Keep Out: How State Campaign Finance Laws Erect Barriers to Entry for Political Entrepreneurs
Keep Out:
How State Campaign Finance Laws Erect Barriers to Entry for Political Entrepreneurs
By Jeffrey Milyo, Ph.D.
September 2010
Such political entrepreneurs bring vibrancy to American democracy and keep the political establishment on its toes, much as economic entrepreneurs drive innovation and change in the marketplace.
Yet campaign finance laws in all 50 states erect barriers to entry for political entrepreneurs, just as occupational licensing laws keep upstarts from competing with established interests.
Milyo shows how contribution limits and campaign finance red tape make it harder for political entrepreneurs to form new groups and bring new voices to political debate, as well as reduce the resources available for political advocacy. The message from political insiders to upstart citizen groups could not be clearer: Keep out!
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Stories of Political Entrepreneurs
• “SpeechNow” Groups Spring Up in Wake of Entrepreneur’s Successful Battle
• Colorado Blogger Wrapped Up in Red Tape
• Political Enthusiasts Silenced by Florida’s Campaign Finance Laws
Newer vs. Older Groups: Average Individual Contributions to Top 527 Organizations [Figure 1]
527 vs. PAC: Percentage of Funds Raised from Large Individual Contributions [Figure 2]
Estimated Additional Funds from Individuals from PACs Absent Contribution Limits [Figure 3]
Table 1: Limits on Individual Contributions to Independent Expenditure Committees
|
Maximum Allowable Contribution |
||
|
Alaska |
$500 |
|
|
Connecticut |
$750 |
|
|
Florida |
$500 |
|
|
Hawaii |
$1,000 |
|
|
Illinois* |
$10,000 |
|
|
Kentucky** |
$1,000 |
|
|
Louisiana |
$100,000 |
Over four years |
|
Maryland |
$4,000 |
Over four years |
|
Massachusetts*** |
$500 |
|
|
New Hampshire |
$5,000 |
|
|
New Jersey |
$7,200 |
|
|
New Mexico |
$5,000 |
|
|
New York |
$150,000 |
Aggregate contributions |
|
Ohio |
$11,395 |
|
|
Oklahoma |
$5,000 |
|
|
Rhode Island |
$1,000 |
|
|
South Carolina |
$3,500 |
|
|
South Dakota |
$10,000 |
|
|
Tennessee |
$66,100 |
Biennial PAC aggregate contributions |
|
Vermont |
$2,000 |
|
|
Washington |
$5,000 |
21 days before election |
|
West Virginia |
$1,000 |
|
|
Wisconsin |
$10,000 |
Annual aggregate contributions to political committee |
|
Wyoming |
$25,000 |
Biennial aggregate contributions |
Source: Author compilation from state government websites on campaign finance disclosure.
* Effective January 1, 2011.
