Campaign Funding in US Elections
What is happening?
On January 20, 2025, the next President of the United States of America (US) will be inaugurated. Two major players have set the stage for the upcoming elections on November 5, 2024:1 current President Joe Biden, representing the Democratic Party, and former President Donald J. Trump for the Republican Party (GOP). Two other Republicans, two other Democrats, and three independent and third-party candidates are in the running alongside the pair.2 Underlying the political struggle towards the presidency is a money race, as contenders fight to gain crucial campaign support and outweigh their opposition both within and outside of their parties, given that “fundraising is one of the key components of political campaigns.”3 Campaigns, through the use of advertisements, engagements, political commercials, and state visits, to name a few methods, influence the support garnered for candidates by the general public throughout the electoral process: between January and June, state primaries and caucuses occur,4 where candidates try to win the most delegates from their respective parties;5 delegates later vote for their preferred presidential nominee during partisan national conventions.6 Campaign financing is sourced from individual donations, self-funding, political action committees (PACs) that pool and distribute funds to candidates,7 and other organizations.8 It has, however, arguably contributed to the “growing disconnect between elected officials and the majority of people they represent.”9
The 2024 election cycle is predicted to be the most expensive in US history.10 Trump raised over $60 million by the end of September 2023,11 since the early launch of his campaign in the final quarter of 2022.12 However, over a third of his funds at the time went towards legal fees on court cases and lawsuits.13 For Republicans, campaign financing holds greater significance as the Republican National Committee – the party’s primary committee that organizes its undertakings, such as the Republican National Convention14 where the GOP candidate is set to be nominated in July15 – has “polling and fundraising thresholds” that candidates must meet to qualify for debates.16 Trump remained in the lead among then-GOP candidates as of the third quarter of 2023, with more money stored than all his competitors, combined.17 Meanwhile, Biden’s campaign gained $72 million in a short three months from April to June 2023, through the Biden-Harris campaign, the Democratic National Committee (DNC), and their joint fundraising committees.18 The DNC – alike in role of its Republican counterpart and will host the Democratic National Convention in August19 – has been a “central part of the Biden re-election strategy.”20 The incumbent leader merged the party with his campaign in an uncommon move, and restructured what was considered a disordered committee.21 Additionally, during a “fundraising sprint” in December 2023,22 Biden raised about $4 million from campaigns targeted towards grassroots donors with the help of former President Barack Obama; $2.6 million of which was gained through a contest to meet the two of them.23 During the 2020 election cycle, Biden became the first candidate in the history of political fundraising to have $1 billion contributed to his campaign from donors alone.24 In the same cycle, federal spending, encompassing presidential and congressional spending, reached a record $14.4 billion; the Democratic party amounted to $8.4 billion, whereas the GOP spent $5.3 billion.25 Presidential spending on campaigns totaled $5.7 billion, standing in stark contrast to the $2.4 billion spent in 2016.26 In 2012, the then-most expensive election cycle, the campaigns of former President Barack Obama and his main contender, Mitt Romney, spent over $1 billion each,27 with campaign funds totaling $2.6 billion.28
Candidates or parties with more financing during the electoral cycle can extend their campaign’s influence widely and eliminate opposition with less economic backing throughout the process. Campaign financing commonly holds two main motivations: influencing legislation to lobby for specific policies or ensuring election outcomes. One clear outcome of funding, and longstanding practice in the modern era of the US presidency, is the appointment of wealthy independent donors to ambassadorial postings abroad, despite these individuals lacking credentials or prior experience.29 Legally, “contributions to political campaigns should not be a factor in the appointment” of diplomats, yet both Democratic and Republican leaders have participated in what has been termed the donor-to-ambassador pipeline.30 Despite Biden’s promise that contributions to his 2020 campaign “would not be any basis” for his decisions,31 a study reveals that non-career ambassadors nominated by the current president have, along with their spouses, donated a total of over $22 million to Democratic committees in the decade leading to their nomination.32 For instance, Jane Hartley, US Ambassador to the United Kingdom, contributed more than $600,000 to Democrats directly between 2017 and 2020,33 only one example of a number of similar cases under the Biden administration.34 During Obama’s presidency, Hartley was appointed as US Ambassador to France, having contributed a similar amount to the party between 2008 and 2012, but more importantly, supported efforts to secure more than $500,000 in 201235 through campaign fundraisers known as ‘bundlers.’36 Likewise, Trump’s political appointees, both abroad and domestic within the government and his Cabinet, including their families, contributed over $6 million to him and his allied super PACs in the 2016 electoral cycle, and over $25 million to Republican candidates between 1989 and 2016.37 Notably, several federal investigations launched on these individuals concluded poor performance and cases of embassies that serve “no significant role in policy advocacy or reporting,” consequently increasing international and domestic distrust in American diplomacy and risking the country’s foreign relations.38 The evident link between political appointment and financial contribution also indicates the pervasiveness of corruption within US governance, bolstered by the nature of campaign financing. As the average amount of campaign contributions has grown noticeably in the past decade, the so-called “purchase price” of political appointments has “effectively increased,” and is expected to reflect more prominently in the upcoming elections.39
Why is it happening?
