Political Action Committees: Their Role in Financing Congressional Elections

CRS Report for Congress
Received through the CRS W eb
Political Action Committees: Their Role in
Financing Congressional Elections
Specialist i n American N ational Government
Government and Finance Division
Political action committees, or P ACs, are l egal entities t hrough w h i ch interest
groups raise and spend m oney i n elections. They constitute one of four major s ources
of funds contributed t o c o n g r e s s i o n a l c a m p a i g n s , a l o n g w i t h i n d i v i d u a l c itizens, political
parties, and candidates. W h ile P ACs proliferated and b ecame an i ssue i n t he 1970s and

1980s, i nterest groups have long played a m aj or role in funding American elections.

The t erm political action committee is colloquial and does not appear in federal l aw,
and corresponds with two l e g al ex pressions— separate s egregated fund and political
committee—depending on whether t he PAC i s affiliated with a s ponsoring organization.
Of the 4,027 PACs regi stered with the Federal Election C o m m i s s i on (FEC) at t he
end o f 200 2 , 7 4 % w e r e separate segregat ed funds. S uch a fund is essentially a
bookkeeping arrangement, wherein an o rganiz ation p rohibited b y l aw from m aking d irect
campaign donations from its treasury operates a separate entity (using treasury funds) t hat
seeks voluntary contributions from its “m em bers” for ex pressly political purposes .
Organiz ati o n s t h at maintain such funds include labor unions, corporations, t rade and
health associations, m embership groups (e.g., National R ifle Associ ation and National
Organiz ation for W o men), cooper a t i ves (e.g., dairy cooperatives), and corporations
without capital s tock ( e.g.,some savings and loan or shareholder i nsurance companies).
The remaining 26% of today's P ACs are not sponsored by organiz ations and d o not
constitute separate segregat ed f unds. These PACs, referred t o as nonconnected by the
FEC, are organized m e rel y by meeting t he law’s definition of political committee—a
group that raises or spends $1,000 or more in a year. Unlike s eparate s egregated funds,
these P ACs are not required t o limit fundraising appeals t o s pecified groups of persons;
however, t he nonconnect ed PACs must pay t heir own administrative and fundraising
ex pens e s out of contributions, not having s ponsors t o underwrite these costs. For the
most part, t he nonconnected PACs comprise ideologi cal and s ingl e-issue groups.

Congressional Research Service ˜ The Library of Congress

PACs had t heir origin in the 1940s, as a response b y o rganiz ed labor to the 1943 W ar
Labor Disputes Act’s p rohibition o n contri butions from union treasuries i n connect i o n
with federal elections [ 5 7 S tat. 167] ; t his b a n was m ade p ermanent by the 1947 Labor
Management Relations Act [ 61 Stat. 159] . Unions began t o establish s eparate s egregated
funds to conduct electioneerin g a c tivities; and, for t he nex t three d ecades, l abor PACs
dominat ed the field of interest group political activities. Corporations, prohibited s ince
the 1907 Tillman Act [ 3 4 S tat. 864] from m aking contributions in federal elections, were
rel u ct ant t o est abl i s h P A C s , i n part because of t h e rel at i v e l ack of precedent for such
endeavors and the concomitant absence of conclusive judici al rulings .
A number of l egislative, judici al , and administrative act i o n s in the early and mid-
1970s helped pave the way for o ther groups to ex plore t he PAC option b y removing legal
am biguities and granting s tatutory authority to unions, corporations, t rade associ ations,
and o thers t o s et up separate segregated funds. In addition t o t he elimination o f l egal
barriers, the growth o f P AC s was spurred b y a p e r c e i v e d d ecline i n t he strength of
political parties, by high er contribution limits than those for individuals, and as a response
to increased government regu lation and involvement in people's lives and livelihoods.
Contr i buti on Li m i t s
The l aw provides for different sets of l i mits for t wo types of P ACs: political
committee and multicandidate committee. The limits for a (bas ic) political committee are
$2,000 per election t o a federal candidate, $25,000 per year to a n ational political party
committee, and $5,000 per year to another political committee [ 2 U.S.C. 431(4)] . In these
limits, t he law t reat s a political committee as i t does an i ndividual c i tizen, ex cept t hat
committees are not subject to an aggregate, a nnual limit on all political contributions.
The l aw allows a political committee t o contribute h igher amount s b y b ecoming a
multicandidate committ ee, i.e., b ei ng regi st ered wi t h t h e FEC for at l east s i x m ont hs,
recei vi ng cont ri but i ons from m ore t han 5 0 p ersons, a n d — ex cept for a s t at e part y
committee—contributing t o at l east five fed eral can d i dates [ 2 U.S.C. 441b(b)] . By so
qualifyi ng, as t he vast majority of PACs d o , a P AC is eligible for limits of $5,000 per
election t o a federal candidate (such a PAC m ay also gi ve $5,000 per year to a political
committee and $15,000 per year to a n ational p arty committee).
Table 1 shows aggregate P AC data in each election cycle since 1972 in current and
constant 2002 dollars: receipts, ex penditures, and donations to congressional candidates,
which account for t he great bulk o f federal PAC giving. The gap between ex penditures
and contributions consists of donations to parti e s a n d to state, local, and presidential
r aces , t o congressional races in other years, nonconnected PACs’ fundraising and
administrative costs (which, for separate segregated funds, are paid for b y s ponsors), and
independent ex penditures.