** State election agency recently declared it will not enforce limits.
*** State is in the process of approving new regulations to eliminate limits.
Table 2: Timing and Amount of Itemized Contributions to Top 527 Organizations
|
2003 Contributions |
2004 Contributions |
|||
|
Number |
Average per contribution |
Number |
Average per contribution |
|
|
Panel A: Contributions from all sources |
||||
|
America Coming Together |
23 |
$544,130 |
925 |
$72,736 |
|
Joint Victory Campaign 2004 |
25 |
$317,847 |
323 |
$197,726 |
|
Media Fund |
- |
- |
116 |
$530,338 |
|
Progress for America |
- |
- |
602 |
$74,633 |
|
Swift Vets & POWs for Truth |
- |
- |
18,807 |
$904 |
|
MoveOn.org Voter Fund |
9,364 |
$513 |
3,635 |
$2,134 |
|
College Republicans National Committee |
121,988 |
$37 |
175,395 |
$47 |
|
New Democrat Network |
912 |
$2,962 |
1,565 |
$6,406 |
|
Citizens for a Strong Senate |
- |
- |
84 |
$258,422 |
|
Club for Growth |
1,664 |
$1,800 |
1,436 |
$3,623 |
|
Panel B: Contributions from individuals |
||||
|
America Coming Together |
19 |
$499,211 |
693 |
$47,736 |
|
Joint Victory Campaign 2004 |
24 |
$201,924 |
312 |
$200,250 |
|
Media Fund |
- |
- |
37 |
$175,389 |
|
Progress for America |
- |
- |
570 |
$74,483 |
|
Swift Vets & POWs for Truth |
- |
- |
18,761 |
$895 |
|
MoveOn.org Voter Fund |
9,364 |
$513 |
3,633 |
$2,127 |
|
College Republicans National Committee* |
121,988 |
$37 |
175,386 |
$45 |
|
New Democrat Network |
799 |
$852 |
1,440 |
$4,208 |
|
Citizens for a Strong Senate |
- |
- |
64 |
$304,335 |
|
Club for Growth |
1,657 |
$1,798 |
1,432 |
$3,625 |
Source: Contribution data are from the Center for Public Integrity: http://projects.publicintegrity.org/527/.
*Because of the large number of itemized contributions to the College Republicans National Committee, I have only screened organizational donors from among itemized contributions over $5,000; all smaller donors to this group are assumed to be individuals.
Table 3: America Coming Together, 2003-2004 (individual contributions only)
|
527 Organization |
Political Action Committee |
|||||
|
Size of individual contribution ($) |
Number |
Sum ($) |
Cumulative % of dollars |
Number |
Sum ($) |
Cumulative % of dollars |
|
<200 |
36 |
$1,032 |
0.0 |
n.a. |
$17,788,351 |
53.3 |
|
200-4,999 |
167 |
$229,806 |
0.5 |
35,630 |
$14,228,276 |
95.9 |
|
5,000 |
99 |
$495,000 |
1.7 |
267 |
$1,335,000 |
99.9 |
|
5,001-10,000 |
125 |
$1,152,649 |
4.4 |
4* |
$36,589 |
100 |
|
10,001-99,999 |
198 |
$6,503,610 |
19.7 |
0 |
$0 |
100 |
|
100,000 or more |
87 |
$34,184,000 |
100 |
0 |
$0 |
100 |
|
Total individual contributions |
712 |
$42,566,097 |
>125,290 |
$33,386,667 |
||
*I have not investigated whether amounts contributed above the legal limit were returned to these contributors.
Table 4: MoveOn.org, 2003-2004 (individual contributions only)
|
527 Organization |
Political Action Committee |
|||||||
|
Size of individual contribution ($) |
Number |
Sum ($) |
Cumulative % of dollars |
Number |
Sum ($) |
Cumulative % of dollars |
||
|
<$200 |
7,891 |
$641,789 |
5.1 |
n.a. |
$22,966,505 |
72.8 |
||
|
200-4,999 |
5,034 |
$1,759,486 |
19.2 |
181,012 |
$7,973,895 |
98.1 |
||
|
5,000 |
29 |
$145,000 |
20.3 |
118 |
$590,000 |
99.9 |
||
|
5,001-10,000 |
12 |
$114,500 |
21.2 |
3* |
$22,450 |
100 |
||
|
10,001-99,999 |
17 |
$540,999 |
25.6 |
0 |
$0 |
100 |
||
|
100,000 or more |
14 |
$9,326,442 |
100 |
0 |
$0 |
100 |
||
|
Total individual contributions |
12,997 |
$12,528,216 |
>296,542 |
$31,552,850 |
||||
*I have not investigated whether amounts contributed above the legal limit were returned to these contributors.
