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- T-minus four months to Election Day, so get ready for hardcore partisans, special interests, and shadowy figures all trying to twist the race for the White House and control of Congress to their financial advantage.
- It’s a dizzying scene, and even the experts can get confused. ‘No rational person would have set up a campaign finance system the way it is,’ said one former Federal Election Commission chairman.
- To help Insider readers out, here’s our review of the most burning money questions swirling around this election cycle — and what’s at stake.
- Visit Business Insider’s homepage for more stories.
Feel utterly bamboozled by the billions of dollars gushing through Election 2020? Don’t fret. It’s not you.
Even the professionals are flummoxed.
“No rational person would have set up a campaign finance system the way it is — it’s a hodgepodge of laws and court rulings and FEC decisions,” said Michael Toner, a former Federal Election Commission chairman who now leads the election law and government ethics practice at Wiley Rein.
Nevertheless, it’s our system. It isn’t going anywhere. And to ignore it is to ignore a ballroom blitz of hardcore partisans, special interests, and shadowy figures all trying to twist the race for the White House and control of Congress to their advantage.
To help Insider readers out, here’s our review of the nine burning money questions swirling around this election cycle — and what’s at stake:
Business financial make money capital trading Donald Trump or Joe Biden: Who really has more cash?
First, the big picture: Both presidential candidates are flush with funds and well positioned to run robust, national campaigns from now until Election Day.
President Donald Trump and presumptive Democratic nominee Joe Biden are also unexpectedly conserving cash because the COVID-19 pandemic is crimping their campaigns’ travel, event and logistics expenditures.
Biden’s anemic fundraising during an historically crowded Democratic primary resolved itself once he effectively secured the party nomination with Bernie Sanders’ April withdrawal from the race. Biden quickly consolidated support and began vacuuming in cash from people who previously supported the Vermont senator, as well as Pete Buttigieg, Elizabeth Warren and others.
Entering June, Trump’s campaign committee enjoyed a lead over Biden’s campaign, having raised nearly $300 million. It had more than $108 million cash on hand, an Insider analysis of federal records indicates. (New numbers covering the full month of June are expected on July 20.)
Comparatively, Biden’s campaign has raised more than $210 million and reported more than $82 million in available cash entering June. Biden outraised Trump in May and will likely do so in June.
This does not include the nine-figure sums that both the Republican National Committee and Democratic National Committee have raised, much of which will directly support Trump and Biden, respectively.
The RNC has raised and spent significantly more money than the DNC during Election 2020, according to the Center for Responsive Politics.
It also doesn’t include a constellation of super PACs and nonprofit organizations that are spending mountains of cash on the presidential election. (More on that in a moment.)
Business financial make money capital trading Wait, I thought public money funded presidential campaigns with that $3 check-off on my tax return?
Once upon a time, it did. But not now.
Blame Barack Obama, at least in part.
Upon securing the Democratic presidential nomination in 2008, Obama broke a promise to accept presidential matching funds for the general election against Republican nominee John McCain, who did accept taxpayers’ matching funds.
No major party presidential nominee has taken public money since. The public presidential matching program still exists, but it’s functionally obsolete, used only by a handful of White House long shots and minor party candidates.
More than $369 million languished in the fund as of April 30, according to federal records.
Could Congress repurpose that cash to, say, help fight the COVID-19 pandemic? Legally, yes. But lawmakers have so far chosen not to.
Business financial make money capital trading OK, let’s now jump to super PACs. Start with the basics. What are they, exactly?
A super PAC — technically, an “independent expenditure-only committee” — may raise and spend unlimited amounts of money to independently advocate for or against political candidates.
Not only may they accept money from individuals, as traditional PACs do, but also corporations, unions, and certain kinds of nonprofit groups.
Super PACs became a thing in 2010 thanks to a federal court ruling in SpeechNow.org v. Federal Election Commission, which came several months after the better-known Citizens United v. FEC decision.
At one time, candidates feared what would happen if they tried to merge their efforts with super PACS.
“If we coordinate in any way, whatsoever, we go to the big house,” then-Republican presidential candidate Mitt Romney said in 2011.
Today, Romney’s hand-wringing is laughably quaint. Some of the most notable have become de facto divisions of the Republican and Democratic parties and candidates openly consort with super PACs that support them by spending seven- or eight-figure sums.
Hundreds of federally registered super PACs exist, although only a few raise truly big money.
Business financial make money capital trading So, which super PACs are the big players in 2020?
Among the super PACs raising the biggest money, most are either helping Trump or Biden.
America First Action is Trump world’s alpha super PAC, populated by former Trump staffers and openly referring to itself as the “official” pro-Trump super PAC, although there’s supposed to be nothing “official” about it. It even rents access to lists of Trump campaign donors’ personal information, per the Daily Beast’s Lachlan Markey.
There are other pro-Trump super PACs, including the Committee to Defend the President and Great America PAC, which have both spent seven-figure sums during Election 2020. Both super PACs have previously caught flak for their fundraising and accounting practices.
Biden’s flagship super PAC is Priorities USA Action, which has spent more than $33 million this election cycle through July 10, according to federal records. Two other pro-Biden super PACs, American Bridge 21st Century and Unite the County, have spent big, too.
Other notable super PAC spenders include conservative Club for Growth Action, left-leaning VoteVets.org, the anti-Trump Lincoln Project and Women Vote!, which is sponsored by Democrat-backing EMILY’s List.
