Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

Prepared for Members and Committees of Congress

Drawing from recent legislative and campaign activities, this report discusses selected campaign
finance policy issues that may receive attention during the 111th Congress. Questions about the
health of the presidential public financing system were especially prominent during the 2008
election cycle. The cycle also witnessed new or expanded techniques for raising and spending
money, such as bundling, joint fundraising committees, and hybrid advertising. Remaining issues
from the 110th Congress, such as electronic filing of Senate campaign finance reports, may also
receive renewed scrutiny. Other issues, such as 527 organizations and the Federal Election
Commission, may also be addressed.
Some of the issues discussed in this report have only recently received substantial attention.
Others have been long-running sources of controversy. All appear likely to remain prominent
policy issues. Whether Congress decides to pursue these or other campaign finance issues,
common questions about the role of money in politics, transparency, and the need for additional
regulation are likely to shape the debate.
This report will be updated throughout the 111th Congress as events warrant.

Introduc tion ..................................................................................................................................... 1
Campaign Finance Activity in the 110th Congress: A Brief Review.........................................1
Emerging Campaign Finance Policy Issues..............................................................................2
Bundling....................................................................................................................... ....... 2
Electronic Filing of Senate Campaign Finance Reports.....................................................3
Federal Election Commission Issues..................................................................................5
Hybrid Advertising..............................................................................................................7
Joint Fundraising Committees............................................................................................8
Public Financing of Presidential Campaigns ...................................................................10
527 Organizations.............................................................................................................12
Overarching Policy Concerns and Concluding Comments.....................................................14
Amounts and Sources of Money.......................................................................................15
Tr ansparency ..................................................................................................................... 15
Scope of Regulation..........................................................................................................16
Table 1. Current Members of the Federal Election Commission....................................................6
Table 2. Individual Contribution Limits for the 2007-2008 Election Cycle....................................9
Table 3. Receipts and Expenditures of 527 Organizations, 2004 and 2008 Election
Cycles ......................................................................................................................... ................ 13
Author Contact Information..........................................................................................................16

This report provides an overview of selected campaign finance policy issues that have received
recent legislative attention, or have otherwise been prominent, and which could receive attention th
during the 111 Congress. Specifically, the report discusses seven issues: (1) bundling; (2)
electronic filing of Senate campaign finance reports; (3) the Federal Election Commission (FEC);
(4) hybrid political advertising; (5) joint fundraising committees; (6) public financing of
presidential campaigns; and (7) 527 organizations. The report includes a brief overview of each
issue followed by a discussion of recent legislation (if any) and policy considerations. Recent
legislative or regulatory activity, developments during the 2008 election cycle, or a combination th
of all those factors suggest that each issue will remain a topic of debate during the 111 Congress.
This report is not intended to provide an exhaustive discussion of each topic. In some cases
(noted throughout the report) other CRS products provide additional detail.
The topics addressed in this report are typically considered separately, suggesting targeted th
legislation if Congress chooses to revisit the issues. However, the 111 Congress could also
consider broad legislation addressing one or more campaign finance issues. However Congress
decides to proceed, the debate will likely be shaped by questions of: (1) amounts and sources of
money; (2) transparency; and (3) scope of regulation. As the final section of this report discusses,
these factors unify the seemingly disparate policy issues discussed in the report and are common
themes in the debate over campaign finance policy.

During the 110th Congress, approximately 50 legislative measures affecting federal campaign 1
finance policy were introduced. Two became law. Most significantly, the Honest Leadership and
Open Government Act (HLOGA; P.L. 110-81) restricted campaign travel aboard private aircraft
and required political committees to report additional information to the FEC about certain th
contributions bundled by lobbyists. In addition, late in the second session of the 110 Congress,
the FEC’s Administrative Fine Program, which had been scheduled to expire, was extended until

2013 (P.L. 110-433).

Other issues received hearings or floor votes but did not become law. These included:
• House passage of legislation affecting campaign payments to candidate families
(H.R. 2630, Schiff); disbursement of campaign funds by non-treasurers (H.R.
3032, Jones (NC)); and funding for certain criminal enforcement of the
Bipartisan Campaign Reform Act (H.R. 3093, the relevant provision was an
amendment sponsored by Representative Pence);
• A Committee on House Administration, Subcommittee on Elections, hearing on 2
automated political telephone calls;
See CRS Report RL34324, Campaign Finance: Legislative Developments and Policy Issues in the 110th Congress,
by R. Sam Garrett.
2 This was an oversight hearing, although various bills on the topic were introduced. See CRS Report RL34361,
Automated Political Telephone Calls ("Robo Calls") in Federal Campaigns: Overview and Policy Options, by R. Sam
Garrett and Kathleen Ann Ruane.

• Senate Rules and Administration Committee hearings on public financing of
congressional campaigns (S. 1285, Durbin); coordinated party expenditures (S.

