Political Action Committee (pac)

In 1907 the issue of political financing was first introduced when the State of Union believed wealthy men were buying their way into the White House. By the 1940’s, new acts and organizations were created in attempts to regulate the amount of money political campaigns were receiving. Groups such as the Political Action Committee (PAC) strictly limited the quantity of money that an individual can directly donate to a running candidate. As a result of the limitation of campaign money, other organizations like the Section 527 Committee and the Super Political Action Committee (Super PAC) were built to supply politicians with more money. Despite each committee having their own separate approach in funding politicians, all of these organizations share similar ideals and have gain inspiration from one another. Due to the differences and similarities the Political Action Committee and Section 527 Committee obtain, one can see how the Super Political Action Committee origins from these two organizations.

During 1940’s the first Political Action Committee group was formed in hopes of raising money for the re-election campaign of Franklin D. Roosevelt. A year prior to the first PAC meeting, the Smith-Connally Act of 1943 was passed, prohibiting unions from funding political campaigns. The act was created as a response to the dominant influence of labor unions election during the Great Depression. As a result of the Smith-Connally Act, the Congress of Industrial Organizations created PACs to provide funds for individual candidates. A PAC is an organization that gives money directly to a running candidate instead of the political party or campaign. These organizations receive unbidden donations funds from union members rather than union treasuries, therefore not disobeying the Smith-Connally Act. The most committee can accept from an individual is 5,000 dollars annually. The PACs also have a limit of how much money can be funded towards candidates, political parties, and other PAC groups. “PACs can give $5,000 to a candidate committee per election (primary, general or special). They can also give up to $15,000 annually to any national party committee, and $5,000 annually to any other PAC ”(OpenSecrets, 2012). These PACs are still used today to fund presidential and political campaigns. However other organizations have been formed subsequently to the creation of PACs. These new committees do not restrain from giving or receiving funds.

The Bipartisan Campaign Reform Act of 2002, banned the use of non federal money also know as “Soft Money” for federal campaigns. “Soft Money” is money donated to the particular candidate to support their political actions. Despite it being a law, organizations like the Section 527 Committee, were exempt from following the Bipartisan Reform Act. These committees are the outcome of an Internal Revenue Services (IRS) loophole. Instead of reporting to Federal Election Commissions, the Section 527 organization informs the Internal Revenue Service due to an outlet they discovered. “These groups are the result of a loophole which was opened more than 25 years ago when the IRS broadened its definition of the types of groups eligible for tax-exempt, non-profit status as political committees” (Willis, 2014). The definition was broader than the FEC’s, allowing groups to gain political committee status under tax law. Both the Section