What Are Political Action Committees (PACs)?
What is a PAC? A political action committee (PAC) is a group of like-minded individuals who band together to achieve a political goal. The law refers to PACs as either, "separate segregated funds” (SSF) and "political committees”; the difference being whether or not these PACs are affiliated with a sponsoring organization. SSF make up approximately 75% of the federally registered PACs since they are "connected” with a parent organization. These PACs are limited to soliciting members in their respective "membership class”. The parent organization is allowed by law to pay for all administrative costs incurred by these PACs.
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The political committees, (the other 25% of PACs) are basically stand-alone PACs and are not affiliated with any organizations. These are usually ideological or single issue PACs that can solicit anyone whenever they want but must pay the cost of the solicitations out of the profits raised.
Federal campaign reform started as early as 1907 when President Theodore Roosevelt signed the Tillman Act into law. This law made it illegal for corporations to contribute directly to the campaigns of federal candidates. Congress extended campaign reform in 1925 through the passage of the Federal Corrupt Practices Act, which continued to prohibit corporate political contributions and required disclosure of receipts and expenditures of federal candidates.
With corporations out of the way, the labor movement took full advantage of their financial power and dominated campaign financing during the 1930's and early 1940's. Through the use of union dues, they were able to make sizeable campaign contributions and thus have an enormous effect on federal elections. Finally in 1943, Congress passed the Smith-Connally Act, which placed the same restrictions on labor as those, which had existed on businesses for more than 36 years. The Taft-Hartley Act of 1947 made permanent the ban on federal political contributions and expenditures from both corporate and union treasuries.
Labor immediately adapted to these new bans by creating the first modern-day political action committee with the formation of the Congress of Industrial Organizations Political Action Committee (CIO-PAC) in 1943. They were separate committees set up to solicit voluntary funds from their members for political purposes. In 1955, with the merger of the American Federation of Labor with the Congress of Industrial Organizations, the Committee on Political Education (COPE) was created and is still one of the largest and more powerful PACs today.
The business community was much slower in following suit. The American Medical Association Political Action Committee, founded in 1961, was the first major business PAC. The National Association of Manufacturers began their PAC in 1963 and the American Dental Association started ADPAC in 1969.
Congress passed the Federal Election Campaign Act (FECA) in 1971, which was specifically aimed at federal election practices. This law not only addressed certain candidate reporting requirements and campaign contribution and expenditure restrictions, but also contained provisions dealing with the establishment of political action committees. Restrictions on the use of both corporate and union treasury funds for federal campaign purposes were outlined in this legislation.
FECA defines a political action committee as any committee, association or organization that accepts contributions or makes expenditures during a calendar year in an aggregate amount exceeding $1,000. A federal PAC must maintain separate bank accounts from the sponsoring organization. A 1971 ruling of the U.S. Supreme Court found the development of political action committees totally within the law if they were properly structured and complied with FECA.
In the aftermath of the Watergate scandal, Congress concluded that more stringent campaign finance laws were in order. So in 1974, amendments to the Federal Election Campaign Act were passed. These amendments put further restrictions on contributions to federal candidates and established the Federal Election Commission (FEC) to enforce the election laws and to monitor federal election activities.
Many anti-PAC proponents claim that these more than 4,000 federally registered political action committees and the nearly 300 state registered PACs here in Maryland, corrupt the system and should be dissolved. As James Madison's theory points out, many interests compete with each other thus producing a balance with the interests regulating each other. PACs are the perfect illustration of this point. All facets of our society are equally represented or have the right to be represented in the PAC arena.
Surely PACs provide organized interests access to these candidates. This access is to allow an organization an opportunity to express their concerns to a lawmaker. It is up to that representative to decide if this is in the common good of his/her constituency.
Along with campaigns, PACs are the most regulated entity in our political system. PACs provide millions of Americans the opportunity to participate in campaigns. The framers of the Constitution wanted a representative form of government that would allow people in the United States the opportunity to participate. PACs encourage participation in this process.