1091, Corker); electronic filing of Senate campaign finance reports (S. 223,

Feingold); FEC nominations; and automated political telephone calls (S. 2624,
Some of the issues considered during the 110th Congress may be addressed again during the 111th
Congress. Others became prominent during recent election cycles, especially 2008. The following
discussion provides additional detail about selected issues that may continue to be on the
legislative or oversight agenda.
Bundling is a fundraising practice in which an intermediary either receives contributions and
passes them on to a campaign or is credited with soliciting contributions that go directly to a
campaign. Lobbyists often serve as bundlers. Bundling has been prominent in recent years both
because of the additional disclosure required in HLOGA and because of the role bundling played 3
in the 2008 presidential elections.
Bundling opponents contend the practice allows individuals to circumvent the Federal Election 4
Campaign Act (FECA) by delivering larger contributions than they could on their own, even 5
though those contributions are funded by multiple sources. Critics also point to anecdotal
evidence suggesting that some contributions routed through bundlers might have been coerced or 6
come from impermissible sources. Nonetheless, bundling is not prohibited by FECA or FEC
regulations; it is also a common fundraising practice.
At least two bundling issues could face the 111th Congress. First, Congress may wish to monitor
ongoing implementation of the HLOGA bundling provisions. Second, existing requirements are
either easily circumvented or do not cover some common bundling activities, which raises the 7
question of whether additional regulation is needed.
See, for example, Brody Mullins and Ianthe Jeanne Dugan,Mega-Bundlers Up Financing Ante,” Wall Street
Journal, November 5, 2008, p. A4.
4 FECA is 2 U.S.C. § 431 et seq.
5 See, for example, “In Costly Elections Wake, Give us Real Campaign Reform, Santa Fe New Mexican, November
9, 2008, p. B2.
6 See, for example,Baleful Bundlers, New York Times, August 11, 2008, p. A16.
7 The FEC adopted bundling rules on December 18, 2008. The draft rule as adopted by the FEC appears on the agency
website at Those rules cannot be finalized until the Commission
approves an accompanying explanation and justification document. At the December 18 FEC meeting at which the
rules were approved, Chairman Donald McGahn stated that the explanation and justification document could be
considered in January 2009 (audio from that proceeding is available at
20081218_06.mp3). Implementation also requires publication of the rules and the E&J in the Federal Register.

If Congress chooses to revisit bundling policy, two perspectives could be relevant. The first
emphasizes reporting information about bundling. The second emphasizes further regulating
bundling practices.
From the reporting (disclosure) perspective, a key question is whether campaigns should continue
to be permitted to provide information only about bundling by registered lobbyists (or
organizations employing lobbyists). If so, existing requirements could be sufficient, provided that
Congress is satisfied with the reporting criteria established in HLOGA (i.e., disclosure of two or 8
more bundled contributions during a six-month period totaling at least $15,000). On the other
hand, Congress may wish to increase transparency about bundling overall, including by non-
lobbyists. A relatively straightforward way to do so could be to extend the existing disclosure 9th
requirements to cover bundling by anyone, regardless of profession. During the 110 Congress,
S. 2030 (Obama) essentially proposed such an approach; the bill did not advance beyond 10
committee referral.
Even with additional reporting requirements, however, bundling is likely to continue. If Congress
adopted the view that bundling should be discouraged or reduced, additional regulation could be
necessary. For example, limits could be applied to the amount or number of contributions
arranged by a single bundler. Bundling could also be banned altogether. Depending on specifics,
however, a ban could prohibit even basic fundraising involving multiple contributors.
For those who believe that bundling circumvents FECA, additional restrictions or disclosure
requirements could enhance transparency, limit the prevalence of bundling, or both. On the other
hand, those restrictions could increase compliance burdens for the regulated community. Finally,
those who view bundling as an efficient and effective fundraising practice may object to further
Unlike all other federal political committees (except those raising or spending less than $50,000
annually), Senate campaign committees, party committees, and political action committees 11
(PACs) are not required to file campaign finance reports electronically. Senate reports are also
unique because they are filed with the Secretary of the Senate rather than directly with the FEC. th
In the 110 Congress, the Senate Committee on Rules and Administration reported S. 223
(Feingold), which would have extended electronic filing to Senate reports. The bill was never
considered on the Senate floor, despite attempts to bring it up under unanimous consent. Despite th
the lack of success in the 110 Congress, electronic filing remains a widely popular policy
2 U.S.C. § 434(I).
9 An alternative approach could be to strengthen existing restrictions on conduits and earmarked contributions. See 2
U.S.C. § 441a(a)(8). Although those requirements appear to require that bundled contributions count against the
bundlers personal contribution limit, they can be easily avoided by designating bundlers as campaign fundraisers.
10 Four other bills introduced in the 110th CongressH.R. 776 (Meehan), S. 436 (Feingold), H.R. 4294 (Price, NC),
and S. 2412 (Feingold)also contained bundling provisions. Many of these provisions were eventually enacted in
HLOGA (after some of the four bills cited above had been drafted and introduced).
11 11 C.F.R. §104.18(a).

