.

Campaign Finance: Potential Legislative and
Policy Issues for the 111th Congress

R. Sam Garrett
Analyst in American National Government
March 30, 2009
Congressional Research Service
7-5700
www.crs.gov
R40091
CRS Report for Congress
P
repared for Members and Committees of Congress
c11173008

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

Summary
Drawing from recent legislative and campaign activities, this report discusses selected campaign
finance policy issues that may receive attention during the 111th Congress. Questions about the
health of the presidential public financing system were especially prominent during the 2008
election cycle. The cycle also witnessed new or expanded techniques for raising and spending
money, such as bundling, joint fundraising committees, and hybrid advertising. Remaining issues
from the 110th Congress, such as electronic filing of Senate campaign finance reports (S. 482 in
the 111th Congress), may also receive renewed scrutiny. Other issues, such as 527 organizations
and the Federal Election Commission, may also be addressed. Early in the 111th Congress, the
House Administration Committee also reported legislation (H.R. 749) concerning authority to
disburse campaign funds after a candidate’s death.
Some of the issues discussed in this report have only recently received substantial attention.
Others have been long-running sources of controversy. All appear likely to remain prominent
policy issues. Whether Congress decides to pursue these or other campaign finance issues,
common questions about the role of money in politics, transparency, and the need for additional
regulation are likely to shape the debate.
This report will be updated throughout the 111th Congress as events warrant.

Congressional Research Service

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

Contents
Introduction ................................................................................................................................ 1
Campaign Finance Activity in the 110th Congress: A Brief Review ........................................ 1
Emerging Campaign Finance Policy Issues ........................................................................... 2
Authority to Disburse Campaign Funds ........................................................................... 2
Bundling......................................................................................................................... 3
Electronic Filing of Senate Campaign Finance Reports.................................................... 5
Federal Election Commission Issues ............................................................................... 7
Hybrid Advertising.......................................................................................................... 9
Joint Fundraising Committees ....................................................................................... 10
Public Financing of Presidential Campaigns ................................................................. 12
527 Organizations ......................................................................................................... 14
Overarching Policy Concerns and Concluding Comments ................................................... 16
Amounts and Sources of Money.................................................................................... 17
Transparency ................................................................................................................ 18
Scope of Regulation ...................................................................................................... 18

Tables
Table 1. Current Members of the Federal Election Commission................................................... 9
Table 2. Individual Contribution Limits for the 2007-2008 Election Cycle................................. 11
Table 3. Receipts and Expenditures of 527 Organizations, 2004 and 2008 Election
Cycles.................................................................................................................................... 15

Contacts
Author Contact Information ...................................................................................................... 18

Congressional Research Service

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

Introduction
This report provides an overview of selected campaign finance policy issues that have received
recent legislative attention, or have otherwise been prominent, and which could receive attention
during the 111th Congress. Specifically, the report discusses seven issues: (1) bundling; (2)
electronic filing of Senate campaign finance reports; (3) the Federal Election Commission (FEC);
(4) hybrid political advertising; (5) joint fundraising committees; (6) public financing of
presidential campaigns; and (7) 527 organizations. The report includes a brief overview of each
issue followed by a discussion of recent legislation (if any) and policy considerations. Recent
legislative or regulatory activity, developments during the 2008 election cycle, or a combination
of all those factors suggest that each issue will remain a topic of debate during the 111th Congress.
This report is not intended to provide an exhaustive discussion of each topic. In some cases
(noted throughout the report) other CRS products provide additional detail.
The topics addressed in this report are typically considered separately, suggesting targeted
legislation if Congress chooses to revisit the issues. The 111th Congress could also consider broad
legislation addressing one or more campaign finance issues. However Congress decides to
proceed, the debate will likely be shaped by questions of: (1) amounts and sources of money; (2)
transparency; and (3) scope of regulation. As the final section of this report discusses, these
factors unify the seemingly disparate policy issues discussed in the report and are common
themes in the debate over campaign finance policy.
Campaign Finance Activity in the 110th Congress: A Brief Review
During the 110th Congress, approximately 50 legislative measures affecting federal campaign
finance policy were introduced. Two became law.1 Most significantly, the Honest Leadership and
Open Government Act (HLOGA; P.L. 110-81) restricted campaign travel aboard private aircraft
and required political committees to report additional information to the FEC about certain
contributions bundled by lobbyists. In addition, late in the second session of the 110th Congress,
the FEC’s Administrative Fine Program, which had been scheduled to expire, was extended until
2013 (P.L. 110-433).
Other issues received hearings or floor votes but did not become law. These included:
• House passage of legislation affecting campaign payments to candidate families
(H.R. 2630, Schiff); disbursement of campaign funds by non-treasurers (H.R.
3032, Jones (NC)); and funding for certain criminal enforcement of the
Bipartisan Campaign Reform Act (H.R. 3093, the relevant provision was an
amendment sponsored by Representative Pence);
• A Committee on House Administration, Subcommittee on Elections, hearing on
automated political telephone calls;2

1 See CRS Report RL34324, Campaign Finance: Legislative Developments and Policy Issues in the 110th Congress, by
R. Sam Garrett.
2 This was an oversight hearing, although various bills on the topic were introduced. See CRS Report RL34361,
Automated Political Telephone Calls ("Robo Calls") in Federal Campaigns: Overview and Policy Options, by R. Sam
Garrett and Kathleen Ann Ruane.
Congressional Research Service
1

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

• Senate Rules and Administration Committee hearings on public financing of
congressional campaigns (S. 1285, Durbin); coordinated party expenditures (S.
1091, Corker); electronic filing of Senate campaign finance reports (S. 223,
Feingold); FEC nominations; and automated political telephone calls (S. 2624,
Feinstein).
Emerging Campaign Finance Policy Issues
Some of the issues considered during the 110th Congress may be addressed again during the 111th
Congress. Others became prominent during recent election cycles, especially 2008. The following
discussion provides additional detail about selected issues that may continue to be on the
legislative or oversight agenda.
Authority to Disburse Campaign Funds
FECA assigns campaign treasurers with primary responsibility for filing FEC reports and
ensuring that political committees comply with the act.3 Treasurers—not candidates—are legally
responsible for disbursing campaign funds. In fact, FECA does not specify a role for candidates in
campaign financial decisions. As a practical matter, however, candidates may exert substantial
informal influence over campaign spending.
In recent Congresses, some Members have expressed concern about how campaign funds would
be spent in the event a candidate died. On March 25, 2009, the House Committee on
Administration reported H.R. 749 (Jones, NC) by voice vote and without amendment. The bill
would permit candidates to designate to the FEC an individual to direct campaign spending
following the candidate’s death. That designation would supersede the treasurer’s normal
spending responsibilities, but would not affect the treasurer’s reporting or other responsibilities. A
backup could also be identified if the designee died, became incapacitated, or were unable or
unwilling to carry out his or her responsibilities. The bill also permits candidates to specify their
wishes about how funds would be disbursed. H.R. 749 is virtually identical to H.R. 3032, also
sponsored by Representative Jones, and which the House passed on July 15, 2008, under
suspension of the rules and by voice vote. The Senate took no action on the bill during the 110th
Congress.
Policy Considerations
H.R. 749, and its predecessor (H.R. 3032) have received bipartisan support amid candidates’
desires to influence their campaign spending and make their wishes clear. To that end, H.R. 749
could alleviate the potential for asset disputes following candidate deaths. That outcome,
however, depends on designees adhering to candidate wishes, and assumes that designees would
be more faithful to candidate wishes than would be treasurers (who are currently responsible for
spending decisions).
H.R. 749 could create different levels of candidate authority over spending in life than in death.
Specifically, although H.R. 749 would provide a mechanism for circumventing the treasurer after