Table 5: New Democrat Network, 2003-2004 (individual contributions only)
|
527 Organization |
Political Action Committee |
|||||
|
Size of individual contribution ($) |
Number |
Sum ($) |
Cumulative % of dollars |
Number |
Sum ($) |
Cumulative % of dollars |
|
<200 |
1,431 |
$81,971 |
1.2 |
n.a. |
$831 |
0.7 |
|
200-4,999 |
651 |
$458,212 |
8.0 |
13 |
$20,745 |
18.5 |
|
5,000 |
46 |
$230,000 |
11.4 |
19 |
$95,000 |
100 |
|
5,001-10,000 |
32 |
$315,035 |
16.1 |
0 |
$0 |
100 |
|
10,001-99,999 |
56 |
$1,586,000 |
39.6 |
0 |
$0 |
100 |
|
100,000 or more |
23 |
$4,069,429 |
100 |
0 |
$0 |
100 |
|
Total individual contributions |
2,239 |
$6,740,647 |
>36 |
$116,576 |
||
Table 6: Club for Growth, 2003-2004 (individual contributions only)
|
527 Organization |
Political Action Committee |
|||||
|
Size of individual contribution ($) |
Number |
Sum ($) |
Cumulative % of dollars |
Number |
Sum ($) |
Cumulative % of dollars |
|
<200 |
650 |
$63,392 |
0.8 |
n.a. |
$300,317 |
16.0 |
|
200-4,999 |
2,183 |
$1,370,258 |
17.5 |
1,256 |
$817,750 |
59.5 |
|
5,000 |
97 |
$485,000 |
23.5 |
151 |
$755,000 |
99.6 |
|
5,001-10,000 |
80 |
$736,500 |
32.5 |
1* |
$7,500 |
100 |
|
10,001-99,999 |
58 |
$1,665,490 |
52.9 |
0 |
$0 |
100 |
|
100,000 or more |
21 |
$3,850,000 |
100 |
0 |
$0 |
100 |
|
Total individual contributions |
3,089 |
$8,170,640 |
>2,916 |
$1,880,567 |
||
*I have not investigated whether amounts contributed above the legal limit were returned to these contributors.
Table 7: State Ballot Issue Committees:
Minimum Dollar Thresholds for Selected Disclosure Requirements
|
Itemize Contributions |
||||
|
Register as Committee |
Name and Address |
Employer or Occupation |
Itemize Expenditures |
|
|
Alaska |
500 |
0 |
250 |
0 |
|
Arizona |
500 |
25 |
25 |
0 |
|
Arkansas |
500 |
50 |
- |
100 |
|
California |
1,000 |
100 |
100 |
100 |
|
Colorado |
200 |
20 |
100 |
20 |
|
Florida |
500 |
0 |
100 |
100 |
|
Idaho |
500 |
50 |
- |
25 |
|
Illinois |
3,000 |
150 |
500 |
150 |
|
Maine |
5,000 |
50 |
50 |
100 |
|
Massachusetts |
0 |
50 |
200 |
50 |
|
Michigan |
500 |
0 |
100 |
50 |
|
Mississippi |
200 |
200 |
200 |
200 |
|
Missouri |
500 |
100 |
100 |
100 |
|
Montana |
0 |
35 |
35 |
0 |
|
Nebraska |
5,000 |
250 |
- |
250 |
|
Nevada |
10,000 |
1,000 |
- |
1,000 |
|
North Dakota |
0 |
100 |
- |
100 |
|
Ohio |
0 |
0 |
100 |
25 |
|
Oklahoma |
500 |
50 |
50 |
50 |
|
Oregon |
0 |
100 |
100 |
100 |
|
South Dakota |
500 |
100 |
- |
- |
|
Utah |
50 |
50 |
50 |
50 |
|
Washington |
0/5,000* |
25 |
100 |
50 |
|
Wyoming |
0 |
25 |
- |
0 |
Source: Author compilation from state government websites on campaign finance disclosure.
* The second figure represents threshold for reporting requirements. Full reporting also triggered by single contributor giving more than $500 in aggregate.
