A political action committee (PAC) is a legal entity created for the purpose of raising MONEY for political purposes. PACs have become a central feature of the American political landscape at both the national and state levels. Tip O’Neil, the legendary Speaker of the House of Representatives, once quipped that “money is the mother’s milk of politics.” If so, then PACs are a major mammary gland, as much of the money for political activities comes through PACs. At the national level, PACs play a relatively larger role in congressional campaigns than in presidential campaigns. This is because the presidential election campaign is partially funded through public funding, a system created by the Federal Election Campaign (FEC) Act of 1974. In congressional campaigns during the 1997–98 campaign cycle, candidates raised a little over $710 million. Of this total, about 30 percent came through PACs (calculations based on FEC figures). The major single source of money is individual contributions, but it should be remembered that almost all individuals also have ties to interest groups, so PAC giving grossly underestimates the monetary influence of interest groups. Interest groups (some of which represent the interests of American corporations) and the PACs that are associated with them have found ways to exert influence in presidential campaigns as well as in congressional campaigns. They can contribute money to candidates during the primary stages of campaigns; they can contribute to political parties and to other PACs that may be supporting or opposing a candidate; and until the passage of a major campaign finance bill in 2002, they could contribute unlimited amounts of money through a soft-money loophole. Soft-money contributions are unlimited donations to the political parties from corporations, labor unions and wealthy individuals. The soft-money loophole was opened by a 1978 Federal Election Commission (FEC) ruling designed to strengthen political parties by allowing them to use unrestricted funds for such activities as voter registration drives and get-out-the-vote efforts. Soft money was used primarily for this purpose throughout most of the 1980s, but by the 1992 election cycle, clever attorneys for the parties determined they could use soft money to pay for massive amounts of television attack ads while remaining within the letter, if not the spirit, of the law. The overwhelming majority of PAC money goes to incumbents. In the 2000 elections, incumbents in the House of Representatives enjoyed more than an 8 to 1 advantage in PAC contributions. In the House, 392 of 399 incumbents won reelection. On the Senate side, incumbents had a 6 to 1 advantage in PAC contributions, and 23 of 28 won reelection. Although victory cannot be attributed solely to money advantages, it certainly helps. In close contests, PACs frequently contribute to both candidates, because no matter who wins, they want access to the officeholder. Thus the contributions serve two separate but related functions. First, they help those who hold views favorable to the group get elected and stay in office. Second, they assure access to the officeholder so that the PAC or associated group can provide information on issues of concern. A number of watchdog groups keep track of all contributions, including those from PACs. These include Common Cause (www.commoncause.org), Political Money- Line (www.tray.com), Open Secrets (www.opensecrets.org), and the Campaign Finance Institute (www.cfinst.org/index. html). All of these groups base their reports on data provided by the Federal Election Campaign Commission (www. fec.gov). PACs have been on the political scene since the 1900s, when federal laws banned contributions directly from CORPORATIONs (contributions banned in 1907) and labor UNIONs (contributions banned in 1943). Union PACs were formed first as a way of offsetting large contributions made by corporate leaders. Union leaders solicited contributions from members and then presented the money to candidates as contributions. Some of the largest contributors are the Teamsters Union and the American Federation of Labor. Business PACs outspend labor PACs by almost 2 to 1. The National Association of Business Political Action Committees (NABPAC), an association of more than 100 special-interest political action committees (PACs) that represent American corporations. Among NABPAC’s leading special-interest givers to congressional campaigns are:
• The National Association of Realtors, one of the largest PAC givers in politics today, which has contributed more than $14 million to congressional candidates since 1985.
• The American Medical Association, another long-time major player in money politics, having given $13.8 million to congressional candidates since 1985.
• Some of the country’s largest defense contractors, who have made their mark in Washington with big-money PAC contributions to congressional candidates since 1985. Among them are Lockheed Martin, which has given $4.5 million since 1985; Northrop Grumman, at $3.4 million; General Electric, at more than $2.4 million; Textron, at $2 million; Boeing, at $1.6 million; United Technologies, at $1.5 million; and AlliedSignal, at $1.2 million.
• Insurance companies and their lobbying groups, which are among the biggest PAC players in Washington. Among them are the National Association of Life Underwriters, which has given $6.9 million in PAC contributions to congressional candidates since 1985; BlueCross/BlueShield Associations, which has given $1.6 million; and the National Association of Independent Insurers, the Professional Insurance Agents and CIGNA Corp, which have given more than $1 million each.