3 See, for example, 2 U.S.C. § 432(a). On treasurer responsibilities, see 2 U.S.C. § 434(a)(1); 2 U.S.C. § 432(c); and 2
U.S.C. § 432(d).
Congressional Research Service
2

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

a candidate dies, the bill would not provide additional remedies for such action while the
candidate is living. This may be a minor distinction due to candidates’ de facto influence over
their campaigns, despite FECA’s general silence on the issue. Nonetheless, if Congress chose to
enact H.R. 749 and felt it were important to create parity in candidates’ abilities to direct
campaign spending, it could amend FECA to create a clearer candidate role over campaign funds
regardless of whether the candidate is living or dead. Congress might also provide explicit
permission in FECA for candidates to hire and fire campaign treasurers.
Bundling
Bundling is a fundraising practice in which an intermediary either receives contributions and
passes them on to a campaign or is credited with soliciting contributions that go directly to a
campaign. Lobbyists often serve as bundlers. Bundling has been prominent in recent years both
because of the additional disclosure required in HLOGA and because of the role bundling played
in the 2008 presidential elections.4
Bundling opponents contend the practice allows individuals to circumvent the Federal Election
Campaign Act (FECA)5 by delivering larger contributions than they could on their own, even
though those contributions are funded by multiple sources.6 Critics also point to anecdotal
evidence suggesting that some contributions routed through bundlers might have been coerced or
come from impermissible sources.7 Nonetheless, bundling is not prohibited by FECA or FEC
regulations; it is also a common fundraising practice.
The FEC unanimously approved rules implementing HLOGA’s bundling provisions on December
18, 2008. An “explanation and justification” (E&J) statement approved in February 2009
provided additional guidance and clarified the Commission’s decision-making process.8
HLOGA’s major requirement regarding bundling, and the major requirement in the new bundling
rules, is that political committees9 report contributions “reasonably known” to be bundled if at
least two of those contributions aggregated at least $15,000 ($16,000 as adjusted for inflation in
2009) during specified six-month periods. Only contributions bundled by registered lobbyists (or
their leadership PACs10) must be included in bundling disclosure reports. Committees are to
determine whether bundlers are registered lobbyists by consulting the websites of the Clerk of the
House, Secretary of the Senate, or FEC (in the case of PACs maintained or controlled by

4 See, for example, Brody Mullins and Ianthe Jeanne Dugan, “Mega-Bundlers Up Financing Ante,” Wall Street
Journal
, November 5, 2008, p. A4.
5 FECA is 2 U.S.C. § 431 et seq.
6 See, for example, “In Costly Election’s Wake, Give us Real Campaign Reform,” Santa Fe New Mexican, November
9, 2008, p. B2.
7 See, for example, “Baleful Bundlers,” New York Times, August 11, 2008, p. A16.
8 Federal Election Commission, “Reporting Contributions Bundled by Lobbyists, Registrants and the PACs of
Lobbyists and Registrants," 74 Federal Register 7285, February 17, 2009.
9 The requirements apply to authorized committees (candidates’ principal campaign committees), party committees,
and leadership PACs.
10Leadership PACs emerged as lawmakers looked for options to contribute more money to their colleagues than they
could through authorized committees. Historically, leadership PACs were regarded as a way for congressional leaders
and committee chairpersons to support their colleagues’ campaigns and to secure majorities in the House and Senate. It
is increasingly common, however, for “rank and file” Members to establish leadership PACs. In the case of bundling
disclosure, the requirement would likely be most applicable to leadership PACs established by former Members of
Congress who are serving as lobbyists.
Congressional Research Service
3

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

registered lobbyists). The Commission noted in the new rules, however, that other sources of
knowledge about lobbyists’ bundling activities could also trigger reporting requirements. (As
discussed in the next section, however, credit plays a more prominent role in bundling disclosure
than does knowledge.)
Two aspects of the new bundling rules have generated some controversy. The first concerns
whether political committees “credit” particular lobbyists with raising bundled contributions.
Under the new rules, political committees are required to report contributions as being bundled
only if the committee has awarded (through external recognition or internal records) credit to a
particular lobbyist or lobbyists for having bundled the contributions.11 As the Commission noted
in the E&J, a lobbyist merely claiming to have bundled contributions does not necessarily warrant
disclosure, nor does committee knowledge of a lobbyist being a bundler if the committee has not
credited that person with bundling for the committee.12 According to the Commission, “[M]ere
knowledge [of bundling], in and of itself, is not enough. Rather, it is necessary for a reporting
committee to credit through ‘records, designations, or other means of recognizing that a certain
amount of money has been raised’ before reporting is required.13
The second area of contention, related to the first, concerns how credit is awarded for jointly
hosted fundraising events. Under the new rules, all hosts of joint fundraising events would have
to be listed in bundling disclosure reports only if those hosts were registered lobbyists and were
credited by the campaign with raising bundled contributions that met the $16,000 threshold. As
the FEC stated in the E&J, for example, an event co-hosted by three lobbyists that generated
$20,000 would require bundling disclosure attributing the entire amount to only the one lobbyist
the committee credited with having been responsible for raising the funds (assuming the
committee did not award credit to the other two). In cases in which more than one lobbyist is
credited with raising funds, the committee must report the share raised by and credited to each
individual.14
Some groups have criticized both these components of the rules, suggesting they could permit
political committees to avoid disclosing bundling activities simply because they do not award
tangible credit for doing so. The joint-fundraiser provisions, they say, also could allow
committees to avoid disclosing the roles of some bundlers through manipulation of crediting
arrangements.15 The FEC, however, contends that awarding credit is the “focus of HLOGA
Section 204” [the bundling provision] and that the rules are consistent with the law’s legislative
history.16

11 See, for example, Federal Election Commission, “Reporting Contributions Bundled by Lobbyists, Registrants and the
PACs of Lobbyists and Registrants," 74 Federal Register 7285, February 17, 2009, pp. 7292-7293.
12 Ibid., pp. 7293-7296.
13 Ibid., p. 7295.
14 Ibid. pp. 7296-9297.
15 See, for example, Paul S. Ryan, “President Obama Gets Short Shrift from FEC in Lobbyist Bundling Rules,”
Campaign Legal Center Blog at [http://www.clcblog.org/blog_item-271.html]; posted February 4, 2009.
16 Federal Election Commission, “Reporting Contributions Bundled by Lobbyists, Registrants and the PACs of
Lobbyists and Registrants," 74 Federal Register 7285, February 17, 2009, p. 7293.
Congressional Research Service
4

