Revising the Electoral Donation System

Big Picture

Monetary donations are currently a crucial part of electoral strategy. The 2020 presidential election saw a massive 14.4 billion dollars in political spending. This value represents more than the gross domestic product of 75 countries.

The current political restrictions do not apply to areas such as TV ads and travel expenses, allowing candidates to receive substantial amounts and benefits through those facets.

The Federal Election Campaign Act (FECA) currently limits individual and political organization donations to candidates running for federal office (both in primaries and the general election) to $3,300. However, they can donate more money through the different political action committees (PAC) at the disposition of the candidates. Some of these do not have any limits, allowing any organization or individual to donate unlimited funds or benefits to their preferred candidate indirectly.

Recently, many reports showed that money received by the Save America PAC was used to cover legal fees for Donald Trump’s cases. This brings questions about whether candidates can use PAC money for their personal use.

Operative Definitions

1. Candidate Committee: Committee every candidate for election or re-election to public office that accepts contributions and makes expenditures for their bid. 

2. PAC: Committee that makes contributions to other federal political committees. They can only send $5,000 per year.

3. SuperPAC or Independent-expenditure-only political committees: Political committees that only make independent expenditures that are not coordinated with candidates, cannot contribute money to political parties or campaigns and have no limited contributions from the same source.

4. Leadership PAC: Additional Committee to every candidate, mostly by candidates in a close race. Donations come from individuals and politicians with a maximum donation of $5,000 annually. Politicians often use their PACs to contribute to the election of other party candidates seeking a higher office as a means of acquiring political leverage.
   

Important Facts and Statistics:

1. The current amount raised by all presidential candidates in the 2024 presidential election, which is $482.9 million, is higher than the GDP of seven countries.

2. The Federal Election Campaign Act is the original law of election donation regulations, but it has been frequently reformed since its adoption in 1971.

3. The most significant reform was the Supreme Court decision of  Citizens United v. Federal Election Commission in 2010 which lifted the limits of corporate and union spending in independent political advertising.

Three-Point Plan

1. Instate a donation cap for SuperPACs. In the Citizens United v. Federal Election Commission decision in 2010, the Supreme Court stated that donations for independent expenditures were protected under the First Amendment and the right to free speech. Since then, the presidential election costs went from $1.8 billion in 2008 to almost $4 billion in 2020. A cap donation for SuperPACs would reduce donation inequality between the major parties, which are the Democratic Party and the Republican Party, and minority parties including independent candidates. It would allow more equality between the presidential candidates and weaken the bipartisan political system of the country. 
   

2. Donations are denied to a SuperPAC if the individual or the organization already donated to a Leadership PAC, a PAC or a candidate committee. Any individual or organization can currently donate to all of these different committees while respecting the contribution limits. This proposed restriction would allow individuals and organizations to donate for independent expenditures or directly related expenditures for a candidate. This way, when the expenditures of a candidate report the origins of their spending at the Federal Electoral Commission, the public will be able to retrace which individuals or organizations directly supported a candidate and which indirectly supported them. Also, just like the previous point, the amount of donations will significantly decrease, which will help reach more equal elections between candidates.
   

3. Warn PAC donors the use of their contributions before accepting their donation. The SuperPACs are not currently obligated to inform their donors of their intentions with their contributions, which led to confusion when the leadershipPAC “Save America” donated the majority of their donations to pay Donald Trump’s legal fees. All PACs should warn their contributors before they donate the purpose of their money to avoid confusion like “Save America.” PAC donations are used for political purposes, not personal. The PACs are mostly used for candidates’ political campaigns, but some like Save America are used for a candidate's personal reasons. The money donated should strictly be used for political campaigns like events, conferences or other leadership PACs. 

Why This Initiative is Important

This initiative directly addresses multiple problems and concerns about the current political donation system. Political donations have become more and more a fundamental part of electoral strategies, which negatively affects politicians, tiered parties and the vast majority of political donors. This plan proposes a more transparent donation system by associating more evidently the donors and the candidates of the party receiving their contribution. The restrictions presented in these policy proposals also set more equal elections by giving them more equal budgets, thus shifting the bipartisan political system to a multi-partisan one.

While establishing a compromise between free speech and giving more equal opportunities to candidates seeking governmental offices, this policy proposal also assures donors of the purpose of their donations.  

Acknowledgment: The opinions expressed in this article are those of the individual author.