Political Action Committee

A political action committee (PAC) in the United States is an organization which collects funds from members and then directs them towards political campaigns. These funds may be directed to campaigns for or against candidates in elections. The vast majority of political action committees are set up to represent businesses, labor or specific interests such as environmentalism and abortion rights.

Connected vs Non-connected PACs

Broadly speaking, there are two types of political action committees in the US: connected and non-connected PACs. The main characteristics of connected PACs (also known as separate segregated funds - SSFs) are as follows:

• Connected Organizations - connected PACs are associated with a “connected organization” which actively sets up, administers and raises money. These “connected organizations” are generally corporations or labor organizations.
• Unlimited sponsorship - connected PACs are usually able to benefit from unlimited administrative support from their connected organizations, which is generally not subject to federal disclosure rules. 
• Restricted solicitations - connected PACs may only solicit campaign finance funds from a particular group of individuals who have a certain relationship with the connected organization. For example, stockholders if the connected organization is a corporation, or members and their families if it is a labor union.

In contrast, non-connected PACs have the following characteristics:

• No connected organization - unlike connected PACs, non-connected PACs do not have a “connected organization”. However, they may receive limited financial or administrative support from a “sponsoring organization” that isn’t a corporation or labor organization - for example, unincorporated associations and partnerships.
• Limited sponsorship - all forms of support from sponsoring organizations are, however, deemed as being contributions which a subject to prohibitions, annual limits and federal disclosure under the Federal Election Campaign Act.
• Unrestricted solicitations - non-connected PACs are able to solicit contributions from the general public at large.

Leadership PACs

Non-connected PACs are generally set up and sponsored by single-issue groups, political leaders or members of Congress. In the case of the latter, they are called “leadership PACs”. Since there are strict federal limits restricting the amount of campaign finance that elected officials and political parties may give directly to candidates, leadership PACs are set up by members of Congress to provide unlimited “independent expenditures” to other candidates within their own party. This is perfectly legal as long as expenditures aren’t coordinated with the recipient candidate. Congressmen and women who set up leadership PACs may not direct these funds towards their own campaign. 

Super PACs

Super PACs are a relatively recent form of political action committee which arose out of the Supreme Court judgment in Citizens United v. Federal Election Commission 2010. In this case, the court held that the First Amendment of the US Constitution prevented the government from restricting political campaign spending by unions, corporations or any other group. Subsequently, super PACs may support political candidates through unlimited contributions from corporations, unions, and individuals. Such contributions are often given anonymously and can be used to run ads supporting or attacking certain candidates, as long as no contributions are given directly to candidates.

See also: Federal Election Campaign Act, Federal Election Commission, Election Campaign

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