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

Policy Considerations
If Congress chooses to revisit bundling policy, two perspectives could be relevant. The first
emphasizes reporting information about bundling. The second emphasizes further regulating
bundling practices.
From the reporting (disclosure) perspective, a key question is whether campaigns should continue
to be permitted to provide information only about bundling by registered lobbyists. If so, existing
requirements could be sufficient, provided that Congress is satisfied with the reporting criteria
established in HLOGA and FEC regulations.17 Congress may also wish to monitor continued FEC
implementation of the HLOGA requirements and the effectiveness of the new reporting process,
which takes effect during the spring and summer of 2009. If it chose to do so, Congress could
also amend Section 204 of HLOGA to require different disclosure than is articulated in the new
bundling rules.
From a broader perspective, Congress may wish to increase transparency about bundling overall,
including by non-lobbyists. A relatively straightforward way to do so could be to extend the
existing disclosure requirements to cover bundling by anyone, regardless of profession.18 During
the 110th Congress, S. 2030 (Obama) essentially proposed such an approach; the bill did not
advance beyond committee referral.19
If Congress adopted the view that bundling should be discouraged or reduced, additional
regulation could be necessary. For example, limits could be applied to the amount or number of
contributions arranged by a single bundler. Bundling could also be banned altogether. Depending
on specifics, however, a ban could prohibit even basic fundraising involving multiple
contributors.
For those who believe that bundling circumvents FECA, additional restrictions or disclosure
requirements could enhance transparency, limit the prevalence of bundling, or both. On the other
hand, those restrictions could increase compliance burdens for the regulated community. Finally,
those who view bundling as an efficient and effective fundraising practice may object to further
regulation.
Electronic Filing of Senate Campaign Finance Reports
Unlike all other federal political committees (except those raising or spending less than $50,000
annually), Senate campaign committees, party committees, and political action committees
(PACs) are not required to file campaign finance reports electronically.20 Senate reports are also
unique because they are filed with the Secretary of the Senate rather than directly with the FEC.
In the 110th Congress, the Senate Committee on Rules and Administration reported S. 223

17 2 U.S.C. § 434(I).
18 An alternative approach could be to strengthen existing restrictions on conduits and earmarked contributions. See 2
U.S.C. § 441a(a)(8). Although those requirements appear to require that bundled contributions count against the
bundler’s personal contribution limit, they can be easily avoided by designating bundlers as campaign fundraisers.
19 Four other bills introduced in the 110th Congress—H.R. 776 (Meehan), S. 436 (Feingold), H.R. 4294 (Price, NC),
and S. 2412 (Feingold)—also contained bundling provisions. Many of these provisions were eventually enacted in
HLOGA (after some of the four bills cited above had been drafted and introduced).
20 11 C.F.R. §104.18(a).
Congressional Research Service
5

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

(Feingold), which would have extended electronic filing to Senate reports. The bill was never
considered on the Senate floor, despite attempts to bring it up under unanimous consent. Despite
the lack of success in the 110th Congress, electronic filing remains a widely popular policy
proposal. In the 111th Congress, Senator Feingold has introduced S. 482. That bill is substantially
similar to S. 223 from the 110th Congress.
Policy Considerations
Two major policy questions surround electronic filling. Both are straightforward. First, should
Senate campaign finance reports be filed electronically? Second, if so, where should those reports
be filed?
The primary arguments in favor of electronic filing concern efficiency and expense. Currently, a
contractor converts the paper reports filed with the Secretary into electronic format. The FEC
then makes the reports publicly available on the Internet. The conversion process can take weeks
or months at a reported cost of $250,000 annually.21 As a result, House campaign finance data
filed electronically (and directly with the FEC) are routinely available well before Senate data.
Various Members of Congress, campaign finance groups, and media organizations have
supported electronic filing. Both the FEC and the Secretary of the Senate have stated publicly that
their offices are, or can be, prepared to administer electronic filing.22
Electronic filing could eliminate the conversion process and make public disclosure of the data
much faster. Electronic filing could, therefore, improve transparency and reduce costs. Requiring
electronic filing of Senate reports would also place the same filing responsibilities on Senate
committees that currently exist for House candidate committees, party committees, and PACs. As
a result, uniform filing standards would apply to all political committees.
There is little, if any, notable opposition to electronic filing itself. However, some Members have
called for addressing other campaign finance disclosure issues alongside electronic filing. For
example, attempts in the 110th Congress to bring up S. 223 were unsuccessful amid a dispute over
whether the bill would be amended to require groups filing ethics complaints to disclose their
donors.23 Similarly, at a March 2007 Senate Rules and Administration Committee hearing on S.
223, Senator Stevens emphasized the need to also consider disclosure requirements for 527
organizations.
Filing location has been a secondary issue of debate. Senate reports are currently filed with the
Secretary of the Senate rather than with the FEC. Bypassing filing with the Secretary of the
Senate could make reports more readily accessible to the public and could reduce delay or costs
associated with transmitting the reports to the FEC. If campaign finance reports are considered
Senate documents, however, some may object to their being filed with the FEC. During the 110th
Congress, Senator Feinstein reported at a markup of S. 223 that Senator Byrd raised concerns

21 Statement of Sen. Dianne Feinstein in “Senate Rules and Administration Committee Holds Markup of S 223, the
Senate Campaign Disclosure Parity Act,” Congressional Quarterly congressional transcript, Mar. 28, 2007, p. 1. See
also Dan Morain, “Senators move donor disclosures at a snail’s pace,” Los Angeles Times, Feb. 3, 2007, p. A12.
22 “Senate Rules and Administration Committee Holds Hearing on Campaign Finance Disclosure,” CQ transcript,
March 14, 2007.
23 For example, see the exchange between Senators Ensign and Feinstein at “Unanimous Consent Request—S. 223.”
Remarks in the Senate. Congressional Record, daily edition, vol. 153 (September 24, 2007), p. 11997.
Congressional Research Service
6

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

about the possibility of filing directly with the FEC because he viewed filing with the Secretary as
a matter of Senate prerogative.24
Federal Election Commission Issues
The 1974 FECA amendments established the FEC, which enforces civil compliance with
campaign finance law.25 The Commission also facilitates disclosure of federal campaign finance
data and administers the presidential public financing program.26 Six presidentially appointed
Commissioners lead the agency; the Senate may confirm or reject nominations to the FEC.27
The 110th Congress enacted one bill affecting the agency’s functioning. P.L. 110-433, which
President George W. Bush signed in October 2008, extended authority for the FEC’s
Administrative Fine Program (AFP) until 2013. (The program had been set to expire at the end of
2008.) The AFP sets standard penalties for routine financial-reporting violations and requires
fewer resources than the Commission’s full enforcement process.
Policy Considerations
The most immediate issues facing FEC operations concern funding. The Commission is currently
operating under a continuing resolution, which has the effect of freezing agency funding at the
$59.2 million appropriated for FY2008.28 Steven T. Walther, the agency’s 2009 chairman, has
expressed concern that maintaining existing funding levels inhibit the Commission’s ability to
pay approximately $1.9 million in staff salary increases a $900,000 rent increase. Walther
recently noted that, as a consequence, the Commission cannot expand its services and will
constrict some others.29 An appropriation of $63.6 million, which would presumably address the
FEC’s current financial constraints, was recommended in the President’s budget for FY2009; the
House and Senate Appropriations Committees also recommended that amount.
Beyond appropriations, Congress could choose to undertake legislative or oversight action related
to the agency. The Senate may also be asked to consider FEC nominations during the 111th
Congress. Perhaps the most fundamental policy question surrounding the FEC is the status of the
agency itself. Questions about the Commission’s structure and effectiveness (particularly
regarding enforcement) have long been a topic of debate.30 In the 110th Congress, for example,

