A Primer on Money in Politics
“Corrupt politicians make the other ten percent look bad.”
―Henry Kissinger
It will come as little surprise that there is money in politics—a lot of money. Let’s first get familiar with some of the basics about this key way of influencing politics and government. We’ll keep it simple, and the definitions and information available via the links will help facilitate a better understanding of this important topic.
Let’s start with the beginning of the process, when politicians run for office. By law, candidates must file periodic disclosure reports of all campaign contributions that exceed a relatively small amount. In some cases, significant contributors are also required to file disclosure reports.
The threshold for reporting depends on several factors, such as the office being sought, and whether it’s at the Federal, State, or Local level. Because of past abuses, campaigns can typically avoid reporting only those donations under $50-$200. The disclosure reports are routinely available, via government agencies, to the general public. Unfortunately, this vital information is often difficult to understand. But this post, along with others on GeorgeWasRight, will prove helpful in finding the data and making sense of it.
In recent years, elections have seen the increased use of the small-contribution model, where politicians accept only donations of a low amount. This means that a candidate effectively funds their campaign with donations from individual citizens, rather than from corporations or lobbyists. Nevertheless, the old-fashioned way of funding campaigns by way of sizable contributions from moneyed special-interests still dominates our political landscape—and not for the better.
Below are just some of the ways special interests can express their “love,” politically speaking.
Soft Money and Super Political Action Committees (Super PACs)
It is important to know two terms—soft money and hard money—and the difference between them. Soft-money committees are not controlled by a candidate, but rather are set up to support or oppose them. Contributions made to them are largely unregulated and unlimited. Such committees are often referred to as Independent Expenditure groups (IEs).
Super PACs are a popular form of soft-money committee. They’re often used by wealthy individuals or groups, since contributions to them, besides being unlimited, can also sometimes be made anonymously.
Under current law, IEs are not supposed to coordinate their activities with candidates or candidate-run committees. There are also limitations to what their contributions can be spent on, with it allowed mostly for advertising.
Here's an easy way to tell the difference between PACs and Super PACs. PACs are usually funded by public-facing entities like companies or unions. Super PACs are usually run by a small number of individuals or entities. Super PACs tend to make larger contributions, since donations to them are mostly unregulated.
Unfortunately, partisan deadlock at the Federal Election Commission (FEC), the Federal agency that regulates campaign financing, rarely enforces its regulations. This article explains more about the problems at the FEC, and why they matter.
Hard-Money Contributions
These are contributions given by individuals and political action committees (PACs). PACs are legal vehicles used by corporations, unions, and other groups to donate to candidates. Such contributions are subject to regulations regarding their amount and timing.
One big advantage of hard-money contributions made directly to a candidate is that television stations are required by law to give such committees the lowest rate they charge for airing commercials. In election seasons, when political advertising is rampant and ad rates are higher, this can provide a particularly valuable benefit.
Leadership PACs
As their name implies, leadership PACs are formed mostly by legislative leaders. They do so in order to give money to other politicians in the hope of gaining their future loyalty in contests for legislative leadership posts.
Leadership PACs are also a convenient means of getting around hard-money donation limits for other types of campaign contributions.
Mr. X for Treasurer in 2024, Mr. X for Governor in 2026...
Another method of bypassing contribution limits is by forming committees for multiple offices in future elections. Such committees are easy to spot because their title must include the name of the candidate, the office they’re seeking, and the year the election is taking place.
Candidates can transfer funds between committees, so there's no downside to creating lots of them, even if they have no intention of running for all of the offices for which they’ve formed PACs.
Dark Money
Plenty of people recall having heard of dark-money groups, perhaps it because of their cool, film-noirish name. Paradoxically, though, such groups provide cover to wealthy individuals attempting to influence our democracy. Dark-money groups are a type of nonprofit, tax-exempt entity that can accept unlimited contributions without disclosing the identities of donors.
Such groups are ideal vehicles for contributing large sums of money, and doing so anonymously. Funds from these organizations can be utilized for political activity as long as they spend less than half of their total funds on electioneering.
Dark-money groups are playing an increasingly larger role in politics and elections today. This OpenSecrets article explains more about dark money, as well as some of the other ground we cover here.
Did You Know…?
What is the most common use of the political term “Revolving Door?”