Two major policy questions surround electronic filling. Both are straightforward. First, should
Senate campaign finance reports be filed electronically? Second, if so, where should those reports
be filed?
The primary arguments in favor of electronic filing concern efficiency and expense. Currently, a
contractor converts the paper reports filed with the Secretary into electronic format. The FEC
then makes the reports publicly available on the Internet. The conversion process can take weeks 12
or months at a reported cost of $250,000 annually. As a result, House campaign finance data
filed electronically (and directly with the FEC) are routinely available well before Senate data.
Various Members of Congress, campaign finance groups, and media organizations have
supported electronic filing. Both the FEC and the Secretary of the Senate have stated publicly that 13
their offices are, or can be, prepared to administer electronic filing.
Electronic filing could eliminate the conversion process and make public disclosure of the data
much faster. Electronic filing could, therefore, improve transparency and reduce costs. Requiring
electronic filing of Senate reports would also place the same filing responsibilities on Senate
committees that currently exist for House candidate committees, party committees, and PACs. As
a result, uniform filing standards would apply to all political committees.
There is little, if any, notable opposition to electronic filing itself. However, some Members have
called for addressing other campaign finance disclosure issues alongside electronic filing. For th
example, attempts in the 110 Congress to bring up S. 223 were unsuccessful amid a dispute over
whether the bill would be amended to require groups filing ethics complaints to disclose their 14
donors. Similarly, at a March 2007 Senate Rules and Administration Committee hearing on S.
223, Senator Stevens emphasized the need to also consider disclosure requirements for 527
Filing location has been a secondary issue of debate. Senate reports are currently filed with the
Secretary of the Senate rather than with the FEC. Bypassing filing with the Secretary of the
Senate could make reports more readily accessible to the public and could reduce delay or costs
associated with transmitting the reports to the FEC. If campaign finance reports are considered th
Senate documents, however, some may object to their being filed with the FEC. During the 110
Congress, Senator Feinstein reported at a markup of S. 223 that Senator Byrd raised concerns
about the possibility of filing directly with the FEC because he viewed filing with the Secretary as 15
a matter of Senate prerogative.
Statement of Sen. Dianne Feinstein inSenate Rules and Administration Committee Holds Markup of S 223, the
Senate Campaign Disclosure Parity Act,” Congressional Quarterly congressional transcript, Mar. 28, 2007, p. 1. See
also Dan Morain, “Senators move donor disclosures at a snail’s pace,” Los Angeles Times, Feb. 3, 2007, p. A12.
13Senate Rules and Administration Committee Holds Hearing on Campaign Finance Disclosure,” CQ transcript,
March 14, 2007.
14 For example, see the exchange between Senators Ensign and Feinstein at “Unanimous Consent RequestS. 223.
Remarks in the Senate. Congressional Record, daily edition, vol. 153 (September 24, 2007), p. 11997.
15 See the exchange between Senators Feinstein and Stevens, during which Senator Byrd’s position was referenced, in
“Senate Rules and Administration Committee Holds Markup of S. 223, the Senate Campaign Disclosure Parity Act,”
CQ transcript, March 28, 2008, at
congressional/110/congressionaltranscripts110-00 00 02 48 25 80 .h tml@co mmittees&metapub=CQ-

The 1974 FECA amendments established the FEC, which enforces civil compliance with 16
campaign finance law. The Commission also facilitates disclosure of federal campaign finance 17
data and administers the presidential public financing program. Six presidentially appointed 18
Commissioners lead the agency; the Senate may confirm or reject nominations to the FEC.
The 110th Congress enacted one bill affecting the agency’s functioning. P.L. 110-433, which
President George W. Bush signed in October 2008, extended authority for the FEC’s
Administrative Fine Program (AFP) until 2013. (The program had been set to expire at the end of
2008.) The AFP sets standard penalties for routine financial-reporting violations and requires
fewer resources than the Commission’s full enforcement process.
The most immediate issues facing FEC operations concern funding. The Commission is currently
operating under a continuing resolution, which has the effect of freezing agency funding at the 19
$59.2 million appropriated for FY2008. Steven T. Walther, the agency’s incoming (2009)
chairman, has expressed concern that maintaining existing funding levels inhibit the
Commission’s ability to pay approximately $1.9 million in staff salary increases a $900,000 rent
increase. Walther recently noted that, as a consequence, the Commission cannot expand its 20
services and will constrict some others. An appropriation of $63.6 million, which would
presumably address the FEC’s current financial constraints, was recommended in the President’s
budget for FY2009; the House and Senate Appropriations Committees also recommended that
Beyond appropriations, Congress could choose to undertake legislative or oversight action related th
to the agency. The Senate may also be asked to consider FEC nominations during the 111
Congress. Perhaps the most fundamental policy question surrounding the FEC is the status of the
agency itself. Questions about the Commission’s structure and effectiveness (particularly 21th
regarding enforcement) have long been a topic of debate. In the 110 Congress, for example,
two similar bills (H.R. 421 (Meehan) and S. 478 (McCain)) would have replaced the FEC with a 22
proposed Federal Election Administration (FEA). Major provisions of those bills would have
established a three-member governing body with enhanced enforcement powers. Neither bill
For the 1974 amendments, see P.L. 93-443; 88 Stat. 1263.
17 The Treasury Department and IRS also have administrative responsibilities for presidential public financing.
18 No more than three of the six commissioners may be affiliated with the same political party. See 2 U.S.C. §
19 For additional discussion, see the FEC portion of CRS Report RL34523, Financial Services and General
Government (FSGG): FY2009 Appropriations, by Garrett Hatch.
20 Steven T. Walther, “Message From the Chairman, Federal Election Commission Record, vol. 35, no. 1 (January
2009), p. 1. See especially p. 13 of the article.
21 See, for example, Meredith McGehee and Susan Gershon, “Lets Scratch Out the FEC, Legal Times (July 21, 2008),
p. 52. For an FEC perspective on its enforcement activities, see Federal Election Commission, Federal Election
Commission Annual Report 2006, June 30, 2007, at This is the most recent publicly
available version of the annual report.
22 Some public financing bills also propose to revamp certain aspects of the FEC. See CRS Report RL34534, Public
Financing of Presidential Campaigns: Overview and Analysis, by R. Sam Garrett, for additional discussion.

