How campaign finance law works, and why you should check the FEC for the numbers

Campaign finance law is the only field of American life where a person can be told, with a straight face, that it is illegal to give a candidate more than a set amount of money but perfectly legal to spend unlimited amounts of your own money on a TV ad praising him. If that sounds like it was written by a committee that had been locked in a room with a bag of pretzels and no windows, congratulations: you have the right instinct. It was written by several committees, over a century, with the Supreme Court correcting the homework along the way.

I want to give you the structure, in order, because the structure explains the oddities. And I want to give you one habit that will serve you better than any number I could print here: when someone quotes a dollar limit, go look it up. The limits are adjusted over time, the rules have exceptions, and the only safe source is the Federal Election Commission itself.

The question the law is trying to answer

Every campaign finance rule is an answer to one question: how do we keep money from corrupting politics without silencing the people who want to take part in it?

Reasonable people disagree about the answer, so let me state the two poles fairly.

The reformer says: money buys access, access buys influence, and a democracy where the biggest donors get the first phone call is not a democracy. Cap the money, and you protect the ordinary voter.

The conservative answer, which I find more persuasive, runs the other way. Political speech is the speech the First Amendment protects most. Spending money is how you make speech reach people: you cannot publish a pamphlet, buy a broadcast, or rent a hall for free. A cap on spending is a cap on speech. And the people who write the caps are the incumbents who run under them, which is a conflict of interest you could drive a campaign bus through.

Both sides agree on one thing: voters have a right to know who is paying. That is why disclosure is the part of the system with the broadest support, and why the habit of checking the filings is the habit that matters most.

The history in six steps

The law was built in layers, and each layer answers the one before it.

Step one: the early laws

The first federal limit on political money was aimed at corporations. The Tillman Act of 1907 barred corporations from contributing to federal candidates. Congress later extended the same ban to labor unions in the 1940s. The principle, that a corporation or a union treasury should not write checks to candidates, has stood for more than a century and is still the law for federal contributions. If you hear that corporations can "give unlimited money to candidates," that is wrong. We will come back to what they can do.

For the period of scandal and reform that followed, including the Teapot Dome era, see Teapot Dome and What a Party Owes Its Voters When Its Own People Fail.

Step two: FECA in 1971 and the 1974 amendments

The modern system begins with the Federal Election Campaign Act of 1971, which required candidates and committees to disclose what they raised and spent. It was strengthened by the 1974 amendments, passed in the shadow of Watergate, which did four big things:

1. They set limits on contributions from individuals and groups to federal candidates.
2. They set limits on spending: by candidates, by their campaigns, and by outsiders working independently.
3. They created public financing for presidential campaigns.
4. They created the Federal Election Commission, the agency that enforces the law.

The FEC has six commissioners, no more than three from the same party, and most formal actions require four votes. That design was deliberate: it means the commission cannot act against a party's candidates without at least some votes from the other side. It also means the FEC can deadlock, which critics on both sides have complained about. Whichever way you see it, the commission is the place where the filings, the guidance and the enforcement cases live.

Step three: Buckley v. Valeo (1976)

Almost at once, the 1974 law went to the Supreme Court. In Buckley v. Valeo (1976), the Court split the statute in two, and the line it drew still organizes the field.

The Court held that:

1. Contribution limits are constitutional. Giving money to a candidate is a form of speech, but a less direct one, and limits are justified by the government's interest in preventing corruption or the appearance of it, especially the exchange of money for favors.
2. Spending limits are not. The Court struck down limits on how much a candidate could spend on their own campaign, limits on a campaign's total spending, and limits on independent expenditures by people acting without coordination with a campaign. Spending money to communicate is, in the Court's view, the core of the speech right.
3. Disclosure is constitutional. Requiring reports of who gives and who spends serves the public's interest in knowing where the money comes from, and the burden is modest.

If you remember one sentence from this entire post, make it this one: after Buckley, the government can limit what you give to a candidate, but it cannot limit what a person spends independently to speak. Everything else follows from that line.

Buckley also held that the original structure of the FEC, with some commissioners chosen by Congress, did not square with the Appointments Clause, and Congress rebuilt the commission in 1976.

Step four: McCain-Feingold in 2002

By the late 1990s, money found a way around the limits, and the main route was soft money: unregulated donations to the national parties, supposedly for "party building," that ended up funding ads in all but name for federal candidates. Congress responded with the Bipartisan Campaign Reform Act of 2002, usually called McCain-Feingold after its Senate sponsors, John McCain and Russ Feingold.

The law did two main things:

• It banned national parties from raising and spending soft money.
• It created the category of electioneering communications: broadcast ads naming a federal candidate shortly before an election (within 30 days of a primary or 60 days of a general election), which could not be paid for out of corporate or union treasuries.

It also required the "I approve this message" statements candidates make at the end of their ads.

The Supreme Court upheld most of the law in McConnell v. FEC (2003). But the ground shifted again over the following years, and the key event came in 2010.

Step five: Citizens United in 2010

The case began over a documentary. Citizens United, a nonprofit corporation, produced a film critical of a presidential candidate and wanted to release it through video-on-demand close to a primary. The electioneering rule seemed to bar it. How the case started, and the strange turn the argument took over what the statute could reach, is told in The Citizens United Case Began With a Movie, and Banning Books Was on the Table.