A) When Members of the Senate or House of Representatives are elected to the other chamber of Congress
B) When lawmakers cooperate with investigations about potential illegal campaign contributions
C) When law-enforcement officials employ bribes to get corrupt lawmakers to cooperate in an investigation
D) When former lawmakers become lobbyists, or former lobbyists become lawmakers
You can find the correct answer at the bottom of this page.
Unused Campaign Contributions — You Can Take Them with You
Have you ever wondered what happens to unspent campaign contributions? Well, the answer is pretty much anything. They can be transferred to other candidates, used for other races, or for just about any purpose other than personal use. And the line drawn around personal use is actually pretty fuzzy. Here’s how the FEC defines the term.
But spending funds for personal use is hardly the only way politicians can live an upgraded lifestyle. Want a free vacation at an opulent resort? Just schedule a meeting with other lawmakers or Local officials, or attend an all-inclusive conference sponsored by a special-interest trade group. It’s all on the house: luxury accommodations, gourmet dining, greens fees at premiere golf courses, pricey gifts, and more. Special-interest groups will gladly pick up the tab to get face time with lawmakers. It’s a great system for politicians and lobbyists, but it comes at tremendous cost to everyone else.
With the gridlock at the Federal Election Commission, the regulation of such activities is decidedly lax, which creates a wild-west atmosphere. Candidates and officeholders are continually pushing against and expanding the boundaries of what they’re permitted to do, often getting away with whatever they can.
Opening Up Our Political System to More Candidates
Many potentially viable candidates won’t consider running for office simply to avoid the distastefulness of constant fundraising. The exorbitant cost of campaigning has left candidates who do not possess great personal wealth very few choices other than becoming dependent on special-interest groups, political parties, and other politicians for large contributions.
Recently, though, the trend of funding campaigns with large numbers of small donations is creating more opportunities for people to run for office without having to spend their elected lives dialing for big dollars.
Special-interest money will always find a way to ooze under Capitol doorways. But if fewer candidates accept such contributions, and instead focus on receiving funding in greater numbers of smaller donations, voters could make taking large amounts from special-interest groups a greater political liability. Of course, voters will need to know where candidates are getting their campaign funds. On GeorgeWasRight, you’ll learn just how easy that is to do.
Congressional Call Centers
Perhaps nothing epitomizes the unending dash for campaign cash better than the Congressional Call Centers both major parties maintain near the Capitol. Politicians utilize these private facilities because it’s illegal to solicit contributions from inside a government office.
Comedian John Oliver makes it easy to get a whiff of this action with his video about Congressional fundraising. It paints a very humorous, though sad, portrait of lawmakers in hot, sweaty rooms asking strangers for money.
Let's pause a moment and try to get a breath of fresh air.
Where You Can Go Online to See Who's Giving and Taking Big Money
Following the political money trail isn’t easy to do on government websites. Many lawmakers prefer it that way since they’d like to keep such data out of public view.
Even in tech-savvy California, following the money for statewide and State legislative offices is difficult using the State's infamous Cal-Access system. That system is supposed to allow the public to track campaign spending, identify donors, and understand lobbying activities. Though it has been improved some in recent years, it still lacks the level of usability necessary for most voters to find it practical.
Fortunately, there's an excellent nationwide resource to learn who's funding candidates and ballot measures. In the next piece on Money in Politics, Revealing Open Secrets, we’ll talk about this informative, easy-to-use website, where you can quickly learn how to follow the money in a variety of ways.
To get more elected representatives who actually prioritize the needs of constituents over their contributors, it is critical to let them know that we know what they’re doing.
Summing It Up
As mentioned throughout GeorgeWasRight, one of the keys to restoring our democracy and returning power to the people is understanding how to follow the money in politics. If most of us continue to turn a blind eye to the flow of political cash, then special-interest groups will continue to dominate the landscape of government—at our expanse, and the expense of future generations. We sincerely hope that the GWR content on this topic will help you gain a better understanding of this vital subject.
Answer to the Did You Know…? Question
The answer is D) When former lawmakers become lobbyists, or former lobbyists become lawmakers.
The “revolving door” in politics refers to the all-too-common practice of former legislators taking lucrative jobs in the private sector as lobbyists in the industries they once oversaw, or vice versa. Such movement between government and business creates potential conflicts of interest, as well as serious ethical concerns about undue influence.