Political action committee

In the United States, a political action committee, or PAC, is the name commonly given to a private group, regardless of size, organized to elect political candidates or to advance the outcome of a political issue or legislation. Legally, what constitutes a "PAC" for purposes of regulation is a matter of state and federal law. Under the Federal Election Campaign Act, an organization becomes a "political committee" by receiving contributions or making expenditures in excess of $1,000 for the purpose of influencing a federal election.

Use of PACs (before 2010)

When an interest group, union, or corporation wants to contribute to federal candidates or parties, it must do so through a PAC. These PACs receive and raise money from a "restricted class," generally consisting of managers and shareholders in the case of a corporation, and members in the case of funds to candidates for federal office. Contributions from corporate or labor union treasuries are illegal, though they may sponsor a PAC and provide financial support for its administration and fundraising. Overall, PACs account for less than thirty percent of total contributions in U.S. Congressional races, and considerably less in presidential races.^{[citation needed]}

Contributions by individuals to federal PACs are limited to $5,000 per year. It is important to note, however, that as a result of the United States Court of Appeals for the District of Columbia Circuit decision in SpeechNow.org v. FEC, PACs which make only "independent expenditures" (that is, advertisements or other spending that calls for the election or defeat of a federal candidate but which is not coordinated with a federal candidate or political party) are not bound by this contribution limit.

Corporations and unions may not contribute directly to federal PACs, though they may pay for the administrative costs of a PAC affiliated with the specific corporation or union. Corporate-affiliated PACs may only solicit contributions from executives, shareholders, and their families, while union-affiliated PACs may only solicit contributions from members. "Independent" PACs not affiliated with a corporation, union, or trade or membership association may solicit contributions from the general public but must pay their operating costs from these regulated contributions.

Federal multi-candidate PACs are limited in the amount of money they can contribute to candidate campaigns or other organizations:

• at most $5,000 per candidate per election. Elections such as primaries, general elections and special elections are counted separately.
• at most $15,000 per political party per year.
• at most $5,000 per PAC per year.

Under federal law, PACs are not limited in their ability to spend money independently of a candidate campaign. This may include expenditures on activities in support of (or against) a candidate, as long as they are not coordinated with the candidate.

If two or more PACs share the same sponsoring organization, they are considered to be "affiliated" and their total donations are counted under aggregate limits, i.e. the total donations from all may not exceed $5,000 for a specific candidate in a given election.

PACs must report all of the financial activities, including direct donations and other expenses, to the Federal Election Commission (FEC), which makes the reports available to the public.

Citizens United ruling

Main article: Citizens United v. Federal Election Commission

In 2010, the landmark case filed by Citizens United changed the rules regarding corporate campaign expenditures. This ruling made it legal for corporations and unions to spend from their general treasuries to finance independent expenditures. Direct corporate and union contributions to federal campaigns, however are still prohibited. Thus corporations or unions seeking to contribute to federal candidate campaigns must still rely on traditional PACs for that purpose. However, they may spend money independently of campaigns without forming a PAC.

Categorization of PACs

Further information: List of political action committees

Federal law allows for two types of PACs, connected and non-connected.

Connected PACs

Most of the 4,600 active, registered PACs are "connected PACs" established by businesses, labor unions, trade groups, or health organizations. These PACs receive and raise money from a "restricted class," generally consisting of managers and shareholders in the case of a corporation and members in the case of a union or other interest group. As of January 2009, there were 1,598 registered corporate PACs, 272 related to labor unions and 995 to trade organizations.

Non-connected PACs

Groups with an ideological mission, single-issue groups, and members of Congress and other political leaders may form "non-connected PACs". These organizations may accept funds from any individual, business PAC or organization. As of January 2009, there were 1,594 non-connected PACs, the fastest-growing category.

Super PACs

The 2010 election marked the rise of a new political committee, dubbed "super PACs," and officially known as "independent-expenditure only committees," which can raise unlimited sums from corporations, unions and other groups, as well as individuals. The super PACs were made possible by two judicial decisions. The first was the U.S. Supreme Court decision in Citizens United v. Federal Election Commission which held that government may not prohibit unions and corporations from making independent expenditures about politics. Soon after, in Speechnow.org v. FEC, the Federal Court of Appeals for the D.C. Circuit held that contributions to groups that only make independent expenditures could not be limited. Super PACs are not allowed to coordinate directly with candidates or political parties and are required to disclose their donors, just like traditional PACs.

Even absent a formal connection to a campaign, Super PACs openly support particular candidacies. In the primary season before the 2012 presidential campaign, for example, the Restore Our Future Super PAC benefited Republican Mitt Romney while attacking rival Newt Gingrich. In the same election, the pro-Gingrich Winning Our Future Super PAC attacked Romney. Each Super PAC was run by former employees of the candidate it supported, and each attracted money from that candidate's associates.

The status of super PACs in Montana is in dispute. The Montana Supreme Court in Western Tradition Partnership, Inc. v. Attorney General of Montana (Dec, 2011) upheld that state's law prohibiting corporate spending in political races. Directly addressing the U.S. Supreme Court decision in Citizens United, it concluded that "Montana has a compelling interest to impose the challenged rationally-tailored statutory restrictions" to prohibit "independent political expenditures by a corporation related to a candidate." The plaintiffs (since renamed American Tradition Partnership) have announced plans to appeal the decision.

Leadership PAC

A leadership PAC in U.S. politics is a political action committee established by a member of Congress to support other candidates. Under the FEC rules, leadership PACs are non-connected PACs, and can accept donations from an individual or other PACs. While a leadership PAC cannot spend funds to directly support the campaign of its sponsor (through mail or ads), it may fund travel, administrative expenses, consultants, polling, and other non-campaign expenses. It can also contribute to the campaigns of other candidates.

Between 2008 and 2009, leadership PACs raised and spent more than $47 million.

Controversial use of leadership PACs

• Former Speaker Nancy Pelosi's (D) leadership PAC, Team Majority, was fined $21,000 by federal election officials "for improperly accepting donations over federal limits."
• Former Rep. John Doolittle's (R) leadership PAC, Superior California Federal Leadership Fund, paid his wife's single-person company, Sierra Dominion Financial Solutions, 15 percent of all money raised ($68,630 in 2003 and 2004, $224,000 in 2005 and 2006). A campaign committee report in February said Doolittle's campaign still owed Julie Doolittle $137,000. The PAC purchased $2,139 in gifts from Bose Corporation.
• Former Rep. Richard Pombo (R) used his leadership PAC to pay hotel bills ($22,896) and buy baseball tickets ($320) for donors.

2008 election

In the 2008 elections, the top nine PACs by money spent by themselves, their affiliates and subsidiaries were as follows:

1. International Brotherhood of Electrical Workers PAC $3,344,650
2. AT&T Federal PAC $3,108,200
3. American Bankers Association (BANK PAC) $2,918,140
4. National Beer Wholesalers Association PAC $2,869,000
5. Dealers Election Action Committee of the National Automobile Dealers Association $2,860,000
6. International Association of Fire Fighters $2,734,900
7. International Union of Operating Engineers PAC $2,704,067
8. American Association for Justice PAC $2,700,500
9. Laborers' International Union of North America PAC $2,555,350

See also

• 527 group
• Lobbying in the United States
• Money loop
• Politics of the United States
• Soft money

External links

• Federal Election Commission
  • Campaign Guide for Corporations and Labor Organizations
  • Campaign Guide for Nonconnected Committees
• OpenSecrets.org
• PoliticalMoneyLine
• New 'Super Pacs' bringing millions into campaigns, Dan Eggen and T.W. Farnam, The Washington Post, September 28, 2010