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Show Me the Money: Political Action Committees

Posted By Nick de Julio, Tuesday, August 26, 2014
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An effective tool in building relationships with decision makers

Citizens have many opportunities to influence the legislative process — hire a lobbyist, join an association, volunteer on a political campaign or ballot initiative, or contribute financial resources. You can contribute to an individual candidate, state or local political party unit, or to a political action committee (PAC). Many organizations form PACs as a way to provide financial contributions to candidates for office who have been helpful to the organization in the policy arena, and to candidates who may show an interest in the organization’s issues into the future. The following information explains how Political Action Committees work in Minnesota; laws vary by state and federal laws apply to campaigns for federal offices. There are also issue-oriented PACs, commonly referred to as Super PACs, that are formed to advocated for a political position or candidates, but they are not allowed to make contributions directly to candidates for office.

What is a PAC?
PACs are organizations that obtain contributions from individuals and distribute donations to candidates for political office, promote or defeat legislation, or support or oppose a ballot question.

Where the money comes from…
PACs have strict rules about who they can collect contributions from and who they can contribute to:

  • PACs may accept contributions from individuals, other registered PACs and political party units, as well as individual candidates’ campaign committees.
  • Anonymous contributions and contributions from associations that are not registered with the Minnesota Campaign Finance and Public Disclosure Board cannot be accepted.
  • PACs cannot accept any contributions that are designated by the contributor for a specific candidate (also known as “earmarks”).
  • Corporations cannot donate to a PAC, although there are some exceptions regarding non-profits.

Where the money goes…..
Once the PAC has raised money, it is restricted to certain types of contributions or expenditures:

  • A PAC can contribute to individual candidates, political party units, and to political committees or funds either registered or not registered with the Minnesota Campaign Finance Board.
  • The PAC can make direct expenditures and independent expenditures, or expenditures made on behalf of a candidate, without their permission.
  • PACs are also allowed to spend money on their own operating expenses.

Campaign Contributions and limits
Candidates and elected officials can accept contributions from many sources  — individuals, lobbyists, political committees and political party units. Candidates cannot accept contributions from corporations or anonymous contributions over $20.

During a legislative session, candidates and elected officials cannot receive contributions from lobbyists or PACs.

Candidates and elected officials also have limits as to what they may accept from lobbyists, political units and large donors during a two-year period. If they go over these limits, they must return the funds to the original source.

  • In a non-election year, a PAC can donate $2000 to candidates for governor, $1500 for attorney general candidates, and $1000 to candidates running for secretary of state, state auditor, or the state legislature.
  • In an election year, the limit jumps to $4,000 for governor, $2,500 for attorney general, and $2000 for secretary of state and state auditor, and $1,000 for the state legislature.
  • There are no limits on contributions to state or local political party units.

Details on the contribution limits can be found at the MN Campaign Finance Board.

How are they held accountable?
PACs must register with the Minnesota Campaign Finance and Public Disclosure Board, which regulates the PAC. Upon registration, a PAC needs a chair and a treasurer (who can be the same person) as well as a bank account. Once the PAC is registered, the treasurer needs to submit an annual report of receipts and disbursements. For each contribution, the PAC must report the name, the address and/or registration number, the employer, the date of payment, and the amount of payment. For expenditures, the PAC must report the specific purpose of the expenditure. The Board makes software and training seminars available to ease the process of reporting this information.

Tags:  decision makers  nick de julio  PAC  political action committee 

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