If No One is around when democracy dies, does it make a sound? Part 3
By Alan J. Yeck, Founder
Coming out of the our recent election just days ago, the term PACs and SuperPACs need to be defined now as much as ever. What do these acronyms mean? And how are these groups contributing to the fall of American democracy?
Political action committees (PACs)
Traditional nonconnected political action committees –
are prohibited from accepting money from corporations, unions, and associations. These are tax-exempt organizations that raise money in support of candidates and/or specific legislation they want to see pass/defeated. Federal campaigns are regulated by the Federal Election Commission (FEC) and State and local PACs are regulated by the State and local election boards. Nonconnected PACs are required to file quarterly reports with the FEC exactly who contributed the money and how the PAC spent the money. Individuals can donate up to $2,800 per election cycle (primary and general election) for a maximum of $5,600 a year.
- A nonconnected committee does not have a “connected organization”—that is, no corporation or labor organization establishes, administers or raises money for a nonconnected committee.
- All forms of support including money and other things of value received by a nonconnected committee from a sponsoring organization are considered contributions, which are subject to annual limits, prohibitions and disclosure requirements under the Federal Election Campaign Act.
- A nonconnected committee may solicit contributions from anyone in the general public who may lawfully make a contribution in connection with a federal election.
Today the FEC has registered from January to the end of June, 2019, 6,785 federal PACs reporting total receipts of $958.2 million and disbursements of $818.7 million. I want to stress here that PACs themselves are not inherently bad or corrupt. PACs can be a group of social workers trying to improve situations for families or environmentalist concerned with ocean pollution. Nonetheless, there is plenty of room here for layers and manipulation in the political garden of evil. I am confident we can develop a better, completely transparent system of funding political campaigns that honestly informs the voters who exactly is writing the checks, why they’re supporting/defeating, and who they are connected to beyond current reporting requirements. NOTE – The Federal Election Commission who overseas campaign contributions is basically a non-functioning mess right now and it itself needs reform and rehabilitation.
Super PACs – Separate segregated funds (SSFs)
Federal election law refers to a corporate- or labor organization-sponsored political committee as a “separate segregated fund” (SSF), though it is more commonly called a “political action committee” or PAC. As the name implies, money contributed to an SSF is held in a separate bank account from the general corporate or union treasury. A corporation or union that sponsors an SSF is called the connected organization. While corporations and labor organizations are generally prohibited from making contributions in connection with federal elections, the Federal Election Campaign Act (the Act) and Commission regulations permit them to set up political committees, which may raise funds permissible under the Act in order to make contributions to and expenditures on behalf of federal candidates and other committees.
- An SSF always has a sponsoring corporation or labor organization.
- An SSF may generally receive unlimited administrative support from its connected organization, and such support is usually not subject to federal disclosure requirements. The connected organization may use its general treasury funds to pay the establishment, administration, and fundraising costs for the SSF.
- An SSF may solicit only a limited class of individuals who have specific relationships with the connected organization (i.e., stockholders or members and certain employees of the connected organization and their families).
- The connected organization may also exercise control over its SSF. Corporations and unions often adopt bylaws to govern their SSFs, though bylaws are not required under the law and do not have to be filed with the FEC except when requested.
This is part 2 of the “Democracy Dies” series, covering the corruption surrounding PACS, SuperPACs, and how candidates pay for votes.