This is how a candidate for president of the United States is financed



Cartel de Obama en Charlotte

Two people sell commemorative buttons on September 3, 2012, at CarolinaFest 2012, during the Democratic National Convention. EFE / DAVIS TURNER

The US presidential elections, which take place on November 6 , have an inevitably superficial dimension: debates between the main candidates that live as if they were crucial boxing matches, legends of cinema that take sides noisily, anthological outbursts ….

But also another dimension, more tedious, annoying, that is truffled with figures with several zeros, modest contributions, splendid donations, collection committees and, in short, an agonizing battle to make cash. That is to say, of all that underlies -and copes with- the papier-mache splendor of political propaganda.

US election campaigns move a huge amount of dollars . It has always been that way, both throughout the past century and so far. But the 2012 elections – which are paradoxically held in the midst of an almost unprecedented economic crisis – mean, financially, one more turn of the screw.

The issue that most threatens democracy is the private financing of campaigns Since 2010, a new law allows unlimited funding of campaigns. A decision that, in spite of the voices against that warn about a possible perversion of the system, was ratified by the Supreme Court in January of this year. “The issue that most threatens democracy is the private financing without limit of the campaigns”, complains Alana Moceri, director of the course of Expert in Communication and Lobbying of the European University of Madrid.

The ideology, the mobilization of the electorate, the proud defense of the great values ​​continue to count when deciding who gets the privilege of inhabiting the White House, but in the campaigns of the two parties that play the triumph, the importance of money collected is vital . This is a review of the forms of financing the elections , from the modest participation to the large sums of money donated by millionaires and companies.

Public financing: a discarded option

As happened in the last elections, those of 2008, both the Democratic candidate Barack Obama as the Republican candidate Mitt Romney have rejected in these the option of public financing of their campaigns, so they only get money through private funds of people, organizations and companies.

The public financing option exists since 1971, but it stopped being used in 2008. The public financing option exists in the US since 1971 , when the Campaign Fund for the Presidential Elections was created. To this fund, as established by successive reforms, US taxpayers can designate three dollars of their income tax return.

The first elections in which candidates made use of this money were those of 1976, won by the Democrat Jimmy Carter. Since then and until Obama publicly renounced them during the campaign that took him to the White House, all aspiring presidents made use of this trick.

PAC: regulated private financing

Political Action Committees (PACs) are the traditional way to raise funds for party campaigns through donations from individuals, unions and businesses . Donations that may or may not be direct to candidates.

PACs were born in the 1940s (the first that was created was intended to support the campaign for the re-election of Democrat Franklin D. Roosevelt) and since then they are subject to control and oversight by the Federal Elections Commission (in English) , FEC). Since the 1970s and until today, they have not stopped growing in number and importance.

The main characteristic of PACs is that there is a limit on the contribution set by law. There are two types of PAC. The first, the most common, are the so-called ‘separate funds’ . They are created by organizations and unions that can not contribute money directly to campaigns, so they use these committees to collect contributions, which they then spend to support their candidate.

The second ones are the PACs of ‘unconnected’ or ‘leadership’ committees , and they are formed by organizations outside the unions and other corporations that directly support a politician. Since the last elections, these PACs have been obliged to disclose who they support (previously they were secret).

Examples of the latter are the Prosperity PAC, which during this year put almost a million dollars to support the Republican candidate for vice president of the country, Paul Ryan, and the PAC to the Future, which injects money – almost $ 700,000 – for the Democrat Nancy Pelosi, former president of the House of Representatives.

The main characteristic of PACs is that there is a limit on the contribution . As a curiosity, some of the PACs of the first type that spend the most (see this table prepared by the Center for Responsive Politics, a non-profit organization specializing in political transparency ) donate their money in a similar proportion between the two major parties. This is done, for example, by the American Association of Beer Distributors, which in these elections has spent almost three million dollars (41% for Democrats, 59% for Republicans).