As shown i n t able 1, PAC ex p enditures h a v e i n c reased greatly since 1972, from
$19.2 million t o $656.5 million i n 2002—a nearly 700% increase, controlled for inflation.
The d ata also reveal that the P AC ex plosion o f t he 1970s and early 1980s reached a h igh
point in 1986, after which total P AC ex penditure s l eveled off o r even d eclined in constant
dollars. Not until 2000 a n d again in 2002 did inflation-controlled P AC ex penditures
increas e again, and notably so. A similar pattern is seen in contributions to congressional
candidates, which rose from $8.5 million t o $266.1 million i n current dollars from 1972-
2002. Controlled for inflation, this represented a m o r e t h an 600% increase. After
reaching t he constant dollar h igh point in 1988, aggregate contributions were relatively
level until the 2000 and 2002 elections, when s ignificant i ncreases occurred.
Table 1. F inancial Activity of PACs: 1972-2002 a
(millions of current and constant 2002 dollars)
Adj u s t e d Adj u s t e d Cont ri but i o ns i n
Year receipts expendi t ures congressional races
Current $ Constant $ Current $ Constant $ Current $ Constant $
1972 n.a. -- $19.2 $82.6 $8.5 $36.6
1974 b n.a. -- $25.0 $91.2 $12.5 $45.6
1976 $54.0 $170.7 $52.9 $167.3 $22.6 $71.5
1978 $80.0 $220.7 $77.4 $213.6 $35.2 $97.1
1980 $137.7 $300.6 $131.2 $286.4 $55.2 $120.5
1982 $199.5 $371.9 $190.2 $354.6 $83.6 $155.9
1984 $288.7 $499.9 $266.8 $462.0 $105.3 $182.3
1986 $353.4 $580.1 $340.0 $558.1 $132.7 $217.8
1988 $384.6 $584.9 $364.2 $553.8 $147.8 $224.8
1990 $372.1 $512.2 $357.6 $492.2 $149.7 $206.1
1992 $392.8 $503.7 $402.4 $516.0 $178.6 $229.0
1994 $391.8 $475.6 $388.1 $471.1 $179.6 $218.0
1996 $437.4 $501.5 $429.9 $493.0 $203.9 $233.8
1998 $502.6 $554.7 $470.8 $519.6 $206.8 $228.2
2000 $604.9 $632.0 $579.4 $605.3 $245.3 $256.3
2002 $685.3 $685.3 $656.5 $656.5 $266.1 $266.1
S ources: For 1972: Herb ert E. Alexander, Financing the 1972 Election (Lexington: D.C. Heath, 1976), pp. 93, 95;
Common Cause, Camp aign Finance Monitoring P roject, 1972 Federa l Campaign Finances: Interest Groups
and Political Parties (Washington, 1974), vol. 1 , p . vi. For 1974: [ National Information Cen ter o n P olitical
Finance] inInterest Groups: Bigger Spenders on7 4 Races, Congressional Quarterly Weekl y R ep o r t s , vo l .
32, Sept. 28, 1974, pp. 2583-2584; Co mmo n Cau se, Campaign Finan ce M o n i t o r i n g P roject, 1974
Congressional Campaign Finances: Interest Groups and Politica l P a rties (Washington, 1976), vol. 5 , p .
xii. For 1976: unpublished FEC data; [ Co mmo n Cau se] inIn t e r e st Group Gifts to 1976 Congressional
Camp aign s,” Congressional Quarterly Weekl y R ep o r t s , vo l. 35, Ap r. 16, 1977, p. 710. For 1978-2002: U.S.
Federal Election Commi s s i o n , FEC Reports on Financial Activity: Party and Non-Party Political
Committees, Final Reports an d p ress releases: Apr. 1980, Jan. 1982, Oct. 1983, No v. 1985, Mar. 1988, Sept.
1989, Oct. 1991, Jan. 1994, No v. 1995, Ap r. 1997, Jun. 1999, May 2001, an d Mar. 2003.
a Data are fo r fu l l el ection cycle (election year an d p revious year), excep t 1972 contributions data co ver the period
beginning on Ap ril 7 , 1972. Contributions reflect only money to candidates running in that election cycle.
Constant 2002 dollars, in shaded columns, are based o n Consumer P rice Index.b
Ad justed expenditure fo r 1974 is estimated based o n available d ata.
Tabl e 2 pl aces P AC gi v i n g i nt o p erspect i v e b y s howi n g cont ri but i ons t o
congressional candidates i n general el e ctions since 1972 as a p ercentage of campaign
receipts. In order t o portray the l evel of receipts t hat are whol l y o r partly under
candi dat es’ co n t r o l , t h e t abl e present s t wo t yp es of dat a: t ot al recei pt s report ed b y

