Campaign finance | Political participation | US government and civics | Khan Academy #Finance

let’s talk a little bit about money in elections in the united states and the various actors that might be involved you of course at the center of the action you have the various campaigns for the candidates then you have the party committees that will try to influence the election

we’ll talk about how in a little bit you have individuals who besides being voters can also be donors and then you have organizations it could be corporations it could be interest groups it could be labor unions and then last but not least we have these two boxes where you see pack one and

pack two and so the obvious question is what is a pack well it stands for political action committee and they’ve been around for decades and a simple way to think about it is it’s a way to pull resources which then can be donated to other parties to influence an election but how can the

money actually flow well as you can see it can flow in many many many different ways and to help us understand this i’m going to introduce some terminology that you might have heard before there is hard money and hard money is money that is actually regulated by the federal election committee

and there are caps in terms of how much people can donate to various parties in general any donation to a candidate’s campaign is considered hard money so that would be hard money there coming from the individuals this would be hard money right over here coming from that pack which has pooled

a bunch of money this would be hard money right over here coming from that pack to donald trump’s campaign this would be hard money coming from the democratic party to hillary clinton’s campaign or from the republican party to donald trump’s campaign if there’s something

called hard money perhaps there’s also something called soft money and you would be correct there is something called soft money a simple definition for soft money is it doesn’t have the regulations that hard money does and so an example of it would be let’s say the democratic

party here some of the money that they spend so i’ll just draw some of the money they spend this part right over here or maybe some of the money that the republican party spends during the election it’s used for what’s sometimes known as party building activities to get more

people to join their party or to advertise about certain issues and as long as it’s done not in coordination with the candidates campaigns this is not going to have any limit and so some of the money that goes from an individual to a party or some of the money that goes from a pack to a party

can also be considered soft money if once again if it keeps separate from coordinating with a candidate’s actual campaign and use for those party building activities now party building is a pretty broad definition and soft money has been demonized a lot because people say well it’s just

a way of getting around campaign Finance regulations because even though it might not be directly coordinated with a candidate’s campaign it can influence an election

in a pretty significant way now to further understand this diagram you see these dotted lines between the corporations or the labor unions and these political action committees what does that mean well a political action committee can be connected or sponsored by a corporation or a labor union but

it cannot receive funds directly from the Treasury of that corporation or labor union but the corporation can sponsor it can say hey this is associated with us and it can if it’s a labor union it can go to its membership and say hey i want you to donate to this pack if

it’s a corporation it can go to its management team and say hey let’s all donate to this pack personally or it could go to its shareholders and say hey why don’t we all donate to this pack because this pack can donate money to the party or the candidate that might help influence

the election in a way that might benefit us or benefit the corporation now an attempt to limit soft money came in 2002 when you have the bipartisan campaign reform act of 2002 often known as mccain feingold who are the two sponsors in the senate among other things it tried to limit this soft money

after this act even this party spending would have to be hard money it would have to be subjected to the caps when they are raising that money it also made clear that corporations and labor unions couldn’t participate in what’s called electioneering activities where they’re

spending money on say issue based ads with oftentimes the intent of influencing the election especially in the run-up to the election so this was made explicitly illegal as well but this gets challenged in 2010 where you have this major case citizens united versus the federal election committee

citizens united was an organization that was releasing a movie called hillary the movie during the 2008 election and this was a movie that was pretty negative on hillary clinton and so the argument of the government was that hey even though this looks like a movie it’s really political

advertising it’s electioneering as we have as we go into the run-up to an election and so citizens united which is a non-Profit corporation should not be able to do this but the supreme court ruled in citizens united’s favor they said as long as they are not

coordinating with the actual candidates campaigns they are allowed based on the notion of free speech to directly participate in electioneering in the run-up to an election and to a large degree the citizens united ruling from 2010 really gutted the strength of the bipartisan campaign reform act of

2002. that act was trying to curtail soft money that for the most part was going through parties but now post citizens united on both sides folks started to say gee i could start an organization that pulls money let’s call that a pac but i’m going to keep it independent it’s not

going to coordinate in any other way with the elections of the individual candidates and so this is often referred to technically as an independent expenditure pac and here post citizens united i can get unlimited unlimited funding from corporations or from individuals that is not regulated in

terms of spending caps and now i can spend an unlimited amount of money on electioneering to try to influence the campaign and because of the power of these types of independent expenditure packs they have been termed super pacs now the key difference between a super pac and a regular pack is that

the regular packs that we talked about have limitations in terms of how much money people can donate to them they actually even can’t take direct money from the treasuries of a corporation or a labor union they also had limitations in terms of how much they could donate to an individual

campaign but they could donate to a campaign a super pac on the other hand can take unlimited amounts of funds from individuals from other pacs and it could actually take money from corporate treasuries themselves and as long as they are independent of the candidates campaigns they don’t

coordinate with them they can spend as much money as they would like so as always it’s really interesting to think about what is going to be the eventual repercussions of citizens united vs fec we’ve already seen in the 2016 elections money approaching a billion dollars in terms of

super pac money what is the influence that has on the democracy but a lot of folks might immediately demonize the super pac and said hey money was already in politics and this is just making it worse where now you have corporations that are essentially being able to directly contribute large

amounts of money we’ve always had issues with foreign nationals contributing to our elections we’ve always tried to prevent that but a corporation can have ownership from around the world even if it’s a united states-based corporation how do you prevent foreign interest from

showing up through this money but on the other hand i encourage you to read the supreme court’s rulings because they had some very strong arguments in terms of a slippery slope if you don’t allow citizens united to publish a movie saying that it’s electioneering at what point is

something a political organization or a media organization and the supreme court found it very difficult to regulate citizens united without going down a slippery slope where they would have to regulate a whole set of corporations and media i’ll let you think about it but these questions are

quite interesting