arrowSection 3.1 - Campaign Finance

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This topic is monitored by Moritz Law Professor Edward B. Foley

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Glossary of Terms

Bipartisan Campaign Reform Act of 2002 (BCRA)

The Bipartisan Campaign Reform Act (BCRA), also known as “McCain-Feingold,” amended Title 2, Chapter 14 of the U.S. Code.

BCRA restricts the receipt and use of “soft money,” or “any funds... that are not subject to the limitations, prohibitions, and reporting requirements of this Act,” by national parties, federal officeholders, and federal candidates. 116 Stat. 81, 82. BCRA also expands the definition of “campaign advertisement” to include “electioneering communications,” bringing more campaign advertisements within the scope of disclosure requirements and contribution limits. 116 Stat. 81, 88. Corporate and labor sponsorship of electioneering communications are prohibited except for ideological non-profit corporations that qualify under MCFL. 116 Stat. 81, 91.

Some other provisions of BCRA increase certain contribution limits, 116 Stat. 81, 87; specify disclosure requirements, 116 Stat. 81, 87; and require the FEC to maintain a website of all publicly available election-related reports and information, 116 Stat. 81, 114-15. BCRA also imposes additional disclosure requirements on broadcasters, 116 Stat. 81, 115; and establishes the “millionaire’s amendment” to increase contribution limits for opponents of wealthy self-financed candidates, 116 Stat. 81, 97, 99.

BCRA included a prohibition on contributions by minors, 116 Stat. 81, 109; but this provision was struck down in McConnell v. FEC, 124 S. Ct. 619, in which the Supreme Court upheld the major provisions of BCRA.

Buckley v. Valeo

Buckley v. Valeo, 424 U.S. 1 (1976), is a landmark case in election law. In Buckley, the Supreme Court interpreted and ruled on the constitutionality of the Federal Election Campaign Act of 1971 (FECA).

The Court upheld FECA’s campaign disclosure requirements, while allowing a potential exemption for those whom disclosure may harm. Buckley v. Valeo, 424 U.S. 1, 60 (1976). The Court also upheld FECA’s contribution limits, finding that the accompanying restriction on political free speech was justified by “serv[ing] the basic governmental interest in safeguarding the integrity of the electoral process without directly impinging upon the rights of individual citizens and candidates to engage in political debate and discussion.” Buckley at 58. Also upheld were the provisions for public financing of the president’s campaigns. Buckley at 85.

Other provisions of FECA were struck down. The Court ruled that FECA’s limits on independent expenditures, a candidate's personal expenditures, and overall campaign expenditures violated the First Amendment by placing “substantial and direct restrictions on the ability of candidates, citizens, and associations to engage in protected political expression.” Buckley at 58-59. The Court also found the presidential and congressional appointments of the Federal Election Commission to be unconstitutional as violating the principle of separation of powers. Buckley at 140.

Contribution

A contribution is any gift, subscription, loan, advance, or deposit of money or other value made by any person for the purpose of influencing a federal election. It also includes payment of compensation for another person’s personal services rendered to a political committee without charge for any purpose. 2 U.S.C.S. 431(8). A contribution includes “contributions made directly or indirectly to a candidate, political party, or campaign committee,” contributions made to others but earmarked for political purposes, and “expenditures placed in cooperation with or with the consent of a candidate, his agents, or an authorized committee of the candidate.” Buckley v. Valeo, 424 U.S. 1, 78 (1976). Exceptions to the definition of “contribution,” including certain volunteer work and expenditures, are listed at 2 U.S.C.S. 431(8)(b).

Electioneering Communication

An electioneering communication is any broadcast, cable, or satellite communication which refers to a clearly identified candidate for federal office, is publicly distributed shortly before an election for the office that candidate is seeking, and, in the case of U.S. House and Senate candidates only, is targeted to the relevant electorate. 2 U.S.C.S. 434(f)(3)(a)(i); construed in Federal Election Commission, Electioneering Communications (2004), available at http://www.fec.gov/pages/brochures/electioneering.htm.

