A divided U.S. Supreme Court has again issued an important campaign finance ruling in a tight election year, striking down limits on the overall campaign contributions of individual donors to federal candidates and committees. InMcCutcheon v. FEC, the Court found that federal caps on the aggregate amount of contributions made to candidates, political action committees and party committees during each two-year election cycle were unconstitutional. Chief Justice John Roberts announced the decision, saying the aggregate limits do not act to prevent corruption, which is the rationale the Court traditionally has used to uphold contribution limits. Advocates of federal campaign finance laws and the dissenting members of the Court have warned that the decision will allow donors to funnel large amounts of money to a favored candidate in the absence of the overall limit. The decision does not impact the limits on individual contributions to specific candidates, parties or committees.
The decision increases significantly the amount of money that an individual may contribute in a two-year election cycle to federal candidates, parties and political action committees (PACs). Using the 2013-14 limits, individuals were limited to a total aggregate contribution of $123,200 ($48,600 to all candidates and $74,600 to all PACs and parties combined). Under the McCutcheon ruling, those caps are removed and, in a two-year election period, an individual could contribute as much as $2,433,600 to U.S. House and Senate candidates, $1,194,400 to federal political parties, and additional millions to federal PACs.
The McCutcheon case may lead to a greater proliferation of federal PACs, with millions of dollars flowing through those PACs to candidate committees. However, PAC contributions may not appeal to big donors given that donors typically do not control which candidates receive contributions from PACs. If a donor asks a PAC to direct a contribution to a specific candidate, the earmarking rules require that the contribution count against the donor’s limit of $2,600 per election.
A potentially more useful tool for candidate fundraising is the Joint Fundraising Committee (JFC). A JFC can include candidate committees, political party committees, federal PACs and unregistered organizations such as state party committees. The committees that form a JFC agree how large contributions will be allocated among them, and this requires fairly detailed disclosure to potential donors.
Post-McCutcheon, as an example, all U.S. House candidates from one party running in a state could form a JFC with their party’s congressional campaign committee – in Ohio that would be 17 separate committees. With 16 candidate committees and the congressional campaign committee, a fundraiser before the primary could solicit $115,600 from each individual contributor – allocating $83,200 to the candidate committees ($2,600 for the primary and $2,600 for the general election for each candidate committee) and $32,400 to the congressional campaign committee. Prior to McCutcheon, this JFC contribution would have violated the $48,600 biennial limit on contributions to candidate committees.
This is a simple example of what could be done – candidates may develop much more complicated JFCs that also include multiple PACs and state party committees. Although each candidate committee would not receive any more money than it would have before the McCutcheon ruling, the JFC is a powerful tool for combining fundraising efforts. Those candidates with access to big contributors may use also JFCs as vehicles to support other candidates and PACs. And big contributors might make more of an impact by writing one large check to a JFC instead of sending individual $5,200 checks to each candidate committee.