Case Study: Campaign Finance

Case Study: Campaign Finance 

Running for a national election in a large country takes money. In the 2020 elections, $14.4 billion was spent on congressional and presidential campaigns. Candidates use these large amounts of money to pay for everything from advertisements to travel to day-to-day operations. The large amounts of campaign funds that are now spent on elections has raised questions over the role of money in American politics. 

In the early American republic, campaigning looked very different from the modern day. Candidates did not campaign for themselves or appear in the public spotlight, believing that doing so would make them appear ambitious and desiring power. Instead, their supporters would canvas on their behalf. With no organized campaign for congressional or presidential candidates, very little fundraising took place.  

After the Civil War, fundraising for political office began to increase, as wealthy families like the Vanderbilts began to contribute large funds into political campaigning. Additionally, presidential campaigns began to rely more and more on government employees working to help elect or re-elect candidates, who in turn would help them on their career path by re-appointing or promoting them. In 1867, the Naval Appropriations Act, the first federal campaign finance law, was passed. The law prohibited government employees from soliciting contributions from Navy yard workers. 

During the Progressive Era in the early twentieth century, some Americans pressed for stronger regulation of campaign spending. Advocates argued that corporations and wealthy individuals had too big an influence in American politics and they could rig the system in their favor over the interests of the people. Congress passed, and President Theodore Roosevelt signed, the Tillman Act in 1907. The Tillman Act banned any corporate donations to candidates for federal office. However, businesses were able to find loopholes, and many still found ways to support their chosen candidates. 

In 1971, Congress passed the Federal Election Campaign Act (FECA). It created strong regulations of campaign finance and spending. A few years later, additional amendments to the act were passed, which created the Federal Election Commission (FEC). The Supreme Court ruled in the landmark case of Buckley v. Valeo (1976) that portions of FECA that limited the amount campaigns could spend violated First Amendment free speech protections. However, the Court upheld the portion that placed limits on amounts that individuals could contribute to a campaign because such limitations enhance the “integrity of our system of representative democracy.”  

In 2002, Congress passed the Bipartisan Campaign Reform Act. The act banned any money from being used by corporations or unions for broadcasting advertisements for candidates. In 2010, the Supreme Court ruled in the landmark decision Citizens United v. Federal Elections Commission that parts of the act were unconstitutional. The Court determined donations could not be restricted when used by a group creating advertisements, so long as they did not coordinate with the candidate they were supporting. It ruled that restricting such donations violated First Amendment free speech guarantees. The ruling led to the rise of Super PACs, or groups that may raise an unlimited sum of money from corporations, unions, and individuals. 

The Citizens United ruling did not end debates about campaign finance. Some have critiqued the increase in the amount of money involved in campaigns since the Citizens United ruling as undermining American democracy. These critics argue the ruling allows corporations, unions, and wealthy individuals to have a large influence over policy compared to the average voter. Others support the Court’s decision and oppose limits, arguing that spending money on behalf of a candidate without giving that money directly to the candidate is an expression of free speech. The topic of campaign finance will likely continue to be controversial for many decades.