When contributing to congressional campaigns political action committees

In the U.S., a political action committee (PAC) is a political committee that pools campaign contributions from members and donates those funds to campaigns for or against candidates, ballot initiatives, or legislation. PACs are typically formed to represent business, labor, or ideological interests by individuals who wish to privately raise money to donate to a political campaign.

The first PAC was formed in 1944 in order to raise money for the re-election of then-President Franklin D. Roosevelt.

  • In the U.S., a political action committee (PAC) is a political committee that pools campaign contributions from members and donates those funds to campaigns for or against candidates, ballot initiatives, or legislation.
  • Political Action Committees (PACs) are typically formed to represent business, labor, or ideological interests.
  • The first PAC was formed in 1944 in order to raise money for the re-election of then-President Franklin D. Roosevelt.

At the federal level, an organization is considered a PAC when it receives or spends more than $1,000 for the purpose of influencing a federal election.

There are many types of restrictions that guide how PACs are able to fundraise for and donate their contributions to political campaigns and/or causes. They can contribute $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. PACs may receive up to $5,000 from any one individual, PAC, or party committee per calendar year.

A PAC must register with the U.S. Federal Election Committee within 10 days of its formation, and it must provide the name and address for the PAC, its treasurer, and any affiliated organizations. For the purpose of contribution limits, all affiliated PACs are treated as one donor.

PACs are also required to disclose information about all individuals who contribute to them. However, sometimes these names are not disclosed until after the election (when votes have already been cast).

There are many categories of PACs, including separate segregated funds (SSFs), nonconnected committees, Super PACs, and Leadership PACs.

Corporations, labor unions, membership organizations, or trade associations can establish separate segregated funds (SSFs). Once established, these committees can only receive contributions from individuals that are associated with that connected or sponsoring organization.

Unlike SSFs, nonconnected committees are not sponsored by a specific entity or organization. As a result, they can accept contributions from the general public.

Super PACs can receive unlimited contributions from individuals, corporations, labor unions, and other PACs.

A hybid PAC can act as both a PAC and a Super PAC. Hybrid PACs must maintain segregated bank accounts for their unlimited Super PAC activities and their normal PAC fundraising and contributions, which are subject to the same statutory limitations as a regular PAC.

A leadership PAC is a PAC that is established by a candidate or an individual holding federal office. It is common for members of Congress and other political leaders to establish leadership PACs in order to support candidates for various elected offices. Leadership PACs can only contribute up to $5,000 per election to a federal candidate committee.

Super PACs were created in 2010 after the U.S. Court of Appeals' decision in SpeechNow.org v. Federal Election Committee. This decision allowed for a greater level of deregulation as to how political funds are raised and distributed. While Super PAC funds cannot be donated directly to a campaign, Super PAC managers and political candidates are permitted to collaborate and discuss strategy.

Since the inception of Super PACs, they have quickly grown to be a hugely influential force in American politics. In fact, it is estimated that during the 2012 Republican primaries, Super PACs spent more money during the election cycle than the individual candidates' campaigns did. The majority of this money was donated by individuals rather than businesses.

Corporations cannot contribute directly to a campaign; however, a 2010 Supreme Court decision–Citizens United v. Federal Election Committee–made it legal for corporations to support a PAC. The decision overruled the 2002 Campaign Reform Act, which prevented corporations, unions, and other entities from donating money to political campaigns. 

The new laws allow these entities to contribute a limited amount of money to a PAC, which can, in turn, be donated to a campaign. In the case of Super PACs, a corporation can contribute an unlimited amount of money. Even though this money can't be directly given to a campaign, it can be spent to indirectly influence an election.

Order Code 98-255 GOV Updated July 11, 2003 CRS Report for Congress Received through the CRS Web

Political Action Committees: Their Role in


Financing Congressional Elections -name- re dacted- Specialist in American National Government Government and Finance Division

Summary

Political action committees, or PACs, are legal entities through which interest groups raise and spend money in elections. They constitute one of four major sourcesof funds contributed to congressional campaigns, along with individual citizens, politicalparties, and candidates. While PACs proliferated and became an issue in the 1970s and1980s, interest groups have long played a major role in funding American elections.