The issue of political financing is historically rooted in US presidential elections. In the 1970s, public concern grew over a lack of reliable data on the nature, source, and quantity of campaign financing. The Federal Election Campaign Act of 1971 (FECA), later amended in 1974, reformed legislation, “introducing, among other things, extensive reporting and disclosure requirements for political contributions and expenditures” and is referred to as a “major milestone in the development of campaign finance regulation.”40 Notably, the act established the Federal Election Commission (FEC), an agency that ensures adherence to finance laws.41 The six members of the commission’s panel are divided equally between Democrats and Republicans, intended to guarantee unbiased decision-making, but instead causing deadlock and disagreements. Thus, the commission ultimately fails to implement campaigning laws, such as those concerning recent allegations against Trump’s campaign.42 Further, a significant Supreme Court decision in 2010, Citizens United v. Federal Election Commission,43 overruled previous spending restrictions and established super PACs that can spend unlimited funds on campaigns on the condition that they do not coordinate with candidates.44 Subsequently, more than 59 “alleged unlawful coordination” cases have been put forward for investigation, only seven of which have been authorized given persisting disputes within the FEC.45 Coordination rules, therefore, prove ineffective.46 The Supreme Court’s ruling also enabled groups to maintain undisclosed sources of funds, referred to as dark money, which has since contributed a minimum of $1 billion to campaigns, and become increasingly common, specifically in highly competitive races.47 Election campaigns following the 2010 decision have exponentially grown in expense, with “[big money and secret spending] emboldened by inaction from Congress and gridlock within the [FEC].”48
Moreover, research indicates that campaign contributions impact congressional voting behavior in roll call votes – cast by members of Congress on bills, resolutions, and nominations, among other procedures49 – with primary influence on junior legislators.50 Political action committees, one of the main sources of campaign financing,51 often align with — and at times, are established to represent — the economic or ideological interests of a party; labor PACs typically support Democrats, whereas corporate PACs frequently back Republicans.52 In 2022, a total of 2,476 super PACs raised more than $2.7 billion and spent over $1.3 billion.53 PACs are “self-interested, materially oriented, and narrowly focused” and may “desire to effect a government that conforms to their ideology.”54 Some use an electoral strategy to guarantee their preferred candidate’s votes, while others donate to both parties, particularly those hosting incumbent leaders, following an access strategy for future influence on legislative matters of interest.55 Independent wealthy donors often push their money into super PACs as they are eligible to pour unlimited funds into the committees but are restricted by direct contribution limits otherwise.56 They spent an unprecedented $880 million in the 2022 midterm elections, becoming primary funders in recent years.57 Donors and PACs alike are “policy maximizers,” where the decision to support candidates is intended to gain entry into their party if elected, at times driven by specific legislation.58 PACs can “manipulate government policies either by buying policies directly from legislators or by buying elections,”59 dangerously bolstered by the introduction of super PACs in 2010. Thereby, while financial campaigning is motivated significantly by partisanship, it is frequently more policy-oriented.
