Political Action Committee Definition and Examples

Political action committees are among the most common sources of funding for campaigns in the United States. The function of a political action committee is to raise and spend money on behalf of a candidate for elected office at the local, state and federal levels.   A political action committee is often referred to as a PAC and can be run by candidates themselves, political parties or  special interest groups. Most committees represent business, labor or ideological interests, according to the Center for Responsive Politics in Washington, D.C. The  money they spend is often referred to as hard money because it is being used directly for the election or defeat of specific candidates. In a typical election cycle, political action committee raise more than $2 billion and spend nearly $500 million. There are more than 6,000 political action committees, according to the Federal Election Commission. Oversight of Political Action Committees Political action committees that spend money on federal campaigns are regulated by the Federal Election Commission. Committees that function at the state level are regulated the states. And PACs the operate at the local level are overseen by county election officials in most states. Political action committees must file regular reports detailing who contributed money to them and how they, in turn, spend the money. The 1971 Federal Election Campaign Act FECA allowed corporations to establish PACs and also revised financial disclosure requirements for everyone: candidates, PACs, and party committees active in federal elections had to to file quarterly reports. Disclosure — the name, occupation, address and business of each contributor or spender — was required for all donations of $100 or more; in 1979, this sum was increased to $200. The McCain-Feingold Bipartisan Reform Act of 2002 attempted to end the use of non-federal or soft money, money raised outside the limits and prohibitions of federal campaign finance law, to influence federal elections. In addition, issue ads that do not specifically advocate for the election or defeat of a candidate were defined as electioneering communications. As such, corporations or labor organizations can no longer produce these ads. Limits on Political Action Committees A political action committee is permitted to contribute $5,000 to a candidate per election and up to $15,000 annually to a national political party. PACs may receive up to $5,000 each from individuals, other PACs and party committees per year.  Some states have limits on how much a PAC can give to a state or local candidate. Types of Political Action Committees Corporations, labor organizations and incorporated membership organizations cannot make direct contributions to candidates for federal election. However, they may set up PACs that, according to FEC, can only solicit contributions from individuals associated with [the] connected or sponsoring organization. The FEC calls these segregated funds organizations. There is another class of PAC, the non-connected political committee. This class includes what is called a leadership PAC, where politicians raise money to — among other things — help fund other candidate campaigns. Leadership PACs can solicit donations from anyone. Politicians do this because they have their eye on a leadership position in Congress or a higher office; its a way of currying favor with their peers. Different Between a PAC and a Super PAC Super PACs  and PACs are not the same thing.  A super PAC is allowed to raise and spend unlimited amounts of money from corporations, unions, individuals and associations to influence the outcome of state and federal elections. The technical term for a super PAC is independent expenditure-only committee.  They are relatively easy to create under federal election laws. Candidate PACs  are prohibited from accepting money from corporations, unions and associations. Super PACs, though, have no limitations on who contributes to them or how much they can spend on influencing an election. They can raise as much money from corporations, unions and associations as they please and spend unlimited amounts on advocating for the election or defeat of the candidates of their choice. Origin of Political Action Committees The Congress of Industrial Organizations created the first PAC during World War II, after Congress prohibited organized labor from influencing politics via direct monetary contributions. In response, the CIO created a separate political fund that it called the Political Action Committee. In 1955, after the CIO merged with the American Federation of Labor, the new organization created a new PAC, the Committee on Political Education. Also formed in the 1950s were the American Medical Political Action Committee and the Business-Industry Political Action Committee.