Legal Issues
Campaign funding has become a very hotly debated issue. Therefore, contributions to political campaigns are watched closely.
The federal government, all states, and even most counties and towns have their own laws regarding campaign financing. These laws detail who can contribute, how much they can contribute, what the money must be spent on, and how contributions and expenditures need to be reported. Before the campaign gets started, it is imperative that everyone involved in fundraising efforts understands the laws and regulations that will affect the campaign. You can be sure your opponents will immediately jump on any missteps you make.
If you have someone with a legal background involved as a volunteer or supporter in any manner, this may be the person to ask about following up on such laws. It is important to appoint at least one person to check and make sure each aspect of fundraising follows the letter of the law.
In 2002, a new set of campaign finance laws, the Bipartisan Campaign Reform Act, was enacted. National political parties cannot use soft money to run campaigns. Soft money is the term used to describe contributions that are not regulated by federal election laws. The original exemption was made to encourage party-building activities, which benefit the political parties in general but not specific candidates. The money was supposed to be used for political activities to support the party platforms, from bumper stickers to ads encouraging more people to vote. The result, however, allowed very wealthy donors (who could only contribute a limited amount to a single campaign) to contribute heavily to a party, and the money would then filter into high-tech office equipment and other means of helping a specific candidate. Parties also used it to back candidates in key states during the midterm year elections.
Unlimited contributions to the national political parties are no longer allowed. In addition, contributions from corporate or union treasuries are outlawed in federal elections. This will have a major effect on the financing of the Democratic and Republican parties. The contribution limits for individuals giving to federal candidates and political parties were also increased. Individuals can now give $2,300 (up from $2,000 when the law was first enacted) to a candidate for an election, which is more than twice the previous limit under the old law.
A study by The Campaign Finance Institute found that the increase allowed by BCRA meant a congressional candidate could increase the amount of funds raised without having to rush to expand his donor base. According to the study, most of the dollars went to incumbents — good news for anyone seeking re-election.
