Application of Campaign Finance Law to Indian Tribes
Application of Campaign Finance Law
to Indian Tribes
L. Paige Whitaker
American Law Division
R. Sam Garrett
Analyst in American National Government
Government and Finance Division
Under the Federal Election Campaign Act (FECA), Indian tribes are subject to
contribution limits applicable to “persons,” as defined by the act. For the 2008 election
cycle, these limits include $2,300 per election to a candidate, $28,500 per year to a
political party’s national committee, and $5,000 per year to a political action committee
(PAC). The Federal Election Commission (FEC) has found, however, that FECA’s
$108,200 election cycle aggregate limit applicable to “individuals,” as defined by the
act, does not apply to Indian tribes (similar to FECA’s treatment of other interest groups
that operate through PACs and are also not subject to an aggregate limit). In addition,
as most Indian tribes are unincorporated, they are not subject to the FECA ban on use
of corporate treasury funds for contributions and expenditures in connection with federal
elections. Hence, unlike corporations, most Indian tribes are not required to establish
PACs in order to participate in federal elections. As the result of an FEC ruling, unlike
PACs, Indian tribes are also not required to disclose the amounts and recipients of any
contributions they make. With regard to unregulated soft money, Indian tribes may
spend unlimited amounts of money on issue advocacy communications.
The Bipartisan Campaign Reform Act (BCRA) of 2002 made several significant
changes to FECA, including increasing certain contribution limits from their previous
levels. BCRA also prohibited any “person,” which includes Indian tribes, from making
soft money donations to political parties. While FECA prohibits corporations and
unions from paying for broadcast issue advertisements that refer to federal candidates
within 30 days of a primary or 60 days of a general election, labeled by BCRA as
“electioneering communications,” unincorporated Indian tribes are not subject to such
a prohibition. However, if an Indian tribe sponsors an electioneering communication,
regardless of its incorporation status, it is subject to disclosure requirements, including
the identification of disbursements and donors over certain dollar amounts.
Application of Campaign Finance Law to Indian Tribes 1
Activity Fully Regulated by Federal Law: Hard Money. The Federal
Election Campaign Act (FECA)2 regulates contributions and expenditures for federal
election campaigns. The term “hard money,” which is not statutorily defined, typically
refers to funds raised and spent in accordance with the limitations, prohibitions, and3
reporting requirements of FECA. Unlike soft money, which will be discussed in the next
section, hard money may be used “in connection with” or “for the purpose of influencing”
Under FECA, hard money restrictions apply to contributions from and expenditures
by any “person,” as defined to include “an individual, partnership, committee, association,
corporation, labor organization, or any other organization or group of persons,” but not
including the federal government.4 FECA provides that a “person” is limited to
contributing no more than
!$2,000 per candidate, per election5 (adjusted for inflation to $2,300 for
the 2007-2008 election cycle);6
!$25,000 per year to a national committee of a political party (adjusted
for inflation to $28,500 for the 2007-2008 election cycle); and 7
!$5,000 per year to PACs (limits on contributions by and to PACs are not
adjusted for inflation).
FECA further provides that an “individual” is subject to an aggregate limit on all
contributions per two-year election cycle (encompassing all contributions to federally
registered candidates, parties, and PACs): $95,000 per two-year election cycle, with sub-
limits: (a) $37,500 to all candidates and (b) $57,500 to all PACs and parties (no more than
$37,500 of which is to state and local parties and PACs).8 As indexed for inflation, the
2007-2008 election cycle limit is $108,200, with sub-limits: (a) $42,700 to all candidates
and (b) $65,500 to all PACs and parties (no more than $42,700 of which is to state and
local parties and PACs).
In interpreting such statutory provisions, the Federal Election Commission (FEC) has
consistently found that the act’s definition of “person” includes unincorporated Indian
tribes, thereby subjecting tribes to the $2,300 per candidate per election limit, the $28,500
1 Now-retired CRS specialist Joseph E. Cantor co-authored this report. CRS analyst R. Sam
Garrett is available to answer questions regarding Cantor’s contributions to the report.
