The Finances Involved In A Presidential Campaign

Complex arrangements and questionable intentions abound


The US political system is not one that has been widely emulated. None of the hundred or so countries organized since the second world war have imitated America’s political system, and nowhere in the world has even remotely considered copying the circus that is a US election. In most first world countries, election campaigns last around four to eight weeks, with limits on television access to ensure that it’s fair. In the US, it seems someone is in the oval office ten minutes before the primaries begin all over again.

This year’s primaries have seen a bewildering array of candidates and issues, but it has seen significant amounts of money donated. Indeed, the one good thing about these primaries has been that both Bernie Sanders and Donald Trump have brought the issue of campaign funding to the fore. Trump’s has largely been self-funded, while Sanders has made use of record amounts of small donations.

These days, candidates have to spend almost all of their time and resources raising money. This is a relatively new phenomenon, though. Between 1976 and 1996, major presidential candidates were able to focus most of their time on talking to voters because of a law enacted in 1971 that allowed millions of Americans to check a box on their annual IRS returns which earmarked $3 of their taxes to go into the Presidential Election Campaign Fund. The idea was that this would ensure presidents would not be beholden to wealthy interests.

Now, it’s different. The financing of electoral campaigns at the federal level in the United States is supervised by the Federal Election Commission (FEC), an independent government agency. Most campaign spending is privately financed, but to some limited extent, public financing is available for qualifying candidates for the President of the United States during both the primaries and the general election. The amount an individual can give directly to a candidate is limited to $2500, while it is $30,800 to a national party committee and $10,000 to a state, district or local party committees. Organizations are also limited by federal law in what they’re allowed to contribute to candidates, campaigns, political parties, other FEC-regulated groups and corporations, and unions cannot donate money directly to candidates or national party committees.

There are, however, ways around this, primarily enabled by so-called ‘Super PAC’ (political action committee), which has driven a significant portion of funding in these primaries, particularly for Hillary Clinton and Jeb Bush. Super PACs were made possible by a Supreme Court decision in early 2010, Citizens United v. Federal Election Commission, that effectively allowed unlimited contributions for political purposes to these committees. Unlike regular PACs, which have been around since the 1940s and are limited by FEC spending restrictions, Super PACs can raise and spend as much as they want on behalf of a particular candidate, party, or political issue. If a PAC contributes directly to candidates, the most a person can donate to the PAC is $5,000. Super PACs, on the other hand, can receive unlimited contributions from individuals, corporations, or unions.

Super PACs are supposedly required to disclose their donors and are not allowed to coordinate with the candidates or agendas they advocate, but the FEC appears to be trying to find ways around this for them. In perhaps the most extreme example of how much leeway is being afforded to the Super PACs, the FEC declared that Karl Rove’s Super PAC American Crossroads’ advertisements were not ‘coordinated’ with campaigns, even if the candidates appeared in the ads and consulted with the Super PAC on developing the scripts, and they were, therefore, free to fund them as they saw fit. The FEC has also seen fit to rule that it is not coordination if a candidate solicits funds for a Super PAC.

Gore Vidal once wrote, ‘Any individual who is able to raise $25 million to be considered presidential is not going to be any use to the people at large. He will represent oil, or aerospace, or banking, or whatever moneyed entities are paying for him.’ He wrote this before the rise of Super PACs, which has arguably made things worse whilst limiting access to candidates for citizens.


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