candidates and political party coordinated expenditures. The latter is a unique form of
spending that allows pa r t i e s t o s pend mone y on behal f of t heir candidates with thei r
cooperation, but without any requirement to report t he ex penditures i n candidates’ FEC
filings [ 2 U.S.C. 441a(d)] . Thus, t able 2 p resents candidate receipt s , party coordinated
ex penditures, PAC contributions to candidates, and t he percentage of PAC m oney i n t otal
candi dat e recei pt s. The p ercent age was cal cul at ed b y d i v i d i n g t he P AC cont ri but i ons by
t h e s um of candi dat e recei pt s and part y ex p endi t u res.
T h e dat a i n t able 2 s how a consistently great er reliance on P AC money amo n g
House candidates t han among Senate candidates. PACs accounted for b etween 30% and
40% of House candi dat e recei pt s and bet ween 15% and 22% of S enat e candi dat e recei pt s
during m ost o f t he years covered. These d ata also s how an increasing P AC role relative
to other s o u rces through 1988 among Senate candidates, when a h igh o f 22.3% was
reached, and through 1990 among House candidates, when a h igh o f 40.4% of funds came
from P ACs. After t hose elections, however, t he data show a notable decline followed b y
a l eveling off in the rel ative P AC role in House elections, and a decline i n t he nex t three
Senate elections, followed b y an i ncrease and then rather constant levels since 1996.
Table 3 documents the P AC proliferation s ince the 1970s, i ndicating b y category
t h e num ber o f P AC s regi s t ered at t he end o f each t w o-year peri od. The d at a fal l i nt o s i x
categories d evised by the FEC in 1977: corporat e; labor; t rade, m embership, and h ealth;
nonconnect ed; cooperatives ; and corporations wi t hout capital stock. (The latter two,
representing only a small s hare of contri butions, are combined here.) From 1974 to 2002,
the number o f registered P ACs rose from 608 to 4,027, reaching a high of 4,268 in 1988,
followed b y a general l eveling o ff. W h ile labor’s 201 PACs in 1974 made up one-third
of all P ACs, their 320 P ACs in 2002 accounted for j ust 8 % o f t he total. By contrast, t he