While super PACs are big deals at the presidential level, they can play an especially outsized role in congressional elections. In a few congressional races, super PACs and other outside political groups have together spent more than the candidates themselves.
Business financial make money capital trading What’s the deal with Citizens United v. FEC? Is that still a thing?
A quick history lesson: The Supreme Court’s 5-4 Citizens United ruling from January 2010 allowed corporations, unions, and certain nonprofit groups to raise and spend unlimited amounts of money to overly advocate for and against the election of political candidates.
The decision, written by then-Associate Justice Anthony Kennedy, also provided the legal foundation for other federal court rulings related to money in politics, including the SpeechNow.org decision that led to super PACs. An overall increase in power and influence among so-called “outside” political organizations springs from Citizens United.
“An absolute game changer,” says Denise Roth Barber, managing director of the nonpartisan National Institute on Money in Politics. “There’s a lot less accountability.”
And for all of Sanders’ anti-Citizens United bluster during his presidential run and calls primarily by Democrats to reverse the decision via a constitutional amendment, here’s some reality: It’s not happening anytime soon.
Why? It takes two-thirds of both the US House and US Senate to pass a constitutional amendment, then three-fourths of US states must ratify it. The last time the nation amended the Constitution was 1992 — and that amendment was proposed … in 1789.
Business financial make money capital trading Let’s talk about ‘dark money.’ What the heck is that?
“Dark money” is generally considered funds raised for use during a political campaign that can’t be traced back to a human source.
It’s a scary sounding term that’s become the currency of select members of two classes of nonprofit organization — “social welfare” groups and business leagues. The conflict: These nonprofits may legally spend a portion of their income on electoral politics but they’re not generally required to reveal their donors’ identities.
The primarily Republican-supporting US Chamber of Commerce and NRA Institute for Legislative Action, and the Democrat-backing Majority Forward and Big Tent Project Fund are examples of nonprofits that have each spent millions of dollars on political campaigns in recent years.
Notably, the NRA’s nonprofit wing and sister PAC haven’t yet been a major player in Election 2020 after spending more than $54 million during the 2016 cycle— much of it to support Trump.
The Center for Responsive Politics estimates that “dark money” organizations have spent nearly $1 billion on elections since the 2010 cycle.
Super PACs, which are supposed to publicly disclose the sources of their income, also trade in “dark money” sometimes. How? They simply accept and publicly disclose money from politically active nonprofit groups, which don’t themselves disclose their donors.
Some conservatives consider “dark money” ill-defined or overblown.
“I’ve never really been able to nail anyone down with regard to what ‘dark money’ is,” Trey Trainor, the Republican-appointed new commissioner of the FEC, said in a recent interview.
But Norm Ornstein, a resident scholar at the American Enterprise Institute, said that “dark money” is frighteningly real and “there are fundamentally no rules anymore” that dissuade political actors from using it.
During the past decade, congressional Democrats have attempted to pass laws curtailing “dark money,” to no avail. Meanwhile, the FEC doesn’t have enough commissioners to enforce campaign finance laws.
Business financial make money capital trading My email inbox is full of political committees’ desperate pleas for money. Are they always being honest?
For the love of your dignity and savings account, beware of tricks, games and gimmicks that’d make P.T. Barnum giggle in his grave.
For example, House Speaker Nancy Pelosi and the Democratic Congressional Campaign Committee often send supporters emails with the subject line, “NOT asking for money.” Click a couple of links, answer some questions, volunteer personal information and presto, they … ask you for cash.
Trump’s campaign routinely texts supporters for a donation, promising to enshrine them in the “Trump 100 Club,” immortalize them on the “Trump Donor Wall” or send them a “PERSONALIZED Trump Gold Membership Card.”
Both Democrats and Republicans also habitually hawk “triple match” or “500% match” promotions. The idea: You give their committee $100, and it’ll magically morph into $300, or $500.
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The good news? Most political committees comply with rules and regulations. Those who don’t risk fines, or in extreme cases, criminal prosecution.
Business financial make money capital trading Let’s say I do donate. How much can I give a presidential candidate? Or a party committee? Or a super PAC?
Fully answering this question requires a very detailed chart.
Lucky for you, the FEC publishes one — because there’s no way you’ll remember the rules otherwise.
Perhaps the most relevant contribution limit is $2,800 — the maximum amount an individual may give a federal political candidate per election. (Regulators treat primary votes and general election separately, so the de facto limit is $5,600.)
Individuals may give up to $5,000 per year to a traditional PAC, such as one backed by a company, labor union or ideological group. As for super PACs, individuals — as well as corporations, unions and certain nonprofits — may give them as much money as they want.
Business financial make money capital trading Now please explain why political candidates always ask me to give some paltry amount to their campaign, like $5?
Seemingly de minimis donations serve several purposes.
Once someone donates a buck, campaigns will hit them up again and again. That money can add up. Small-dollar donors are also more inclined to vote or volunteer for candidates they patronize.
Some candidates also seek small-dollar street cred — Sanders is a prime example — that they tout as an elixir to big-dollar, special interest contributions.
A $1 donation also scores political committees federally mandated personal information about you: your name, your address, your employer and occupation.
Political committees may rent or sell this information to other political committees or third-party data brokers, meaning your dollar may be worth more than you think.