Glossary of Terms
Glossary of Terms
501(c) what?! Keeping track of court cases and IRS-isms is tough. Here are the words and terms to know when talking money in politics.
501(c) organizations refers to a section of the U.S. Internal Revenue Code, referring to tax-exempt nonprofit corporations or associations. The code refers to 28 types of nonprofit organizations that are exempt from some federal income taxes.
501(c)(3) exemptions apply to religious, charitable, scientific, literary or educational purposes, among others. These organizations cannot participate in political campaigns, but are allowed to lobby elected officials.
501(c)(4) organizations are also tax-exempt nonprofits, but are able to lobby for legislation and can participate in political campaigns (as long as campaigning isn’t the organization’s primary purpose), typically on behalf of specific issues. 501(c)(4) organizations do not have to publicly disclose their donors. They are commonly called “social welfare” organizations. Many super PACs have a 501(c)(4) component to their organizational structure.
527 Committee — Tax-exempt groups that raise money for political activities. Before Citizens United, many 527 groups were used to raise unlimited amounts of soft money for voter mobilization and issue advocacy. Citizens United allowed 527s to advocate explicitly for or against specific candidates, spurring the creation of super PACs. The Federal Election Commission requires 527s to disclose their donors if they are advocating for or against a candidate in an election, but reporting schedules make it easy for many organizations to delay reporting.
Buckley v. Valeo — A 1976 U.S. Supreme Court case that upheld federal limits to campaign contributions but allowed for unlimited spending by campaigns. The court also ruled that “money is speech” or donating money to candidates is protected by the First Amendment. The case was spurred by a 1974 act by Congress passing significant amendments to the Federal Election Campaign Act of 1971.
Citizens United v. FEC — A landmark 5-4 Supreme Court decision in January 2010 that declared limiting corporations’ political spending unconstitutional, allowing both corporations and unions to advocate explicitly for or against political candidates. The rulingenables corporations and unions to spend unlimited funds on campaigns. The majority opinion, voiced by the court’s conservative-leaning judges, said that the First Amendment meant that the government could not regulate political speech. The dissenters, mostly progressive, said that a flood of corporate money would corrupt democracy.
The case began during the 2008 election when a conservative nonprofit corporation, Citizens United, wanted to advertise its film critical of then Democratic presidential candidate Hillary Clinton. The film was overtly political, and Citizens United wanted to purchase airtime on a video on-demand service on cable television. This supposedly violated rules on the production of political ads, especially on who may fund them — not corporations. Citizens United initially lost a suit against the Federal Election Commission and then appealed to the Supreme Court.
This decision enabled the formation of super PACs in time for the 2010 elections.
“Corporations are people”/ Corporate personhood — This phrase has become a rallying point for Occupy Wall Street, used as common shorthand for the Supreme Court’s 2010 Citizens United decision, which held that corporations had certain rights to free speech, much like people.
However, the concept of corporate personhood has been around for over a century: In the late 1800s, the Supreme Court case of Santa Clara County v. Southern Pacific Railroad ruled that corporations had the same rights to the 14th amendment — the Equal Protection Clause — as actual humans.
U.S. law treats corporations as persons in some circumstances: corporations can be persecuted for crimes, own property and have rights to contracts. However, they cannot marry, vote or run for office.
Many of the legal issues involving corporations that we’re concerned with involve corporations’ right to speech, including the Citizens United decision. Interestingly, the majority of justices who supported striking down campaign spending regulations did not use corporate personhood in their arguments. It was actually used by the court’s more liberal dissenters, who noted that one important part of the concept of corporate personhood was the differences between actual persons and metaphysical persons (like corporations). They said that different free speech rights should apply to these very different entities.
FEC (Federal Election Commission) — An independent regulatory agency that oversees and enforces campaign finance legislation. It was created by Congress in 1975 as part of the Federal Election Campaign Act. The FEC is meant to disclose campaign finance information, enforce limits and prohibitions on campaign contributions and administer public funding of presidential elections. It is made up of six members, each appointed by the president and confirmed by the Senate, who serve six-year terms.
Get Money Out — A campaign started by MSNBC host Dylan Ratigan working to end the corrupting influence of money in politics. With a membership of nearly 300,000 people, Get Money Out recently merged with United Republic to achieve our common goal of restoring faith in government by cleaning up institutionalized corruption.
The Hill — Shorthand for Capitol Hill, where the Capitol building and Congress are located.
Influence industry — A name for the mass of lobby shops, public relations firms, unions, nonprofits and other associations that spend a lot of money to have a say in what happens in lawmaking in Washington.
K Street — A street in downtown Washington where most of the city’s largest lobbying firms are located. Often used as a shorthand for lobbying firms in general.
Lobbyist — A person who is paid to influence legislation on behalf of a special interest. The best-paid lobbyists are typically former government employees (including former members of Congress) who can use personal experience and connections to influence governmental decisions. Along with making campaign contributions to politicians, corporations, unions and other organizations spend billions every year on lobbying Congress, the White House and other federal agencies. Some organizations and companies have their own in-house lobbyists, while others work with lobby firms, many of which are located on Washington’s K Street.
The Lobbying Disclosure Act, which covers federal lobbyists, says that a person must register as a lobbyist if he or she fulfills three main criteria: two or more contacts with a lawmaker, a congressional staff member or an administration official on behalf of a client; 20 percent of time spent working for a client must consist of “lobbying activities” and the person must earn at least $3,000 from the client per quarter. As we’ve reported, sometimes lobbying activities are done by people who aren’t legally registered as lobbyists.
