176 PART Two • ThE PoliTiCs oF AmERiCAn DEmoCRACy
Hatch Act
An act passed in 1939
that restricted the political
activities of government
employees. It also
prohibited a political
group from spending
more than $3 million in
any campaign and limited
individual contributions to
a campaign committee to
$5,000.
Federal Election
Commission (FEC)
The federal regulatory
agency with the task
of enforcing federal
campaign laws. As a
practical matter, the FEC’s
role is largely limited
to collecting data on
campaign contributions.
Political Action
Committee (PAC)
A committee set up by and
representing a corporation,
labor union, or special
interest group. PACs raise
campaign donations.The way campaigns are financed has changed dramatically in the past several years.
For decades, candidates and political parties had to operate within the constraints imposed
by complicated laws regulating campaign financing. Many of these constraints still exist,
but recent developments have opened up the process to a striking degree. Today, there
are no limits on how much any person or institution can invest in the political process, and
only modest limits on how this spending can take place.The Evolution of the Campaign Finance system
Throughout much of early American history, campaign financing was unregulated. No
limits existed on contributions, and no data were collected on campaign funding. During
the twentieth century, however, a variety of federal corrupt practices acts were adopted
to regulate campaign financing. The first of these acts, initially passed in 1910, contained
many loopholes and proved to be ineffective. The Hatch act (Political Activities Act) of
1939 is best known for restricting the political activities of civil servants. The act also made
it unlawful for a political group to spend more than $3 million in any campaign and limited
individual contributions to a campaign committee to $5,000. Of course, such restrictions
were easily circumvented by creating additional political organizations.The Federal Election Campaign Act. The Federal Election Campaign Act (FECA) of
1971, which became effective in 1972, replaced all previous laws. The act restricted the
amount that could be spent on campaign advertising. It also limited the amount that can-
didates could contribute to their own campaigns and required disclosure of all contribu-
tions and expenditures over $100. In principle, the FECA limited the role of labor unions
and corporations in political campaigns.
Amendments to the FECA passed in 1974 created the Federal election commission
(Fec). This commission consists of six bipartisan administrators whose duty is to enforce
compliance with the requirements of the act. The 1974 amendments also placed limits on
the sums that individuals and committees could contribute to candidates.
The principal role of the FEC today is to collect data on campaign contributions.
Candidate committees must file periodic reports with the FEC listing who contributed,
how much was spent, and for what it was spent. As an enforcement body, however, the
FEC is conspicuously ineffective and typically does not determine that a campaign has
violated the rules until an election is over, if then.
The original FECA of 1971 limited the amount that each individual could spend on
his or her own behalf. The Supreme Court overturned the provision in 1976, in Buckley v.
Valeo,^4 stating that it was unconstitutional to restrict in any way the amount congressional
candidates could spend on their own behalf. The Court later extended this principle to
state elections as well.Political Action Committees. Changes to the FECA in 1974 and 1976 allowed corpo-
rations, labor unions, and other interest groups to set up political action committees
(Pacs) to raise funds for candidates. PACs can contribute up to $5,000 to each candi-
date in each election. Each corporation or each union is limited to one PAC. The number
of PACs grew significantly after 1976, as did the amounts that they spent on elections.
Since the 1990s, however, the number of traditional PACs has leveled off because inter-
est groups and activists have found alternative mechanisms for funneling resources into
campaigns.4. 424 U.S. 1 (1976).
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