89 corporat e P AC s i n 1974 grew to a high of 1,816 in 1988—a more than 1,900%

rise—and today constitute 38% of all P ACs. The m ostly ideologi cal, nonconnected PACs
grew from 162 in 1978 (the first year the FEC used this category) to a h igh o f 1,145 in

1992; today 26% of PACs are nonconn ected. The fourth major grouping—trade,

membership, and health—grew from 318 in 1974 to a h igh o f 975 in 2002.
Table 3 a l s o p rovides i nformation o n t he aggregat e l evel of cont ri but i ons t o
congressi onal candi dat es for each of t h e FEC cat egori es o f P AC s. The dol l ar fi gures
amplify s ome o f t he trends shown b y t he other d ata i n t his t able. The $3.6 million given
by labor PACs in 1972 constituted 42% of all P AC co n t r i b u t ions that year; t he $51.9
million from l abor PACs in 2002 accounted for j ust 20% of all P AC contributions. S ome
34% of 2002 contri butions were from corporate P AC s —$91.6 million—making i t t he
largest financial category among the s ix FEC groupings. The s econd hi gh e s t l e v el of
c o n t ributions in 2002 was from t he largely business-oriented trade, membership, and
h eal t h P ACs, whose $71.5 million m ade up 27% of all P AC donations. The f o u r t h
category—nonconnected P ACs—accounts for th e s mallest share o f contributions among
the m ajor groupings—$44.6 million i n 2002—although i t i s t he second most numerous
cat egory. These P AC s t yp i cal l y gi ve l ess i n cont ri but i ons t h an t h e o t h ers b ecause a l arge
portion o f t heir receipts are spent o n t heir substanti a l operating costs (often involving
ex pensive d irect-mail fundraising).