advanced beyond committee referral. Similar proposals may reemerge during the 111th Congress.
Nonetheless, FEC reform has not been the subject of sustained legislative activity during recent
Other FEC issues would not necessarily warrant legislative action, but could be relevant for
oversight or appropriations matters. In particular, Congress may wish to monitor the agency as
the FEC continues to recover from a six-month loss of its policymaking quorum. Between
January and June 2008, only two Commissioners remained in office due to a nominations 23
dispute. As a result, the Commission was unable to approve (among other things) agency rules
and enforcement actions. Additional nominees were confirmed in June 2008, bringing the agency
back to full policymaking strength. The Commission continues to work through a backlog of 24
enforcement cases. The FEC has announced that it will hold a January 2009 hearing on various 25
issues related to its operations, including enforcement. Several rulemakings also remain
pending. In particular, the Commission has yet to finalize the HLOGA bundling and travel
Finally, nominations to the FEC, subject to Senate advice and consent, are possible during the th
111 Congress. In April 2009, the terms of two Commissioners will expire. The term of a third
Commissioner has already expired. However, as discussed below, this does not necessarily mean
that additional nominations will occur.
As Table 1 shows, the term26 of Commissioner Ellen Weintraub expired in 2007.27 She remains at
the agency in holdover status. The terms of Commissioners Donald McGahn and Steven Walther
will expire on April 30, 2009. The President may make additional nominations to fill these seats
or the incumbents may remain in office in holdover status. A Commissioner may remain in office
after the expiration of his or term unless or until: (1) the President nominates, and the Senate
confirms, a replacement; or (2) the President, as conditions permit, makes a recess appointment to 28
the position.
Table 1. Current Members of the Federal Election Commission
Commissioner Term Expires Date Confirmed Party Affiliation
Cynthia L. Bauerly 04/30/2011 06/24/2008 Democrat
Caroline C. Hunter 04/30/2013 06/24/2008 Republican
Donald F. McGahn 04/30/2009 06/24/2008 Republican
Matthew S. Petersen 04/30/2011 06/24/2008 Republican
Steven T. Walther 04/30/2009 06/24/2008 Democrat
For additional discussion, see CRS Report RS22780, The Federal Election Commission (FEC) With Fewer than
Four Members: Overview of Policy Implications, by R. Sam Garrett.
24 See, for example, Kenneth P. Doyle, “FEC Drops Presidential Campaign Cases Amid Deep Backlog of Enforcement
Matters,” Daily Report for Executives, December 8, 2008, p. A8.
25 Federal Election Commission, “Agency Procedures,” 73 Federal Register 74494, December 8, 2008.
26 Commissioners may serve only a single six-year term. See 2 U.S.C. § 437c(2)(A).
27 CRS analyst Henry Hogue provided consultations on this section.
28 For additional discussion of recess-appointment powers, see CRS Report RL33009, Recess Appointments: A Legal
Overview, by T. J. Halstead.

Commissioner Term Expires Date Confirmed Party Affiliation
Ellen L. Weintraub 04/30/2007 (remains in 03/12/2003 Democrat
holdover status)
Source: Legislative Information System nominations database. CRS added party affiliation based on various
media accounts.
Hybrid advertising references a clearly identified candidate and makes generic references to other 29
candidates of a political party (e.g., “John Doe and our Democratic team”). Hybrid ads are of
potential legislative concern because of a cost-sharing practice associated with the ads. With
traditional advertising, the sponsoring entity typically covers all costs. With hybrid advertising,
the party and the candidate’s campaign committee share costs. An FEC rulemaking on the issue 30
has been open since May 2007.
The controversy over hybrid advertising concerns whether the method of paying for those
advertisements undermines FECA. Those calling for additional regulation of hybrid ads have
suggested that cost-sharing represents a “loophole” that permits parties to improperly subsidize 31
campaign spending. This is particularly noteworthy for publicly financed presidential
campaigns, which must agree to limit their spending as a condition of receiving public funds.
Cost-sharing might also be viewed as way of circumventing limits on coordinated party 32
expenditures. Those who object to current cost-sharing practices allege that shared costs
primarily benefit only the named candidate yet allow that candidate’s campaign committee to pay
for only a portion (e.g., 50%) of the advertising. Some groups have urged the FEC to adopt 33
regulations attributing 100% of the cost to the named candidate.
If Congress determines that additional regulation of hybrid advertising is necessary, it could wait
for the FEC’s ongoing rulemaking to proceed. However, it is unclear if or when the agency will
issue new rules. Alternatively, Congress could legislate particular cost-sharing requirements.
Doing so could close the arguable loophole surrounding hybrid ads, but would also involve 34
legislating in a technical area more typically left to the FEC.
The John Doe example appears in Myles Martin, “Hearing on Proposed Rules on Hybrid Ads, Federal Election
Commission Record, vol. 33, no. 9 (September 2007), p. 3.
30 Federal Election Commission, “Hybrid Communications,” 72 Federal Register 26569, May 10, 2007.
31 Brennan Center et al., “Statement of Reform Groups Announcing Government Integrity Reform Agenda for the 111th
Congress,” press release, November 6, 2008, at mocrac Type=B_P R&SEC={91FCB139-CC82-4DDD-AE4E-
32 Through coordinated expenditures, parties may (notwithstanding other provisions in the law regulating contributions
to campaigns) buy goods or services on behalf of a campaign, subject to limits. For additional discussion, see CRS
Report RS22644, Coordinated Party Expenditures in Federal Elections: An Overview, by R. Sam Garrett and L. Paige
33 Campaign Legal Center and Democracy 21, comments on NPRM 2007-10, submitted to the Federal Election
Commission, June 11, 2007, at
34 See, for example, Bob Bauer,Hybrid Ads and Public Financing Reform,” moresoftmoneyhardlaw blog posting at

Congress could also choose to make no changes if it determines that hybrid ads do not circumvent
FECA or that additional regulation is unnecessary. Those opposed to additional restrictions
suggest that existing FEC regulations provide sufficient guidance on various cost-sharing
arrangements, including hybrid advertising. Additional restrictions, including legislation, could
also minimize parties’ flexibility to allocate costs according to individual circumstances. That
flexibility was a central concern for various party representatives who testified at a July 2007 35
FEC hearing. Finally, cost-sharing associated with hybrid ads could also be viewed as the
continuation of a long tradition of various contacts between parties and campaigns during 36
campaigns. Therefore, some may fear that additional restrictions on hybrid advertising could
threaten the relationship between parties and candidates.
Joint fundraising committees were particularly active in the 2008 presidential race, but also 37
supported House and Senate contests. Joint committees are of potential legislative concern
because some observers contend that they facilitate large contributions that would otherwise be
impermissible under FECA.
FECA limits contributions from individuals as shown in Table 2. In 2007-2008, individuals could
contribute no more than $4,600 to a candidate campaign ($2,300 for the primary campaign and 38
another $2,300 for the general-election campaign). As shows, individuals could also donate up
to $28,500 annually to national party committees and up to $10,000 annually to state or local
party committees.