Super PAC: money at baskets

Those known as Super PAC are the novelty in these presidential elections. They were born in 2010 , at the risk of the aforementioned law that grants carte blanche for the unlimited financing of campaigns.

“Since its inception,” says Moceri, ” there are no limits on spending on political communication.” What is being translated, for example, in a huge amount of ads , many of them negative political propaganda, against the candidates of both parties.

Super Pacs have no limitations when it comes to donating money to a candidate. Unlike PACs, they can not donate money directly to candidates, although they are subject to inspection by the FEC, and they have the obligation to declare their expenses as well as the name of your donors.

As of October 28, Open Secrets , the Center for Responsive Politics data website, has posted 971 Super PACs that have entered 600 million dollars and spent about 500 million dollars. Of these almost 1,000 Super PACs, the two most important and most money moving are Restore Our Future and American CrossRoad , which support Romney, and Priority USA Action , which supports Obama.

It is to these Super PACs that the American magnates donate money. Long, the one that brings more money is Sheldon Adelson, owner of Las Vegas Sands and promoter of Eurovegas in Spain, which according to a classification developed by The New York Times , has donated 35 million dollars to Republicans. Harold Simmons, owner of several of the major American chemical industries, is second on the list of millionaires who contribute money, and like Adelson, he does it to the Romney campaign.

Among those who contribute the most money to the Super PACs that support the Democrats, and although the figures do not reach those of the Republicans, there is the speculator and philanthropist George Soros (who has put out of his pocket 1.5 million dollars) or the film director Morgan Freeman (both have donated $ 1 million to relaunch the Obama campaign).

Political Parties: classic collection

The committees of the parties themselves are the organizations strictly related to these and that are therefore able to finance them directly .

The ‘bundling’ are meetings, parties, celebrations where you contribute collectively to a campaign. There are two types. Direct contributions to parties and candidates are called hard money , and are regulated and limited by the FEC. And the contributions denominated soft money , whose quantity is unlimited, but that can not go to finance the campaigns of the candidates, but the state and local committees (usually it is money for base activities, register of voters, merchandising of the party, etc. )

There is also a way to directly finance the campaigns by circumventing the limitations imposed by the FEC. It is known as Bundling : a person, normally known, collects money from other people through celebrations or charity events and then delivers it to the candidate. Hollywood actors such as George Clooney have organized collecting parties of this type.

The 527s: propaganda outside the system

The 527s are organizations that do not directly ask for votes for candidates, but induce the voter to create a favorable or unfavorable image of them (they are something like an ideological version of a think tank , but without its academic residue). They are called numerically 527s because they are exempt from paying federal taxes .

Because of their elusive nature , they are not supervised by the Federal Elections Commission, so donations and expenses are not regulated in the campaign, as are those of the PACs or the contributions of partisan organizations. They are controlled, however, by the Internal Revenue Service (in English, IRS), the federal agency in charge of collecting taxes.

Behind the 527s there are usually interest groups that try to influence to mobilize the vote Behind the 527s there are usually interest groups that try to influence to mobilize the vote through announcements in the media, through telephone calls to the addresses, as explained by the Center for Responsive Politics.

Associated largely with the 527s is what is known as shadow money , which is the money that these organizations move ‘tax-free’ and with which anonymous donors (who have no obligation to reveal their name in any case) contribute to support the campaigns.

This ‘money in the shade’ has increased exponentially in the last presidential campaigns (see chart). In general, it is intended to make negative political propaganda of the candidates. In this sense Obama is the candidate who receives the most negative propaganda (worth 74 million dollars), far from Romney, the second (which hardly supports advertising against him worth 5 million dollars), according to Open Secrets .

  • Obama poster in Charlotte

    Two people sell commemorative buttons on September 3, 2012, at CarolinaFest 2012, during the Democratic National Convention. (EFE / DAVIS TURNER)

    “> Obama poster in Charlotte