The term political action committee is colloquial and does not appear in federal law,


and corresponds with two legal expressions—separate segregated fund and political
committee—depending on whether the PAC is affiliated with a sponsoring organization. Of the 4,027 PACs registered with the Federal Election Commission (FEC) at the end of 2002, 74% were separate segregated funds. Such a fund is essentially a bookkeeping arrangement, wherein an organization prohibited by law from making directcampaign donations from its treasury operates a separate entity (using treasury funds) thatseeks voluntary contributions from its “members” for expressly political purposes.Organizations that maintain such funds include labor unions, corporations, trade and

health associations, membership groups (e.g., National Rifle Association and National


Organization for Women), cooperatives (e.g., dairy cooperatives), and corporations
without capital stock (e.g.,some savings and loan or shareholder insurance companies). The remaining 26% of today's PACs are not sponsored by organizations and do not

constitute separate segregated funds. These PACs, referred to as nonconnected by the


FEC, are organized merely by meeting the law’s definition of political committee—agroup that raises or spends $1,000 or more in a year. Unlike separate segregated funds,these PACs are not required to limit fundraising appeals to specified groups of persons;however, the nonconnected PACs must pay their own administrative and fundraisingexpenses out of contributions, not having sponsors to underwrite these costs. For themost part, the nonconnected PACs comprise ideological and single-issue groups.

Congressional Research Service ˜ The Library of Congress


CRS-2
Origin of PACs PACs had their origin in the 1940s, as a response by organized labor to the 1943 War Labor Disputes Act’s prohibition on contributions from union treasuries in connectionwith federal elections [57 Stat. 167]; this ban was made permanent by the 1947 LaborManagement Relations Act [61 Stat. 159]. Unions began to establish separate segregatedfunds to conduct electioneering activities; and, for the next three decades, labor PACsdominated the field of interest group political activities. Corporations, prohibited sincethe 1907 Tillman Act [34 Stat. 864] from making contributions in federal elections, werereluctant to establish PACs, in part because of the relative lack of precedent for suchendeavors and the concomitant absence of conclusive judicial rulings. A number of legislative, judicial, and administrative actions in the early and mid- 1970s helped pave the way for other groups to explore the PAC option by removing legalambiguities and granting statutory authority to unions, corporations, trade associations,and others to set up separate segregated funds. In addition to the elimination of legalbarriers, the growth of PACs was spurred by a perceived decline in the strength ofpolitical parties, by higher contribution limits than those for individuals, and as a responseto increased government regulation and involvement in people's lives and livelihoods.

Contribution Limits


The law provides for different sets of limits for two types of PACs: political
committee and multicandidate committee. The limits for a (basic) political committee are$2,000 per election to a federal candidate, $25,000 per year to a national political partycommittee, and $5,000 per year to another political committee [2 U.S.C. 431(4)]. In theselimits, the law treats a political committee as it does an individual citizen, except thatcommittees are not subject to an aggregate, annual limit on all political contributions. The law allows a political committee to contribute higher amounts by becoming a

multicandidate committee, i.e., being registered with the FEC for at least six months,

receiving contributions from more than 50 persons, and—except for a state partycommittee—contributing to at least five federal candidates [2 U.S.C. 441b(b)]. By soqualifying, as the vast majority of PACs do, a PAC is eligible for limits of $5,000 perelection to a federal candidate (such a PAC may also give $5,000 per year to a politicalcommittee and $15,000 per year to a national party committee).

PAC Statistics

Table 1 shows aggregate PAC data in each election cycle since 1972 in current and constant 2002 dollars: receipts, expenditures, and donations to congressional candidates,which account for the great bulk of federal PAC giving. The gap between expendituresand contributions consists of donations to parties and to state, local, and presidentialraces, to congressional races in other years, nonconnected PACs’ fundraising andadministrative costs (which, for separate segregated funds, are paid for by sponsors), andindependent expenditures. CRS-3 As shown in table 1, PAC expenditures have increased greatly since 1972, from $19.2 million to $656.5 million in 2002—a nearly 700% increase, controlled for inflation.The data also reveal that the PAC explosion of the 1970s and early 1980s reached a highpoint in 1986, after which total PAC expenditures leveled off or even declined in constantdollars. Not until 2000 and again in 2002 did inflation-controlled PAC expendituresincrease again, and notably so. A similar pattern is seen in contributions to congressionalcandidates, which rose from $8.5 million to $266.1 million in current dollars from 1972-2002. Controlled for inflation, this represented a more than 600% increase. Afterreaching the constant dollar high point in 1988, aggregate contributions were relativelylevel until the 2000 and 2002 elections, when significant increases occurred.

