How Much Money Can Pacs Give To Candidates

OLR Research Report

October 2, 2003 98-R-0271

TO:

FROM: Mary M. Janicki, Corpus Psychoanalyst

RE: Untoughened Money

You asked for data on the then-titled "soft money" used in election campaigns. You want to eff the definitions for soft and hard money; where soft money comes from; how it is worn-out; and how it can equal used in Connecticut.

SUMMARY

The Federal Election Campaign Act (FECA) limits contributions that individuals and political action committees (PACs) can make to support candidates for federal department. It bans contributions from the treasuries of corporations, labor organizations, national banks, federal government contractors, and foreign nationals. Soft money (sometimes known as non-Union soldier money) means contributions successful outside the limits and prohibitions of Federal law. This means that it is direct corporate and spousal relationship contributions and large someone and PAC contributions. Then again, hard money means the contributions that are subject to FECA; that is, limited individual and PAC contributions only.

The construct of flocculent money grew out of the post-Watergate reforms established in the FECA. The original purpose of leaving these donations unstructured was to keep party organizations relevant and strong. To put up thought parties and their activities, amendments to the law, Federal Election Commission (FEC) rulings, and the courts allowed parties to raise funds outside the restrictions connected contributions to candidates. The unregulated soft money contributions can be used for overhead expenses of party organizations and shared expenses that benefit both federal and non-regime elections. It is spent on party construction and issue protagonism, unconnected to individual candidates.

A an unlimited resource for parties, soft money contributions and expenditures have grown dramatically. In the years since parties have been required to report such receipts, the system has fully grown from $86 zillion in 1992 to $262 million in 1996. In the Statesmanly election cycles/second of 1995-96, both parties raised a total of $262.1 million in soft money. And parties raised over $67.4 meg in 1997, the most ever in an off-election year. Contributors include wealthy individuals, corporations, labor unions, and pro associations.

In the last Chief of state election cycle, political party committees spent $271.5 million of their soft money (actually more than they raised, resulting in some debt). The money went to (1) put forward party committees, (2) state and local candidates, (3) cosignatory federal and non-federal activities, and (4) other expenses.

Current state natural law permits national party committees to impart money to state or local party committees without distinguishing whether the contribution is from a Union or not-federal account (that is, whether it is hard or soft money). FEC statistics on national party transfers to Department of State and local political party committees for the 1995-96 election rhythm render that the Democratic National Citizens committee gave $986,035 to Connecticut party committees; patc the Republican Political unit Citizens committee made nary such transfers to its party committees in the state.

DEFINITIONS

Soft Money

Campaign contributions that are referred to atomic number 3 soft money are those raised by national and res publica parties that are not regulated by the Federal campaign finance police force because they are not contributed directly to a candidate but rather to a party commission for its use in generic "party building" activities like "get-kayoed-the-voter turnout" or voter registration programs. Contributors are non subject to the part limits and prohibitions of Fed law. The money comes from large individual and PAC contributions and through corporate and union contributions. It must be deposited in separate, non-federal accounts. In practice, use of the funds sometimes benefits specific candidates, making IT a vehicle for skirting contribution limits and restrictions.

Hard Money

By contrast, hard money is federally regulated campaign contributions and other moneys spent to influence the outcome of a Federal soldier election. Individuals are subject to an time period limit of $25,000 on contributions they can make to regime candidates, party committees, and PACs (2 USAC. � 441a(a)(3)). They can give no to a higher degree $2,000 per election cycle to a lonesome nominee. Corporate PACs are limited to $10,000 per candidate for primary and general elections. The limits determined in the FECA take been the indistinguishable since they were set in 1974.

SOFT MONEY ORIGINS

The use of soft money resulted from the ruffian post-Watergate reforms established in the 1974 FECA. The inexperienced law was sol disciplinary that candidates and political parties complained after the 1976 election cycle that it inhibited unpaid worker and grass roots party activity. In response to those complaints, the Federal Election Direction ruled in 1978 that limitless nation contributions could invite out political party activities. Congress codified the concept in 1979, amending the FECA (PL 96-187) to permit state and local parties to buy in unlimited campaign materials for volunteer activities promoting federal candidates and party building. Since 1991, FEC rules have required parties to report most soft money. In 1996, the U.S. Supreme Court subordinate that soft money could be dog-tired on such things as tv set advertising, thereby increasing the demand for so much funds.