24 See the exchange between Senators Feinstein and Stevens, during which Senator Byrd’s position was referenced, in
“Senate Rules and Administration Committee Holds Markup of S. 223, the Senate Campaign Disclosure Parity Act,”
CQ transcript, March 28, 2008, at http://www.cq.com/display.do?dockey=/cqonline/prod/data/docs/html/transcripts/
congressional/110/congressionaltranscripts110-000002482580.html@committees&metapub=CQ-
CONGTRANSCRIPTS&searchIndex=0&seqNum=1625.
25 For the 1974 amendments, see P.L. 93-443; 88 Stat. 1263.
26 The Treasury Department and IRS also have administrative responsibilities for presidential public financing.
27 No more than three of the six commissioners may be affiliated with the same political party. See 2 U.S.C. §
437c(a)(1).
28 For additional discussion, see the FEC portion of CRS Report RL34523, Financial Services and General
Government (FSGG): FY2009 Appropriations
, by Garrett Hatch.
29 Steven T. Walther, “Message From the Chairman,” Federal Election Commission Record, vol. 35, no. 1 (January
2009), p. 1. See especially p. 13 of the article.
30 See, for example, Meredith McGehee and Susan Gershon, “Let’s Scratch Out the FEC,” Legal Times (July 21, 2008),
p. 52. For an FEC perspective on its enforcement activities, see Federal Election Commission, Federal Election
Commission Annual Report 2006
, June 30, 2007, at http://www.fec.gov/pdf/ar06.pdf. This is the most recent publicly
(continued...)
Congressional Research Service
7

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

two similar bills (H.R. 421 (Meehan) and S. 478 (McCain)) would have replaced the FEC with a
proposed Federal Election Administration (FEA).31 Major provisions of those bills would have
established a three-member governing body with enhanced enforcement powers. Neither bill
advanced beyond committee referral. Similar proposals may reemerge during the 111th Congress.
Nonetheless, FEC reform has not been the subject of sustained legislative activity during recent
Congresses.
Other FEC issues would not necessarily warrant legislative action, but could be relevant for
oversight or appropriations matters. In particular, Congress may wish to monitor the agency as
the FEC continues to recover from a six-month loss of its policymaking quorum. Between
January and June 2008, only two Commissioners remained in office due to a nominations
dispute.32 As a result, the Commission was unable to approve (among other things) agency rules
and enforcement actions. Additional nominees were confirmed in June 2008, bringing the agency
back to full policymaking strength. The Commission continues to work through a backlog of
enforcement cases.33 Several rulemakings also remain pending. In particular, the Commission has
yet to finalize the HLOGA travel regulations.
Commission enforcement and operations could also be of interest to Congress. In January 2009,
the FEC held two days of hearings on those topics. At these wide-ranging sessions, a variety of
election lawyers and interest-group representatives both praised and criticized the FEC’s
operations and transparency. The FEC’s internal examination of the hearings is ongoing. Policy or
regulatory changes are possible. The Commission also appointed a new staff director, Robert A.
Hickey, in February 2009.34
Finally, nominations to the FEC, subject to Senate advice and consent, are possible during the
111th Congress. In April 2009, the terms of two Commissioners will expire. The term of a third
Commissioner has already expired. However, as discussed below, this does not necessarily mean
that additional nominations will occur.
As Table 1 shows, the term35 of Commissioner Ellen Weintraub expired in 2007.36 She remains at
the agency in holdover status. The terms of Commissioners Donald McGahn and Steven Walther
will expire on April 30, 2009. The President may make additional nominations to fill these seats
or the incumbents may remain in office in holdover status. A Commissioner may remain in office
after the expiration of his or term unless or until: (1) the President nominates, and the Senate

(...continued)
available version of the annual report.
31 Some public financing bills also propose to revamp certain aspects of the FEC. See CRS Report RL34534, Public
Financing of Presidential Campaigns: Overview and Analysis
, by R. Sam Garrett, for additional discussion.
32 For additional discussion, see CRS Report RS22780, The Federal Election Commission (FEC) With Fewer than
Four Members: Overview of Policy Implications
, by R. Sam Garrett.
33 See, for example, Kenneth P. Doyle, “FEC Drops Presidential Campaign Cases Amid Deep Backlog of Enforcement
Matters,” Daily Report for Executives, December 8, 2008, p. A8.
34 Hickey most recently served as chief of staff at the National Intelligence University. For additional information, see
Federal Election Commission, “Robert A. Hickey Named New Staff Director Of Federal Election Commission," press
release, February 27, 2009, http://www.fec.gov/press/press2009/20090227staffdirector.shtml.
35 Commissioners may serve only a single six-year term. See 2 U.S.C. § 437c(2)(A).
36 CRS analyst Henry Hogue provided consultations on this section.
Congressional Research Service
8

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

confirms, a replacement; or (2) the President, as conditions permit, makes a recess appointment to
the position.37
Table 1. Current Members of the Federal Election Commission
Commissioner
Term Expires
Date Confirmed
Party Affiliation
Cynthia
L.
Bauerly
04/30/2011 06/24/2008 Democrat
Caroline C. Hunter
04/30/2013
06/24/2008
Republican
Donald
F.
McGahn
04/30/2009 06/24/2008 Republican
Matthew S. Petersen
04/30/2011
06/24/2008
Republican
Steven T. Walther
04/30/2009
06/24/2008
Democrat
Ellen L. Weintraub
04/30/2007 (remains in
03/12/2003 Democrat
holdover status)
Source: Legislative Information System nominations database. CRS added party affiliation based on various
media accounts.
Hybrid Advertising
Hybrid advertising references a clearly identified candidate and makes generic references to other
candidates of a political party (e.g., “John Doe and our Democratic team”).38 Hybrid ads are of
potential legislative concern because of a cost-sharing practice associated with the ads. With
traditional advertising, the sponsoring entity typically covers all costs. With hybrid advertising,
the party and the candidate’s campaign committee share costs. An FEC rulemaking on the issue
has been open since May 2007.39
Policy Considerations
The controversy over hybrid advertising concerns whether the method of paying for those
advertisements undermines FECA. Those calling for additional regulation of hybrid ads have
suggested that cost-sharing represents a “loophole” that permits parties to improperly subsidize
campaign spending.40 This is particularly noteworthy for publicly financed presidential
campaigns, which must agree to limit their spending as a condition of receiving public funds.
Cost-sharing might also be viewed as way of circumventing limits on coordinated party
expenditures.41 Those who object to current cost-sharing practices allege that shared costs