Table 1. Financial Activity of PACs: 1972-2002a

(millions of current and constant 2002 dollars)

Adjusted


Adjusted
Contributions in
Year
receipts
expenditures
congressional races Current $ Constant $ Current $ Constant $ Current $ Constant $

1972

n.a. -- $19.2 $82.6 $8.5 $36.6

1974 b

n.a. -- $25.0 $91.2 $12.5 $45.6

1976

$54.0 $170.7 $52.9 $167.3 $22.6 $71.5

1978

$80.0 $220.7 $77.4 $213.6 $35.2 $97.1

1980

$137.7 $300.6 $131.2 $286.4 $55.2 $120.5

1982

$199.5 $371.9 $190.2 $354.6 $83.6 $155.9

1984

$288.7 $499.9 $266.8 $462.0 $105.3 $182.3

1986

$353.4 $580.1 $340.0 $558.1 $132.7 $217.8

1988

$384.6 $584.9 $364.2 $553.8 $147.8 $224.8

1990

$372.1 $512.2 $357.6 $492.2 $149.7 $206.1

1992

$392.8 $503.7 $402.4 $516.0 $178.6 $229.0

1994

$391.8 $475.6 $388.1 $471.1 $179.6 $218.0

1996

$437.4 $501.5 $429.9 $493.0 $203.9 $233.8

1998

$502.6 $554.7 $470.8 $519.6 $206.8 $228.2

2000

$604.9 $632.0 $579.4 $605.3 $245.3 $256.3

2002

$685.3 $685.3 $656.5 $656.5 $266.1 $266.1

Sources: For 1972: Herbert E. Alexander, Financing the 1972 Election (Lexington: D.C. Heath, 1976), pp. 93, 95;


Common Cause, Campaign Finance Monitoring Project, 1972 Federal Campaign Finances: Interest Groups
and Political Parties (Washington, 1974), vol. 1, p. vi. For 1974: [National Information Center on Political
Finance] in “Interest Groups: Bigger Spenders on ’74 Races,” Congressional Quarterly Weekly Reports, vol.
32, Sept. 28, 1974, pp. 2583-2584; Common Cause, Campaign Finance Monitoring Project, 1974
Congressional Campaign Finances: Interest Groups and Political Parties (Washington, 1976), vol. 5, p.xii. For 1976: unpublished FEC data; [Common Cause] in “Interest Group Gifts to 1976 Congressional

Campaigns,” Congressional Quarterly Weekly Reports, vol. 35, Apr. 16, 1977, p. 710. For 1978-2002: U.S.


