Presidential Campaign Finance

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Center for Responsive Politics: Race for the White House
Campaign Finance Institute
Public Citizen: White House for Sale
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Total Cost of 2008 Presidential Campaign: About $2.4 Billion 
Presidential campaigns are expensive, but none was more expensive than the 2008 campaign.  The Center for Responsive Politics estimated the cost of the 2008 presidential race at $2.4 billion, and reported that fundraising by the presidential candidates was double that of 2004. (>)  By comparison, the Center put total spending on the 2004 presidential election at $1.2 billion while noting that "this figure includes a very conservative estimate of spending by advocacy groups." (>)  The Obama campaign shattered fundraising records raising a total of $744.9 million.  During the primaries its biggest month was March 2008 when it brought in $55.4 million; it far surpassed that in the general election, raising over $150 million in September 2008.  This record fundraising gave the Obama campaign a substantial advantage over first Hillary Clinton as the primaries stretched on and then John McCain in the general election. 

An Irrelevant System
In the aftermath of Watergate, Congress passed the Federal Election Campaign Act, instituting a system of partial public financing for presidential primary candidates and full public financing for general election candidates.  Candidates who qualify and agree to abide by certain restrictions receive payments from U.S. Treasury.  The federal payments come out of the Presidential Election Campaign Fund, which is filled by the check-off on federal income tax forms.  (For the record, in 2008 the Fund distributed a total of $139.4 million: $21.7 million in matching funds to eight primary candidates, $33.6 million for the two major party conventions, and $84.1 million to the McCain-Palin campaign; this compares to a total of $207.5 million distributed in 2004).

As one might expect, over a period of more than thirty years problems have emerged. 
The Federal Election Commission, although one of the most public-friendly agencies in Washington, is by design rather ineffective; typically by the time it has finished investigating a matter the campaign will have long since ended.  In 1996 the campaign finance system experienced a catastrophic failure.  Laws were bent, if not broken, and stories about White House coffees, Lincoln bedroom sleepovers, and Chinese money filled the headlines through much of 1997.

Large soft money contributions to the political parties drew  particular criticism.  After years of work campaign finance reform advocates achieved a major victory on March 20, 2002 when the Senate passed the Bipartisan Campaign Reform Act of 2002 (BCRA, also known as McCain-Feingold) in a 60 to 40 vote.  President Bush quietly signed the measure into law (Public Law No. 107-155) on March 27, 2002; it took effect on Nov. 6, 2002.   There were concerns that cutting off the flow of soft money to the parties would harm those institutions, but the parties adapted to the new environment.  Further, the large soft money contributions quickly found a new channel in the so called "Section 527" political organizations.  (527 page)  The constitutionality of BCRA was challenged in the U.S. Supreme Court and legal wrangling continues to this day.  On Nov. 13, 2009, the RNC filed a lawsuit challenging several campaign finance restrictions imposed by BCRA. > 

One small but noteworthy change brought about by BCRA was to raise the $1,000 limit on individual contributions to $2,000 with indexing for inflation ($2,300 in the 2008 cycle).  The $1,000 limit had not been adjusted for inflation since the law was enacted in 1974 and was worth about one-third of the original level. 

In a Feb. 9, 2005 letter FEC Chairman Scott E. Thomas and Vice Chairman Michael E. Toner called on Congress to review the presidential public funding program. "If Congress does not act within the next two years, the system runs the risk of being totally irrelevant in the 2008 election and beyond," the Commissioners warned.  The federal income tax check-off is plagued by a low level of citizen participation -- in recent years only about 11 percent of filers have done the check off compared to 27.5 percent on 1976 returns.  The check-off amount has been raised from the original $1 to $3.  But the problems with the public financing system run deeper.  In recent cycles leading primary candidates, not wishing to be constrained by spending limits, have opted not to take primary matching funds.  In 2008, for the first time ever, one of the major party candidates chose not to receive the general election grant. 

Some possible fixes are contained in the report "So the Voters May Choose...  Reviving the Presidential Matching Fund System" issued by the Campaign Finance Institute's Task Force on Financing Presidential Nominations on April 12, 2005.  In July 2006 Sen. Russ Feingold (D-WI) and Reps. Marty Meehan (D-MA) and Christopher Shays (R-CT) introduced legislation to address the problems.  However, their Presidential Funding Act of 2006 (S.3740/H.R.5905) did not advance in the 109th Congress.  They reintroduced the bill, the Presidential Funding Act of 2007, but it would not have taken effect until 2009, that is for the 2012 campaign.  This legislation would have made significant changes to the system of public funding, for example changing the primary match from 1:1 to 4:1, raising the spending limit for primary candidates from about $45 million to $150 million, and raising the income tax check-off from $3 to $10.  (press release).