37 For additional discussion of recess-appointment powers, see CRS Report RL33009, Recess Appointments: A Legal
Overview
, by T. J. Halstead.
38 The John Doe example appears in Myles Martin, “Hearing on Proposed Rules on Hybrid Ads,” Federal Election
Commission Record
, vol. 33, no. 9 (September 2007), p. 3.
39 Federal Election Commission, “Hybrid Communications,” 72 Federal Register 26569, May 10, 2007.
40 Brennan Center et al., “Statement of Reform Groups Announcing Government Integrity Reform Agenda for the 111th
Congress,” press release, November 6, 2008, at
http://www.democracy21.org/index.asp?Type=B_PR&SEC={91FCB139-CC82-4DDD-AE4E-
3A81E6427C7F}&DE={2FE0F2D2-AEB4-4407-AC92-E268C87FF568}.
41 Through coordinated expenditures, parties may (notwithstanding other provisions in the law regulating contributions
to campaigns) buy goods or services on behalf of a campaign, subject to limits. For additional discussion, see CRS
Report RS22644, Coordinated Party Expenditures in Federal Elections: An Overview, by R. Sam Garrett and L. Paige
(continued...)
Congressional Research Service
9

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

primarily benefit only the named candidate yet allow that candidate’s campaign committee to pay
for only a portion (e.g., 50%) of the advertising. Some groups have urged the FEC to adopt
regulations attributing 100% of the cost to the named candidate.42
If Congress determines that additional regulation of hybrid advertising is necessary, it could wait
for the FEC’s ongoing rulemaking to proceed. However, it is unclear if or when the agency will
issue new rules. Alternatively, Congress could legislate particular cost-sharing requirements.
Doing so could close the arguable loophole surrounding hybrid ads, but would also involve
legislating in a technical area more typically left to the FEC.43
Congress could also choose to make no changes if it determines that hybrid ads do not circumvent
FECA or that additional regulation is unnecessary. Those opposed to additional restrictions
suggest that existing FEC regulations provide sufficient guidance on various cost-sharing
arrangements, including hybrid advertising. Additional restrictions, including legislation, could
also minimize parties’ flexibility to allocate costs according to individual circumstances. That
flexibility was a central concern for various party representatives who testified at a July 2007
FEC hearing.44 Finally, cost-sharing associated with hybrid ads could also be viewed as the
continuation of a long tradition of various contacts between parties and campaigns during
campaigns.45 Therefore, some may fear that additional restrictions on hybrid advertising could
threaten the relationship between parties and candidates.
Joint Fundraising Committees
Joint fundraising committees were particularly active in the 2008 presidential race, but also
supported House and Senate contests.46 Joint committees are of potential legislative concern
because some observers contend that they facilitate large contributions that would otherwise be
impermissible under FECA.
FECA limits contributions from individuals as shown in Table 2. In 2007-2008, individuals could
contribute no more than $4,600 to a candidate campaign ($2,300 for the primary campaign and
another $2,300 for the general-election campaign).47 As shows, individuals could also donate up

(...continued)
Whitaker.
42 Campaign Legal Center and Democracy 21, comments on NPRM 2007-10, submitted to the Federal Election
Commission, June 11, 2007, at http://www.fec.gov/pdf/nprm/hybrid/CLC_Democracy_21.pdf.
43 See, for example, Bob Bauer, “Hybrid Ads and Public Financing Reform,” moresoftmoneyhardlaw blog posting at
http://www.moresoftmoneyhardlaw.com/moresoftmoneyhardlaw/updates/political_parties.html?AID=1370, November
11, 2008.
44 See Federal Election Commission, “Public Hearing on Hybrid Communications,” hearing transcript, July 11, 2007, at
http://www.fec.gov/pdf/nprm/hybrid/hyrbrid_hearing_transcript_071107.pdf; and Myles Martin, “Hearing on Proposed
Rules on Hybrid Ads.” Recent attention to hybrid advertising has focused on broadcast communications. However, the
concept can also be relevant for other forms of communications.
45 See, for example, the comments of David Mason, then Vice Chairman of the FEC, in “Public Hearing on Hybrid
Communications,” pp. 7-11.

46 See, for example, Brody Mullins, “Georgia Runoff Exposes Gaps in Campaign Finance Law,” Wall Street Journal,
November 19, 2008, p. A3.
47 The text refers to contributions to privately financed candidates. Contributions to publicly financed presidential
candidates (there is no public financing option for congressional campaigns) were limited to $2,300 in the primary
(continued...)
Congressional Research Service
10

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

to $28,500 annually to national party committees and up to $10,000 annually to state or local
party committees.
Table 2. Individual Contribution Limits for the 2007-2008 Election Cycle
To district, state,
To other political
To candidate
To national party
and local party
committees (e.g.,
committees
committees
committees
PACs)
Special Limits
$2,300a
$28,500a
$10,000
$5,000 per calendar
$108,200 aggregate
year
biennial limitb
per candidate, per
per calendar year
per calendar year
election
(combined limit)
Source: Adapted by CRS from Federal Election Commission, “Contribution Limits 2007-08,” at
http://www.fec.gov/pages/brochures/contriblimits.shtml.
a. These contribution limits are adjusted for inflation in odd-numbered years.
b. Of the $108,200 aggregate, no more than $42,700 may be contributed to candidate committees. No more
than $65,500 may be contributed to PACs and parties.
During the 2008 cycle, joint fundraising committees affiliated with the Democratic and
Republican presidential campaigns collected contributions that exceeded the limits discussed
above. In some cases, the committees (often called “victory funds”) reportedly received
contributions of $70,000 or more from a single source.48 Joint committees then distributed those
contributions, in permissible amounts (i.e., consistent with the individual contribution limits), to
other political committees. Recipients included each party’s presidential campaign, their legal and
accounting compliance committees, national party committees, and party committees in targeted
states.
Policy Considerations
As Congress considers whether or how to restrict joint fundraising committees, a key question is
whether the House and Senate believe joint committees circumvent FECA. Some joint
committees represent an “extra” way to support candidates above the individual contribution
limits. A coalition of interest groups has urged the 111th Congress to ban joint fundraising
committees.49

(...continued)
election for the 2008 cycle; additional fundraising for the general election is not permitted. Candidates may also accept
additional contributions for separate legal and accounting funds. See 11 C.F.R. § 9003.3. These funds are known as
“general election legal and accounting compliance funds” (GELAC). For an overview of GELAC funds see Anthony
Corrado, “Public Funding of Presidential Campaigns,” in Anthony Corrado, Thomas E. Mann, Daniel R. Ortiz, and
Trevor Potter, eds. The New Campaign Finance Sourcebook (Washington: Brookings Institution Press, 2005), pp. 195-
197. For additional discussion of presidential public financing generally, see CRS Report RL34534, Public Financing
of Presidential Campaigns: Overview and Analysis
, by R. Sam Garrett.
48 See Matthew S.L. Cate, “Multiple pots let political donors give big,” Arkansas Democrat Gazette, October 26, 2008,
p. 1; Karen E. Crummy, “Campaign Loophole,” Denver Post, October 24, 2008, p. A1; and Elizabeth Holmes, “New
McCain Fund Gets Around Donation Limits,” “Washington Wire” Blog, Wall Street Journal online, April 12, 2008, at
http://blogs.wsj.com/washwire/2008/04/19/new-mccain-fund-gets-around-donation-limits/; and Matthew Most,
“McCain Able to Skirt Limits of Federal Financing,” Washington Post, September 17, 2008, p. A4. Large contributions
also appear in publicly available disclosure reports filed with the FEC.
49 Seven groups issued a November 2008 statement containing a shared agenda for the 111th Congress. See Brennan
(continued...)
Congressional Research Service
11

