The Bipartisan Campaign Reform Act of 2002 (BCRA) includes several provisions designed to end the use of nonfederal, or "soft money" (money raised outside the limits and prohibitions of federal campaign finance law) for activity affecting federal elections. These include:
Beginning November 6, 2002, national party committees may not solicit, receive, direct to another person or spend nonfederal funds. Moreover, such committees must use only federal funds (hard money) to raise funds that are used, in whole or in part, for expenditures and disbursements for federal election activity. These restrictions also apply to organizations which are established, financed, maintained, or controlled by the national parties.
National party committees may not solicit funds for, or make or direct donations to, tax-exempt 501(c) organizations if the organization makes expenditures or disbursements in connection with a federal election, including for federal election activity.
National party committees may solicit funds or make or direct donations to so-called "527 organizations" only if they are political committees registered with the FEC or state, district or local party committees or authorized campaign committees of state or local candidates.
National party committees may no longer accept funds into building accounts and any funds remaining in building fund accounts after November 6, 2002 must be paid to the U.S. Treasury or returned to donors.
In general, state and local parties must use federal funds (hard money) to pay for federal election activity, but in some cases they can use "Levin" funds for a portion of voter registration activity or for voter identification, get-out-the-vote activities (GOTV) or generic campaign activity as long as they don't refer to a clearly identified federal candidate and are not used for radio or television communications (unless they are exclusively state and local candidates).
There are three categories of funding available to state, district, and local parties;
State, district, and local party committees may not solicit funds for, or make or direct donations to, tax-exempt 501(c) organizations if the organization makes expenditures or disbursements in connection with federal elections. They can only solicit or donate to "527 organizations" if they are registered with the FEC, are state, district or local party committees, authorized campaign committees for state or local candidates, or committees registered under state law that support only state or local candidates and don't make disbursements that are federal election activity.
The BCRA places limits on the amounts and types of funds that can be raised by federal candidates and officeholders for both federal and state candidates. These restrictions apply to the candidates and/or officeholders, their agents, and entities directly or indirectly established, maintained, or controlled by, or acting on behalf of, any such candidate or officeholder.
These restrictions do not apply if the person is a candidate for state or local office and the fundraising or spending refers only to that state or local candidate or any other candidate for that same state or local office, or both.
Federal candidates or officeholders may, however, attend, speak, or be a featured guest at a fundraising event for a state, district, or local party organization at which non-federal or Levin funds are raised.
These persons may make general solicitations for tax-exempt organizations if the organization does not engage in activities in connection with an election, or its primary purpose is not activity in connection with elections and the solicitation is not to obtain funds to be used in connection with a federal election, including federal election activity.
The BCRA, and FEC rules, contain provisions related to television and radio ads that refer to a clearly identified federal candidate and are distributed (targeted) to the relevant electorate within a particular time period before an election. These are often referred to as "issue ads" because they have typically discussed candidates in the context of certain issues without specifically advocating a candidate's election or defeat. Under the new rules, such ads would now be considered "electioneering communications" and as such, may no longer be funded by corporations or labor organizations. Other individuals or groups who pay for these ads must report the activity and the sources of funds if the payments exceed a specific threshold.
The defining characteristics of an "Electioneering Communication" are:
NOTE: The Supreme Court ruling in Wisconsin Right to Life v. FEC provides for additional exceptions covering issue ads.
New rules define when a communication is considered coordinated between a candidate or political committee and a person making a communication. The new regulations provide for a three-part test to determine coordination. Satisfaction of all three justifies the conclusion that a communication is coordinated and is for the purpose of influencing an election. As a result, the person with whom coordination takes place has made an in-kind contribution or made a coordinated expenditure (in the case of party committees) on behalf of the candidate.
New rules also address the making of coordinated and independent expenditures by a party committee. Political parties may no longer make both independent and coordinated expenditures but now must choose between the two. A party's national, state and local committees are considered one political party for the purpose of choosing the kind of expenditure they will make.
Anyone making independent expenditures that aggregate $10,000 or more with respect to a given election anytime up to 20 days before an election must now report those expenditures to the FEC within 48 hours after the communication was disseminated. Within the last 20 days, these expenditures must be reported within 24 hours of their distribution.
The BCRA increases limits on contributions made by individuals and some political committees; indexes certain contribution limits for inflation; prohibits contributions by minors to federal candidates and parties; and prohibits contributions, donations, expenditures, independent expenditures and disbursements by foreign nationals.
National party committees may now contribute up to a total of $35,000* to Senate candidates per six-year campaign (was $17,500).
Amounts with an asterisk are indexed for inflation. Increases will be implemented during odd-numbered years starting in 2005 and will be in effect for a two-year period.
Individuals who are 17-years-old and younger are prohibited from making contributions to candidates and from making contributions or donations to any accounts of state or local party committees (including "Levin" accounts). They may make contributions to other types of political committees.
The existing prohibition on contributions in federal, state, or local elections by foreign nationals was clarified and expanded in BCRA. The ban now clearly applies to:
The new law specifies additional requirements accompanying radio, television, print and other campaign communications. Some of the changes are:
The personal use regulations retain the existing prohibitions regarding personal use of campaign funds but amended them in a few areas. Some of the amendments include:
The new law may raise the individual contribution limits for Senate and House candidates who are facing self-financed candidates if those candidates spend more than a specified amount of their own funds on the campaign. The increase depends on the amount that the self-financed candidate spends from personal funds, along with some other factors. The law also removes the limitation on national and state party committee expenditures on behalf of a candidate if the opposing self-financed candidate's expenditures exceed a threshold amount and other conditions are met.
