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When you take look at the election campaign in the United States, in addition to expressions of democracy raised to the highest level of political spectacle, you cannot ignore the fact that it’s a show that costs money. Not pennies, but hundreds of millions of dollars. Huge amounts of money are spent in election campaigns overseas, which is far too much, even for Americans.
Forbes magazine writes that Trump's campaign committee alone raised 217.2 million USD from January 2023 to June 30, 2024. The campaign staff of Biden/Harris (it was the latter who actually received the funds) collected 284.1 million USD in the first 24 hours after the announcement of the campaign partner, Tim Walz, the governor of Minnesota. Kamala Harris herself raised an additional $36 million for the election campaign. But these amounts account for merely a percentage of the total funds raised so far, as each candidate has numerous other groups of endorsers who are not subordinated to the campaign staffs, but campaign for (as in actively “promote”) the candidates nonetheless.
Sources of funding for the well-oiled American election machine: citizens, corporations and various committees
The American system of funding election campaigns is quite transparent. It allows candidates and parties to juggle large sums of money. To better understand how it works, it is important to know that the relevant legislation regulates the amounts of money that candidates or political parties can receive from individuals or organizations, as well as the total amounts of money that individuals or organizations can donate.
The law also defines who can make such contributions, who can endorse candidates with either funds or specific actions. As a rule, the money comes from donations or contributions from individuals, political party committees and political action committees (PACs).
The so-called independent groups, (i.e. corporations, unions, or non-profit organizations) are barred from contributing directly to federal campaigns. However, they can influence federal elections by creating political action committees, better known as PACs. These committees raise donations from members and associates, contributing to the campaign or financing campaign activities such as advertising. Funds raised and spent by PACs are subject to federal limitations.
The first federal limitation was introduced in 1910 and defined a maximum amount of money that a citizen could donate to a political campaign. The introduction of this limitation was actually aimed at creating equal opportunities for poor and wealthy citizens alike. In other words, without this cap on contributions, very wealthy individuals can make huge financial contributions for a candidate to try to advance their own political agenda. Therefore, American lawmakers thought this would eliminate corruption.
Later, in the early 1970s, the election legislation was amended to impose spending limitations for campaigns staffs in mass-media.
Federal contribution and spending limitations targeted funds addressing both official campaigns and independent groups that spend money during election cycles.
Independent spending during election cycles has skyrocketed since 2010.
Why 2010? In recent decades, there have been a number of important Supreme Court rulings that have significantly influenced regulations on election campaign financing. One of those impactful Supreme Court rulings was Citizens United v. the Federal Election Commission, which was settled in 2010. In short, the Court ruled that legal limitations on how much money an independent group is allowed to spend on a political campaign were unconstitutional, as long as the said group did not coordinate spending directly with the candidates (which would undermine their independence).
And that's how the so-called SUPER-PACs were created. The colossal amounts of money raised by these independent committees are spent on advertising or other actions, and any donations to these SUPER-PACS are NOT subject to federal limitations. In theory, they cannot contribute directly to election campaigns, nor can they coordinate with campaign staff or candidates. In practice, the money raised this way is allocated to campaign actions of specific candidates.
American candidates would rather trade state funding for private funding
However, presidential campaigns in the United States are also financed by the state. Under the Presidential Crowdfunding Program, eligible presidential candidates receive federal government funds to cover their campaign expenses in both the primary and general elections.
These funds are financed in part by taxpayers who choose to redirect part of their income to the Presidential Campaign Fund in the form of tax returns. In order to be able to access these funds, all candidates, including those entering the race for the White House, must agree to restrictions imposed by the Federal Election Commission (FEC) on spending and fundraising. That is, presidential candidates in particular can only receive public funds if they agree not to use private donations. Many major party candidates are turning down public funding in favor of privately raised funds.
To get just an idea of the amount of money that is being circulated around these campaigns, let's look at the 2019-2020 election cycle for reference. We are therefore talking about Trump vs Biden. According to data made public by the Federal Election Commission, no less than 4.1 billion dollars was collected and spent at the time!
This means that the amount at stake for the presidential election at the time was almost 4 times higher than that of the previous election cycle, 2015-2016, when Donald Trump won the race for the White House to the detriment of Hillary Clinton.
A study conducted by Caltech shows that, paradoxically, most funds do not come from traditional donors mentioned earlier, corporations or their owners, but from the so-called hidden donors.
The term specifically refers to people who donate under 200 dollars, in money or gifts, an amount that does not have to be reported to the Federal Election Commission. Anything over 250 USD must be reported to the FEC.
The 2016 case of Bernie Sanders is a case in point in that respect. In 2016, the Democratic Senator ran in the party primary for the presidential nomination. He lost, however, to Hillary Clinton. But the mechanism by means of which Sanders defrauded the Federal Election Commission remained in place. Small, seemingly insignificant contributions were collected online through an intermediary tool called ActBlue. And there were over a hundred million recorded donations in small amounts, accounting for 33% of all funds for the Sanders campaign in 2016. The Caltech study shows that there were 7 times more hidden donors than those recorded through traditional channels.
All these machinations behind the US election campaign has given rise to heated debates in American society, especially since, in the case of the SUPER PACs, they have also allowed wealthy donors to partially hide the sources of their contributions, meaning it is often impossible to know exactly where all the money spent to the benefit or detriment of a given candidate comes from.
All things considered, when you finally see the amounts at stake, and taking into account the atypical voting system in America, you cannot help wondering who dictates the agenda? Money or voters?