(...continued), November
11, 2008.
35 See Federal Election Commission, “Public Hearing on Hybrid Communications,” hearing transcript, July 11, 2007, at; and Myles Martin, “Hearing on Proposed
Rules on Hybrid Ads.” Recent attention to hybrid advertising has focused on broadcast communications. However, the
concept can also be relevant for other forms of communications.
36 See, for example, the comments of David Mason, then Vice Chairman of the FEC, inPublic Hearing on Hybrid
Communications,” pp. 7-11.

37 See, for example, Brody Mullins,Georgia Runoff Exposes Gaps in Campaign Finance Law, Wall Street Journal,
November 19, 2008, p. A3.
38 The text refers to contributions to privately financed candidates. Contributions to publicly financed presidential
candidates (there is no public financing option for congressional campaigns) are limited to $2,300 in the primary
election; additional fundraising for the general election is not permitted. Candidates may also accept additional
contributions for separate legal and accounting funds. See 11 C.F.R. § 9003.3. These funds are known asgeneral
election legal and accounting compliance funds (GELAC). For an overview of GELAC funds see Anthony Corrado,
Public Funding of Presidential Campaigns, in Anthony Corrado, Thomas E. Mann, Daniel R. Ortiz, and Trevor
Potter, eds. The New Campaign Finance Sourcebook (Washington: Brookings Institution Press, 2005), pp. 195-197.
For additional discussion of presidential public financing generally, see CRS Report RL34534, Public Financing of
Presidential Campaigns: Overview and Analysis, by R. Sam Garrett.

Table 2. Individual Contribution Limits for the 2007-2008 Election Cycle
To district, state, To other political
To candidate To national party and local party committees (e.g.,
committees committees committees PACs) Special Limits
$2,300a $28,500a $10,000 $5,000 per calendar $108,200a aggregate b
per candidate, per per calendar year per calendar year year biennial limit
election (combined limit)
Source: Adapted by CRS from Federal Election Commission, “Contribution Limits 2007-08,” at
a. These contribution limits are adjusted for inflation in odd-numbered years. Adjustments for the 2010
election cycle are expected to be released in early 2009.
b. Of the $108,200 aggregate, no more than $42,700 may be contributed to candidate committees. No more
than $65,500 may be contributed to PACs and parties.
During the 2008 cycle, joint fundraising committees affiliated with the Democratic and
Republican presidential campaigns collected contributions that exceeded the limits discussed
above. In some cases, the committees (often called “victory funds”) reportedly received 39
contributions of $70,000 or more from a single source. Joint committees then distributed those
contributions, in permissible amounts (i.e., consistent with the individual contribution limits), to
other political committees. Recipients included each party’s presidential campaign, their legal and
accounting compliance committees, national party committees, and party committees in targeted
As Congress considers whether or how to restrict joint fundraising committees, a key question is
whether the House and Senate believe joint committees circumvent FECA. Some joint
committees represent an “extra” way to support candidates above the individual contribution th
limits. A coalition of interest groups has urged the 111 Congress to ban joint fundraising 40
If Congress chooses to restrict joint committees, at least four options exist.41 First, joint
committees could be prohibited. Second, candidate participation in joint fundraising could be
restricted. Third, Congress could restrict joint committees’ abilities to transfer funds to other 42
recipients. Fourth, FECA or FEC regulations on coordination could be amended to encompass
See Matthew S.L. Cate, “Multiple pots let political donors give big, Arkansas Democrat Gazette, October 26, 2008,
p. 1; Karen E. Crummy, “Campaign Loophole, Denver Post, October 24, 2008, p. A1; and Elizabeth Holmes, “New
McCain Fund Gets Around Donation Limits,”Washington Wire Blog, Wall Street Journal online, April 12, 2008, at; and Matthew Most,
McCain Able to Skirt Limits of Federal Financing, Washington Post, September 17, 2008, p. A4. Large contributions
also appear in publicly available disclosure reports filed with the FEC.
40 Seven groups issued a November 2008 statement containing a shared agenda for the 111th Congress. See Brennan
Center et al., “Statement of Reform Groups Announcing Government Integrity Reform Agenda for the 111th
41 Some of the options discussed here have been proposed byreform campaign finance groups. See, for example,
David Arkush and Craig Holman, Campaign Finance ‘Reformers’ Open the Floodgates,” Roll Call, June 5, 2008, at
42 This approach could be accomplished either by restricting transfers outright, or by amending relevant law or FEC

joint fundraising. If joint fundraising committees were prohibited or restricted, those who wanted
to support more than one political committee would have to contribute directly to those
committees, within the limits established in FECA. Applying the coordination restrictions to joint
committees could limit the amount of permissible transfers among committees. Any of these
options could make it more difficult for individuals to make contributions to a single source in the
hopes of benefitting multiple recipients.
Conversely, Congress could choose to maintain the status quo if it determines that joint
committees do not violate the spirit of FECA. In turn, this conclusion depends on whether one
believes that joint committees are a backdoor method of supporting individual candidates or
whether joint committees support a variety of party-building activities, as existing FECA
provisions and FEC regulations appear to assume. Some also contend that joint committees
represent an efficient way to funnel large aggregate contributions, in permissible amounts, to
targeted states and political committees. No legislative action is necessary to maintain the status

