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Political action committees (PACs) are groups that raise money from people, companies, and unions to finance political campaigns to elect a candidate or defeat another candidate.
What Exactly Is a PAC?
A political action committee, often known as a PAC, is a non-profit organization that is exempt from paying taxes and solicits monetary donations from people, corporations, and unions to fundraise and collect political contributions. The fundamental objective of a political action committee (PAC) is to work for either the election of one candidate or the ousting of another candidate. PACs were established so political campaigns, ballot initiatives, lobbying efforts, and legislative proposals could be funded.
A Brief History of Political Action Committees in the US
After the US Congress passed a law in 1943 prohibiting unions from making direct contributions to political parties and candidates, the first political action committee (PAC) was founded. As a result of the Federal Election Campaign Act, passed in 1971, this law now governs federal election campaigns. Its purpose was to impose additional laws and restrictions on the amount of money PACs can give to federal elections.
Additional limitations were imposed on PACs by the Bipartisan Campaign Reform Act (BRCA), passed in 2002. In its decision regarding the BCRA, the Supreme Court banned national political party committees from fundraising without federal limits. It also prohibited issue-advocacy advertisements paid for by corporations that named a candidate before an election. Both of these restrictions were put into place because of the BCRA.
In Citizens United v. FEC, which took place in 2010, the Supreme Court invalidated parts of BRCA. The Supreme Court concluded that it would violate the Constitution to restrict the number of money companies and unions are allowed to donate to political campaigns.
The 5 Different Categories of PACs
There are five distinct categories of political action groups, and they are as follows:
SSFs, which stands for separate segregated funds:
Stakeholder strategy funds (SSFs) are political committees businesses may create, labor unions, membership groups, or trade associations. They are only allowed to request donations from individuals who are affiliated in some way with the group that is sponsoring the event.
Committees that are not connected:
Committees not tied to any organizations or unions are free to solicit contributions from members of the general public to fulfill their fundraising responsibilities.
Super PACs:
A Super PAC is an organization that can collect unlimited donations from people, businesses, unions, and other PACs to support independent campaign expenditures. Any source of funding can be used, including campaigns for political office. Super PACs are not allowed to contribute to political parties or campaigns. Still, they can spend unlimited money on other political activities, such as attending events and traveling.
Hybrid PACs:
In the same way that a Super PAC may spend unlimited money on political action outside of a campaign, so can a Hybrid Political Action Committee (PAC). However, Hybrid Political Action Groups can contribute to political parties, candidates, or campaigns, notwithstanding the restrictions that apply to SSFs and nonconnected committees.
PACs for Leadership:
A leadership political action committee (PAC) is a committee founded by a candidate for federal office or a person already serving in federal office. Leadership political action committees (PACs) are a kind of political action committee that members of Congress may establish to provide financial support to federal candidates running under the banner of their respective political party.
How Does the Operation of a Political Action Committee Take Place?
Political action committees, sometimes known as PACs, were established to provide financial assistance to politicians running for office or seeking reelection. SSFs, Nonconnected PACs, and Leadership PACs are restricted in how much money they may contribute or spend on a candidate's campaign. Following federal law, political action committees (PACs) are not permitted to give more than the following amounts during an election cycle: $5,000 to a candidate or candidate committee; $15,000 to a political party; $5,000 to a state or local party committee; $5,000 to another PAC;
Hybrid political action committees are subject to the same contribution limits, but they are free to spend unlimited money on political activities unrelated to candidates or campaigns. It is permissible for Super PACs to accept an unlimited amount of dollars for political action unrelated to candidates or campaigns. Still, they are not allowed to donate to individual political campaigns.
What Sets Super PACs Apart From Regular Political Action Committees?
PACs can make direct financial contributions to political candidates or campaigns, but Super PACs are specifically designed to support political action unrelated to electoral campaigns. The following are some of the many ways in which regular political action committees and super political action committees vary from one another:
Campaign contribution size
It is legal for political action committees (PACs) to collect contributions from individuals of up to 5,000 dollars every calendar year. There is no limit placed on donations that may be made to Super PACs.
Campaign donation size
A political action committee (PAC) can contribute up to $5,000 to a candidate for each election or up to $15,000 to a party committee each year. Those limits do not apply to committees known as super PACs.
Donors
While political action committees (PACs) are not authorized to take contributions from corporate or union interests, independent super PACs can collect unlimited contributions from these sources.