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

If Congress chooses to restrict joint committees, at least four options exist.50 First, joint
committees could be prohibited. Second, candidate participation in joint fundraising could be
restricted. Third, Congress could restrict joint committees’ abilities to transfer funds to other
recipients.51 Fourth, FECA or FEC regulations on coordination could be amended to encompass
joint fundraising. If joint fundraising committees were prohibited or restricted, those who wanted
to support more than one political committee would have to contribute directly to those
committees, within the limits established in FECA. Applying the coordination restrictions to joint
committees could limit the amount of permissible transfers among committees. Any of these
options could make it more difficult for individuals to make contributions to a single source in the
hopes of benefitting multiple recipients.
Conversely, Congress could choose to maintain the status quo if it determines that joint
committees do not violate the spirit of FECA. In turn, this conclusion depends on whether one
believes that joint committees are a backdoor method of supporting individual candidates or
whether joint committees support a variety of party-building activities, as existing FECA
provisions and FEC regulations appear to assume. Some also contend that joint committees
represent an efficient way to funnel large aggregate contributions, in permissible amounts, to
targeted states and political committees. No legislative action is necessary to maintain the status
quo.
Public Financing of Presidential Campaigns 52
Perhaps the most prominent campaign finance issue during the 2008 election cycle was the status
of the presidential53 public financing system. Even before the 2008 campaigns began in earnest,
the cycle was widely perceived as the last in which the current public financing system could
survive without major reform. The program suffers from low taxpayer participation, resulting in
funding shortfalls during recent elections.54 As the program’s financial resources and public
participation generally declined in recent elections, so did participation by major candidates.
In 2008, eight candidates received PECF matching funds during the primaries. Senator McCain,
the Republican nominee, received public funds during the general-election campaign. Senator

(...continued)
Center et al., “Statement of Reform Groups Announcing Government Integrity Reform Agenda for the 111th
Congress.”
50 Some of the options discussed here have been proposed by “reform” campaign finance groups. See, for example,
David Arkush and Craig Holman, Campaign Finance ‘Reformers’ Open the Floodgates,” Roll Call, June 5, 2008, at
http://www.rollcall.com/issues/53_147/guest/25640-1.html.
51 This approach could be accomplished either by restricting transfers outright, or by amending relevant law or FEC
regulations concerning coordinated expenditures. Coordinated party expenditures are subject to limits based on office
sought, state, and voting-age population (VAP). Exact amounts are determined by formula. (See 2 U.S.C. §
441a(d)(3).) For additional discussion, see CRS Report RS22644, Coordinated Party Expenditures in Federal
Elections: An Overview
, by R. Sam Garrett and L. Paige Whitaker.
52 For a detailed discussion of the presidential public financing program, see CRS Report RL34534, Public Financing
of Presidential Campaigns: Overview and Analysis
, by R. Sam Garrett. Some of the material in this section is adapted
from that report.
53 On the related topic of proposed public financing for congressional campaigns, see CRS Report RL33814, Public
Financing of Congressional Campaigns: Overview and Analysis
, by R. Sam Garrett.
54 The Presidential Election Campaign Fund (PECF) is funded solely by voluntary “checkoff” designations on
individual income tax returns.
Congressional Research Service
12

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

Obama, the Democratic nominee, became the first major-party nominee since the program’s
inception to completely decline public funds. Some observers have suggested that Senator
Obama’s decision to opt out of public financing, combined with the other challenges discussed
above, marks the death knell of the program. Others contend that the public financing program
can work well again if reformed.
Policy Considerations
Until the 2000 election, the public financing program was the major funding source in
presidential campaigns, particularly for the general election. Nonetheless, as noted above, public
financing has become less appealing to candidates in recent elections. Other developments, such
as joint fundraising committees allegedly threaten the program’s intended emphasis on limiting
private fundraising in exchange for public funds.
Maintaining the status quo would leave the public financing program unchanged. If that approach
is taken, however, there is widespread agreement that the most competitive candidates will
continue to forego public funds. As a result, the program could be in danger of providing funding
only for those candidates with a limited chance of success.
As the preceding discussion suggests, a fundamental policy question is what role—if any—
Congress wants public financing to play in presidential campaigns. If that role is to be a
prominent one, there is broad agreement that the program needs to be at least partially revamped.
Making the program more attractive to competitive candidates, particularly through increased
spending limits, is a major focus of several reform proposals. Such efforts will not come without
costs. An infusion of funds, through an increased checkoff designation,55 other revenue sources,
increased taxpayer participation, or a combination of all three, would likely be necessary. Public
financing can also be controversial along ideological lines, which suggests that strong political
will and coalition-building will be necessary if changes to the program are to be enacted.
In the aftermath of the 2008 election cycle, the related issue of small contributions has also been a
prominent topic of debate. Although publicly financed general-election candidates must agree to
forgo private fundraising for their campaigns, public financing is designed to supplement small,
private contributions during the primary campaign. Currently, the Presidential Election Campaign
Fund (PECF) provides a 100% match of individual primary contributions up to $250. Providing
additional matching funds have been a major component of recent reform proposals.
Thus far no presidential public financing legislation has been introduced in the 111th Congress.56
During the 110th Congress, four bills (H.R. 776 (Meehan); H.R. 4294 (Price, NC); S. 436
(Feingold), and S. 2412 (Feingold)) that proposed to restructure the PECF would have matched
small contributions at 400% or 500% rather than the current 100%. In addition, the maximum
matching contribution would have been lowered to $200 from the current $250.
Increasing the match rate from the current 100% to 400% or 500% could increase the effect of
small contributions. It could also provide substantially greater resources to publicly financed

55 Currently, individual taxpayers may designate $3 to the fund; married couples filing jointly may designate $6.
56 One bill (H.R. 158; Obey) has been introduced on the related topic of congressional public financing. See CRS
Report RL33814, Public Financing of Congressional Campaigns: Overview and Analysis, by R. Sam Garrett for
additional discussion.
Congressional Research Service
13

