Traditionally, American parties provided the bulk of funding for a candidate. However, this is now done by pressure groups and political action committees.

PACs are committees set up by many pressure groups in order to pool donations from members or supporters and pass them on to individual candidates. As corporations and trade unions are banned by law from making electoral contributions from their general treasuries, they therefore must set up PACs if they wish to donate to particular candidates. PACs have existed as long as ago as back in the 1930s, but it was not until the 1970s that they assumed a much greater significance. In 1974, the Federal Election Campaign Act restricted any PAC from giving more than $5,000 to any particular campaign, but did not set any overall limit on their total contributions. There had long been some regulations, but it was the passage of the FECAs (especially the 1974 FECA) that introduced stricter limits. PACs became useful, because although there was a limit of $5,000 for each candidate at each stage of the electoral campaign, an additional $10,000 could also be given to a PAC to support the candidate; the more PACs were backing the candidate, the greater the number of such donations. PACs were in addition able to spend as much money as they wanted in order to support or attack a particular candidate, as opposed to contributions donated to his or her funds.

After this Act was passed, the number of PACs increased rapidly, more than doubling in the 1980s and reaching a peak in 1988. During the 1990s the numbers stabilised at just fewer than 4,000 (the FEC counted 4,195 in 1992 and estimates point to the figure now being around 5,000). The biggest growth in the number of PACs has been in individual corporations setting up their own committees, so that business PACs outnumber trade union PACs by a ratio of five to one. However, it terms of the spending on campaigns, organised labour contributed 57% of the money donated by business corporations in 1997-98. There has also been an increase in the scale of their participation.

The spending by PACs has tended to be around a quarter of the total spent by candidates in congressional campaigns, with House candidates being more reliant on such funding than their Senate colleagues. In 1997-98, PAC donations of $158.7m to House candidates were 32% of the overall receipts, but their contribution of $48.1m to the Senate races were only 17%. During the first 18 months of the 1999-2000 election cycle the Federal Election Commission reported that PACs contributed $167m to federal candidates, a 24% increase on the same period in the 1997-98 cycle. However, PACs only play a minor role in presidential campaigns, for which candidates look to individual donations and public funding as the main sources of finance. In the House in 1998 PACs gave $120m to incumbents and $14m to challengers, and in the Senate they gave $30m to incumbents and $6m to challengers.

Most PACs use an ‘access’ strategy and donate money to those members of Congress who have influence in the policy areas that their parent groups are interested in. This means that the chairmen of committees and party leaders raise the most funds and PACs heavily weight their contributions to incumbents. In 1997-98 incumbents received 78% of PAC donations, while their challengers were only given 10%. By 2000, House candidates relied on PACs for 40% of their spending. The Realtors Association contributed $2,474,133 to the 1998 mid-term elections.

PACs can offer advice and information to candidates to help them with their forthcoming elections. This is due to the fact they can concentrate on one topic that they are interested in, especially if they are a PAC that is linked to a pressure group or Trade Union.

They can also offer money, which will help them with the campaign. This can mean that they may add to democracy, because candidates who have little support can win support because of the amount of money that they have been donated. They can then organise and distribute these donations efficiently, because this is one of their few jobs. This can then mean that although there may be more bureaucracy, the organisations themselves are organised efficiently. This enables candidates with less financial resources to stand for election.

PACs can encourage more grass-roots support for a party by fund-raising in a local area. This also increases political interest and awareness, and leads to more democracy, as the public are more aware of the issues involved in the election, especially in areas of the country that may be neglected by more ‘conventional’ forms of canvassing.

As there are so many PACs they can adequately claim to represent all sections of society. This is because most of the large pressure groups and Trade Unions have their own PACs, which they can use to raise money for candidates whom they support. This means that all a member of the public has to do is donate money to the PAC of a pressure group whom they support.

PACs are also fully open to public scrutiny, disproving many claims of ‘backdoor’ dealings. This again means that the system adds democracy to the American political system.

However, although donations are regulated, they are easy to split up and so get around the system. Someone could give money to as many pressure groups as they wished, meaning that the original idea of PACs has been undermined. PACs were introduced because it is illegal for Trade Unions and corporations to make donations to political candidates, so in effect these groups are simply cheating the system.

It can also make Congressmen accountable to their PACs first, before the people they are supposed to represent, as if they do things that their PAC does not like, they can withdraw funding. This can lead to policies being determined ‘behind the scenes’ away from the public eye. This actually leads to a less democratic system, because the public are losing out to big businesses, even though they voted for this person to represent them.

PACs are also biased towards incumbents ($120m was given to incumbents in the House in 1998, compared to just $14m for non-incumbents). This means that they discriminate unfairly and lead to incumbents having more money at their disposal, so meaning that they are more likely to be re-elected, even though they may not be the best candidate.

There is also a democratic deficit between the PACs and their members, as PACs are often not internally democratic.

The main criticism of PACs is that money buys influence and power, leading to a wholly undemocratic system ($470m was paid out in 1997/98). Few candidates can resist the lure of money from PACs. After the defeat of Steve Sovern, a democratic candidate, he organised his own PAC, called LASTPAC (Let The American System Triumph PAC). This tried to urge candidates to shun funding from PACs. The public interest lobbying body that wishes to open up the processes of government, Common Cause, has also waged war against this method of election finance.

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