Federal Election Commission, FEC Reports on Financial Activity: Party and Non-Party Political
Committees, Final Reports and press releases: Apr. 1980, Jan. 1982, Oct. 1983, Nov. 1985, Mar. 1988, Sept.1989, Oct. 1991, Jan. 1994, Nov. 1995, Apr. 1997, Jun. 1999, May 2001, and Mar. 2003. a Data are for full election cycle (election year and previous year), except 1972 contributions data cover the period beginning on April 7, 1972. Contributions reflect only money to candidates running in that election cycle. Constant 2002 dollars, in shaded columns, are based on Consumer Price Index. b Adjusted expenditure for 1974 is estimated based on available data. Table 2 places PAC giving into perspective by showing contributions to congressional candidates in general elections since 1972 as a percentage of campaignreceipts. In order to portray the level of receipts that are wholly or partly under candidates’ control, the table presents two types of data: total receipts reported by CRS-4 candidates and political party coordinated expenditures. The latter is a unique form ofspending that allows parties to spend money on behalf of their candidates with theircooperation, but without any requirement to report the expenditures in candidates’ FECfilings [2 U.S.C. 441a(d)]. Thus, table 2 presents candidate receipts, party coordinatedexpenditures, PAC contributions to candidates, and the percentage of PAC money in totalcandidate receipts. The percentage was calculated by dividing the PAC contributions bythe sum of candidate receipts and party expenditures. The data in table 2 show a consistently greater reliance on PAC money among House candidates than among Senate candidates. PACs accounted for between 30% and40% of House candidate receipts and between 15% and 22% of Senate candidate receiptsduring most of the years covered. These data also show an increasing PAC role relativeto other sources through 1988 among Senate candidates, when a high of 22.3% wasreached, and through 1990 among House candidates, when a high of 40.4% of funds camefrom PACs. After those elections, however, the data show a notable decline followed bya leveling off in the relative PAC role in House elections, and a decline in the next threeSenate elections, followed by an increase and then rather constant levels since 1996. Table 3 documents the PAC proliferation since the 1970s, indicating by category the number of PACs registered at the end of each two-year period. The data fall into sixcategories devised by the FEC in 1977: corporate; labor; trade, membership, and health;nonconnected; cooperatives; and corporations without capital stock. (The latter two,representing only a small share of contributions, are combined here.) From 1974 to 2002,the number of registered PACs rose from 608 to 4,027, reaching a high of 4,268 in 1988,followed by a general leveling off. While labor’s 201 PACs in 1974 made up one-thirdof all PACs, their 320 PACs in 2002 accounted for just 8% of the total. By contrast, the89 corporate PACs in 1974 grew to a high of 1,816 in 1988—a more than 1,900%rise—and today constitute 38% of all PACs. The mostly ideological, nonconnected PACsgrew from 162 in 1978 (the first year the FEC used this category) to a high of 1,145 in1992; today 26% of PACs are nonconnected. The fourth major grouping—trade, membership, and health—grew from 318 in 1974 to a high of 975 in 2002. Table 3 also provides information on the aggregate level of contributions to congressional candidates for each of the FEC categories of PACs. The dollar figuresamplify some of the trends shown by the other data in this table. The $3.6 million givenby labor PACs in 1972 constituted 42% of all PAC contributions that year; the $51.9million from labor PACs in 2002 accounted for just 20% of all PAC contributions. Some34% of 2002 contributions were from corporate PACs—$91.6 million—making it thelargest financial category among the six FEC groupings. The second highest level ofcontributions in 2002 was from the largely business-oriented trade, membership, andhealth PACs, whose $71.5 million made up 27% of all PAC donations. The fourthcategory—nonconnected PACs—accounts for the smallest share of contributions amongthe major groupings—$44.6 million in 2002—although it is the second most numerouscategory. These PACs typically give less in contributions than the others because a largeportion of their receipts are spent on their substantial operating costs (often involvingexpensive direct-mail fundraising). CRS-5
Table 2. PAC Contributions as a Percentage of Congressional Candidate Receipts: 1972-2002a (millions of current dollars)

House


Senate
House and Senate combined
Year Candidate Party coord. PAC % given by Candidate Party coord. PAC % given Candidate Party coord. PAC % given receipts expenditures

contributionsb

PACsc receipts expenditures contributionsb by PACsc receipts expenditures contributionsb by PACsc

