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

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

– [Instructor] Let’s
talk a little bit about money and 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, and 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 PAC 1 and PAC 2. The obvious question is, what is a PAC? Well it stands for
political action committee, and they’ve been around for decades. A simple way to think about is
it’s a way to pool 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 gonna introduce some terminology that you might’ve heard before. There is hard money. 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. That would be hard money there
coming from the individuals. This would be hard money right over here coming from that PAC which
has pooled a bunch of money. This would be hard money right over here coming from that PAC 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. 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. 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. As long as it’s done not in coordination with the candidate’s campaigns, this is not going to have any limit. Some of the money that goes
from an individual to a party, or some of the money that
goes from a PAC to a party, can also be considered
soft money if once again, if it keeps separate
from coordinating with the candidate’s actual campaign, and used for those party
building activities. Now party building is a
pretty broad definition. 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. The corporation can
sponsor it, can say hey, this is associated with us. If it’s say, a labor union,
it can go to its membership and say hey, I want you
to donate to this PAC. If it’s a corporation it can
go to its management team and say hey, let’s all donate
to this PAC personally. Or it could go to its
shareholders and say hey, why don’t we all donate to this PAC? Because this PAC 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 election nearing 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. This was made explicitly illegal as well. 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. This was a movie that was pretty negative on Hillary Clinton. 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 go
into the run up to an election, and so Citizens United, which
is a nonprofit 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 candidate’s 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 pools money. Let’s call that a PAC. But I’m gonna keep it independent. It’s not gonna 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. Here, post-Citizens United,
I can get 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. Because of the power of these types of independent expenditure PACs, they have been termed Super PACs. Now the key difference between a Super PAC and a regular PAC is that the regular PACs 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. 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 versus FEC? We’ve already seen in the 2016 elections money approaching a billion dollars in terms of Super PAC money. What is the influence
it has on the democracy? But a lot of folks might
immediately demonize the Super PAC and said say, 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 what 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.

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