• Oil companies, which have pumped millions of dollars into the Washington influence money system. NABPAC’s biggest oil industry PAC contributors to congressional candidates since 1985 include: Chevron, at more than $1.6 million; AMOCO, at $1.5 million; ARCO, at more than $1.3 million; and Mobil Oil and Occidental Petroleum (OXY USA), both at more than $1 million. • The nation’s top two tobacco manufacturers—RJR Nabisco and Philip Morris—which each contributed more than $3.5 million in PAC contributions to congressional candidates since 1985.
• Telephone companies—both long distance and local Baby Bells—including a number of million-dollar PAC givers. Heading the list is AT&T;, which contributed $7 million to congressional candidates since 1985. Also on the million-dollar list are: GTE, at $2.8 million; Bell- South, at $2.7 million; Pacific Telesis and Sprint, at more than $1.3 million; and US West and SBC Communications, both at more than $1.1 million.
The campaign finance reforms that came in the 1970s following the Watergate scandals encouraged the growth of PACs of all kinds because the reforms banned direct contributions from any group other than PACs. Technically the law says that groups must create a “separate segregated fund,” which cannot have any “membership dues or other money as a condition of EMPLOYMENT or membership or any money obtained through a commercial transaction.” In reality, unions and corporations can exert subtle pressure on executives and members to make contributions. Moreover, an FEC ruling in 1975 allowed sponsoring groups to pay for the PAC’s organizational costs, so corporations can use PROFITs to pay for the expenses involved in raising money for the PAC. Under FEC laws, PACs are limited in what they can collect and what they give in federal elections. Most states also have limits that apply to PACs operating at the state level. At the national level, PACs can collect no more than $5,000 from any individual in a single calendar year. However, multiple members of families or different executives in a corporation are all separate individuals. PACs can contribute up to $5,000 per candidate per election; thus, $10,000 for a primary and general election, with an additional $5,000 if there is a run-off. One way to bypass this limit is to create multiple PACs, and another way is to conduct “independent campaigns” either for or against a candidate. To be independent, the PAC may not coordinate its activities with the candidate. The 2002 campaign finance reform law banning soft money also attempts to place limits on independent-issue ads, but the full impact will not be known until after court challenges of the reforms. The number of PACs has grown dramatically. In 1972, before the reforms, only 113 PACs were registered with the FEC. By 2000 the number hovered around 4,000. This does not count PACs active only at the state level, of which there are thousands more. One estimate is that about 12,000 exist below the federal level. Most PACs are “affiliated” PACs—that is, affiliated with some organized interest group. For example, the AB-PAC (Anheuser-Bush PAC), affiliated with the well-known brewery, raised and contributed about $400,000 to federal candidates in the 2000 election cycle. About 25 percent of PACs are “nonaffiliated”—that is, they have no parent or sponsoring organization but collect money from individuals and contribute it to political candidates. What the individuals have in common is some concern or goal that they support through giving money. One of the most important nonaffiliated PACs is EMILY’s List, which stands for Early Money Is Like Yeast. EMILY raises money for feminist candidates across the nation using a technique called “bundling,” which allows it to evade contribution limits. Donors give $100 to the PAC directly and then give separate checks made out to candidates that the list supports. EMILY uses the PAC contribution to cover internal costs and then bundles the checks made out to candidates together and delivers them. Thus, technically the contributions come from individuals and not the PAC, so the $5,000 per candidate per election limit that normally applies to PACs does not apply to EMILY. Only the $1,000 individual-contribution limits apply (raised to $2,000 following the 2002 elections). This technique makes EMILY, which bundles contributions from about 50,000 members, the number one PAC in the nation, contributing over $10 million in election cycle since 1995–96. “Leadership” PACs are formed by political candidates for several purposes; for example, they may be for the purpose of collecting money to help explore a possible candidacy before the official announcement takes place. Virtually all presidential candidates do this in the years preceding the presidential primaries. Candidates may collect money to contribute to the campaigns of other candidates. Typically members of Congress will make contributions to fellow members or challengers who share their party label to help like-minded people get elected. This practice also furthers incumbents’ own aspirations within Congress as they seek some leadership position that requires the support of fellow members. The well-publicized campaign finance reforms passed in 2002 and aimed at ending soft money could have an impact on PACs. If the ban stands up in a court challenge, much money that went to candidates through the softmoney route will either be lost to the political process or find other ways to reach candidates. One possible route is through PACs that use all existing ways to give money to candidates or independently spend it on their behalf. While reformers aim many complaints at PACs, to the extent that they allow the public to track the collection and contribution of money to candidates and causes, they are a vast improvement over the pre-1974 status quo. In those days a few wealthy people, dubbed “fat cats,” gave large amounts of unreported money to unnamed politicians for unreported purposes. While it is true that the public can never be sure what PAC contributions are buying, at least some limits apply, and the public can find out who is giving how much to whom. Until the public demands complete public financing of campaigns at all levels, PACs are likely to be a fact of life.