1972

$38.9 n.a. $5.4 0.1% $23.3 n.a. $2.8 0.1% $62.2d n.a. $8.5 0.1%

1974

$45.7 n.a. $7.8 17.1% $28.2 n.a. $3.1 11.0% $73.9d n.a. $11.6 15.7%

1976

$65.7 $0.3 $14.7 22.3% $39.1 $0.1 $5.8 14.8% $104.8 $0.4 $20.5 19.5%

1978

$92.2 $1.6 $22.9 24.4% $66.0 $3.2 $8.9 12.9% $158.2 $4.8 $31.8 19.5%

1980

$124.6 $2.7 $36.0 28.3% $76.9 $6.7 $15.9 19.0% $201.6 $9.4 $51.9 24.6%

1982

$183.9 $6.3 $57.9 30.4% $116.0 $11.1 $21.8 17.2% $299.9 $17.4 $79.7 25.1%

1984

$196.1 $8.1 $72.9 35.7% $147.5 $11.2 $27.9 17.6% $343.6 $19.3 $100.8 27.8%

1986

$228.4 $6.2 $85.2 36.3% $192.0 $16.8 $44.6 21.4% $420.3 $23.0 $129.8 29.3%

1988

$242.5 $7.1 $99.1 38.7% $182.6 $16.9 $44.4 22.3% $425.1 $24.0 $143.5 32.0%

1990

$249.5 $6.3 $103.4 40.4% $178.2 $12.9 $40.8 21.4% $427.7 $19.2 $144.2 32.3%

1992

$319.1 $2.8 $118.1 36.7% $189.1 $28.4 $45.2 20.8% $508.2 $31.2 $163.3 30.3%

1994

$354.8 $16.2 $126.6 34.1% $270.2 $21.5 $43.0 14.7% $625.0 $37.7 $169.6 25.6%

1996

$446.0 $15.0 $150.6 32.7% $222.7 $19.4 $41.9 17.3% $668.7 $34.4 $192.5 27.4%

1998

$425.7 $10.4 $153.5 35.2% $247.2 $18.7 $47.4 17.8% $672.9 $29.1 $200.9 28.6%

2000

$548.0 $ 7.6 $189.9 34.2% $373.9 $16.0 $50.4 12.9% $921.9 $23.5 $240.3 25.4%

2002

$550.3 $ 8.1 $198.5 35.5% $289.2 $11.8 $56.2 18.7% $839.5 $19.9 $254.7 29.6%

Sources: For 1972-1974—Gary C. Jacobson, “The Pattern of Campaign Contributions to Candidates for the U.S. House of Representatives, 1972-78,” in U.S. Congress, House Committee on House


Administration, An Analysis of the Impact of the Federal Election Campaign Act, 1972-1978. Committee Print, 96th Cong., 1st sess. (Washington: GPO, 1979), pp. 20, 24; Michael J. Malbin,
“Of Mountains and Molehills: PACs, Campaigns, and Public Policy,” in Parties, Interest Groups, and Campaign Finance Laws (Washington: AEI, 1980), pp. 154-155. For 1976—FECDisclosure Series No. 6 and 9, p. 3 and p. 4; For 1978-86 candidate/PAC data and 1994-96 party data—FEC press releases: Jun. 1979, Jan. 1982, Oct. 1983, Nov. 1985, Mar. 1988, Nov. 1995,and Apr. 1997; For 1976-92 party data—FEC press releases: Apr. 1980, Jan. 1982, Oct. 1983, Nov. 1985, Mar. 1988, Sept. 1989, Oct. 1991, and Jan. 1994. For 1988-98 candidate and 1998 party data—FEC press release: Apr. 1999. For all 2000 data—FEC press release: May 2001. For all 2002 data—FEC press release: Jun. 2003. a Financial activity for candidates on the general election ballot only (covering their primary and general elections); primary losers are excluded.b These figures reflect only contributions to general election candidates and do not match figures in tables 1 or 3 (except for 1972, which only reflects general election candidate activity in all three tables).c Percentages derived by dividing PAC contributions by the sum of candidate receipts and party coordinated expenditures (to get a more accurate measure of relative funding sources, especially the parties).d The House and Senate data for 1972 and 1974 do not add up to the combined figures shown here, due to discrepancies among the sources consulted. CRS-6
Table 3. Number of PACs and Total Congressional Candidate Contributions by Type of PAC: 1972-2002a (millions of current dollars)

Cooperative &


Trade, membership, and
Corporate
Labor
Nonconnected
corporation without
Total
health
Year
capital stock No. Contrib.b No. Contrib.b No.c Contrib.b No. Contrib.b No. Contrib.b No.d Contrib.

1972

n.a.

$1.7

n.a.

$3.6

n.a.

$1.0

n.a.

$1.5

n.a.