There have been other proposals to reduce the influence of big donors in the nominating process.  The now inactive Unity08 promoted a "Clean Money Pledge" which citizens pledge, "I will only vote for a presidential candidate who has raised more than half of his/her funds through small contributions of $250 or less."  Former Howard Dean campaign manager Joe Trippi proposed a "$100 Revolution" to give grassroots Democrats a greater say in the party's presidential nominating process.  On March 11, 2005 he created a stir speaking at the Politics Online conference at the George Washington University when he threw out the idea of website that will ask donors for their email address and a pledge of $100 towards the 2008 Democratic presidential campaign.  As Trippi envisaged it, the pledges would accumulate to a formidable sum that would go to the first Democratic candidate who promised he or she will take only contributions of $100 or less.

On top of its inherent weakness, the FEC struggled along for almost the first half of 2008 with just two Commissioners due to a stalemate over one of President Bush's nominees.  Not until June 24 did the U.S. Senate finally approve five Commissioners, bringing the FEC to its full complement of six.

During two years between the last presidential election and the mid-term elections, many potential presidential candidates use leadership PACs to fund their activities, including travel and supporting candidates and party committees, particularly in key states.  The pre-campaign period can be useful for starting up a fundraising team and for building fundraising lists.  Potential presidential candidates may also raise millions of dollars for their re-election efforts.  Many U.S. Senators who have run for president have transferred funds from their re-election committees to their presidential campaign committees in an attempt to get an early advantage.  

Primary Candidates
For primary candidates there is a voluntary system of partial public financing. 

After a candidate qualifies by meeting the $100,000 threshold--raising $5000 in 20 states in contributions of $250 or less--his or her campaign becomes eligible to receive matching funds.  Contributions from individuals of up to $250 are matched dollar for dollar with payments from the Presidential Election Campaign Fund.  Candidates began receiving payments in January 2004.  They must agree to comply with spending limits, based on the 1974 figure of $10 million, adjusted for inflation (in 2008 the limit was $50,460,000; when costs associated with fundraising were included it was actually higher).

A candidate who chooses not to participate in the matching funds program can spend as much as he or she wants, but contributions from individuals still may not exceed $2,300 (BCRA's $2,000 indexed for inflation).  There is no limit to how much a candidate can spend of his or her own money.  As a result the matching funds program has drifted to irrelevancy, ignored by most leading candidates.

In the 2000 Republican primary campaign then Gov. George W. Bush declined matching funds and brought in more than $90 million in individual contributions, a record.  In 2004 President Bush again declined matching funds and  there were suggestions that he could raise upwards of $200 million although he faced no credible Republican challenger.  Faced with this prospect, two of the Democratic candidates, former Gov. Howard Dean and Sen. John Kerry, opted out of the public financing system as well.  In the 2008 cycle most of the major candidates opted out of the matching funds program; of the top-tier candidates only Edwards ultimately accepted matching funds while McCain, Romney, Huckabee, Obama and Clinton did not participate.  (McCain first applied for matching funds, but later decided to opt releases).  Payments to eight candidates who did participate totaled about $21.7 million (Edwards $12.9 million, Tancredo $2.2 million, Biden $2.0 million, Dodd $2.0 million, Kucinich $1.1 million, and Nader, Hunter and Gravel less than $1 million each).

In February 2007 the Obama campaign started soliciting funds for use not only in the primaries but in the general election as well.  (see FEC draft Advisory Opinion).  The campaign said, however, that if Obama did win the nomination it would adhere to public funding in the general election provided the Republican nominee did so as well; a position it later reversed.  The prospect of campaigns declining to participate in general election public funding caused concern among reform groups (press release).

Early money is vital to a candidate's viability.  During the year leading up to the election year, campaigns trumpet their fundraising successes. Candidates that do not fare well tended to be relegated to second-tier status.

All told through June 30, 2008 twelve Republican candidates received a total of $337.3 million in individual contributions.  During the same period eight Democratic candidates reported $633.8 million in individual contributions (see tables below; also this chart > shows different figures 11 Republicans: $320,351,722 and 8 Democrats: $622,701,933).  Taking into account other receipts, including transfers from other committees, loans often from the candidate, federal matching funds and PAC contributions, total receipts in the pre-nomination period by just the campaign committees were over $1 billion as were total disbursements. 