For the Democrats, the Future Forward super PAC is a main source of funding and hosts a dark money nonprofit, Future Forward USA Action, to which Hungarian-American billionaire George Soros donated over $15 million in 2022.60 Future Forward allegedly spent $108 million on television advertisements in the last five weeks of the 2020 elections to boost Biden’s campaign.61 It also supports Democratic causes, such as repealing tax cuts for the wealthy and improving insurance to make healthcare affordable in the US.62 Soros, a megadonor, contributed the largest donation of an overall $178 million to Democrats between 2021 and 2022 alone;63 however, his “projects are notorious for pushing policies that undermine safety, democracy, and the rule of law”64 and it remains unclear what policies he is specifically lobbying for through funding. Another large funder for the Democrats is the American Israel Public Affairs Committee (AIPAC), “one of the most influential political organizations in Washington,” which established a super PAC, the United Democracy Project, before the 2022 election65 to “strengthen the involvement of the pro-Israel community in politics.”66 The United Democracy Project is officially non-partisan but leans towards Democratic candidates; in 2022, $26 million, out of a total of $31 million raised, was contributed predominantly to the Democratic congressional primaries. Most candidates fueled by AIPAC won in midterm races.67 About a third of the United Democracy Project’s funding at the time, amounting to $10.5 million, was donated by AIPAC itself.68 Significantly, the United Democracy Project at times funds Republican congressional candidates in order to weaken the support for Democrats deemed ‘anti-Israel.’69 Its motives therefore align more so on policy outcomes within its ideological belief system, rather than on partisan loyalty.
The Republicans benefit more so from independent donors, who favor spending towards the GOP.70 Elizabeth and Richard Uihlein, billionaire businesspeople and founders of shipping company Uline, are megadonors and highly influential within the party; they have been referred to as “key benefactors behind the GOP’s move to the hard-right in recent years.”71 The couple has supported Republican campaigns since the ‘90s,72 and spent about $26 million in 2018 towards more than 60 congressional candidates to “advance a combative, hard-right conservatism.”73 By 2022, they had contributed a total of $194 million towards federal candidates and causes.74 The couple has been recently accused of association with dark money groups in their “web of financial influence.”75 In the 2020 election cycle, they pushed over $70 million into conservative causes, almost half of which went towards the Restoration PAC and Americas PAC, which then partially went towards efforts for Trump’s re-election.76 Moreover, the National Rifle Association (NRA) PAC has been financing GOP candidates since at least the 1990s,77 specifically those lobbying for gun rights. The NRA spent $14.5 million in 2022, $22.74 million two years prior, and similar amounts in the past decade on election cycles.78
Furthermore, foreign actors allegedly pour funding into the US presidential elections despite a federal ban on the matter. The 2016 elections were scattered with reports of Russian financing of the NRA and Trump’s campaign, including “Russian spending on online political ads designed to sway public opinion.”79 In February 2018, a federal grand jury charged “13 Russians and three Russian entities” with the violation of “US criminal laws in order to interfere with US elections and political processes,” and charged them with “conspiracy to defraud” the country.80 Many of the social media campaigns led by the Russians in 2016 were used to hinder the campaign of then-Democratic candidate Hillary Clinton and targeted swing states81 that are crucial to the outcome of the Electoral College, which dictates the final decision of the elections regardless of the “popular vote winner.”82 Trump notoriously referred to the notion of the Russian interference project as “fake news” and a “hoax,”83 but many speculate whether his campaign funding was linked to the Congress’ decision under his administration in 2018 not to impose further sanctions on Russia.84
What’s being done about it?
