Campaign Finance by ufLjf8W


									Campaign Finance
• 1974 Federal Election Campaign Act
  • Public financing of presidential elections
  • Limits on spending if accept public finance
  • Created Federal Election Commission
  • Required candidates and donors to report donations to
    the FEC, with caps now on donations
  • Required candidates and donors to establish Political
    Action Committees (PACs) to handle money end of the
  • Limited amount of personal wealth candidates could
• Buckley vs. Valeo (1976)
  • restrictions on personal spending violate the First
  • caps on contributions, however, do not
  • federal finance of campaign do not, as long as it
    is voluntary (that is, candidates can opt to accept
    the money -- and the limits -- or not)
• Loopholes within the FECA
  • No limits on donations to party (“soft money”)
  • No limits on party spending for “get out the
    vote” drives (“soft money”)
  • No limits on number of political action
  • “bundling”
• 2002 Bipartisan Campaign Reform Act
  • Closed soft money loophole
  • Raised the limits on PAC contributions and other
  • Bans “group sponsored” ads 30 days prior to a
    primary and 60 days prior to general election
• Loopholes
  • PACs can raise unlimited amounts of money
  • 527 Organizations -- nonprofit issue advocacy

• Basics of Campaign Finance Law
 - 2002 Bipartisan Campaign Reform
• Campaign Finance and Electoral
  Success 2008

• In 2008 House elections, in only 2%
  of the races did the candidate with
  lower campaign contributions win
• In 2008 Senate races, in only 6% of
  the races did the candidate with
  lower campaign contributions win.
• Better financed campaigns generally have a better
  chance of success
   • They can hire better talent
   • They can buy advertising to rebut or make charges
   • They can extend the campaign longer and respond to
     changes in the election atmosphere
• Efforts to curtail influence of money in campaigns
  began in earnest with post-Watergate reforms and
  have met with limited success
• So, should we be concerned about the role of money
  in politics?
       Campaign Contribution
• Concern depends on why peopleof
  organizations contribute
• Do they contribute for policy/electoral reasons
  or for “service” reasons?
• When does it make sense to contribute?

  Why Contribute?
• Assume two candidates: Democrat
  Don and Republican Ron
• Assume each has campaign
  contribution XD and XR, respectively,
  where “X” equals cash on hand
• Assume candidate with the most
  money is most likely to win, then...
    Why Contribute
• We’ll define the probability that
  Demo Don wins as PD = XD
• And we’ll define the probability that
  Repub Ron wins as PD = XR
  Why Contribute?
• Further, if we assume if both X     D   and
  XR is 0, then PD = PR = 0.5 (50%)
• In other words, if the money is equal,
  the race is a toss-up
• And if either has more money, then
  they have a better chance of winning
 Why Contribute?
• For example, if Demo Don has all the
  money then, using the formula we
  developed we get:
•P D=     1D      =   1
• Likewise, if Repub Ron has all the
  money, then he has a 100% chance of
     Why Contribute?

• Notice that: P = 1 - P
                D      R

• In other words, if we will assume if
  candidates are trying to win, then
  they will try to maximize their
  campaign contributions
   Why Contribute

• Turn to page 201 and the Sierra Club
   Why Contribute

• Next week finish chapters 6 and 7

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