  • A communication refers to a “clearly identified” candidate if it contains the candidate’s name, nickname, or image, or makes unambiguous reference to the person or their status as a candidate. 11 C.F.R. § 100.17 (2003); construed in Federal Election Commission, Electioneering Communications (2004), available at http://www.fec.gov/pages/brochures/electioneering.htm.
  • Distribution that qualifies as “shortly before an election” is distribution within 60 days before a general, special, or runoff election for the office sought by the candidate; or 30 days before a primary or preference election, or a convention or caucus of a political party that has authority to nominate a candidate for the office sought by the candidate. 2 U.S.C.S. 434(f)(3)(a)(i).
  • A communication targets the relevant electorate if it can be received by at least 50,000 people in the U.S. House or Senate candidate’s district or state, respectively. 11 C.F.R. 100.29(b)(5); construed in Federal Election Commission, Electioneering Communications (2004), available at http://www.fec.gov/pages/brochures/electioneering.htm.

Electioneering communication is subject to federal campaign finance law, including disclosure requirements, contribution limits, and the prohibition on corporate and union sponsorship. Federal Election Commission, Electioneering Communications (2004), available at http://www.fec.gov/pages/brochures/electioneering.htm.

Expenditure

An expenditure is any purchase, payment, distribution, loan, advance, deposit, or gift of money or anything of value, made by any person for the purpose of influencing a federal election. A written contract, promise, or agreement to make an expenditure is included in the definition. 2 U.S.C.S. 431(9)(A). Exceptions are listed at 2 U.S.C.S. 431(9)(B).

As construed by Buckley v. Valeo, 424 U.S. 1 (1976), expenditure has a narrower meaning for the purpose of reporting requirements when it is made by those other than a candidate, an organization under a candidate’s control, or an organization the major purpose of which is a candidate’s nomination or election. In such cases, expenditure includes only “funds used for communications that expressly advocate the election or defeat of a clearly identified candidate.” (see express advocacy) Thus, expenditures only include spending that is “unambiguously related to the campaign of a particular federal candidate.” Buckley at 79-80.

Express Advocacy

Express advocacy is “unambiguously advocating the election or defeat of a clearly identified federal candidate.” A communication can be defined as express advocacy by use of certain “explicit words of advocacy of election or defeat” (also called “magic words”) or in some jurisdictions by the “only reasonable interpretation” test. Federal Election Commission, Campaign Guide for Corporations and Labor Organizations 31, 84 (2001).

Examples of such “magic words” are provided in famous footnote 52 of Buckley v. Valeo, 424 U.S. 1, 44, and include “vote for,” “elect,” “support,” “cast your ballot for,” “Smith for Congress,” “vote against,” “defeat,” and “reject.” Also included in express advocacy as “explicit words of advocacy of election or defeat” are communications urging voters to vote for candidates associated with an issue, for example, “vote pro-life;” when the communications identify such candidates by name or photo. FEC v. Mass. Citizens for Life, Inc., 479 U.S. 238, 249.

The “only reasonable interpretation” test, found in FEC regulations, is followed in some but not all jurisdictions, as some courts have found it invalid. See Federal Election Commission, Campaign Guide for Corporations and Labor Organizations 31 n.4 (2001).

Under this test, express advocacy may be found in the absence of “magic words” when a communication, “when taken as a whole and with limited reference to external events... could only be interpreted by a reasonable person as... [advocating] the election or defeat of one or more clearly identified candidate(s).” 11 C.F.R. 100.22(b).

The presence of express advocacy has important consequences for disclosure requirements. In general, non-candidates and non-candidate-related organizations do not share the candidate disclosure requirements for expenditures unless those expenditures constitute express advocacy.

Federal Election Campaign Act of 1971 (FECA)

The Federal Election Campaign Act of 1971 (FECA), codified at 2 USC §431 et seq., was “by far the most comprehensive reform legislation passed by Congress concerning the election of the President, Vice-President and members of Congress.” Buckley v. Valeo, 519 F. 2d 821, 831 (1975).

As amended in 1974, FECA placed limits on certain political contributions and expenditures, required public disclosure of contributions and expenditures above certain levels, created a system of public funding of Presidential campaign activities under the Internal Revenue Code, and established the Federal Election Commission (FEC). Buckley v. Valeo, 424 U.S. 1, 7 (1976).

Independent Expenditure

An independent expenditure is “an expenditure by a person... expressly advocating the election or defeat of a clearly identified candidate; and... that is not made in concert or cooperation with or at the request or suggestion of such candidate, the candidate's authorized political committee, or their agents, or a political party committee or its agents.” 2 U.S.C.S. 431(17).

Independent expenditures are not subject to limits. Federal Election Commission, Campaign Guide for Corporations and Labor Organizations 31 (2001). However, certain independent expenditures are subject to reporting requirements under 2 U.S.C.S. 434.

