Why a Political Acton Committee is Important to the Equine Industry in Public Policy, and the Power of Your Involvement

“A Political Action Committee has the ability to amplify and individual’s voice”

Individually, we each have a voice in public policy by supporting candidates with our respective right to vote, and our respective right to provide individual financial contribution(s). Voting and contributing are crucial elements of involvement, and the equine industry recognizes each in order to advance the interests of the industry on Capitol Hill. However, a political action committee has the ability to amplify an individual’s voice by uniting the equine industry, thereby providing the means for concerted political action. By uniting an industry, it can more effectively and more efficiently educate lawmakers on the issues important to the industry. Together, we are greater than the sum of our parts, and the true strength in numbers allows the equine industry to control the conversation in public policy. By contributing to a political action committee, like-minded individuals pool their support, and have an important impact on equine public policy.

The equine industry has four important political action committees – the American Horse Council’s Committee on Legislation and Taxation – the National Thoroughbred Racing Association’s “HorsePAC” the American Quarter Horse Association’s “American Quarter HorsePAC” and the Jockey Club’s Jocky ClubPAC. Combined, these PACs represent almost $500,000 for candidates in a congressional election cycle.

What is a Political Action Committee?

A political action committee (PAC) is a tax-exempt organization that collects voluntary contributions and distributes those funds to campaigns to elect or defeat candidates running for federal, state, or local public office. PACs may also collect contributions to be used to influence the passage or defeat of state ballot initiatives, and state or federal legislation. The majority of PACs represent private businesses, labor unions, or particular ideological or political viewpoints.

Political action committees are among the most common sources of funding for campaigns in the United States. The function of a political action committee is to raise and spend money on behalf of a candidate for elected office at the local, state and federal levels.

A political action committee is often referred to as a PAC and can be run by candidates themselves, political parties or special interest groups. Most committees represent business, labor, or ideological interests, according to the Center for Responsive Politics in Washington, D.C.

The money they spend is often referred to as “hard money” because it is being used directly for the election or defeat of specific candidates. In a typical election cycle, political action committees raise more than $2 billion and spend nearly $500 million.

Origins of PACs

PACs were created in the 1940s as an outgrowth of the American labor movement as a way to allow labor unions to contribute money to politicians sympathetic to the interests of their members. Created in July 1943, the first PAC—the CIO-PAC—was established by the Congress of Industrial Organizations (CIO) after the U.S. Congress had passed, over the veto of President Franklin D. Roosevelt, the Smith-Connally Act prohibiting labor unions from making direct contributions to political candidates.

The number of PACs increased rapidly during the 1970s after a series of campaign finance reform laws allowed corporations, trade associations, non-profit organizations, and labor unions to form their own PACs. Today, there are more than 6,000 registered PACs, according to the Federal Election Commission.

Oversight of Political Action Committees

Political action committees that spend money on federal campaigns are regulated by the Federal Election Commission. Committees that function at the state level are regulated by the states. PACs that operate at the local level are overseen by county election officials in most states.

Political action committees must file regular reports detailing who contributed money to them and how they, in turn, spend the money.

The 1971 Federal Election Campaign Act FECA allowed corporations to establish PACs and also revised financial disclosure requirements for everyone: candidates, PACs, and party committees active in federal elections had to file quarterly reports. Disclosure — the name, occupation, address, and business of each contributor or spender — was required for all donations of $100 or more; in 1979, this sum was increased to $200.

The McCain-Feingold Bipartisan Reform Act of 2002 attempted to end the use of non-federal or “soft money,” money raised outside the limits and prohibitions of federal campaign finance law, to influence federal elections. In addition, “issue ads” that do not specifically advocate for the election or defeat of a candidate were defined as “electioneering communications.” As such, corporations or labor organizations can no longer produce these ads.

Limits on Political Action Committees

A political action committee is permitted to contribute $5,000 to a candidate per election and up to $15,000 annually to a national political party. PACs may receive up to $5,000 each from individuals, other PACs and party committees per year. Some states have limits on how much a PAC can give to a state or local candidate.

Types of Political Action Committees

Corporations, labor organizations, and incorporated membership organizations cannot make direct contributions to candidates for the federal elections. However, they may set up PACs that, according to FEC, “can only solicit contributions from individuals associated with the connection or sponsoring organization.” The FEC calls these “segregated funds” organizations.

There is another class of PAC, the non-connected political committee. This class includes what is called a leadership PAC, where politicians raise money to — among other things — help fund other candidate campaigns. Leadership PACs can solicit donations from anyone. Politicians do this because they have their eye on a leadership position in Congress or a higher office; it’s a way of currying favor with their peers.

Different Between a PAC and a Super PAC

Super PACs and PACs are not the same thing. A super PAC is allowed to raise and spend unlimited amounts of money from corporations, unions, individuals and associations to influence the outcome of state and federal elections. The technical term for a super PAC is “independent expenditure-only committee.” They are relatively easy to create under federal election laws.

Candidate PACs are prohibited from accepting money from corporations, unions and associations. Super PACs, though, have no limitations on who contributes to them or how much they can spend on influencing an election. They can raise as much money from corporations, unions and associations as they please and spend unlimited amounts on advocating for the election or defeat of the candidates of their choice.

Super PACs grew directly out of two 2010 court rulings—the U.S. Supreme Court’s landmark Citizen’s United vs. FEC decision and an equally momentous decision by the federal appeals court in Washington. Both courts rule that the government may not prohibit unions and corporations from making “independent expenditures” for political purposes, since doing so “did not give rise to corruption or the appearance of corruption.” Critics claimed the courts had given corporations the same rights reserved to private citizens to influence elections. Supporters praised the decisions as protecting freedom of speech and encouraging political dialogue.