Table 8: State Independent Expenditure Committees Funded by Individuals Only:
Minimum Dollar Thresholds for Selected Disclosure Requirements
|
Itemize Contributions |
||||
|
Register as Committee* |
Name and Address |
Employer or Occupation |
Itemize Expenditures |
|
|
Alabama |
1,000 |
100 |
- |
100 |
|
Alaska |
0 |
0 |
50 |
0 |
|
Arizona |
500 |
25 |
25 |
0 |
|
Arkansas |
500 |
50 |
50 |
100 |
|
California |
1,000 |
100 |
100 |
100 |
|
Colorado |
1,000 |
20 |
100 |
20 |
|
Connecticut |
0/1,000 |
50 |
100 |
0 |
|
Delaware |
0 |
100 |
- |
100 |
|
Florida |
500 |
0 |
100 |
0 |
|
Georgia |
25,000 |
100 |
100 |
100 |
|
Hawaii |
1,000 |
100 |
100 |
0 |
|
Idaho |
500 |
50 |
- |
25 |
|
Illinois |
3,000 |
150 |
500 |
150 |
|
Indiana |
100 |
100 |
1,000 |
100 |
|
Iowa |
750 |
25 |
- |
5 |
|
Kansas |
0 |
50 |
150 |
50 |
|
Kentucky |
0/3,000 |
100 |
100 |
25 |
|
Louisiana |
500 |
0 |
- |
0 |
|
Maine |
1,500 |
50 |
50 |
0 |
|
Maryland |
0/1,000 |
51 |
- |
0 |
|
Massachusetts |
0 |
50 |
- |
50 |
|
Michigan |
500 |
0 |
100 |
50 |
|
Minnesota |
100 |
100 |
100 |
0 |
|
Mississippi |
200 |
200 |
200 |
200 |
|
Missouri |
500 |
100 |
100 |
100 |
|
Montana |
0 |
35 |
35 |
0 |
|
Nebraska |
5,000 |
250 |
- |
250 |
|
Nevada |
0 |
100 |
- |
100 |
|
New Hampshire |
500 |
25 |
100 |
0 |
|
New Jersey |
2,100 |
300 |
300 |
0 |
|
New Mexico |
500 |
0 |
250 |
0 |
|
New York |
0/1,000 |
0* |
- |
0* |
|
North Carolina |
0 |
50 |
50 |
0 |
|
North Dakota |
0 |
200 |
5,000 |
200 |
|
Ohio |
100 |
0 |
100 |
0 |
|
Oklahoma |
500 |
50 |
50 |
50 |
|
Oregon |
0/2,000 |
0 |
0 |
100 |
|
Pennsylvania |
250 |
50 |
250 |
0 |
|
Rhode Island |
0/100 |
0 |
100 |
100 |
|
South Carolina*** |
500 |
100 |
- |
0 |
|
South Dakota |
500 |
100 |
- |
- |
|
Tennessee |
250 |
100 |
100 |
100 |
|
Texas |
500 |
50 |
50 |
0 |
|
Utah |
50** |
50 |
50 |
0 |
|
Vermont |
500 |
100 |
- |
0 |
|
Virginia |
200 |
100 |
100 |
0 |
|
Washington |
0/5,000**** |
25 |
100 |
50 |
|
West Virginia |
0 |
0 |
250 |
0 |
|
Wisconsin |
25 |
20 |
100 |
20 |
|
Wyoming |
0 |
25 |
- |
0 |
Source: Author compilation from state government websites on campaign finance disclosure.
* Second figure represents threshold for reporting requirements if different than registration threshold.
** $50 in expenditures or $750 in contributions.
*** On September 13, 2010, a federal district court in South Carolina struck down that state’s statutory definition of “political committee” as unconstitutional. See S.C. Citizens for Life v. Krawcheck, No. 4:06-cv-2773, 2010 U.S. Dist. LEXIS 96187, *35 (D.S.C. Sept. 13, 2010).
**** Full reporting also triggered by single contributor giving more than $500 in aggregate.