Issue Advocacy

In general terms, issue advocacy is “a position statement about, or a discussion of, public issues.” David Goldberger, The Power of Special Interest Groups to Overwhelm Judicial Election Campaigns: The Troublesome Interaction Between The Code of Judicial Conduct, Campaign Finance Laws, and the First Amendment, 72 U. CIN. L. REV. 1, 38 (2003). For the purpose of campaign law, issue advocacy includes communications not containing express advocacy. Citizens for Responsible Gov't State PAC v. Davidson, 236 F.3d 1174, 1187 (10th Cir. 2000). (See the glossary entry for “express advocacy,” which is defined as unambiguously advocating the election or defeat of a clearly identified federal candidate.) Issue advocacy is shielded from regulation by the First Amendment. Id.

Because the meaning of express advocacy is controversial and varies by jurisdiction, the scope of issue advocacy is similarly unclear. In “magic words jurisdictions,” which require the presence of “magic words” in order to find express advocacy, the scope of issue advocacy is very broad. In other jurisdictions, which may find express advocacy under the “only reasonable interpretation” test, the scope of issue advocacy is more narrow.

An example of straightforward issue advocacy would be a communication discussing an issue and in no way referring to a political candidate. If, however, the communication suggests that a particular candidate is relevant to the issue, it gets closer to express advocacy. In a “magic words jurisdiction,” the communication must contain explicit words of advocacy of the candidate’s election or defeat in order to constitute express advocacy. Thus, any communication not containing such explicit words as “vote for,” “support,” etc., is issue advocacy, regardless of how clearly the communication may advocate a candidate’s election or defeat.

Other jurisdictions, however, may be willing to find express advocacy more easily, when the only reasonable interpretation of the communication is advocating a candidate’s election or defeat. In those jurisdictions, issue advocacy excludes many communications that would have passed the “magic words” test.

Magic Words

Magic words are “explicit words of advocacy of election or defeat” and are required, in some jurisdictions, in order for a communication to constitute express advocacy.

Examples of such “magic words” are provided in famous footnote 52 of Buckley v. Valeo, 424 U.S. 1, 44, and include “vote for,” “elect,” “support,” “cast your ballot for,” “Smith for Congress,” “vote against,” “defeat,” and “reject.” Also included in express advocacy as “explicit words of advocacy of election or defeat” are communications urging voters to vote for candidates associated with an issue, for example, “vote pro-life;” when the communications identify such candidates by name or photo. FEC v. Mass. Citizens for Life, Inc., 479 U.S. 238, 249.

The presence of express advocacy has important consequences for disclosure requirements. In general, non-candidates and non-candidate-related organizations do not share the candidate disclosure requirements for expenditures unless those expenditures constitute express advocacy.

McCain-Feingold

McCain-Feingold refers to the Bipartisan Campaign Reform Act of 2002, which is known as the McCain-Feingold law after its key Senate sponsors.

McConnell v. FEC

In McConnell v. FEC, 124 S. Ct. 619 (2003), the Supreme Court found constitutional the key provisions of the Bipartisan Campaign Reform Act (BCRA). The Court upheld BCRA’s ban on “soft money” in federal elections, regulation of “sham issue advocacy” advertisements, and most other provisions. Craig Holman, The Bipartisan Campaign Reform Act: Limits and Opportunities for Non-Profit Groups in Federal Elections, 31 N. KY. L. REV. 243, 261-62 (2004). It struck down as unconstitutional only two BCRA provisions: the prohibition on contributions by minors, and the requirement that parties choose between independent expenditures or coordinated expenditures on candidates’ behalf. Id. at 262-63.

Sham Issue Advocacy

Sham issue advocacy is “[exploitation] of the ‘magic words’ test to finance ads designed to influence elections but which legally fall outside the scope of campaign advertisements.” Craig Holman, The Bipartisan Campaign Reform Act: Limits and Opportunities for Non-Profit Groups in Federal Elections, 31 N. KY. L. REV. 243, 248 (2004). See also Richard L. Hasen, The Surprisingly Complex Case for Disclosure of Contributions and Expenditures Funding sham Issue Advocacy, 48 U.C.L.A. Law Rev. 265 (Dec. 2000). (“Sham issue advocacy is advertising intended to influence the outcome of elections but lacking words of express advocacy such as ‘vote for’ or ‘defeat’.”).