2 2 U.S.C. § 431 et seq.
3 See 2 U.S.C. §§ 441a, 441b(a).
4 2 U.S.C. § 431(11).
5 2 U.S.C. § 441a(a)(1)(A).
6 2 U.S.C. § 441a(a)(1)(B).
7 2 U.S.C. § 441a(a)(1)(C).
8 2 U.S.C. § 441a(a)(3).
per year limit to a national party, and the $5,000 per year limit to PACs.9 On May 15,
2000, however, the FEC found that whereas an unincorporated Indian tribe is considered
a “person” under FECA, it is not considered an “individual” and therefore is not subject
to the aggregate election-cycle limit.10 As a result of that ruling, it appears that an Indian
tribe, by making, for example, an unlimited number of $2,300, $28,500, and $5,000
contributions, could significantly exceed the $108,200 aggregate election-cycle limit
applicable to “individuals.”11
FECA also prohibits corporations, labor unions, and national banks from using their
treasury funds to make contributions and expenditures in connection with federal
elections.12 Such entities may, however, participate in financing federal elections by
establishing separate segregated funds, also known as political action committees (PACs),
which are permitted to raise voluntary contributions for use in federal elections.13 PAC
contributions are subject to limitations under FECA, as are contributions from individual
citizens and political parties.
Generally, as most Indian tribes are unincorporated, they are not subject to the FECA
ban on the use of corporate treasury funds for contributions and expenditures in
connection with federal elections. Accordingly, most tribes may make contributions in
federal elections directly from their tribal funds, without establishing a PAC. This
appears to facilitate the ability of Indian tribes to make federal election contributions.
That is, while current law limits contributions to a PAC to $5,000 per year from any
source,14 a tribe may acquire a large amount of funds for use in federal elections more
directly (i.e., from its own tribal funds, including, for example, income from tribal
enterprises, so long as those enterprises are neither incorporated nor government
In one key respect, the FEC treats Indian tribes differently than PACs. Although a
1978 FEC ruling had required Indian tribes making contributions to comply with the
periodic reporting requirements of FECA,15 this requirement was explicitly superceded
9 See Federal Election Commission Advisory Opinion, AO 2000-05 (May 15, 2000), citing AO
1978-51, 1999-32, and 1993-12 (where the Commission found that, as “persons,” unincorporated
Indian tribes were subject to the prohibition on contributions by persons with Federal contracts
if they are engaged in such contracts).
10 Federal Election Commission Advisory Opinion, AO 2000-05 (May 15, 2000) .
11 For example, one commentator estimated that without the aggregate limit, an Indian tribe in
2000 could contribute: $240,000 during a two-year election cycle to the two major national
parties and their affiliated House and Senate campaign committees; up to $1 million during an
election cycle to the 100 state party committees; and distribute as much as $1,872,000 to every
candidate running for the House and Senate from the two major political parties. Edward
Zuckerman, FEC Lets Indian Tribes Convert Government Funds to Political Contributions,
Political Finance & Lobby Reporter, vol. 21, June 14, 2000.
12 2 U.S.C. § 441b(a).
13 2 U.S.C. § 441b(b)(2)(C).
14 2 U.S.C. § 441a(a)(1)(C).
15 Federal Election Commission Advisory Opinion, AO 1978-51 (Sept. 1, 1978).
by a 1995 agency ruling.16 Although contributions from tribes must be reported by
recipients, one must view the FEC filings of candidates, PACs, and parties in order to
track the funds given by an Indian tribe, as well as the IRS filings by section 527 political
organizations. PoliticalMoneyLine found that some $25 million was donated for 2000-
20005 federal elections by 212 federally recognized Indian tribes, and that the reporting
was made under almost 2,000 different variations of their names.17 Thus, the ability to
track the flow of election-related money from Indian tribes is more difficult than it is for
other large entities.
