The Top 10 Political Money Terms Everyone Should Know

Welcome to our second #TransparencyTuesday! Today we’re going to start digging into the the mechanics and specifics of our political system. In honor the Executive Committee’s presentation on Campaign Finance last week, let’s cover the basics of money in politics. Here we’ll define, in plain language, some of the most common terms in the ultra complex alphabet soup of political campaign finance.

Want a sneak peek of upcoming topics? Check out my report in the minutes of the last County Committee Executive Committee.

Have topics you’d like to see covered? Let us know on twitter or Facebook with #TransparencyTuesday


Here are the Top 10 Political Money Terms Everyone Should Know. They’re presented in order of utility. So, number 3 will be a lot easier to understand if you know number 2.

*DISCLAIMER: To make our lawyers happy, I must disclose I am not a lawyer and nothing here should be construed as definitive or taken as legal advice. However, it is well researched.

1. Cycle
The time between the end of one election and the the end of the next one. For example, the 2016 Presidential Cycle is the time since Barack Obama was re-elected (in 2012) until the next President is elected in 2016.

It’s in this period that candidates are preparing for the next election (even as currently elected ones work to pass laws and govern the country).

2. PAC (Political Action Committee)
A PAC is nothing more than a political bank account. It’s filled by donations from people and other PACs. The amount each contributor can give is limited by campaign finance law which varies based on Federal, State and local laws.

PAC status is determined solely by raising and spending money for political purposes; such as supporting or opposing candidates, parties or ballot initiatives (referendums).Once a bank account either raises or spends enough money (based on Federal, State or local law), it becomes a PAC and must report who has contributed and what it bought.

Anyone raising or spending enough money is automatically considered a PAC and should file with their local regulator. There are specific types of PACs, with varying limitations, depending on its owners role in the political process including:

Candidate PACs
Political Party PACs
Unauthorized (i.e. some random person or group like yourself) PACs

(Next week we’ll delve into what PACs do, Super PACs, and how to start one)

3. Political Contribution
As the name implies, political contributions are money given by individuals or PACs* to candidates and other PACs. Simple!

Political contributions are capped so that only a certain amount can be given to a candidate or PAC per cycle.

*Contrary to popular belief, corporations may not give to Federal candidates. Only individuals, and PACs which get contributions from individuals, may give. State rules may be different.

However many incorporated entities, have PACs to which their employees or members give. These PACs fight for the interests of the corporation. Banks and Unions do this a lot.

4. In-Kind Contribution
Instead of giving money, people can give other things of value to politicians and PACs. This can be office space, food, a website, a mailing list – whatever it is, the market value of this good/service must be counted towards the individual or PACs contribution limit.

Notably, volunteer time, volunteer commuting costs and homemade items do not count as in-kind contributions.

5. Contribution Limit
The maximum value an individual or PAC may donate to a candidate or PAC. This may in the form of financial contributions or in-kind contributions which must be counted at the market rate.

6. Campaign Expenditure
Money spent by a Candidate Authorized Committee (A PAC specifically for a candidate’s campaign) on winning an election.

7. Independent Expenditure (IEs)
Money spent by an individual or PAC to help a candidate’s campaign without without its knowledge or input.

8. Coordinated Expenditure
Money spent by an individual or PAC to help a candidate’s campaign without with its knowledge or input. This may include sharing strategies, data and resources to amplify the work of the allied spending.

9. Electioneering Communication (Federal Only)
Any broadcast, cable or satellite communication that:

  • Refers to a clearly identified federal candidate;
  • Is publicly distributed by a television station, radio station, cable television system or satellite system for a fee (legally this means can be received by at least 50,000 people);
  • Is distributed within 60 days prior to a general election or 30 days prior to a primary election to federal office.

10. Super PAC
A PAC which makes only Independent Expenditures (see 7). These IEs may include Electioneering Communications (see 9) openly supporting or opposing specific candidates for office.

Before the Supreme Court case Citizens United v. FEC, Corporations and Labor Unions were barred from making, or supporting PACs making, Electioneering Communications. Post Citizens United, they are allowed.

There are no Contribution Limits (see 5) for IEs and therefore for Super PACs.

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