The Supreme Court’s Citizens United ruling marked a shift that increased momentum on adjusting campaign finance legislation as “debate over disclosure and deregulation have been recurring themes in Congress and beyond.”85 The decision is considered a regression in modern campaign finance laws, propelling abuse of the electoral campaign financing system that “largely relies on campaigns and political committees to self-report thousands of donations, expenditures, loans, and refunds, [and] has been left wide open for anyone willing to mislead.”86 Since, bills on the provision of funding have been introduced by both parties, mostly proposing amendments to FECA and recently focusing on reporting requirements and spending restrictions; however, no campaign finance bills have transformed into law.87
Democrats have sought to limit corruption and necessitate further transparency during the electoral process. A major bill that was initially introduced in 2010 post-Citizens United and is continuously reintroduced to Congress by Democrats is the DISCLOSE Act, which includes legislation that pushes to end dark money donations, increase transparency from PACs and independent wealthy donors, prevent foreign influence on campaigns, and emphasize domestic governmental accountability to voter decisions.88 The Act failed to pass in 2022 as Republicans widely opposed it, receiving a 49-49 vote that requires 60 votes to succeed, and causing an even bipartisan split within Congress.89 Senator Sheldon Whitehouse criticized the Republican senators’ “lockstep [stance] with their megadonors and secretive special interest to protect the most corrupting force in American politics,” referring to the critical issue of dark money disputed between the parties, adding that its influence “rig[s]” the government against its citizens and “stymie their priorities.”90 Corruption further extends its influence into Congress, as Mitch McConnell, Senate GOP Leader, “bluntly warned Republican senators” in October 2023 not to sign on the Ending Corporate Influence on Elections Act that worked towards revoking aspects of Citizens United, and reminded them that they “won their seats thanks to the powerful super PAC” that he controls.91 The GOP has made frequent attempts through court cases and the introduction or blocking of bills to delegitimize campaign finance regulations and weaken them. The National Republican Senatorial Committee et al v. Federal Election Commission et al case alleges that the FECA’s “limits on coordinated party expenditures […] violate the First Amendment.”92 Such a ruling would largely benefit Republicans, to whom small donations are a challenge, enabling coordination between funders and candidates, lifting existing spending restrictions,93 and creating a much more direct influence of donations on legislation.
Calls for greater transparency on sources of campaign financing have been amplified ahead of the 2024 elections. In October 2023, OpenSecrets, a nonprofit in Washington that documents data on campaign finance and lobbying, alongside 13 other organizations, called for campaigns to disclose information on their top funders, who have under both Democratic and Republican presidencies “received plum postings, such as ambassadorships and positions on commissions.”94 The Campaign Legal Center, a nonprofit organization in Washington, has suggested the reform of the Foreign Service Act of 1980 to detail the “nominee’s expertise in the language, politics, economics, and history of the country to which they are to be appointed, and how their foreign policy and international affairs experience qualifies them” for ambassadorships.95 The reform aims to minimize the donors-to-ambassadors pipeline, increase accountability, and establish greater international trust in American diplomacy, especially at a time when “international engagement by experienced ambassadors could not be more crucial” as 2024 elections take place “against a backdrop of global political instability.”96 Meanwhile, the Brennan Center for Justice at the New York University School of Law, a nonpartisan law and policy institute, narrows down the vulnerability to foreign interference in the electoral process to dark money groups and businesses with foreign ownership, and proposes solutions including reforming “political spending laws for the internet,” mandating the disclosure of donors and thereby abolishing dark money groups, and extending the foreign spending ban to domestic entities “owned or controlled by foreign interests.”97
What’s next?