Perhaps the most prominent campaign finance issue during the 2008 election cycle was the status 44
of the presidential public financing system. Even before the 2008 campaigns began in earnest,
the cycle was widely perceived as the last in which the current public financing system could
survive without major reform. The program suffers from low taxpayer participation, resulting in 45
funding shortfalls during recent elections. As the program’s financial resources and public
participation generally declined in recent elections, so did participation by major candidates.
In 2008, eight candidates received PECF matching funds during the primaries. Senator McCain,
the Republican nominee, received public funds during the general-election campaign. Senator
Obama, the Democratic nominee, became the first major-party nominee since the program’s
inception to completely decline public funds. Some observers have suggested that Senator
Obama’s decision to opt out of public financing, combined with the other challenges discussed
above, marks the death knell of the program. Others contend that the public financing program
can work well again if reformed.

regulations concerning coordinated expenditures. Coordinated party expenditures are subject to limits based on office
sought, state, and voting-age population (VAP). Exact amounts are determined by formula. (See 2 U.S.C. §
441a(d)(3).) For additional discussion, see CRS Report RS22644, Coordinated Party Expenditures in Federal
Elections: An Overview, by R. Sam Garrett and L. Paige Whitaker.
43 For a detailed discussion of the presidential public financing program, see CRS Report RL34534, Public Financing
of Presidential Campaigns: Overview and Analysis, by R. Sam Garrett. Some of the material in this section is adapted
from that report.
44 On the related topic of proposed public financing for congressional campaigns, see CRS Report RL33814, Public
Financing of Congressional Campaigns: Overview and Analysis, by R. Sam Garrett.
45 The Presidential Election Campaign Fund (PECF) is funded solely by voluntarycheckoff designations on
individual income tax returns.

Until the 2000 election, the public financing program was the major funding source in
presidential campaigns, particularly for the general election. Nonetheless, as noted above, public
financing has become less appealing to candidates in recent elections. Other developments, such
as joint fundraising committees allegedly threaten the program’s intended emphasis on limiting
private fundraising in exchange for public funds.
Maintaining the status quo would leave the public financing program unchanged. If that approach
is taken, however, there is widespread agreement that the most competitive candidates will
continue to forego public funds. As a result, the program could be in danger of providing funding
only for those candidates with a limited chance of success.
As the preceding discussion suggests, a fundamental policy question is what role—if any—
Congress wants public financing to play in presidential campaigns. If that role is to be a
prominent one, there is broad agreement that the program needs to be at least partially revamped.
Making the program more attractive to competitive candidates, particularly through increased
spending limits, is a major focus of several reform proposals. Such efforts will not come without 46
costs. An infusion of funds, through an increased checkoff designation, other revenue sources,
increased taxpayer participation, or a combination of all three, would likely be necessary. Public
financing can also be controversial along ideological lines, which suggests that strong political
will and coalition-building will be necessary if changes to the program are to be enacted.
In the aftermath of the 2008 election cycle, the related issue of small contributions has also been a
prominent topic of debate. Although publicly financed general-election candidates must agree to
forgo private fundraising for their campaigns, public financing is designed to supplement small,
private contributions during the primary campaign. Currently, the Presidential Election Campaign
Fund (PECF) provides a 100% match of individual primary contributions up to $250. Providing
additional matching funds have been a major component of recent reform proposals. During the th

110 Congress, four bills (H.R. 776 (Meehan); H.R. 4294 (Price, NC); S. 436 (Feingold), and S.

2412 (Feingold)) that proposed to restructure the PECF would have matched small contributions
at 400% or 500% rather than the current 100%. In addition, the maximum matching contribution
would have been lowered to $200 from the current $250.
Increasing the match rate from the current 100% to 400% or 500% could increase the effect of
small contributions. It could also provide substantially greater resources to publicly financed
candidates. However, this approach assumes that sufficient funds would be available in the PECF
to cover the additional match. In fact, sufficient funds have been unavailable during portions of 47
recent election cycles. Nonetheless, proposals to reform the public financing program typically
include revisions to funding mechanisms.
Congress could also renew the focus on small contributions by permitting publicly financed
campaigns to spend larger (or unlimited) amounts of funds raised through small contributions.
This approach might or might not include matching funds. The effect could be to encourage
candidates to focus their efforts on small contributions, while still providing government
assistance for some campaign needs.
Currently, individual taxpayers may designate $3 to the fund; married couples filing jointly may designate $6.
47 See CRS Report RL34534, Public Financing of Presidential Campaigns: Overview and Analysis, by R. Sam Garrett.

However, focusing on small contributions would not necessarily contain campaign costs (another
program goal), particularly for those candidates who were able to raise and spend virtually
unlimited amounts. In fact, if spending limits were eliminated, public financing could become an
additional, but potentially unnecessary, funding source for those already able to raise substantial
private funds.
Finally, public financing could be repealed. This approach would largely or entirely (depending th
on specifics) eliminate taxpayer funds in presidential campaigns. In the 110 Congress, two bills
(H.R. 72 (Bartlett); H.R. 484 (Doolittle)) would have repealed parts of the program or the entire
program. Neither bill advanced beyond committee referral.
FECA focuses largely on political committees, which include candidate committees, party 48
committees, and PACs. In recent years, so-called “527” organizations have shaped some 49
elections even though they are not typically considered to be political committees. America
Coming Together and Swift Boat Veterans for Truth, for example, were prominent (and
controversial) in 2004.
Much of the concern surrounding 527s has involved the argument that millions of dollars from 50
these organizations affect federal elections without necessarily being regulated by FECA. The
precise nature of 527s’ financial impact is open to debate, as various research organizations and 51
interest groups classify individual groups’ activities differently and rely on different data.
Nonetheless, and despite differing data and interpretations of those data, research has consistently
shown decreased activity among 527s during the 2008 cycle compared with the 2004 cycle. Table