March 20, 2007
May 23, 2008

Conventions (11CFR9008)
The major parties receive public funds to put on their national nominating conventions, based on the 1974 figure of $4 million, adjusted for inflation.  In June 2007 the FEC certified the Democratic and Republican parties were each entitled to receive $16,356,000 in public funds to put on their 2008 national conventions, and sent letters to the Secretary of the Treasury requesting the payments be made.  When inflation was factored in, the total amount came to $16,820,760.  (Third parties whose presidential nominees received at least five percent of the vote in the previous election also could receive funds toward their conventions; none met this criterion for 2008).  However the majority of convention funding comes from non-profit host committees which are formed to defray expenses connected with hosting conventions; these can accept direct and in-kind contributions from local businesses, unions and individuals.  The Campaign Finance Institute has been sharply critical of the FEC's approach to the host committees, arguing that they create a "loophole for unlimited soft money contributions to the political parties.” (CFI reportThe Denver 2008 Convention Host Committee raised $62.9 million (>) and the Minneapolis-St. Paul 2008 Host Committee raised $54.0 million (>).  (CFI analysis)  By comparison in the 2004 cycle, the Boston host committee raised $56.8 million and the New York host committee raised $85.7 million. 

General Election
The Democratic and Republican nominees are eligible to receive grants to cover all expenses in the general election campaign, based on the 1974 figure of $20 million, adjusted for inflation.  In 2004, immediately after their respective conventions, the Bush and Kerry campaigns each received grants of $74.62 million to cover general election campaign expenses.  However, on June 19, 2008 Sen. Barack Obama (D-IL) announced that his campaign would forego public financing in the general election, the first time this had ever occurred.  The McCain campaign opted in, and on Sept. 8, 2008 the FEC certified McCain-Palin 2008, Inc. to receive $84.1 million.  (Third parties whose presidential nominees received at least five percent of the vote in the last election could also receive funds according to the share of the popular vote obtained).  Campaigns do form and can solicit contributions for general election legal and accounting compliance (GELAC) funds starting April 1 of the election year. (11CRF9003.3)   Joint fundraising committees--McCain-Palin Victory 2008 and Obama Victory Fund--were active in the Fall. (11CFR102.17)  These committees have relatively high contribution limits and distribute the funds among campaign and party committees (example).  Finally, as mentioned above, the party committees may spend some money on behalf of their nominees, in the amount of 2 cents times the voting age population of the United States; these coordinated expenditures amounted to $19.1 million for each party in 2008. (11CFR109)

The Obama campaign's biggest month was September; on Oct. 19, 2008 it announced, "In the month of September, we raised over $150 million and added 632,000 new donors for a total 3.1 million donors to date." 

Because the Obama campaign did not accept public financing, there is no requirement that its FEC reports be audited.  However, on Oct. 5, 2008 the RNC announced it would file a complaint with the FEC seeking an investigation into "foreign national and excessive contributions accepted by the Obama campaign that demonstrate it is operating outside of federal campaign finance law."  Campaigns are not required to disclose names of those who contribute less than $200, but once contributions total more than $200 disclosure is required.  The cases of "Good Will" and "Doodad Pro" drew particular attention; each made dozens of contributions that added up to over $10,000.  (McCain press release)

Much was made of the small donations that fueled the Obama campaign.  While those were significant and the campaign clearly attracted people who had not donated to campaigns before, a post-election analysis by the Campaign Finance Institute found that repeat donors and large donors were equally important. (>)  Further, the watchdog group Public Citizen identified 606 bundlers for the Obama campaign including 52 who raised a minimum of $500,000; the group showed 851 McCain bundlers including 70 who raised at least $500,000.

Tables: Primary Finances
Note: These tables highlight some categories of receipts and does not break out others (contributions from political party and other political committees, offsets, other receipts such as dividends and interest).  Final federal funds payments were higher: Edwards $12,882,877.42, Biden $2,033,471.83, Dodd $1,961,741.71, Kucinich $1,070,521.06, Gravel $215,966.74. (Jan. 2009 >)