Candidates in the 2024 election cycle continue to push for increased funding to advance their stances in the race before parties’ national conventions in July and August, and the November presidential elections. Biden is elevating the Future Forward super PAC as part of his campaign, which was “critical” in 2020 and is set to “play a key role” once again in 2024, having raised $50 million by July 2023 and nearly $400 million in the last five years.98 In the fourth quarter of 2023, Biden’s campaign raised more than $97 million and as of January 15, 2024, has $117 million cash on hand, “more money than any Democratic candidate in history had accumulated at this point in the election cycle.”99 His funds are anticipated to surpass all other candidates in the race, strongly pushing forward his re-election efforts.100 Further, Robert F. Kennedy Jr., an independent candidate who initially ran for the Democratic nomination, sourced $10 million for his campaign mainly from large-dollar donors who didn’t contribute to the last two election cycles, and $5.1 million from small-dollar donations.101
Within the GOP, bolstered by an endorsement from super PAC Americans for Prosperity Action (AFP),102 Nikki Haley – a GOP candidate who at the time was fighting for the second spot in the upcoming nomination, which she now has – doubled her support and successfully neared Trump’s ratings from September to December 2023,103 aiming to replace Trump’s commanding lead in the outcomes of the Iowa caucuses in January. Her unexpected popularity was funded by AFP’s contribution of $5.7 million and more than 100 volunteers and part-time staff to her campaign.104 Motivated by election outcomes, the super PAC found Haley to be in the “best position to defeat Donald Trump in the primaries.”105 Notably, AFP was founded by billionaire brothers Charles and David Koch,106 and has spent over $4 million and spoken to over 250,000 voters to support her in the month following their endorsement in November.107 Haley is also supported by the single-candidate PAC, SFA Fund, which has raised over $18 million so far this election cycle.108 Her then-rival, Ron DeSantis, governor of Florida, was heavily funded by the Never Back Down super PAC, which planned to spend $100 million on his campaign to beat both Trump and Haley.109
Trump nevertheless witnessed a record-setting victory at the Iowa caucus with 51 percent of votes, a landslide compared to Haley’s 19 percent and DeSantis’ 21 percent.110 Notably, within a day following Trump’s win in Iowa, Biden raised over $1.6 million solely from grassroots donors.111 Further, former GOP candidate, Vivek Ramaswamy, receiving less than eight percent of the votes, dropped out of the presidential race and instead endorsed Trump following the caucus.112 Ramaswamy ran a mostly self-funded campaign that spent over $22 million by the end of September 2023, with over $17 million or 60 percent of the campaign’s funds sourced from loans.113 Soon after, DeSantis similarly withdrew his candidacy and announced his support of Trump instead.114 Haley has vowed to persist in the race despite Trump’s subsequent win in the New Hampshire primary;115 posed with the challenge of competing with his dominating force for the GOP nomination in the upcoming months, dependent on further financing of her campaign. In the week leading up to the primary, candidates increased their spending on advertisements in New Hampshire; reportedly, Haley spent $1.6 million and her SFA Fund poured $2.6 million, meanwhile, Trump spent $1.3 million and his MAGA Inc. super PAC paid $2.2 million.116 Overall, advertisement spending in New Hampshire amounted to more than $77 million altogether by Republican campaigns and outside groups.117 In 2024, advertisement spending for elections is estimated to amount to $12.32 billion, a 30 percent increase from 2020.118
Candidates across both parties have raised less than the campaigns of leading candidates Biden and Trump, with Biden having the most funds of all by a wide margin. Most of these funds are expected to be poured into battleground states, including Wisconsin, Arizona, Nevada, Michigan, Pennsylvania, and Georgia.119 Research, academia, and media outlets will continue to analyze and predict campaign financing as they relate to the outcomes of the nearing presidential elections. It is imperative to address the gaps present in federal laws that enable the abuse of power, using funding and dismissing citizens’ will. A key question remains unanswered directly in studies on the matter: how does presidential campaign financing impact the policy decisions and positions of candidates, both throughout the electoral process and when they are in office? While a correlation is established between the two, the lack of transparency, increased censorship, and prevalence of corruption have limited the ability to draw clear lines between donors and specific legislative requests. The status quo of campaign financing, further emboldened post-Citizens United, has contributed to the development of an illiberal electoral process in the US. The Supreme Court’s outlook regarding the economic imbalance generated by campaign financing, which thus dictates presidential elections, has remained similar today as it was in past decades: “Corruption is a permissible target of reform legislation; inequality is not,” despite the two being deeply entrenched.120 The US government must, and more importantly should desire to, adopt a more transparent process if it wishes to uphold the legitimacy of its governance model, and reinstate political liberty for its citizens. Without reform, the integrity of its democratic institutions remains in question.
To access the works cited & endnotes, download the full report.
The statements made and views expressed are solely the responsibility of the author and do not represent Fiker Institute.