SOURCES OF SOFT MONEY

The soft money system has grown from $86 million in 1992 to $262 meg in 1996. Figures on cushioned money contributions include those ready-made to the national party committees (the Democratic Internal Committee and Republican National Committee) every bit healthy as to the congressional committees that parties form to support their candidates running for the Union soldier US Senate and House of Representatives. This report focuses on those contributions to the national committees only when, where they can be isolated from the others.

1997

The parties ' national committees raised $67,443,987 in soft money during 1997, reported to Coarse Get. The amount is the most dull money ever raised in an inactive-election yr. Of that, the DNC raised $17,237,849; the RNC inflated $19,999,527; and the parties ' congressional PACs raised the rest. Table 1 shows the contributors of the largest easy money donations to political unit committees from the six-month period July through Dec 1997.

Table 1: Largest Semisoft Money Contributors

July 1997 through December 1997

*Contributor*	*Recipient role*	*Add up*
Philip Morris	RNC	$350,000
Mr. M.G. "Pat" Robertson	RNC	200,000
Diamond Enterprises of Florida, Inc.	DNC	150,000
Gwendolyn Williams Estate	DNC	133,829

1995-1996 Election Oscillation

In the most recent Statesmanlike election motorcycle, the parties raised and spent dramatically many in soft money contributions than in any other election since non-national gross were reportable. The Democratic national party committees raised $123.9 million in non-federal funds, up 242% from 1992, the go Presidential cycle; while the Republican national party committees raised $138.2 million, up 178%, according to FEC figures.

The largest contributors to the Democrats included: Seagram & Sons, Inc./MCA INC. ($1,180,700); Communications Workers of America ($1,128,425); and AFSCME ($1,091,050). The Republicans received soft money contributions from: Philip Morris Carbon monoxide gas., INC. ($2,517,518); RJR Nabisco, Inc. ($1,188,175); and American Financial Group ($794,000).

SOFT MONEY EXPENDITURES

Indulgent money is used to pay for a company organization ' s overhead expenses, as well as shared expenses that benefit some federal and non-federal elections, even if they indirectly benefit federal candidates. The 1976 FECA amendment permitted commonwealth and localised parties to spend bottomless amounts on hunting expedition materials the like buttons and yard signs for unpaid activities. Party organizations could also bear certain kinds of voter adjustment and get-out-the-balloting drives.

It is also used for issue advocacy, arsenic well as taxonomic category party advertizing. Parties conveyance close to of IT to state and local company committees, while some is contributed now to candidates in non-federal races.

Not surprisingly, soft money expenditures went improving As dramatically as contributions in the 1996-97 election motorbike. The Common political entity party committees exhausted $121.8 million and the Republican committees spent $149.7 zillion. These non-national funds were spent as follows in Table 2.

Table 2: 1996-97 Soft Money Expenditures

*Expenditure*	*Democrats* *(in millions)*	*Republicans* *(in millions)*
Transfers to state company committees	$64.6	$50.2
Contributions to state or local candidates	4.4	5.2
Joint federal official/non-federal bodily function	33.3	57.2
Other expenses	19.5	37.1

Diffuse MONEY DISBURSEMENTS IN Connecticut River

The Legal Basis

Connecticut ' s military campaign finance constabulary permits a sentiment party ' s national committee to make contributions to (1) a state central or town party committee (CGS � 9-333s(b)) and (2) an ongoing (or ideological) PAC including the policy-making committees implanted by the four General Assembly caucuses (CGS � 9-333t(b)). But the law bans contributions from national committees to (1) Nutmeg State candidate committees (Cgs system � 9-333r(b)) and (2) PACs created for a respective primary or election (Cgs system � 9-333u(b)).

The law presently makes no distinction for the source of these contributions 'tween a people committee ' s hard operating theatre soft money (that is, from its federal or non-federal account). Soh the soft money contributed to subject party committees can currently be legally passed on to state centric and town committees. And a state Oregon local party committee can make unlimited contributions to (1) another party committee, (2) a candidate committee, (3) back to a interior party citizens committee, (4) a committee for a candidate for federal or out-of-res publica office, or (5) a PAC (CGS � 9-333s(a)).

Disbursements in Connecticut

The FEC shows that between January 1, 1995 and December 31, 1996, the Republican National Party transferred $986,035 of non-federal money to country and topical anesthetic party committees in Connecticut. The Political party National Committee ready-made no such transfers in the least.

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