$0.7

n.a. $8.5

1974

89

$2.5

201

$6.3

318

$1.9

--

$1.4

--

$0.4

608 $12.5

1976

443

$7.1

224

$8.2

489

$2.9

--

$2.8

--

$1.5

1,146 $22.6

1978

785 $9.8 217 $10.3 453 $11.3 162 $2.8 36 $1.0 1,653 $35.2

1980

1,206 $19.2 297 $13.2 576 $15.9 374 $4.9 98 $2.0 2,551 $55.2

1982

1,469 $27.5 380 $20.3 649 $21.9 723 $10.7 150 $3.2 3,371 $83.6

1984

1,682 $35.5 394 $24.8 698 $26.7 1,053 $14.5 182 $3.8 4,009 $105.3

1986

1,744 $46.2 384 $29.9 745 $32.9 1,077 $18.8 207 $4.9 4,157 $132.7

1988

1,816 $50.4 354 $33.9 786 $38.9 1,115 $19.2 197 $5.4 4,268 $147.8

1990

1,795 $53.4 346 $33.6 774 $42.5 1,062 $14.3 195 $5.8 4,172 $149.7

1992

1,735 $64.1 347 $39.3 770 $51.3 1,145 $17.4 198 $6.5 4,195 $178.6

1994

1,660 $64.4 333 $40.7 792 $50.3 980 $17.5 179 $6.7 3,954 $179.6

1996

1,642 $71.3 332 $46.6 838 $56.5 1,103 $22.5 164 $6.9 4,079 $203.9

1998

1,567 $71.1 321 $43.4 821 $59.0 935 $27.1 154 $6.2 3,798 $206.8

2000

1,545 $84.2 317 $50.2 860 $68.3 1,026 $35.6 159 $7.1 3,907 $245.3

2002

1,528 $91.6 320 $51.9 975 $71.5 1,055 $44.6 149 $6.5 4,027 $266.1

Sources: Number of PACs: U.S. FEC, FEC Semi-Annual PAC Count Shows Increase in 2002, FEC Record, Mar. 2003. Contributions: Common Cause 1972 and 1974 volumes, and


“Interest Group Gifts to 1976 Congressional Campaigns;” FEC Reports on Financial Activity: Party and Non-Party Political Committees, Final Reports and press releaseseries for 1978-1998. (Financial activity for 1972-76 was tabulated by Common Cause, based on different standards of categorization from those used by the FEC.) a Contributions are for two-year cycle (details may not add to total due to rounding), applicable to candidates running for election in that cycle. PAC numbers are as of Dec. 31 for all years. b Common Cause, the source of the 1972-1976 dollar figures, used a different method from the FEC to categorize PACs. For purposes of this table’s dollar values, Common Cause’s

“business” PACs are listed as corporate; “labor,” as labor; “health/ lawyers,” as trade/membership/health; “misc.” and “ideological,” as nonconnected; and “agriculture,” as


cooperatives. This distinction for 1972-1976 contributions is emphasized by showing the figures in italics. c Numbers include all non-corporate and non-labor PACs for 1974 and 1976. d Not all PACs reflected in these totals play an active role in any given election. In 2002, for example, only 3,093 of the 4,027 registered PACs contributed to federal candidates. EveryCRSReport.com The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the Library of Congress, charged with providing the United States Congress non-partisan advice on issues that may come before Congress. EveryCRSReport.com republishes CRS reports that are available to al Congressional staff. The reports are not classified, and Members of Congress routinely make individual reports available to the public. Prior to our republication, we redacted names, phone numbers and email addresses of analysts who produced the reports. We also added this page to the report. We have not intentional y made any other changes to any report published on EveryCRSReport.com. CRS reports, as a work of the United States government, are not subject to copyright protection in the United States. Any CRS report may be reproduced and distributed in its entirety without permission from CRS. However, as a CRS report may include copyrighted images or material from a third party, you may need to obtain permission of the copyright holder if you wish to copy or otherwise use copyrighted material. Information in a CRS report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to members of Congress in connection with CRS' institutional role. EveryCRSReport.com is not a government website and is not affiliated with CRS. We do not claim copyright on any CRS report we have republished.