Several observations may be made about the ability of Indian tribes to spend money
in federal elections compared with that of other interest groups, which typically operate
through PACs. Like other interest groups, Indian tribes are subject to no aggregate limit
on their total federal election contributions (only individual citizens are subject to this
limit). Unlike an interest group PAC, however, an Indian tribe may have a more readily
available pool of funds that could be used in federal elections, that is, its own tribal funds,
as opposed to a fund solely comprised of contributions that are subject to limitations and
source restrictions. This advantage, however, may be somewhat offset by the $5,000 per
candidate, per election limit applicable to a PAC, which typically qualifies as a
“multicandidate committee,”18 compared with the $2,300 per candidate, per election limit
applicable to all other persons, including Indian tribes. (In one apparent anomaly in
FECA, a multicandidate committee may only contribute $15,000 per year to the national
committee of a political party, whereas any other person, including an Indian tribe, may
contribute $25,000,19 or $28,500 in the 2007-2008 election cycle, adjusted for inflation.)
Activity Not Fully Regulated by Federal Law: Soft Money. While “soft
money” is not expressly defined in federal election law and regulation, strictly speaking,
it refers to funds that are not regulated by FECA (i.e., hard money). It may refer to
corporate and labor treasury funds that cannot legally be used in connection with federal
elections, but can be used for other specified purposes. Sometimes referred to as
nonfederal funds, prior to the enactment of the Bipartisan Campaign Reform Act (BCRA)
of 2002 (P.L. 107-155; March 27, 2002), “soft money” often referred to non-FECA funds
raised by the national committees of the two major political parties. BCRA put an end
to this practice by prohibiting national parties from raising funds not subject to FECA,
whether from individual citizens, corporations, labor unions, or Indian tribes.20
Even after the enactment of BCRA, however, spending on issue advocacy
communications remains a prominent soft money activity. Issue advocacy
communications are generally paid for by a group, such as a for-profit or nonprofit
corporation or labor union, for advertisements (typically broadcast on radio or television)
16 Federal Election Commission Advisory Opinion, AO 1995-11 (Apr. 28, 1995), footnote 10.
17 PoliticalMoneyLine Home Page Update, Jan. 28, 2006.
18 2 U.S.C. § 441a(a)(2)(A). A multicandidate committee is defined in 2 U.S.C. § 441a(a)(4) as
a political committee that has been registered for at least six months, has received contributions
from more than 50 persons, and, except for state party committees, has made contributions to five
or more federal candidates.
19 2 U.S.C. §§ 441a(a)(2)(B), 441a(a)(1)(B).
20 2 U.S.C. § 441i(a).
that could be interpreted to favor or disfavor certain candidates, while also serving to
inform the public about a policy issue. Prior to BCRA, issue advocacy communications
were generally unregulated by FECA.21 Therefore, Indian tribes (like corporations, labor
unions, and individuals) could spend unlimited amounts of money on such
With the enactment of BCRA, certain issue ads are now regulated. BCRA created
a new term in federal election law, “electioneering communication,” which describes a
political ad that “refers” to a clearly identified federal candidate, is broadcast within 30
days of a primary or 60 days of a general election, and if for House and Senate elections,
is “targeted to the relevant electorate,” (i.e., is received by 50,000 or more persons in the
state or district where the respective House or Senate election is occurring).22 BCRA
prohibits the financing of such communications with union or certain corporate funds.23
Furthermore, for permissible “electioneering communications,” federal election law
requires disclosure of disbursements over $10,000 for such communications, including
identification of each donor of $1,000 or more.24 Therefore, while corporations and labor
unions are prohibited from engaging in “electioneering communications,” it appears that
most Indian tribes, as unincorporated entities, may continue to finance such
communications, subject to the disclosure requirements.
