All About PACs

To run a campaign, candidates need money, and with the small exception of publicly financed campaigns, a sizeable portion of this money comes from political action committees (PACs).  By providing for a campaign’s war chest, PACs play a massive role in determining how candidates are elected, and in turn, which kinds of policies are enacted.

Overview

The Congress of Industrial Organizations (CIO) established the first PAC in 1943 after Congress prohibited unions from directly contributing to political candidates.  Corporations were initially barred from directly contributing to PACs under the Tillman Act of 1907, and the Smith-Connally Act extended this law to include unions in 1943.  Later, a series of campaign laws including the Federal Election Campaign Act (FECA) of 1971 allowed corporations and trade associations to form PACs.  The FECA also notably established the Federal Election Commission (FEC), which enforces PAC laws.

Businesses, organizations, and other entities form PACs as a way to pool resources together to support the candidates they like, and indirectly, oppose candidates they don’t like.  Overall, a PAC’s purpose is to raise money in support of a candidate, to get them elected, and to help defeat candidates they oppose.  Additionally, PACs aren’t limited to candidates for elected office – such as with state ballot measures.

Types of PACs

There are five types of PACs:

1. Separate Segregated Funds (SSF).  These are political committees established by labor unions, corporations, membership organizations, or trade associations.  They can only solicit contributions from an individual connected with the sponsoring organization, such as an employee or an association member.
2. Nonconnected committees. These entities are not established or sponsored by any particular organization, and unlike separate segregated funds, they can target the general public for solicitation.
3. Super PACs.  Created in 2010 after the US Supreme Court rulings for Citizens United v. FEC and SpeechNOW v. FEC , super PACs cannot make contributions to candidates or parties.  However, these PACs do make independent expenditures in federal campaigns, such as running advertisements or sending mail that either supports or opposes a candidate.  Unlike other PACs, there are no limits or restrictions on the sources of funds that can be used for expenditures.  Super PACs are still bound by the rules of other PACs in that they must file regular reports with the FEC.
4. Hybrid PACs.  Similar to super PACs, hybrid PACs can spend unlimited funds on activities outside a campaign.  What sets hybrid PACs apart, however, is their ability to contribute funds directly to a political party, campaign, or candidate, similar to SSFs and nonconnected committees.
5. Leadership PACs.  These are committees established by candidates or individuals currently holding federal office.  Both Representatives and Senators can establish leadership PACs to support candidates within their political party.

PAC Rules

PACs must follow numerous rules set out by the FECA and the Bipartisan Campaign Reform Act of 2002.  For instance, a PAC has 10 days to register with the FEC after its formation.  The FEC also requires politicians and candidates who create a leadership PAC to be listed when submitting the required documentation.  Furthermore, current laws require PACs to meticulously keep records on how they spend their money, which includes salaries, advertisements, supplies, rent, day-to-day expenses, dinners, and more.

The following chart provides an overview of the limitations on how much different types of PACs can spend and receive.

PACs and Advocacy

By influencing elections, PACs indirectly play a pivotal role in lobbying and advocacy.  Different businesses, industries, and interests have PACs, and they work to get candidates elected who support those issues or host fundraisers for other candidates in the hopes of attracting them to their cause.  In turn, once those candidates are elected, advocates can target public officials who are more likely to be favorable to their cause.  Thus, by helping to get friendlier candidates elected to public office, PACs show they can play a massive role in moving organizations’ advocacy objectives forward.