what is the primary function of a political action committee (pac)

what is the primary function of a political action committee (pac)

what is the primary function of a political action committee (pac)

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What is the primary function of a political action committee (PAC)?

Running for political office is an expensive proposition. During election time, many people and entities contribute funds to political campaigns.

 

What Is a Political Action Committee (PAC)?

In the U.S., a political action committee (PAC) is a political committee that pools campaign contributions from members and donates those funds to campaigns for or against candidates, ballot initiatives, or legislation. PACs are typically formed to represent business, labor, or ideological interests by individuals who wish to privately raise money to donate to a political campaign.

The first PAC was formed in 1944 in order to raise money for the re-election of then-President Franklin D. Roosevelt.

what is the primary function of a political action committee (pac)
what is the primary function of a political action committee (pac)

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Political Action Committee

A political action committee (PAC) in the United States is an organization which collects funds from members and then directs them towards political campaigns. These funds may be directed to campaigns for or against candidates in elections. The vast majority of political action committees are set up to represent businesses, labor or specific interests such as environmentalism and abortion rights.

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Connected vs Non-connected PACs

Broadly speaking, there are two types of political action committees in the US: connected and non-connected PACs. The main characteristics of connected PACs (also known as separate segregated funds – SSFs) are as follows:

  • Connected Organizations – connected PACs are associated with a “connected organization” which actively sets up, administers and raises money. These “connected organizations” are generally corporations or labor organizations.
  • Unlimited sponsorship – connected PACs are usually able to benefit from unlimited administrative support from their connected organizations, which is generally not subject to federal disclosure rules.
  • Restricted solicitations – connected PACs may only solicit campaign finance funds from a particular group of individuals who have a certain relationship with the connected organization. For example, stockholders if the connected organization is a corporation, or members and their families if it is a labor union.

In contrast, non-connected PACs have the following characteristics:

  • No connected organization – unlike connected PACs, non-connected PACs do not have a “connected organization”. However, they may receive limited financial or administrative support from a “sponsoring organization” that isn’t a corporation or labor organization – for example, unincorporated associations and partnerships.
  • Limited sponsorship – all forms of support from sponsoring organizations are, however, deemed as being contributions which a subject to prohibitions, annual limits and federal disclosure under the Federal Election Campaign Act.
  • Unrestricted solicitations – non-connected PACs are able to solicit contributions from the general public at large.
what is the primary function of a political action committee (pac)
what is the primary function of a political action committee (pac)

How a Political Action Committee Works

At the federal level, an organization is considered a PAC when it receives or spends more than $1,000 for the purpose of influencing a federal election.

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There are many types of restrictions that guide how PACs are able to fundraise for and donate their contributions to political campaigns and/or causes. They can contribute $5,000 to a candidate committee per election (primary, general, or special). They can also give up to $15,000 annually to any national party committee, and $5,000 annually to any other PAC. PACs may receive up to $5,000 from any one individual, PAC, or party committee per calendar year.

A PAC must register with the U.S. Federal Election Committee within 10 days of its formation, and it must provide the name and address for the PAC, its treasurer, and any affiliated organizations. For the purpose of contribution limits, all affiliated PACs are treated as one donor.

PACs are also required to disclose information about all individuals who contribute to them. However, sometimes these names are not disclosed until after the election (when votes have already been cast).

Types of Political Action Committees (PACs)

There are many categories of PACs, including separate segregated funds (SSFs), nonconnected committees, Super PACs, and Leadership PACs.

Separate Segregated Funds (SSFs)

Corporations, labor unions, membership organizations, or trade associations can establish separate segregated funds (SSFs). Once established, these committees can only receive contributions from individuals that are associated with that connected or sponsoring organization.

Nonconnected Committees

Unlike SSFs, nonconnected committees are not sponsored by a specific entity or organization. As a result, they can accept contributions from the general public.

what is the primary function of a political action committee (pac)
what is the primary function of a political action committee (pac)

Super PACs

Super PACs can receive unlimited contributions from individuals, corporations, labor unions, and other PACs.

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Hybrid PACs

A hybid PAC can act as both a PAC and a Super PAC. Hybrid PACs must maintain segregated bank accounts for their unlimited Super PAC activities and their normal PAC fundraising and contributions, which are subject to the same statutory limitations as a regular PAC.2

Leadership PACs

A leadership PAC is a PAC that is established by a candidate or an individual holding federal office. It is common for members of Congress and other political leaders to establish leadership PACs in order to support candidates for various elected offices. Leadership PACs can only contribute up to $5,000 per election to a federal candidate committee.

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