Campaign Contribution Limits

By Greg Noakes

As the field of Republican presidential hopefuls grows and congressional incumbents and challengers prepare for 1996 Senate and House elections, candidates are soliciting campaign funds from both individuals and political action committees (PACs). Unfortunately, the PACs, which represent special interests, exhibit far greater understanding than do individuals, representing the public, of the Federal Election Campaign Act and Federal Election Commission (FEC) rules, found in title 11 of the Code of Federal Regulations (11 CFR). These rules limit the total amount of money individuals and PACs may contribute in a given year to influence federal elections, and also define how they may distribute this money.

Federal elections include campaigns for the House of Representatives, the Senate and the U.S. presidency. Contributions are defined not just as money given to a candidate or committee, but also include donations of goods and services, purchase of tickets to fund-raising events, loans, and guarantees or endorsements of bank loans. All such contributions count toward FEC limits.

Individual Limits

Individuals may contribute up to $25,000 per calendar year toward federal elections, but there are rules governing how that $25,000 may be distributed. An individual may contribute up to $1,000 to each candidate or candidate committee per election. For FEC purposes, primaries, general elections and runoffs are considered separate elections.

An individual may also contribute up to $20,000 to a national party committee and up to $5,000 to any other political committee (such as an issue-oriented committee or a state party committee) during a calendar year. Donations to committees count toward the $25,000 limit of the calendar year in which they were given, but contributions to a candidate will be counted toward the year of the candidate's next election.

For example, in June 1995, Jane Doe contributes $5,000 to an issue-oriented PAC and $1,000 to Sen. Joe Smith, a candidate for president in 1996. Because it was given to a political committee, Jane Doe's $5,000 donation to the PAC will be counted toward her 1995 $25,000 limit on federal campaign contributions, but the $1,000 Ms. Doe gave to Senator Smith will count toward her 1996 total, since the presidential primaries will be held in that calendar year. Jane Doe cannot make any more donations directly to Senator Smith's 1996 presidential primary campaign, since she has already reached the $1,000 limit on an individual contribution to a given candidate in a given election.

Should Senator Smith win his party's nomination, however, Doe could contribute an additional $1,000 to Smith's general-election campaign, since the FEC considers this a separate election. As a result of her primary and general-election donations to Senator Smith, therefore, Doe will have spent $2,000 of her $25,000 limit on 1996 federal election contributions.

For purposes of record-keeping, the FEC suggests individuals contributing funds to candidates specify on the check or in an accompanying letter the election for which the contribution is being made. This is particularly important for contributions intended to help retire a candidate's past election debts. Otherwise, an unspecified contribution is automatically applied to a candidate's upcoming election. To use the above example, if Sen. Joe Smith has outstanding debts left over from his 1994 Senate campaign, in June 1995 Jane Doe could contribute $1,000 specifically toward retiring that debt, with the amount counted retroactively toward Doe's 1994 limits on federal campaign giving, since that was the year Smith ran for the Senate. This contribution would have no effect on Jane Doe's 1995 or 1996 campaign contribution limits.

The only condition is that a campaign may not accept donations to retire an existing campaign debt in excess of that debt. In other words, if Senator Smith has a $5,000 debt from his 1994 Senate campaign and receives $6,000 in donations toward retiring that debt, he may not apply the extra $1,000 to his upcoming presidential race, and instead must return it to the donors.

Problem Areas

The FEC warns individual donors to watch out for several problem areas with regard to annual limits. First, individuals should be aware that a joint contribution made with another individual (for example, a husband and wife both signing a single check) will be divided evenly between the contributors unless otherwise specified in an accompanying note. However, if only the husband signs the check, even on a joint account, the total amount of the contribution will be counted toward the husband's contribution limit, not divided between the spouses. This could be an important consideration when making campaign contributions, since the husband and wife each have a separate $25,000 limit, as do children of voting age or older.

Second, when making a contribution to a PAC or a party committee, individuals should specify the account for which the donation is intended, since such committees often have separate accounts for federal and state elections. In other words, if an individual already has given $5,000 in federal election contributions to a PAC during the calendar year, any subsequent donations to the same PAC must be designated for non-federal election campaigns.

Finally, individuals should be aware that donations to a prospective candidate "testing the waters" will be counted as a donation to a federal candidate if the recipient of the contribution eventually declares his or her candidacy for federal office, even though the donation was made before the recipient filed as a candidate.

Committee Contributions

Political committees which donate money toward federal elections operate under similar caps, with some significant differences. First, there is no limit on the total amount of money a political committee can spend in one year to influence federal elections. A multi-candidate committee, defined by the FEC as a committee with more than 50 contributors which has been registered for at least six months and which has made contributions to five or more candidates for federal office, may donate up to $5,000 to each candidate per election, no more than $15,000 to a national party committee per calendar year, and $5,000 to any other political committee during a calendar year.

Political committees which do not meet the FEC criteria for multi-candidate committees, such as committees which donate money to fewer than five federal candidates or which have fewer than 50 contributors, face the same monetary limits as individuals ($1,000 per candidate per election, $20,000 per national committee per year, and $5,000 to any other committee per year). Like the larger multi-candidate committees, though, these political committees have no maximum total they can spend in a calendar year.

Individuals computing their own donation limits should note, however, that a contribution to a single-candidate committee (a "Committee to Elect Joe Smith," for example) counts as a contribution to that candidate rather than as a donation to a political committee, and is thus subject to the individual's $1,000 limit on contributions to a candidate in a given election.

Prohibited Contributors

Some individuals, organizations and companies are prohibited from making federal campaign contributions. Foreign nationals who do not have permanent U.S. resident status (non-green card holders) may not contribute, and individuals may not contribute in someone else's name. Candidates and political committees may not accept cash donations from any individual in excess of $100 and no more than $50 in an anonymous cash contribution.

No federal campaign contributions may be given from the treasury of a corporation, labor organization or national bank. These entities and incorporated membership organizations may, however, create political action committees which are allowed to contribute to federal election campaigns or political committees. Government contractors are not allowed to make contributions, but this prohibition does not apply to their employees, partners or shareholders, who may donate as individuals.

Further Information

The Federal Election Commission has a toll-free number for people with questions about federal election campaign contributions: (800) 424-9530. In the Washington, DC area, call (202) 376-3120. The FEC also has an automated fax service which operates 24 hours a day. By calling (202) 501-3413 from a touch-tone phone and following the instructions, readers may request information to be transmitted automatically to their fax machine. For a complete menu of documents available, select document number 411.

Greg Noakes is the news editor of the Washington Report on Middle East Affairs.