In Citizens United v. FEC (2010), a 5 to 4 Court held that the government may not ban independent expenditures by corporations and unions. If a corporation wants to spend its own money to run an ad urging people to vote for or against a candidate, without coordinating with a campaign, it may. The Court overruled an earlier decision, Austin v. Michigan Chamber of Commerce (1990), and part of McConnell. It also did something that gets less attention: by a vote of 8 to 1 it upheld the disclosure and disclaimer requirements for those ads.

Notice what the case did and did not do. It did not allow corporations to give money to candidates. The Tillman Act ban on corporate contributions to federal candidates is still the law. It did not allow coordination between outside groups and campaigns. It said that independent speech by a corporation or union is protected, as it already was for individuals.

You may disagree with the ruling. But the logic is straightforward: if a newspaper, which is a corporation, can endorse a candidate, and a movie company, also a corporation, can make a film about one, then the line that lets the government silence one corporation and not another has to come from somewhere, and the First Amendment does not supply it.

Step six: Super PACs and the new map

Right after Citizens United, a federal appeals court in SpeechNow.org v. FEC (2010) reasoned that if independent spending can't corrupt, then contributions to a group that does nothing but make independent expenditures can't be limited either. That produced the super PAC, formally an independent-expenditure-only committee. It may raise money in unlimited amounts from individuals and, after Citizens United, from corporations and unions, but it may not give to candidates or coordinate with them.

The most important thing to understand about super PACs is the cost they carry. They cannot coordinate, so the candidate who benefits from the ad does not control it. A candidate cannot tell a super PAC what to say, or when. That is the reason many campaigns grumble about them as often as they thank them.

In McCutcheon v. FEC (2014), the Court struck down the aggregate limits, the overall caps on how much an individual could give in total to all candidates and committees in a two-year cycle. The limits per candidate stayed. The change simply let a donor support more candidates at the base limit.

Who can give, and to whom: the cast of committees

The system has several types of organizations, and the rules are different for each.

The exact limits for each row, who can give how much to whom, and the rules for coordination are all on the FEC's website. I am deliberately not printing the numbers, and here is why.

Why you should check the FEC for the numbers

Three reasons, and each is a reason to distrust any blog, cable segment or friend-of-a-friend who quotes you a figure.

1. The limits are adjusted. The base limits on what individuals can give are indexed to inflation and updated every two years. A figure that was correct in one cycle will be wrong in the next.
2. The numbers depend on the type of giver and the type of recipient. The limit on a gift to a candidate is not the limit on a gift to a party committee, or to a PAC. Different rows, different numbers.
3. The rules have exceptions. There are special rules for presidential primaries, for recounts and legal funds, for coordinated party spending, and for what a host may spend at a home event. Reading the actual guidance is the only way to catch them.

Here is the practical advice. Go to fec.gov. The site has a section of plain-language guidance for candidates and committees, which includes a page of the current contribution limits. It also has a data section where you can search for any federal candidate or committee and read the reports they filed. Use both. Print the limits page and tape it to the wall of your campaign room.

For the state and local level, the equivalent is the website of your state's election or campaign finance agency. State limits differ widely, and some states have no contribution limits at all. Do not assume that the federal answer applies in your town.

The conservative case for disclosure, with one caution

If you accept that spending can't be capped, then the remedy for a worry about who is paying is the one the Court has kept: sunlight. Voters can look up who funds a candidate or a super PAC and decide for themselves. That is the system working.

There is one caution, and conservatives of all people should remember it. In NAACP v. Alabama (1958), the Supreme Court protected a civil rights organization from being forced to hand over its member list to a state government that wanted to intimidate it. The lesson is that disclosure has a price when a government can punish people for their beliefs. A good disclosure rule asks for what the public needs and no more, with thresholds that spare the small donor. Which brings us to how to read the filings themselves, covered in how to read a campaign finance report the way an auditor would.

What this means at your kitchen table

You may not be running a super PAC. But the structure touches ordinary people in three places.

• As a donor. Your gift to a candidate is limited, your name goes on a public report if you give over the reporting threshold, and the money has to be your own. See the host's checklist in hosting a candidate in your living room without breaking the law.
• As a candidate or volunteer. The treasurer's job is a legal job, and the rules about corporate money, personal use and reporting apply to you. A first-time candidate should read the fundraising call sheet, how a first-time candidate asks for money and a campaign budget worksheet for the candidate with no money and no staff before the first ask.
• As a voter. You have the right to know who is paying for the ads that reach you. The reports are online and free.

The bottom line

• The system rests on one line from Buckley: contributions to a candidate can be limited, independent spending to speak cannot, and disclosure is allowed.
• The Tillman Act still bars corporations and unions from giving to federal candidates; Citizens United only protected their independent speech.
• Never trust a dollar limit you read secondhand. The numbers are adjusted and depend on who is giving to whom, so read them at fec.gov.
• Use the FEC's search tools and the filings to see who funds a campaign, and use your state agency for state and local races.
• Back disclosure that is broad enough to inform voters and narrow enough to spare small donors from harassment, and judge candidates by what they do.