* Individual donors of $500 to $1000 are important fund sources but often they are mobilized by and share the interests of various PACs.
* The personal contributions of the candidates themselves are also increasing.
* "Soft money" in the form of independent expenditures, not tied to the campaign but on behalf of the candidate, and unregulated in amount, is also increasing.
* In 1990, Republican and Democratic House incumbents averaged about $400 million in campaigns. Their challengers average a little over $100 million.
* Implication: About 90% of incumbents were re-elected during the 1980s. Individuals are discouraged from running for office, particularly since they often have to forego their regular income during the two-year campaign period, unlike incumbents, who are mostly paid during the campaign period.
* The Savings and Loan scandal of the early 1990s revealed major contributions were made to five Senators who became involved in seeking to help problem banks.
* Clearly PACs and large contributors think contributions gain influence, or at the very least, buy access so that one can make one's case. PACs appeal to their members and supports specifically on the basis that PAC action leads to political influence.
* At the same time, many contributions are principled donations committed because of belief in the positions of the candidate. These donations seek to install/keep the candidate in office, not change his or her views. Principled money is not mutually exclusive from interested money.
Federal law prohibits direct political giving by corporations.
1925: CORRUPT PRACTICES ACT
Passed after the Teapot Dome scandal over cabinet-level bribery. Nominally required disclosure of campaign funds but in practice it was too full of loopholes to be meaningful.
1943
Labor unions prohibited from direct political giving.
1971: FEDERAL ELECTION CAMPAIGN ACT (FECA)
Limited amounts federal candidates could spend on media advertising, required disclosure of sources of revenue and purposes of disbursements, and forced PACs to register.
1971: REVENUE ACT
Taxpayers can check of a $1 contribution used to partially publicly fund presidential campaigns. Another provision gave tax credits to political donors, but this provision was later repealed.
1974: FEDERAL ELECTION CAMPAIGN ACT AMENDMENTS
The Watergate scandal under Nixon in 1972 revealed large amounts of campaign funds were "laundered" in secret foreign bank accounts to bypass campaign regulations. Congress passed the most sweeping campaign reform legislation in U.S. history by establishing more realistic limits on campaign expenditures, limiting contributions, and requiring full disclosure by federal candidates, and partly subsidizing presidential campaigns.
Individuals were limited to donations of $1,000 and PACs to $5,000 per candidate in each of the primary and general elections, and a limit of $25,000 was established for individual giving to all federal candidates in primary and general elections combined.
1976: BUCKLEY V. VALEO DECIDED BY SUPREME COURT
The Supreme Court overturned key aspects of FECA as violations of First Amendment free speech rights of political donors. Congress rewrote FECA, preserving most of its features, but eliminated some provisions such as the overall cap on congressional campaigns.
REMAINING ISSUES
* "Soft Money": Undisclosed funds may be given by individuals and PACs to parties to spend on voter registration drives and party mailings. Presidential candidates emphasizing raising soft money, which bypasses FECA limitations.
* "Related Giving": The ostensible donation limits of FECA are defeated by formation of multiple PACs and by multiple donations by related corporate officers or family members. Although blatant ruses are illegal, reasonable care by astute lawyers easily circumvents FECA limits.
* "FEC Funding": One reform would be simply to fund the Federal Election Commission adequately to enforce existing regulations. Funding for the FEC has declined and it is less and less able to enforce disclosure.
* "Public funding": The most radical reform would be to bar all donations and limit campaign expenditures to a finite amount from public funds. While limited public funding of presidential campaigns does exist, it may be an unconstitutional free speech restraint to bar additional donations. "Equal" funding would give advantage to incumbents, who already have name recognition. Such a reform is unpopular: eighty percent of taxpayers do not check off the $1 for public campaign finance.
* "Banning PACs": Another radical reform would be to eliminate PACs by law. This also might violate the First Amendment. It would also hurt Democrats more than Republicans, since Democrats are more dependent on PAC money. Since PACs are regulated, banning PACs might shift donations to an individual basis where regulation is harder and disclosure less likely. The role of personal wealth of candidates would also grow if PACs were banned.