21 Prior to the Supreme Court upholding the constitutionality of BCRA’s regulation of
electioneering communications in McConnell v. FEC, 540 U.S. 93 (2003), the prevailing view
of the U.S. appellate courts was that Supreme Court precedent (specifically, Buckley v. Valeo,
424 U.S. 1 (1976)) mandated that a communication contain express words advocating the election
or defeat of a clearly identified candidate in order for it to be constitutionally regulated. If a
communication did not contain such express words, most courts determined that it could not be
regulated. Effectively overturning such lower court rulings, the Supreme Court in McConnell
held that neither the First Amendment nor Buckley prohibits BCRA’s regulation of
“electioneering communications,” even though electioneering communications, by definition, do
not necessarily contain express advocacy. The Court determined that when the Buckley Court
distinguished between express and issue advocacy, it did so as a matter of statutory interpretation,
not constitutional command. Moreover, the Court announced that, by narrowly reading the FECA
provisions in Buckley to avoid problems of vagueness and overbreadth, it “did not suggest that
a statute that was neither vague nor overbroad would be required to toe the same express
advocacy line.” McConnell, 540 U.S. at 189-194.
22 2 U.S.C. §§434(f)(3)(A), (C).
23 2 U.S.C. §441b(b)(2). This prohibition does not appear to apply to broadcast ads that would
otherwise be considered “electioneering communications” under BCRA, if they are paid for by
Internal Revenue Code (IRC) §527 or §501(c) organizations that are unincorporated. Although
2 U.S.C. §441b(c)(2) exempts from the prohibition IRC §527 and §501(c)(4) corporations that
pay for ads exclusively with funds provided by individuals who are U.S. citizens or nationals or
who are lawfully admitted for permanent residence, §441b(c)(6) subsequently appears to nullify
that exemption by providing that the exception does not apply if the communication is “targeted.”
24 2 U.S.C. §434(f).
Treatment of Indian Tribes Versus Most Interest Groups and
Individual Citizens under Federal Election Law
Individual CitizensIndian TribesMost Interest Groups
Treated as persons:Activity through PACs:
$2,300 to a candidate* $2,300 to a candidate* $5,000 to a candidate
$28,500 to national party* $28,500 to national party* $15,000 to a national party
Aggregate limit per 2-year No aggregate limit per No aggregate limit per
election cycle: $108,200,election cycleelection cycle
with various sub-limits**
(sources of funds used for contributions)
Personal funds ofTribal funds (but mayOnly amounts donated to
individuals who are U.S.contain no funds fromthe PAC ($5,000 per year
citizens or permanentincorporated businesses orfrom an individual)
resident aliensgovernment contractors)
Individuals have noAs nonpolitical committees,PACs are required by FECA
reporting requirements forTribes have no filingto register and submit
contributions made, underrequirements, per FECperiodic reports of receipts
Permitted to runPermitted to runNo corporate- or union-
“electioneering“electioneeringfunded electioneering ads
communications,” but mustcommunications” (as Indian(broadcast within last 30/60
disclose amounts spenttribes are unincorporateddays before primary/general
entities), but must discloseelections)
amounts spent and $1000+
Donations to Parties
N/A (individuals may BCRA prohibited softBCRA prohibited soft
contribute to extentmoney (i.e., unlimited)money (i.e., unlimited)
permitted by FECA, subjectdonations to a partydonations to a party
to per committee andcommitteecommittee
aggregate cycle limits)
* Under BCRA, these limits are required to be adjusted for inflation at the start of each election cycle. The
amounts shown here are the limits set for the 2007-2008 election cycle.
** Individual citizens, in contrast with Indian tribes and other interest groups via their PACs, are subject
to an aggregate limit on all contributions to federal candidates, PACs, and parties (through federal
accounts), currently $108,200 per two-year cycle, with sub-limits: (a) $42,700 to all candidates; and (b)
$65,500 to all PACs and parties (no more than $42,700 of which is to state and local parties and PACs),