The Truth About PAC’s …In an Election Year

Most likely, this election cycle you have heard the term’ PAC’ used! But do you really understand what it means and its implications for elections?  It can be a bit complex and worth exploring this year.  More and more candidates are no longer accepting PAC money and there is good reason for them to follow this policy!

PAC is an abbreviation for political action committee, which is a term to describe a political committee that is organized for the sole purpose of obtaining money to elect and defeat candidates, legislation or ballot issues.  Individuals pool their money together and contribute as a whole under their PAC name.  Most often a PAC represents a labor union, business or an ideological viewpoint.  It is wise to check out the purpose and ideology of a PAC if you are receiving money from or contributing to one.

PAC’s are limited to giving $5000 to a Federal candidate committee per primary, general or special election. So that could be $10K within both the primary and general election.  PAC’s can also contribute yearly up to $15K to a political party and up to $5K to another PAC. You can become a PAC by receiving or spending more than $1K on influencing a Federal election. Contributions from corporate or labor unions are illegal, though they may sponsor a PAC and provide financial support for its administration and fundraising; Union-affiliated PAC’s may only collect contributions from members; Independent PAC’s may solicit contributions from the general public and must pay their own costs from those funds.

State election donations from PAC’s or individuals differ per state in the amounts that may be contributed. This site explains by state how much can be contributed and by whom: http://www.ncsl.org/Portals/1/Documents/Elections/Contribution_Limits_to_Candidates_2017-2018_16465.pdf  And Open Secrets makes this disturbing statement: “Following the Supreme Court’s 2014 decision in McCutcheon v. FEC, there is no longer an aggregate limit on how much an individual can give in total to all candidates, PACs and party committees combined.” You may see the limits here by state: https://www.opensecrets.org/overview/limits.php

Not so simple?  There is much more behind PAC’s than meets the eye.  First of all, there are also Super PAC’s who cannot donate directly to parties or candidates, however, they can spend unlimited amounts independent of those entities.  They can indeed raise funds from groups, individuals, corporations, etc. without any limits. They are not supposed to influence candidates or political parties directly.

Private corporations also create PAC’s to support those who further their policies and legislative action. I witnessed this firsthand when I worked in telecom. We were asked to contribute to the company PAC which made me uncomfortable as my personal ideals and the company’s goals did not always mesh. This is one of the ways corporations can have influence without directly using corporate funds to support parties or candidates which, by the way, is prohibited by the Federal Election Campaign Act.  This is an overt way to raise unlimited sums of money to advocate for or against political candidates.  Still seems a bit fishy to me.

One example, is a name you may recognize, the NRA, which is a single-issue organization. They established an NRA Political Victory Fund PAC in 1976 to support gun-rights candidates. Even though Planned Parenthood has more members than the NRA, the NRA wields greater power over legislators, in part because of their generous contributions to them. They also spend millions in lobbying. At Open Secret’s website, they state, “The National Rifle Association goes to great lengths (and spends a huge sum of money) to defend the right to bear arms. It is opposed to virtually every form of gun regulation, including restrictions on owning assault weapons, retention of databases of gun purchases, background checks on purchasers at gun shows and changes in the registration of firearms.”

My own current Congressman has received $34,700 from the NRA since his first run in the 6th Congressional District in 2008 more than any other currently serving member of Congress from Colorado!  Of course, we have asked him to refuse more contribution, and are working to unseat him this Fall.

Also, there are other ways that money funds candidates. Candidates may contribute unlimited amounts to their own campaigns.  Individuals may give up to $2,700 per election to a Federal candidate or their campaign committee individually.  That is per election and primaries, runoffs and general elections each are considered separate elections. An individual may contribute up to $5K per year to a PAC, which could add up in a 4-year presidential election cycle.

Have you heard of ‘soft’ and ‘hard’ money?  Simply put ‘hard money’ is money that is given and regulated by law by the Federal Election Commission.  Hard money is given to a specific candidate by an individual or PAC and is regulated by the FEC.

Unlike hard money, ‘soft’ money is unregulated, and unlimited.  Legally this money can only be used for ‘party-building’ activities such as voter registration and advocating for passing a law, but not for promoting a particular candidate. It can be donated by an individual, corporation or PAC.  Corporations and labor unions are prohibited from giving money to candidates in federal offices, but they can give ‘soft’ money to parties.  In 2002, ‘soft money’ was banned in the Bipartisan Campaign Reform Act (or McCain-Feingold). It caps individual contributions to political parties even if the money was for something different than federal elections.

Then there are other types of organizations that also contribute.  A type of US tax-exempt organization is a 527 group which is created to influence the selection, nomination, election, or defeat of candidates to local, state or federal office. As political organizations are formed, the IRS is notified by filing a form to allow the PAC to be tax exempt.   501C4’s are groups akin to money laundering.  Unfortunately, there is not much oversight when it comes to political contributions…is the fox watching the hen house?   The Secretary of State doesn’t do audits either unless a complaint is filed.

One may not deduct political contributions made to a political candidate or a campaign committee on your taxes.  Even ads in dinner bulletins, etc. that benefit a party or candidate are not deductible.

Dark money is funding given to non-profit organizations, including 501’s (social welfare, unions, trade associations) who can receive unlimited donations from individuals, corporations and unions. They do spend funds to influence elections but you cannot tell where or from whom the money actually originated.

One of the most egregious campaign funding decisions was made in 2010, when the Supreme Court ruled on Citizens United organization’s case known as Citizens United vs. FEC.  They struck down a federal law prohibiting unions and corporations from spending money connected to federal elections.  That changed the playing field in politics giving corporations a big advantage and the same rights as people. Groups like Move to Amend are fighting to change this decision, and it is really an important fight, one of the top issues affecting our lives today.

What does it really mean when a candidate says, “I don’t take Corporate PAC money?”  Apparently, it means different things to different candidates. As you can see, following the money can be tough.  Some swear off donations from for-profit companies, trade associations and law firms, but accept money from labor and ideological groups.  Others do accept contributions from some trade associations and corporations.

In Colorado, we have a group called Clean Slate Colorado, where you can see a list of contributions for candidates to know where their funding is coming from. Take a look at the reports and compare some of the candidates and where their donors come from at this site: https://cleanslatenowaction.org/candidates.     There is another person who has a website that is very detailed on election contributions in Colorado: http://ftm.copolitics.co/new_message/   And you can find out contributions at Tracer on the Colorado Secretary of State site.

We definitely need to look more strongly at revamping campaign finance laws! Personally I think it is best if candidates only take money directly from individuals so that they are not beholden to any corporation or PAC, but work on behalf of their constituents.  Senator Bernie Sanders showed that this can be done successfully!