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

candidates. However, this approach assumes that sufficient funds would be available in the PECF
to cover the additional match. In fact, sufficient funds have been unavailable during portions of
recent election cycles.57 Nonetheless, proposals to reform the public financing program typically
include revisions to funding mechanisms.
Congress could also renew the focus on small contributions by permitting publicly financed
campaigns to spend larger (or unlimited) amounts of funds raised through small contributions.
This approach might or might not include matching funds. The effect could be to encourage
candidates to focus their efforts on small contributions, while still providing government
assistance for some campaign needs.
However, focusing on small contributions would not necessarily contain campaign costs (another
program goal), particularly for those candidates who were able to raise and spend virtually
unlimited amounts. In fact, if spending limits were eliminated, public financing could become an
additional, but potentially unnecessary, funding source for those already able to raise substantial
private funds.
Finally, public financing could be repealed. This approach would largely or entirely (depending
on specifics) eliminate taxpayer funds in presidential campaigns. In the 110th Congress, two bills
(H.R. 72 (Bartlett); H.R. 484 (Doolittle)) would have repealed parts of the program or the entire
program. Neither bill advanced beyond committee referral.
527 Organizations
FECA focuses largely on political committees, which include candidate committees, party
committees, and PACs.58 In recent years, so-called “527” organizations have shaped some
elections even though they are not typically considered to be political committees.59 America
Coming Together and Swift Boat Veterans for Truth, for example, were prominent (and
controversial) in 2004.
Much of the concern surrounding 527s has involved the argument that millions of dollars from
these organizations affect federal elections without necessarily being regulated by FECA.60 The

57 See CRS Report RL34534, Public Financing of Presidential Campaigns: Overview and Analysis, by R. Sam Garrett.
58 On the definition of political committees, see 2 U.S.C. § 431(4). See also 26 U.S.C. § 9002(9) and 26 U.S.C. §
9032(8).
59 If Congress chooses to revisit 527s, it may also encounter questions related to organizations regulated under Section
501(c) of the IRC. There is some evidence that 501(c)(4) organizations are also becoming active in federal campaigns.
See, for example, Campaign Finance Institute, “Outside Soft Money Groups Approaching $400 Million in Targeted
Spending in 2008 Election,” press release, October 31, 2008, at http://www.cfinst.org/pr/
prRelease.aspx?ReleaseID=214. On 501(c)s generally during the 2008 cycle, see also Steve Weissman and Suraj
Sazawal, Soft Money Political Spending by 501(c) Nonprofits, Campaign Finance Institute, Washington, DC, February
25, 2009, http://www.cfinst.org/pr/prRelease.aspx?ReleaseID=221. For an overview of restrictions and disclosure
requirements, CRS Report RL33377, Tax-Exempt Organizations: Political Activity Restrictions and Disclosure
Requirements
, by Erika Lunder.
60 For additional discussion, see CRS Report RS22895, 527 Groups and Campaign Activity: Analysis Under Campaign
Finance and Tax Laws
, by L. Paige Whitaker and Erika Lunder; and CRS Report RL33888, Section 527 Political
Organizations: Background and Issues for Federal Election and Tax Laws
, by R. Sam Garrett, Erika Lunder, and L.
Paige Whitaker. Political committees are considered 527s for tax purposes, but not all 527s are considered political
committees for federal-election purposes.
Congressional Research Service
14

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

precise nature of 527s’ financial impact is open to debate, as various research organizations and
interest groups classify individual groups’ activities differently and rely on different data.61
Nonetheless, and despite differing data and interpretations of those data, research has consistently
shown decreased activity among 527s during the 2008 cycle compared with the 2004 cycle. Table
3
displays financial summaries from two prominent sources, CQ MoneyLine (a commercial
tracking service) and the Center for Responsive Politics (CRP).62 Both sources show that 527s’
receipts and expenditures during the 2008 cycle were far below those of the 2004 cycle.63
Table 3. Receipts and Expenditures of 527 Organizations,
2004 and 2008 Election Cycles
Change from 2003-
2003-2004
2007-2008
2004—2007-2008
Receipts for Al Groups
$680,598,284 $490,109,010 -28.3%
(CQ MoneyLine)
Receipts for Al Groups
$599,202,432 $503,291,296 -16.0%
(CRP)
Expenditures for Al
$692,891,316 $475,702,621 -31.5%
Groups (CQ
MoneyLine)
Expenditures for Al
$611,723,836 $487,930,669 -20.2%
Groups (CRP)
Sources: Total receipts and expenditure data appear in the CQ MoneyLine database at http://moneyline.cq.com/
pml/irs527s-receipt-ranked.do?pageIndex=0&electionCycleId=15 for 2007-2008; and http://moneyline.cq.com/
pml/irs527s-receipt-ranked.do?pageIndex=0&electionCycleId=13 for 2003-2004; and the Center for Responsive
Politics at http://www.opensecrets.org/527s/index.php. CRS calculated the percent change column.
Notes: The data include some non-federal activity. Some transfers are excluded. Data were accessed in March
2009. Previous versions of this report relied on data accessed in December 2008, which appears not to have
included financial activity that occurred late in the 2008 election cycle.
Policy Considerations
The 527 issue can be considered from both financial and regulatory perspectives.64 Financially,
527s remain a significant force surrounding some targeted races.65 527s also continue to
command substantial financial resources overall. Nonetheless, 527s’ decreased financial activity
suggests that the issue might not receive as much policy attention as 527s have in recent years.

61 For example, differences frequently occur when classifying 527s’ party affiliations, activities related to federal
elections versus non-federal elections, and transfers among different entities.
62 Both are prominent and frequently used sources of campaign finance data. Other sources, however, may offer
different data or interpretation.
63 In interpreting the data, it is important to note that overall fundraising and spending are not necessarily a proxy for
involvement or influence in federal elections. The variance in the data shown in Table 3 also underscore that the
precise nature of 527s’ activities is sometimes unclear.
64 Litigation has also occurred on the 527 issue. That topic is beyond the scope of this report.
65 See, for example, Campaign Finance Institute, “Outside Soft Money Groups Approaching $400 Million in Targeted
Spending in 2008 Election.”
Congressional Research Service
15

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

Even with decreased financial activity, however, the matter of regulating 527s continues to be
controversial. Indeed, the major policy question surrounding 527s is whether all such
organizations should be regulated as political committees under FECA.66 Thus far, the FEC has
made case-by-case determinations of whether 527s’ activities required them to register as political
committees. Particularly after the 2004 elections, the FEC assessed major fines against some 527s
for failing to register as political committees. However, because fines were not assessed until well
after the election and represented a small portion of the organizations’ operating budgets, some
critics contended that the penalties and current regulation of 527s were insufficient.67 Controversy
over FEC enforcement regarding 527s continues today.68
Against this backdrop, some have suggested that all 527s should be required to register with the
FEC as political committees. In the 110th Congress, H.R. 420 (Meehan) and S. 463 (McCain)
would have amended FECA to treat 527s as political committees, with some exceptions.
Requiring 527s to register as political committees would make those organizations subject to
contribution limits and other requirements in FECA, just as all political committees are today.
Those advocating additional regulation of 527s generally suggest that these groups’ activities
clearly influence federal elections and, therefore, should be captured by FECA. Others, however,
contend that placing additional regulations on 527s is unnecessary and could stifle the groups’
political speech.69
Overarching Policy Concerns and Concluding Comments
A record-breaking $5 billion is believed to have been spent during the 2008 federal elections.70
The pace and amount of fundraising in the presidential campaign has been of particular concern
to some interest groups and members of the media.71 The campaigns of just two presidential