As of October 31, $2.45 billion was spent on lobbying in 2011, with 12,220 people registered as federal lobbyists.
McCain-Feingold (aka the Bipartisan Campaign Reform Act of 2002) — A U.S. federal law that amended the Federal Campaign Act of 1971, the main law regulating campaign finance. The act, sponsored by Senators Russell Feingold (D-WI) and John McCain (R-AZ), addressed both the increased role of soft money in elections and the proliferation of issue advocacy ads. It prohibited national parties from raising or spending unlimited funds. The act also broadened the definition of “electioneering communications” to any ads that name a candidate within a certain amount of time before an election. “Electioneering communications” ads paid for by corporations and other similar organizations were prohibited (a provision overturned by the Citizens United decision). For most Americans, the most obvious effect of this law is the statements by candidates at the end of political ads declaring that they “approve this message.”
“Money is speech” — Shorthand for the consequences of the U.S. Supreme Court’s 1976 Buckley v. Valeo decision, which held that money spent on elections deserves the same constitutional protections as speech. This decision has been used to support more recent decisions that chipped away at Congress’ ability to pass campaign finance reform laws.
PAC — A political action committee, or PAC, is an independent political organization used to raise and spend money to elect and defeat candidates or to influence the outcome of a political issue or piece of legislation. PACs are not directly connected to the government, and typically are associated with businesses, unions or ideological interests. Under the Federal Election Campaign Act, an organization becomes a “political committee” when it raises or spends more than $1,000 in a federal election. Laws defining and regulating PACs also vary by state.
According to campaign finance laws, PACs can give $5,000 to individual candidates during each election (primary, general, special), $15,000 annually to a national party committee and $5,000 to any other PAC.
The first PAC was formed by the Congress of Industrial Organizations (CIO) in 1944. The CIO’s PAC raised money to reelect President Franklin D. Roosevelt and other pro-union candidates. The PAC got around the Smith-Connally Act of 1943, which banned union treasuries from directly contributing to politicians, instead drawing on the voluntary donations from union members. In the 1960s and ’70s, business groups began to form their own PACs, while members of Congress started creating Leadership PACs in the 1980s.Leadership PACs allow members of Congress to distribute campaign funds to other members of their party. Today, hundreds of members have their own Leadership PACs.
Public financing — A system in which candidates can use public money to fund their campaigns, provided they follow certain rules (including campaign spending limits). The FEC defines public financing as using ”federal government funds to pay for the valid expenses of [candidates'] political campaigns in both the primary and general elections.” This money comes from the U.S. Treasury and the amount is determined by taxpayers, who can check a box on tax forms asking that $3 of our taxes go to the Presidential Election Campaign Fund. The government will also match donations to candidates during the primary election.
Legislation for public financing was first proposed by President Teddy Roosevelt in his 1907 State of the Union address, but wasn’t actually used in elections until 1976, after a series of laws were passed enabling candidates to receive public funds.
While all of the presidential candidates from 1976 to 2008 accepted public funding of some kind, in 2008, Barack Obama chose not to use public funds in the general election. In 2012, with none of the major candidates opting to use public financing, some have claimed that the system is dead.
Revolving door — Refers to lobbyists who are former government employees (including former members of Congress). They’ve made the trip through the “revolving door” between government and lobbying firms.
Rootstrikers — A group founded by Harvard law professor Lawrence Lessig that joined forces with United Republic in the fall of 2011. The group’s name is inspired by the Henry David Thoreau quote, “There are a thousand hacking at the branches of evil to one who is striking at the root.” Rootstrikers aims for public funding of elections, a transparent and independent political expenditure system and legal personhood mandated for natural persons only.
Soft money — Contributions made to a political party as a whole, which are not
regulated by federal contribution limits. The Bipartisan Campaign Reform Act of
2002 (also known as McCain-Feingold) banned the national parties from raising soft
money. Soft money was supposed to be used for activities like party building and
voter registration. However, it increasingly became used for “issue” ads that not-so
-subtly attacked the opposite party’s candidates or promoted the party’s
own candidates right before elections. According to OpenSecrets, the two main
parties combined raised more than $500 million in soft money during the 2002
Super PAC — A special political action committee, created in the wake of the Supreme Court’s 2010 Citizens United decision, that can raise and spend unlimited funds for political campaigns. Super PACs can support specific candidates, but must work independently of their campaigns. Corporations, unions and individuals are all able to donate to super PACs.
According to the Center for Responsive Politics, as of December 12, 2011, 250 super PACs have reported total expenditures of $8,563,573 for the 2012 elections. These organizations include American Crossroads, which is associated with Republican strategist Karl Rove, Restore Our Future, supporting Mitt Romney, and Priorities USA Action, supporting Barack Obama.
The 99% (We Are the 99%) — A slogan used by the Occupy Wall Street movement to illustrate the enormous concentration of wealth in the top 1 percent of Americans, versus the bottom 99 percent. The term originated in September 2011 as a Tumblr blog featuring photos of people hurt by recent economic turmoil and their stories. Income inequality has not risen very much over the past 20 years among the bottom 99 percent of Americans, but has increased dramatically when the top 1 percent, who make 24 percent of national income, are factored in. The slogan, which has been adopted in protests worldwide, conveys the anger many Americans feel toward Wall Street and other elites in the wake of the 2008 financial crisis and bank bailout, indicating that the masses are paying for the mistakes of a privileged few.