for stricter regulation and disclosure of political donations.

Matching funds are funds that are set to be paid in proportion to funds available from other sources. Matching fund payments usually arise in situations of charity or public good. The terms cost sharing, in-kind, and matching can be used interchangeably but refer to different types of donations.

<span class="mw-page-title-main">Campaign finance in the United States</span> Contributions to American election campaign funds

The financing of electoral campaigns in the United States happens at the federal, state, and local levels by contributions from individuals, corporations, political action committees, and sometimes the government. Campaign spending has risen steadily at least since 1990. For example, a candidate who won an election to the House of Representatives in 1990 spent on average $407,600, while the winner in 2022 spent on average $2.79 million; in the Senate, average spending for winning candidates went from $3.87 million to $26.53 million.

<span class="mw-page-title-main">Electoral Finance Act 2007</span> Act of Parliament in New Zealand

The Electoral Finance Act 2007 was a controversial act in New Zealand. The Fifth Labour Government introduced the Electoral Finance Bill partly in response to the 2005 New Zealand election funding controversy, in particular to "third-party" campaigns.

Political funding in Australia deals with political donations, public funding and other forms of funding received by politician or political party in Australia to pay for an election campaign. Political parties in Australia are publicly funded, to reduce the influence of private money upon elections, and subsequently, the influence of private money upon the shaping of public policy. After each election, the Australian Electoral Commission distributes a set amount of money to each political party, per vote received. For example, after the 2013 election, political parties and candidates received $58.1 million in election funding. The Liberal Party received $23.9 million in public funds, as part of the Coalition total of $27.2 million, while the Labor Party received $20.8 million.

Electoral reform in the United States refers to efforts to change American elections and the electoral system used in the United States.

Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), is a landmark decision of the Supreme Court of the United States regarding campaign finance laws and free speech under the First Amendment to the U.S. Constitution. The court held 5–4 that the freedom of speech clause of the First Amendment prohibits the government from restricting independent expenditures for political campaigns by corporations, nonprofit organizations, labor unions, and other associations.

The financing of federal political entities in Canada is regulated under the Canada Elections Act. A combination of public and private funds finances the activities of these entities during and outside of elections.

Political finance covers all funds that are raised and spent for political purposes. Such purposes include all political contests for voting by citizens, especially the election campaigns for various public offices that are run by parties and candidates. Moreover, all modern democracies operate a variety of permanent party organizations, e.g. the Democratic National Committee and the Republican National Committee in the United States or the Conservative Central Office and the Labour headquarters in the United Kingdom. The annual budgets of such organizations will have to be considered as costs of political competition as well. In Europe the allied term "party finance" is frequently used. It refers only to funds that are raised and spent in order to influence the outcome of some sort of party competition. Whether to include other political purposes, e.g. public relation campaigns by lobby groups, is still an unresolved issue. Even a limited range of political purposes indicates that the term "campaign funds" is too narrow to cover all funds that are deployed in the political process.

Political party funding is a method used by a political party to raise money for campaigns and routine activities. The funding of political parties is an aspect of campaign finance.

<i>Republic, Lost</i>

Republic, Lost: How Money Corrupts Congress—and a Plan to Stop It is the sixth book by Harvard law professor and free culture activist Lawrence Lessig. In a departure from the topics of his previous books, Republic, Lost outlines what Lessig considers to be the systemic corrupting influence of special-interest money on American politics, and only mentions copyright and other free culture topics briefly, as examples. He argued that the Congress in 2011 spent the first quarter debating debit-card fees while ignoring what he sees as more pressing issues, including health care reform or global warming or the deficit. Lessig has been described in The New York Times as an "original and dynamic legal scholar."

The term corporate donation refers to any financial contribution made by a corporation to another organization that furthers the contributor's own objectives. Two major kinds of such donations deserve specific consideration, charitable as well as political donations.

<span class="mw-page-title-main">Dark money</span> Undisclosed American political contributions

In politics, particularly the politics of the United States, dark money refers to spending to influence elections, public policy, and political discourse, where the source of the money is not disclosed to the public.