66 For additional discussion, see CRS Report RS22895, 527 Groups and Campaign Activity: Analysis Under Campaign
Finance and Tax Laws
, by L. Paige Whitaker and Erika Lunder; and CRS Report RL33888, Section 527 Political
Organizations: Background and Issues for Federal Election and Tax Laws
, by R. Sam Garrett, Erika Lunder, and L.
Paige Whitaker. Political committees are considered 527s for tax purposes, but not all 527s are considered political
committees for federal-election purposes.
67 See, for example, Democracy 21, “Democracy 21 and Campaign Legal Center Statement on FEC Finding that The
Media Fund Illegally Spent Over $50 Million in 2004 Election,” press release, November 19, 2007, at
http://www.democracy21.org/index.asp?Type=B_PR&SEC={7248831A-87CA-4C2D-B873-
60C64918C920}&DE={52D51D31-06C3-46FA-A0AA-23DFF3E7A7EA}.
68 See, for example, Kenneth P. Doyle, “FEC Set to Consider Rule on ‘Bundling’; Drops Case Against Chamber 527
Group,” Daily Report for Executives, December 17, 2008, p. A7.
69 For additional discussion, see CRS Report RS22895, 527 Groups and Campaign Activity: Analysis Under Campaign
Finance and Tax Laws
, by L. Paige Whitaker and Erika Lunder; and CRS Report RL33888, Section 527 Political
Organizations: Background and Issues for Federal Election and Tax Laws
, by R. Sam Garrett, Erika Lunder, and L.
Paige Whitaker. Political committees are considered 527s for tax purposes, but not all 527s are considered political
committees for federal-election purposes.
70 See Center for Responsive Politics, “U.S. Election Will Cost $5.3 Billion, Center for Responsive Politics Predicts,”
press release, October 22, 2008, at http://www.opensecrets.org/news/2008/10/us-election-will-cost-53-billi.html; and
Kenneth P. Doyle, “Campaign 2008: First $5 Billion Federal Election Campaign Prompts Questions on Possible New
Reforms,” Daily Report for Executives, November 5, 2008, p. C1. Data for the entire cycle are not yet available in
some cases, but the $5 billion figure appears likely to be confirmed. CRS analysis of Center for Responsive Politics
data shows that party committees and candidate committees alone spent approximately $4.5 billion. The CRP data are
available at http://www.opensecrets.org/overview/index.php and http://www.opensecrets.org/parties/index.php.
71 See, for example, “Campaign Finance: A victim of President-elect Obama’s Success,” Washington Post, December
15, 2008, p. A20.
Congressional Research Service
16

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

candidates, John McCain and Barack Obama, spent a combined $907.3 million during the 2008
election cycle.72 For some, the 2008 figures suggest that the campaign finance system is in need
of significant reform. Others contend that the primary focus should not be on the amount of
money in politics, but on the way in which that money is regulated. For many, existing regulation
is already too cumbersome.
The 2008 election cycle will undoubtedly inform deliberations about how, if at all, to examine
campaign finance policy during the 111th Congress. Some of the issues discussed in this report are
relatively recent developments that are closely tied to the 2008 elections. Others have been
prominent for several election cycles and have received congressional attention in the past.
All the issues discussed in this report are essentially technical questions about how to regulate a
particular facet of campaigns. Reaching consensus on these points can be difficult. There are,
however, common themes that tend to organize the debate over campaign finance policy. Even
when Members of Congress disagree about particular approaches, these themes can serve as
useful starting points for considering policy options and debate.
Amounts and Sources of Money
Whether the there is “too much” money in American elections is a hotly debated topic. For some,
the billions of dollars involved in federal campaigns signal potential corruption. The “money
chase” of campaigns also allegedly prevents candidates and officeholders from concentrating on
serving their constituents.73 Others counter that fundraising is an important test of a candidate’s
political viability and that the amount of money spent on American elections is far less than the
amount spent on consumer goods.74 It is unlikely that this ideologically charged debate will be
resolved in the foreseeable future.
Even if the debate over amounts money is not resolved, sources of funds could be ripe for
legislation or oversight. The debate over 527s demonstrates that some entities’ financial activities
remain contentious. Similarly, the debate over public financing can be viewed as an attempt to
steer candidates toward lower campaign spending with incentives (or requirements) to limit
private fundraising. Bundling, hybrid advertising, and joint fundraising also raise policy questions
about whether these funding sources should be further regulated.75

72 These figures, which reflect FEC filings through December 31, 2008, do not include related spending, such as
GELAC funds or independent party expenditures. CRS aggregated the $907.3 million figure from candidate summaries
on the FEC website at http://query.nictusa.com/cgi-bin/cancomsrs/.
73 The “money chase” analogy appears in David B. Magleby and Candice J. Nelson, The Money Chase: Congressional
Campaign Finance Reform
(Washington: Brookings Institution Press, 1990).
74 On the latter point, see, for example, George F. Will, “Call Him John the Careless,” Washington Post, October 23,
2008, p. A23. On anti-regulatory arguments generally, see John Samples, The Fallacy of Campaign Finance Reform
(Chicago: University of Chicago Press, 2006).
75 Regulating political money may also raise constitutional questions, a topic that is beyond the scope of this report. For
an overview, see CRS Report RL30669, Campaign Finance Regulation Under the First Amendment: Buckley v. Valeo
and Its Supreme Court Progeny
, by L. Paige Whitaker.
Congressional Research Service
17

.
Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress

Transparency
Transparency is typically accomplished through disclosure. Most of that information is then made
publicly available. The details of which activities should be disclosed, and in which amounts, are
sometimes controversial, but disclosure is generally accepted as a hallmark of campaign finance
policy.
The debate over electronic filing of Senate campaign finance reports has the most obvious
connections to transparency. For some, the current form of paper filing is wasteful and causes
unnecessary delay in providing information to the public. For others, broader disclosure concerns
should also be addressed if Senate electronic filing is reconsidered. Senate prerogative may also
be a concern.
Other recent issues may also be considered from a transparency perspective. In particular, new
disclosure requirements related to bundling—enacted in the 110th Congress and potentially
subject to expansion or revision during the 111th Congress—represent an effort to provide more
information about how some large contributions are raised. On the other hand, those efforts may
cause an additional compliance burden or inhibit some donors from participating (at least as they
otherwise would).
Scope of Regulation
Perhaps the most fundamental questions in campaign finance policy is which behaviors should be
subject to FECA or FEC regulations, and to what extent. As Congress decides how or whether to
address campaign finance issues in the 111th Congress, these questions are again likely to be at the
forefront of debate. All the policy issues addressed in this report could involve placing new
requirements on members of the regulated community.
Among the issues discussed in this report, debate has essentially focused on whether bundling,
electronic filing, hybrid advertising, joint fundraising, recent developments in presidential public
financing, and 527s undermine various requirements in FECA. More generally, the FEC itself
may be reevaluated if Congress determines that its structure or effectiveness is insufficient for
current needs. If Congress decides to address these or other campaign finance issues, a key
question will be whether they are to be considered alone or jointly. All the issues discussed in this
report could be self-contained. Some of the issues are also interactive. This is particularly true for
presidential campaign financing, which has clear connections to public financing, bundling,
hybrid advertising, and joint fundraising.

Author Contact Information

R. Sam Garrett

Analyst in American National Government
rgarrett@crs.loc.gov, 7-6443




Congressional Research Service
18