3 displays financial summaries from two prominent sources, CQ MoneyLine (a commercial 52

tracking service) and the Center for Responsive Politics (CRP). Both sources show that 527s’ 53
receipts and expenditures during the 2008 cycle were far below those of the 2004 cycle.
On the definition of political committees, see 2 U.S.C. § 431(4). See also 26 U.S.C. § 9002(9) and 26 U.S.C. §
49 If Congress chooses to revisit 527s, it may also encounter questions related to organizations regulated under Section
501(c) of the IRC. There is some evidence that 501(c)(4) organizations are also becoming active in federal campaigns.
See, for example, Campaign Finance Institute, “Outside Soft Money Groups Approaching $400 Million in Targeted
Spending in 2008 Election,” press release, October 31, 2008, at
prRelease.aspx?ReleaseID=214. See also CRS Report RL33377, Tax-Exempt Organizations: Political Activity
Restrictions and Disclosure Requirements, by Erika Lunder.
50 For additional discussion, see CRS Report RS22895, 527 Groups and Campaign Activity: Analysis Under Campaign
Finance and Tax Laws, by L. Paige Whitaker and Erika Lunder; and CRS Report RL33888, Section 527 Political
Organizations: Background and Issues for Federal Election and Tax Laws, by R. Sam Garrett, Erika Lunder, and L.
Paige Whitaker. Political committees are considered 527s for tax purposes, but not all 527s are considered political
committees for federal-election purposes.
51 For example, differences frequently occur when classifying 527s’ party affiliations, activities related to federal
elections versus non-federal elections, and transfers among different entities.
52 Both are prominent and frequently used sources of campaign finance data. Other sources, however, may offer
different data or interpretation.
53 In interpreting the data, it is important to note that overall fundraising and spending are not necessarily a proxy for
involvement or influence in federal elections. The variance in the data shown in Table 3 also underscore that the
precise nature of 527s’ activities is sometimes unclear.

Table 3. Receipts and Expenditures of 527 Organizations,
2004 and 2008 Election Cycles
Change from 2003-
2003-2004 2007-2008 2004—2007-2008
Receipts for All Groups $683,327,356 $423,272,445 -38.1%
(CQ MoneyLine)
Receipts for All Groups $599,202,432 $450,280,305 -24.9%
Expenditures for All $694,675,254 $381,928,234 -45.0%
Groups (CQ
Expenditures for All $611,723,836 $399,122,933 -34.8%
Groups (CRP)
Sources: Total receipts and expenditure data appear in the CQ MoneyLine database at
pml/ for 2007-2008; and
pml/ for 2003-2004; and the Center for Responsive
Politics at CRS calculated the percent change column.
Notes: The data include non-federal activity. Some transfers are excluded. Data were accessed in December
The 527 issue can be considered from both financial and regulatory perspectives.54 Financially, 55
527s remain a significant force surrounding some targeted races. 527s also continue to
command substantial financial resources overall. Nonetheless, 527s’ decreased financial activity
suggests that the issue might not receive as much policy attention as 527s have in recent years.
Even with decreased financial activity, however, the matter of regulating 527s continues to be
controversial. Indeed, the major policy question surrounding 527s is whether all such 56
organizations should be regulated as political committees under FECA. Thus far, the FEC has
made case-by-case determinations of whether 527s’ activities required them to register as political
committees. Particularly after the 2004 elections, the FEC assessed major fines against some 527s
for failing to register as political committees. However, because fines were not assessed until well
after the election and represented a small portion of the organizations’ operating budgets, some
Litigation has also occurred on the 527 issue. That topic is beyond the scope of this report.
55 See, for example, Campaign Finance Institute, “Outside Soft Money Groups Approaching $400 Million in Targeted
Spending in 2008 Election.
56 For additional discussion, see CRS Report RS22895, 527 Groups and Campaign Activity: Analysis Under Campaign
Finance and Tax Laws, by L. Paige Whitaker and Erika Lunder; and CRS Report RL33888, Section 527 Political
Organizations: Background and Issues for Federal Election and Tax Laws, by R. Sam Garrett, Erika Lunder, and L.
Paige Whitaker. Political committees are considered 527s for tax purposes, but not all 527s are considered political
committees for federal-election purposes.

