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

 


 
 
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Whether it is the civil rights movement of the 1960s or today’s Tea Party movement, outsiders in American politics have always played a crucial role in challenging the status quo by pushing new ideas to the fore and inspiring newcomers to run for public office.

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!

Download report [PDF]

View charts, tables and sidebar stories below.  These are also available in the pdf download.

 

 




  
Charts

Newer vs. Older Groups: Average Individual Contributions to Top 527 Organizations [Figure 1]

Figure 1: Newer vs. Older Groups

 

527 vs. PAC: Percentage of Funds Raised from Large Individual Contributions [Figure 2]

527 vs. PAC

 

Estimated Additional Funds from Individuals from PACs Absent Contribution Limits [Figure 3]

Estimated Additional Funds from Individuals for PACs Absent Contribution Limits

 


 

Tables

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.


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