Table 2. PAC Contributions as a Percentage of Congressional C andidate Receipts: 1972-2002a
(millions of current dollars)
House Senate H ouse and Senate combined
r Ca nd id a t e Party coord. PAC b %givenbyc Ca nd id a t e Party coord. PAC b %givenc Ca nd id a t e Party coord. PAC b %givenc
receipts exp e nd itur e s c o nt r i b ut i o ns PACs receipts exp e nd itur e s c o nt r i b ut i o ns by PACs receipts exp e nd itur e s c o nt r i b ut i o ns by PACs
$38.9 n.a. $5.4 0 .1% $23.3 n.a. $2.8 0 .1% $62.2 d n.a. $8.5 0 .1%
$45.7 n.a. $7.8 17.1% $28.2 n.a. $3.1 11.0% $73.9d n.a. $11.6 15.7%
$65.7 $0.3 $14.7 22.3% $39.1 $0.1 $5.8 14.8% $104.8 $0.4 $20.5 19.5%
255$92.2 $1.6 $22.9 24.4% $66.0 $3.2 $8.9 12.9% $158.2 $4.8 $31.8 19.5%$124.6 $2.7 $36.0 28.3% $76.9 $6.7 $15.9 19.0% $201.6 $9.4 $51.9 24.6%
$183.9 $6.3 $57.9 30.4% $116.0 $11.1 $21.8 17.2% $299.9 $17.4 $79.7 25.1%
iki/CRS-98-$196.1 $8.1 $72.9 35.7% $147.5 $11.2 $27.9 17.6% $343.6 $19.3 $100.8 27.8%
g/w$228.4 $6.2 $85.2 36.3% $192.0 $16.8 $44.6 21.4% $420.3 $23.0 $129.8 29.3%
s.or$242.5 $7.1 $99.1 38.7% $182.6 $16.9 $44.4 22.3% $425.1 $24.0 $143.5 32.0%
leak$249.5 $6.3 $103.4 40.4% $178.2 $12.9 $40.8 21.4% $427.7 $19.2 $144.2 32.3%
://wiki$319.1 $2.8 $118.1 36.7% $189.1 $28.4 $45.2 20.8% $508.2 $31.2 $163.3 30.3%
http$354.8 $16.2 $126.6 34.1% $270.2 $21.5 $43.0 14.7% $625.0 $37.7 $169.6 25.6%
$446.0 $15.0 $150.6 32.7% $222.7 $19.4 $41.9 17.3% $668.7 $34.4 $192.5 27.4%
$425.7 $10.4 $153.5 35.2% $247.2 $18.7 $47.4 17.8% $672.9 $29.1 $200.9 28.6%
$548.0 $ 7.6 $189.9 34.2% $373.9 $16.0 $50.4 12.9% $921.9 $23.5 $240.3 25.4%
$550.3 $ 8.1 $198.5 35.5% $289.2 $11.8 $56.2 18.7% $839.5 $19.9 $254.7 29.6%
: For 1972-1974—Gary C. Jacobson,The P attern of Camp ai gn C o n t r i butions to Candidates for the U.S. House o f Rep resentatives, 1972-78,” in U.S. Congress, House Committee o n House
Ad ministration, An Analysis of the Impact o f the Federa l Election Campaign Act, 1972-1978 . Committee P rint, 96th Cong., 1st sess. (Washington: GP O, 1979), pp. 20, 24; Mich ael J. Malbin,
Of M ountains an d M oleh ills: P ACs, Camp aign s, an d P ublic P o licy, i n P a rt i e s, I n terest Groups, and Ca mpaign Finance Laws (Washington: AEI, 1980), pp. 154-155. For 1976—FEC
Disclosu re Series No . 6 an d 9 , p . 3 an d p . 4 ; For 1978-86 candidate/P AC data an d 1994-96 party d ataFEC p ress releases: Jun. 1979, Jan. 1982, Oct. 1983, Nov. 1985, Mar. 1988, No v. 1995,
an d Apr. 1997; For 1976-92 party d ataFEC p ress releases: Apr. 1980, Jan. 1982, Oct. 1983, No v. 1985, Mar. 1988, Sept. 1989, Oct. 1991, an d Jan . 1994. Fo r 1988-98 candidate an d 1998
party d ataFEC p ress release: Ap r. 1999. For all 2000 dataFEC press release: May 2001. For all 2002 dataFEC press release: Jun. 2003.
an ci al act i vi t y fo r can d i d at es o n t h e gen eral el ect i o n b al l o t o n l y ( co veri n g t h ei r p ri mary an d gen eral el ect i o n s ); p r i mary l o s ers are excl u d ed .
ese figures reflect only contributions to general election candidates and do not match figures in tables 1 o r 3 (excep t for 1972, wh ich only reflects general election candidate activity in all three tables).
t ages d eri ved b y d i vi d i n g P AC co n t ri b u t i o n s b y t h e s u m o f can d i d at e recei p t s an d p art y co o r d i n at ed exp en d i t u res ( t o get a mo re accu rat e measu r e o f relative funding sources, esp ecially the p arties).
e House and Senate data fo r 1972 an d 1974 do not ad d u p to the co mb ined figu res shown h ere, due to discrepancies among the sources consulted.