Democratic Presidential Campaigns: Receipts and Expenditures Through June 30, 2008
Source: FEC
Individual Contributions
Federal Funds
Total Receipts
Total Disbursements
Cash On Hand /
Debts & Oblig.
8,255,376.03 857,188.89 1,900,000.00 1,293,613.90 12,854,799.55 12,748,059.18 106,740.37 / 1,151,369.77
210,809,074.91 -
10,000,000.00 13,175,000.00 242,683,365.78 216,636,698.58 26,046,667.20 /
10,064,220.03 1,447,568.09 4,739,005.00 1,302,811.25 18,419,662.06 17,175,969.81 1,242,351.63 / 395,793.51
38,978,041.98 8,825,410.98 -
8,974,714.00 58,128,906.16 57,278,549.58   850,356.58 /
504,671.43 -
73,515.73 579,576.34 579,367.95  208.39 /
4,396,503.41 99,999.92 -
4,545,338.00 4,537,956.00 7,274.00 /
338,072,698.64 -
1,400,000.00 -
349,878,040.49 278,242,054.51 71,635,985.98 /
22,717,037.30 -
1,000,000.00 24,411,788.64 24,410,486.31 1,302.33 /

Republican Presidential Campaigns: Receipts and Expenditures Through June 30, 2008
Source: FEC Individual Contributions
Federal Funds
Total Receipts
Total Disbursements
Cash On Hand /
Debts & Oblig.
3,604,055.17 -
575,000.00 -
4,451,307.74 4,451,700.84 -450.67 /
22,178.61 -
 1,055,000.00 1,084,477.91 1,082,700.23 1,777.68 /
349,736.16 -
34,804.03 404,880.64 388,425.91 16,454.73 /
61,899,053.86 -
2,038,268.95 800,000.00 65,856,966.09 65,696,301.22   160,664.87 / 3,658,035.62
16,066,083.71 -
16,429,288.44 16,370,672.17 58,616.27 /
2,369,888.47 100,000.00 36,000.00 130,000.00 2,690,750.03 2,663,655.64 27,094.39 /
125,032,446.65 -
10,537,435.30 3,921,697.20 144,071,947.03 117,289,718.09 26,782,228.94 / 1,453,171.87
34,639,435.12 -
35,082,970.52 34,433,344.82 649,625.70 /
64,728,536.28 -
20,159.89 46,600,000.00 113,504,129.39 113,433,533.33    70,596.06 / 44,600,000.00
4,032,258.81 2,145,125.50 100,000.00 2,002,611.00 8,468,203.62 8,246,565.90 221,637.72 /
23,616,857.60 -
24,154,658.96 23,953,447.87 201,211.09 /
TThompson 976,407.31 -
196,000.00 1,226,129.31 1,225,175.90 953.41 /

Campaign Finance Institute. "Inside Fundraising for the 2008 Party Conventions: Party Surrogates Gather Soft Money While Federal Regulators Turn a Blind Eye."  June 3, 2008.

Campaign Finance Institute (Task Force on Financing Presidential Nominations). "Participation, Competition, Engagement: Reviving And Improving Public Funding For Presidential Nomination Politics."  Report issued on September 22, 2003; updated report issued on April 12, 2005.

Campaign Finance Institute (Steve Weissman and Ruth Hassan).  “The $100 Million Exemption: Soft Money and the 2004 National Party Conventions.”  Report issued on July 7, 2004.

Institute for Politics, Democracy & the Internet.  March 13, 2006.  "Small Donors and Online Giving: A Study of Donors to the 2004 Presidential Campaigns."

Texans for Public Justice.  October 1, 2004.  "Payola Pioneering: Exposing the Bush Pioneer/Ranger Network."

Democracy North Carolina.  August 2003.  "The Color of Presidential Money: North Carolina Case Study."

Center for Public Integrity's Buying of the President 2004
The Center for Public Integrity, "a nonprofit, nonpartisan, non-advocacy, independent journalism organization" published its book looking at the candidates and their career patrons in January 2004, following up on books in 2000 and 1996. This is the companion web site.

Public Citizen's
A project of Public Citizen, the nonprofit public interest organization. 

Fundrace 2004
A project of Eyebeam, a 501(c)3 art and technology non-profit. 

Michael J. Malbin, ed.  March 2006.  The Election After Reform: Money, Politics, and the Bipartisan Campaign Reform Act.  Lanham, MD: Rowman & Littlefield Publishers, Inc

Federal Election Commission--Main
FEC-All Presidential Candidates
CFR Title 11--Federal Elections-(01/08)
CFR Title 26--Internal Revenue -(05/08)
Early 2008 Cycle
Cycle to Date Summary (through Sept. 30, 2007): 18 candidates and 3 former candidates reported $381.7 million in contributions (of which some for the general election), $424.7 million in receipts, $270.9 million in disbursements and closing COH of $153.8 million.

Copyright © 2003, 2004, 2005, 2006, 2007, 2008, 2009 Eric M. Appleman/Democracy in Action.