In recent years, Super PACs have risen to prominence in American politics. Though, there is still a lot of confusion about what they are and how they operate. In this article, you will find a guide to Super PACs—including what they are, how they rose to prominence, and the regulations that apply to them.
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Background: Understanding Political Action Committees (PACs)
To understand Super PACs, you first need to understand how political action committees work. As explained by the Federal Election Commission (FEC), a political action committee (PAC) is a 527 organization that pools financial contributions and donates the funds to support (or oppose) candidates, ballot measures, legislation, or particular policies. There are several different types of political action committees. Here are two key categories of PACs to know about:
1. Separate Segregated Funds (SSFs)/Nonconnected Committees
An SSF/nonconnected committee is a type of PAC that is formed and administered by a corporation, labor union, trade association, or other membership group. SSFs and nonconnected committees can only solicit funds from their members.
2. Super PACs
Super PACs—or as they are officially called “independent expenditure only political committees”—are types of political action committees that can solicit unlimited amounts of funds from any individual, corporation, labor union, or other organization. These funds can be used to support independent political activities.
Key Point
Regular political action committees (PACs) are limited in the amount that they can solicit from a specific donor. However, no such restriction applies to a Super PAC. A person, business, labor union, or other organization can contribute an unlimited amount of money to a Super PAC.
Understanding Super PACs Through a Brief History
There are limits on how much an individual can donate to a particular political candidate during an election campaign. The FEC provides a comprehensive overview of the current federal contribution limits. However, though there are limits on direct contributions to a campaign, a person cannot be limited in the amount of money that they put towards general political messaging. The 1976 Supreme Court of the United States decision in Buckley v. Valeo struck down a key portion of the Federal Election Campaign Act of 1971. It found that total political spending limits were unconstitutional on First Amendment grounds.
In 2010, the Supreme Court issued two more landmark decisions that found that those First Amendment protections also apply to institutional actors, such as corporations, labor unions, and other organizations. By doing so, the nation’s highest court created the modern era of Super PACs. While direct contributions to candidates by individuals, corporations, and unions remain limited, all parties have a right to donate an unlimited amount of funds to a Super PAC. That Super PAC has the right to use the money for independent political messaging and political activities, including in support of or in opposition to a political candidate or a ballot initiative.
What Regulations Apply to Super PACs?
While Super PACs can be used to contribute an unlimited amount of money to support (or oppose) a particular political message, that does not mean that there are no rules or regulations that apply. Super PACs are regulated by both FEC and state-based laws. It is imperative that Super PACs are operated in full compliance with all applicable laws and regulations. Here are some of the key regulations that affect Super PACs:
1. A Super PAC Should Be Properly Registered
A Super PAC should be properly registered. Under federal regulations, a Super PAC becomes a political action committee if it receives more than $1,000 in contributions in a given calendar year. Both direct financial contributions and in-kind contributions count toward this amount. Once that amount is hit, a Super PAC should properly register within ten days. At the federal level, Statement of Organization, Form 1 is used to register a Super PAC.
2. Certain Disclosure Requirements
Super PACs are subject to certain financial disclosure requirements. Anyone involved in the operation and management of a Super PAC must have a broad understanding of these requirements. Financial contributions should be properly reported and properly disclosed in a timely manner. Failure to do so could result in federal or state sanctions.
3. Restrictions Direct on Coordination
Finally, one of the key things to know about Super PACs is that there are restrictions on coordination with campaigns. A person, corporation, or union is limited in how much they can donate to a campaign directly. They are not limited in how much they can give to a Super PAC that is organized to support a particular campaign. However, a candidate and a Super PAC supporting that candidate cannot coordinate activities. Coordination is a violation of federal and state election regulations. As an example, the Connecticut Mirror reported that an unsuccessful candidate for state governor paid a $90,000 fine to resolve allegations that his campaign improperly coordinated with a Super PAC.
Although Super PACs can be formed and organized to support a narrow cause—such as the election of a specific political candidate—the Super PAC must remain independent. It cannot directly coordinate with a campaign if it is receiving unlimited funds from donors.
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