critics contended that the penalties and current regulation of 527s were insufficient.57 Controversy 58
over FEC enforcement regarding 527s continues today.
Against this backdrop, some have suggested that all 527s should be required to register with the th
FEC as political committees. In the 110 Congress, H.R. 420 (Meehan) and S. 463 (McCain)
would have amended FECA to treat 527s as political committees, with some exceptions.
Requiring 527s to register as political committees would make those organizations subject to
contribution limits and other requirements in FECA, just as all political committees are today.
Those advocating additional regulation of 527s generally suggest that these groups’ activities
clearly influence federal elections and, therefore, should be captured by FECA. Others, however,
contend that placing additional regulations on 527s is unnecessary and could stifle the groups’ 59
political speech.
A record-breaking $5 billion is believed to have been spent during the 2008 federal elections.60
The pace and amount of fundraising in the presidential campaign has been of particular concern 61
to some interest groups and members of the media. The campaigns of just two presidential
candidates, John McCain and Barack Obama, spent a combined $860.3 million during the 2008 62
election cycle. For some, the 2008 figures suggest that the campaign finance system is in need
of significant reform. Others contend that the primary focus should not be on the amount of
money in politics, but on the way in which that money is regulated. For many, existing regulation
is already too cumbersome.
The 2008 election cycle will undoubtedly inform deliberations about how, if at all, to examine th
campaign finance policy during the 111 Congress. Some of the issues discussed in this report are
See, for example, Democracy 21, “Democracy 21 and Campaign Legal Center Statement on FEC Finding that The
Media Fund Illegally Spent Over $50 Million in 2004 Election,” press release, November 19, 2007, at R&SEC={7 24 8831A-87CA-4C2D-B873-
58 See, for example, Kenneth P. Doyle,FEC Set to Consider Rule onBundling; Drops Case Against Chamber 527
Group,” Daily Report for Executives, December 17, 2008, p. A7.
59 For additional discussion, see CRS Report RS22895, 527 Groups and Campaign Activity: Analysis Under Campaign
Finance and Tax Laws, by L. Paige Whitaker and Erika Lunder; and CRS Report RL33888, Section 527 Political
Organizations: Background and Issues for Federal Election and Tax Laws, by R. Sam Garrett, Erika Lunder, and L.
Paige Whitaker. Political committees are considered 527s for tax purposes, but not all 527s are considered political
committees for federal-election purposes.
60 See Center for Responsive Politics, “U.S. Election Will Cost $5.3 Billion, Center for Responsive Politics Predicts,”
press release, October 22, 2008, at; and
Kenneth P. Doyle,Campaign 2008: First $5 Billion Federal Election Campaign Prompts Questions on Possible New
Reforms,” Daily Report for Executives, November 5, 2008, p. C1. Data for the entire cycle are not yet available in
some cases, but the $5 billion figure appears likely to be confirmed. CRS analysis of Center for Responsive Politics
data shows that party committees and candidate committees alone spent approximately $4.5 billion. The CRP data are
available at and
61 See, for example, “Campaign Finance: A victim of President-elect Obama’s Success,Washington Post, December
15, 2008, p. A20.
62 These figures, which reflect November 2008 FEC filings, do not include related spending, such as GELAC funds or
party expenditures. CRS aggregated the $860.3 million figure from candidate summaries on the FEC website at

relatively recent developments that are closely tied to the 2008 elections. Others have been
prominent for several election cycles and have received congressional attention in the past.
All the issues discussed in this report are essentially technical questions about how to regulate a
particular facet of campaigns. Reaching consensus on these points can be difficult. There are,
however, common themes that tend to organize the debate over campaign finance policy. Even
when Members of Congress disagree about particular approaches, these themes can serve as
useful starting points for considering policy options and debate.
Whether the there is “too much” money in American elections is a hotly debated topic. For some,
the billions of dollars involved in federal campaigns signal potential corruption. The “money
chase” of campaigns also allegedly prevents candidates and officeholders from concentrating on 63
serving their constituents. Others counter that fundraising is an important test of a candidate’s
political viability and that the amount of money spent on American elections is far less than the 64
amount spent on consumer goods. It is unlikely that this ideologically charged debate will be
resolved in the foreseeable future.
Even if the debate over amounts money is not resolved, sources of funds could be ripe for
legislation or oversight. The debate over 527s demonstrates that some entities’ financial activities
remain contentious. Similarly, the debate over public financing can be viewed as an attempt to
steer candidates toward lower campaign spending with incentives (or requirements) to limit
private fundraising. Bundling, hybrid advertising, and joint fundraising also raise policy questions 65
about whether these funding sources should be further regulated.
Transparency is typically accomplished through disclosure. Most of that information is then made
publicly available. The details of which activities should be disclosed, and in which amounts, are
sometimes controversial, but disclosure is generally accepted as a hallmark of campaign finance
The debate over electronic filing of Senate campaign finance reports has the most obvious
connections to transparency. For some, the current form of paper filing is wasteful and causes
unnecessary delay in providing information to the public. For others, broader disclosure concerns
should also be addressed if Senate electronic filing is reconsidered. Senate prerogative may also
be a concern.
The “money chase” analogy appears in David B. Magleby and Candice J. Nelson, The Money Chase: Congressional
Campaign Finance Reform (Washington: Brookings Institution Press, 1990).
64 On the latter point, see, for example, George F. Will, “Call Him John the Careless, Washington Post, October 23,
2008, p. A23. On anti-regulatory arguments generally, see John Samples, The Fallacy of Campaign Finance Reform
(Chicago: University of Chicago Press, 2006).
65 Regulating political money may also raise constitutional questions, a topic that is beyond the scope of this report. For
an overview, see CRS Report RL30669, Campaign Finance Regulation Under the First Amendment: Buckley v. Valeo
and Its Supreme Court Progeny, by L. Paige Whitaker.

Other recent issues may also be considered from a transparency perspective. In particular, new th
disclosure requirements related to bundling—enacted in the 110 Congress and potentially th
subject to expansion or revision during the 111 Congress—represent an effort to provide more
information about how some large contributions are raised. On the other hand, those efforts may
cause an additional compliance burden or inhibit some donors from participating (at least as they
otherwise would).
Perhaps the most fundamental questions in campaign finance policy is which behaviors should be
subject to FECA or FEC regulations, and to what extent. As Congress decides how or whether to th
address campaign finance issues in the 111 Congress, these questions are again likely to be at the
forefront of debate. All the policy issues addressed in this report could involve placing new
requirements on members of the regulated community.
Among the issues discussed in this report, debate has essentially focused on whether bundling,
electronic filing, hybrid advertising, joint fundraising, recent developments in presidential public
financing, and 527s undermine various requirements in FECA. More generally, the FEC itself
may be reevaluated if Congress determines that its structure or effectiveness is insufficient for
current needs. If Congress decides to address these or other campaign finance issues, a key
question will be whether they are to be considered alone or jointly. All the issues discussed in this
report could be self-contained. Some of the issues are also interactive. This is particularly true for
presidential campaign financing, which has clear connections to public financing, bundling,
hybrid advertising, and joint fundraising.
R. Sam Garrett
Analyst in American National Government, 7-6443