Table 3. N umber o f PAC s and Total Congressional C andidate Contributions by Type of PAC: 1972-2002 a
(millions of current dollars)
Cooperative &
Co rporate Labor Tr ade, me mbership, andhea lt h Nonconnected corporation w ithout To t a l
Yea r capital stock
No . Co ntr ib . b No . Co ntr ib . b No . c Co ntr i b . b No . Co ntr ib . b No . Co ntr ib . b No . d Co ntr i b .
1972 n. a . $1.7 n. a . $3.6 n. a . $1.0 n. a . $1.5 n. a . $0.7 n.a. $8.5
1974 89 $2.5 201 $6.3 318 $1.9 -- $1.4 -- $0.4 608 $12.5
1976 443 $7.1 224 $8.2 489 $2.9 -- $2.8 -- $1.5 1,146 $22.6
2551978 785 $9.8 217 $10.3 453 $11.3 162 $2.8 3 6 $1.0 1 ,653 $35.2
1980 1,206 $19.2 297 $13.2 576 $15.9 374 $4.9 9 8 $2.0 2 ,551 $55.2
1982 1,469 $27.5 380 $20.3 649 $21.9 723 $10.7 150 $3.2 3 ,371 $83.6
iki/CRS-98-1984 1,682 $35.5 394 $24.8 698 $26.7 1 ,053 $14.5 182 $3.8 4 ,009 $105.3
g/w1986 1,744 $46.2 384 $29.9 745 $32.9 1 ,077 $18.8 207 $4.9 4 ,157 $132.7
leak1988 1,816 $50.4 354 $33.9 786 $38.9 1 ,115 $19.2 197 $5.4 4 ,268 $147.8
1990 1,795 $53.4 346 $33.6 774 $42.5 1 ,062 $14.3 195 $5.8 4 ,172 $149.7
://wiki1992 1,735 $64.1 347 $39.3 770 $51.3 1 ,145 $17.4 198 $6.5 4 ,195 $178.6
http1994 1,660 $64.4 333 $40.7 792 $50.3 980 $17.5 179 $6.7 3 ,954 $179.6
1996 1,642 $71.3 332 $46.6 838 $56.5 1 ,103 $22.5 164 $6.9 4 ,079 $203.9
1998 1,567 $71.1 321 $43.4 821 $59.0 935 $27.1 154 $6.2 3 ,798 $206.8
2000 1,545 $84.2 317 $50.2 860 $68.3 1 ,026 $35.6 159 $7.1 3 ,907 $245.3
2002 1,528 $91.6 320 $51.9 975 $71.5 1 ,055 $44.6 149 $6.5 4 ,027 $266.1
S ources: Nu mb er o f P ACs: U. S . F EC, FEC Semi-Annual PAC Count Shows Increase in 2002 , FEC Reco rd , Mar. 2003. Contributions: Commo n Cau se 1972 an d 1974 vo lumes, an d
Interest Group Gifts to 1976 Congressional Campaigns;” FEC Reports on Financial Activity: Party and Non-Party Political Committees, F i n al Rep o r t s an d p ress rel ease
series fo r 1978-1998. (Finan cial activity fo r 1972-76 was tabulated by Co mmo n Cau se, b ased on different standard s o f categorization fro m those u sed by the FEC.)
a Contributions are for two-year cycle (details may not ad d to total due to rounding), applicab le to candidates running fo r election in that cycle. P AC n umbers are as of Dec. 31 for
al l years.b
Co mmo n Cau se, the source of the 1972-1976 dollar figures, u sed a different method from the FEC to categorize P ACs. For purposes of this tables dollar val u es, Co mmo n C au se’s
business” P ACs are listed as co rporate;labor,” as labor;h eal t h / l awyers, as trade/membership/hea lth; mi sc. an d i d eo l o gi cal , as nonconnected; an d “agri cu l t u re, as
coopera tives. This d istinction for 1972-1976 contributions is emphasized by showing the figu res in italics.c
Nu mb ers include all non-co rporate and non-labor P ACs fo r 1974 an d 1976.d
No t all P ACs reflected in these totals p lay an active role in any given election. In 2002, fo r examp le, only 3 ,093 of the 4 ,027 registered P ACs contributed to federal candidates.