6 minute read

Political Action Committee

Further Readings

A group not endorsed by a candidate or political party but organized to engage in political election activities, especially the raising and spending of money for "campaigning." Some political action committees (PACs) are organized solely to help defeat a candidate deemed undesirable by the group.

PACs are most often organized around a particular trade, union, or business; they are also organized to promulgate particular social, economic, or political beliefs or agendas. For example, there are PACs formed to represent the interests of the pharmaceutical industry and the automotive industry. From an ideological perspective on ABORTION, there are both pro-life PACs and pro-choice PACs.

Some PACs are sponsored by a corporation, business, or LABOR UNION. Corporations, business interests, and LABOR UNIONS that sponsor PACs are prohibited from contributing their organizations' funds to the PACs they sponsor, but employees or members of the sponsoring organizations may contribute.

Many types of special-interest groups have established PACs, including the following examples: coal operators, hospitals, labor unions, banks, doctors, feminist groups, lawyers, insurance agents, pharmaceutical companies, and manufacturers. These groups commonly form PACs to promote their legislative goals. Some of these, such as the coal industry and labor PACs, generally give most of their donations to candidates they expect to favor their legislative agendas. Other PACs, such as those created by chiropractors or publishers, may dole out small contributions to dozens of candidates with widely varying political views.

Nearly all PACs have specific legislative agendas. Special-interest PACs are a major force in the financing of congressional campaigns. Their contributions heavily favor incumbents. These PACs' numbers and influence are growing. For example, in 1976 there were only 608 PACs; just 20 years later, in 1996, there were more than 4,000 PACs.

Some PACs are not sponsored by an organization. For example, some members of Congress have formed their own PACs. These PACs are separate from their candidate committees. This separation allows them to accept contributions and distribute larger sums than they otherwise could through their own candidate committee. A newly formed PAC must register with the FEDERAL ELECTION COMMISSION (FEC) within ten days of its formation. The PAC must provide the name and address for the PAC, its treasurer, and any affiliated organizations.

Many politicians also form leadership PACs. These PACs are not technically affiliated with the candidate. Rather, they are a way of raising money to help fund other candidates' campaigns. Leadership PACs are often indicative of a politician's aspirations for leadership positions in Congress or for higher office.

Although PACs are used mostly by members of the House and Senate, they also can be used in presidential campaigns. For example, in Bob Dole's presidential bid in 1994, Dole formed a leadership PAC called "Campaign America." This PAC helped contribute $62,000 to state and local candidates in Iowa. This type of money helped Dole to build a very strong base of support for his presidential bid during the Iowa primaries, although he eventually went on to lose that election bid. The laws regarding public funding for presidential candidates are technically separate from the Federal Election Campaign Act, Pub. L. 92–225, 86 Stat. 19, 2 U.S.C. § 451, and are found in the Presidential Campaign Fund Act, 26 U.S.C. §§ 9001-9012, and the Presidential Primary Matching Payment Account Act, 26 U.S.C. §§ 9031–9042.

PACs first came into existence in 1944. The Congress of Industrial Organizations (CIO) formed the first PAC to raise money for the reelection of President FRANKLIN D. ROOSEVELT. The PAC received voluntary donations from union members rather than from union treasuries; this system did not violate the Smith Connally Act of 1943, which forbade unions from contributing to federal candidates. Although commonly called PACs, federal election law refers to these accounts as "separate segregated funds" because money contributed to a PAC is kept in a bank account separate from the general corporate or union treasury.

In 1936, labor unions began spending union dues to support federal candidates sympathetic to the workers' issues. This practice was prohibited by the Smith-Connally Act of 1943, Pub. L. No. 78-89, 57 Stat. 163 (1943). Thus, labor unions, corporations, and interstate banks were effectively barred from contributing directly to candidates for federal office. In 1944, the Congress of Industrial Organizations (CIO), one of the largest labor interest groups in the nation, found a way to go around the constraints of the Smith-Connally Act by forming the first political action committee, or PAC.

The CIO's political goal was to support the re-election of President Franklin D. Roosevelt. Because the CIO was a union and prohibited from using union money to support a federal candidate by the Smith Connally Act, the PAC circumvented the prohibitions of the act by soliciting volunteer contributions from individual union members.

In the wake of the WATERGATE political scandal in the early 1970s, Congress passed new campaign financing legislation known as the Federal Election Campaign Act (FECA). FECA was intended to do the following:

  • achieve full disclosure of the sources of campaign contributions;
  • limit the size of campaign contributions by wealthy individuals and organized interest groups;
  • provide public funding—with spending limits—for presidential candidates; and

  • enforce campaign finance rules through a new ADMINISTRATIVE AGENCY, the Federal Election Commission (FEC).

This legislation also continued older prohibitions on the use of corporation and union treasury funds in federal elections. These provisions of FECA were sustained by the Supreme Court in the leading case of Buckley v. Valeo, 424 U.S. 1, 96 S. Ct. 612, L. Ed. 659 (1976).

Following the 2002 midterm elections, a new set of campaign finance laws went into effect. The Bipartisan Campaign Reform Act (BCRA), Pub. L. No. 107-155, 116 Stat. 81, is considered the most sweeping change of the U.S. campaign finance system since the FECA. The legislation was sponsored by Senators JOHN MCCAIN (R-AZ) and Russ Feingold (D-WI) and Representatives Chris Shays (R-CT) and Marty Meehan (D-MA).

The BCRA is an attempt to curb the use of "soft money" in campaigns. Basically, soft money is money donated to political parties in a way that leaves the contribution unregulated. Conversely, "hard money" consists of political donations that are regulated by law through the Federal Election Commission. The soft money loophole was created, not by Congress, but by the Federal Election Commission in an administrative ruling in 1978. The law also increases the contribution limits for individuals giving to federal candidates and political parties.

PACs can donate up to $5,000 to a candidate's campaign committee for each individual election bid, and PACs can give $5,000 a year to any other PAC. PACs may receive up to $5,000 from any one individual, PAC, or party committee during any given calendar year. They can also donate up to $15,000 annually to any national party committee. PACs that affiliate with other like-minded PACs are treated as one donor for the purpose of contribution limits.

The Supreme Court has ruled that spending in support of or in opposition to a candidate that is not coordinated with any candidate cannot be limited. Such "independent expenditures" can be made by either individuals or PACs. Independent expenditures are those made on behalf of (or against) a candidate that are not coordinated with a candidate. For example, an exporters' PAC might spend $50,000 on TV ads critical of a candidate's stand on import restrictions and urge a vote against that candidate.

Political ads which urge the viewer to "vote for" or "vote against" a candidate are examples of express advocacy and must be paid for from contributions which come under the restrictions of federal campaign finance laws, including prohibitions on contributions by corporations or labor unions. Advertising campaigns discussing issues—and not directly advocating the defeat or election of a candidate—are not subject to federal campaign finance laws. Thus, these "issue advocacy" campaigns are not subject to limits on spending or contributions and are not required to disclose their contributions or expenditures.


Campaign Finance Reform.

Additional topics

Law Library - American Law and Legal InformationFree Legal Encyclopedia: Plc (public limited company) to Prerogative of mercy