<span class="mw-page-title-main">Political funding in New Zealand</span>

Political funding in New Zealand deals with political donations, public funding and other forms of funding received by politician or political party in New Zealand to pay for an election campaign. Only quite recently has political funding become an issue of public policy. Now there is direct and indirect funding by public money as well as a skeleton regulation of income, expenditure and transparency.

<span class="mw-page-title-main">American Anti-Corruption Act</span> American model legislation

The American Anti-Corruption Act (AACA), sometimes shortened to Anti-Corruption Act, is a piece of model legislation designed to limit the influence of money in American politics by overhauling lobbying, transparency, and campaign finance laws. It was crafted in 2011 "by former Federal Election Commission chairman Trevor Potter in consultation with dozens of strategists, democracy reform leaders and constitutional attorneys from across the political spectrum," and is supported by reform organizations such as Represent.Us, which advocate for the passage of local, state, and federal laws modeled after the AACA. It is designed to limit or outlaw practices perceived to be major contributors to political corruption.

<span class="mw-page-title-main">Electoral reform in India</span>

A number of measures have been suggested to improvise and strengthen the existing electoral practices in India.

References

Notes

  1. ↑ Holtz-Bacha, Christina (2008). Encyclopedia of Political Communication. SAGE Publications. p. 3. ISBN   978-1412917995.
  2. ↑ Pastine, Ivan; Pastine, Tuvana (November 2013). "Soft Money and Campaign Finance Reform" (PDF). International Economic Review. 54 (4): 1117–1131. doi:10.1111/iere.12030. S2CID   51763898.
  3. ↑ Ansolabehere, Stephen; John de Figueiredo; James M. Snyder, Jr. (2003). "Why Is There So Little Money in U.S. politics?". Journal of Economic Perspectives. 17 (1): 105–30. CiteSeerX   10.1.1.455.6486 . doi:10.1257/089533003321164976.
  4. ↑ Gill, David; Lipsmeyer, Christine (2005). Soft Money and Hard Choices: Why Political Parties Might Legislate Against Soft Money Donations. Public Choice. SSRN   1422616.
  5. ↑ Levinson, Jessica (1 December 2020). "Full Disclosure: The Next Frontier in Campaign Finance Law". Denver Law Review. 93 (2): 431.
  6. ↑ "Begging for Bucks". Campaigns and Elections. Archived from the original on 2004-09-16. Retrieved 2007-03-12.
  7. ↑ Kalla, Joshua L.; Broockman, David E. (July 2016). "Campaign Contributions Facilitate Access to Congressional Officials: A Randomized Field Experiment". American Journal of Political Science. 60 (3): 545–558. doi: 10.1111/ajps.12180 .
  8. ↑ Will, George F. (11 December 2005). "'Don't Ask, Don't Tell' Hypocrisy" – via The Washington Post.
  9. ↑ Brennan Center for Justice, New York University Law School, 26 Jun. 2016, "Secret Spending in the States"
  10. ↑ Smilov, Daniel; Jurij Toplak (2007). Political Finance and Corruption in Eastern Europe. Ashgate Press. ISBN   978-0-7546-7046-9.
  11. ↑ "Democracy Policy Network".
  12. ↑ Schnurr, Emily (2022). "Chapter 8: Role of Money in Campaigns and Elections". In Schultz, Toplak (ed.). Routledge Handbook of Election Law. Routledge. pp. 147–159. ISBN   9781138393363.
  13. 1 2 3 Öhman, Magnus; Zainulbhai, Hani. Political Financial Regulation: The Global Experience (PDF). Washington, DC: International Foundation for Electoral Systems. ISBN   978-1-931459-42-6.
  14. ↑ "UNITED NATIONS CONVENTION AGAINST CORRUPTION" (PDF).
  15. ↑ Ohman and Zainulbhai. Political Financial Regulation: The Global Experience (PDF). pp. 13–14.

Sources

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