Where Does the Money in American Elections Come From?

Candidates in the U.S. elections constantly ask their supporters to financially contribute to their campaigns. This issue is even viewed as one of the indicators of whether a candidate can continue their electoral campaign. In the final weeks leading to Joe Biden's withdrawal from the presidential race, a significant and concerning issue for Democrats was the decreasing willingness of supporters to financially back Biden's candidacy. In contrast, Kamala Harris managed to raise over $200 million within a week of announcing her candidacy. The allocation of financial contributions to candidates during various elections in the U.S. has been a longstanding issue, but research shows that these figures have significantly increased compared to a few decades ago. It is predicted that this year, $20 billion will be spent on local, congressional, and presidential elections in the country, whereas in 2000, this figure was only about $5 billion. The main question is how this money is raised? Who contributes, and what limitations exist? According to the law, individuals over 18 years old who are U.S. citizens or green card holders can contribute from $1 to $3,300 to a candidate in any election. However, foreign citizens are not allowed to do so, and if they financially support an American candidate's campaign during an election, they will face legal issues. This limitation is aimed at preventing foreign actors from influencing the electoral process in the U.S. Corporations and unions are also prohibited from making direct contributions to a candidate or party, but they can support their preferred candidates through a Political Action Committee (PAC). PACs are essentially private interest groups that raise and spend money to support candidates and influence elections. A committee established, for example, by an association representing an industry collects funds in support of a candidate and a party aligned with their interests. There are also limitations, as an employee or shareholder can contribute a maximum of $5,000 per year to a PAC. But how do wealthy individuals like Elon Musk and Michael Bloomberg funnel their substantial contributions to the campaigns of Trump and Harris? This is where Super PACs come into play. Super PACs have no limits on the amount of money they can raise in support of a candidate. However, there is a significant difference between a PAC and a Super PAC. Super PACs cannot directly give money to a candidate or party. They also cannot coordinate their spending with a candidate or their party; however, they are allowed to spend unlimited amounts to encourage American citizens to vote for a specific candidate. The creation of these Super PACs has significantly contributed to the rising costs of elections, with predictions that the $15 billion spent in the 2020 elections will likely exceed $20 billion this year. Although the amount of money spent in U.S. elections has been on the rise every year, this spending is particularly concentrated in a few states during presidential elections. Due to the structure of the U.S. presidential elections and the electoral model, several states are recognized as swing states in each cycle. While these states are generally stable, they can shift slightly in some cycles. These swing states are areas that do not traditionally vote for a specific party's candidate. For instance, in California, the Democratic candidate usually wins every election; conversely, in Texas, the Republican candidate always emerges victorious. However, there are several states known as swing states, and anyone wanting to win the presidential election must secure their electoral votes. It is anticipated that in this year's November elections, Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin will be the seven states that determine whether Donald Trump or Kamala Harris will win. As a result, both candidates will spend more in these seven states than in other parts of the U.S. Regarding the amounts spent, although transparency is the principle, there are exceptions. For example, some donors can contribute anonymously if they can prove that revealing their identities may pose a danger to them. Moreover, nonprofit organizations are not required to disclose their donors even when they spend money to influence voters. Therefore, if a wealthy individual makes a donation through a political nonprofit organization, the general public may not realize where these substantial amounts came from. This process is referred to by some as "dark money," and its execution is seen as contrary to the principle of transparency. Hillary Clinton's campaign in 2016 spent about $563 million, significantly more than Donald Trump's $326 million campaign, yet it was Trump who ultimately reached the White House. More money can give any candidate a better chance to compete, and with stronger financial backing, Trump or Harris will be able to pursue more advertising activities and attract undecided voters. Since announcing her candidacy, Kamala Harris has achieved a significant leap in fundraising. According to her campaign's election data, Harris raised over $310 million in July, which is a very substantial figure. In contrast, reports indicate that Donald Trump raised about $138 million in the same month. But can simply spending more guarantee a candidate's victory? Historical experience suggests no. For example, Hillary Clinton's campaign in 2016 spent about $563 million, much more than Donald Trump's $326 million, yet Trump was the one who reached the White House. Moreover, in elections at this level, each candidate is significantly recognized by the public, and voters know which two ideologies they are choosing between. However, results from a Pew Research survey conducted in November 2023 show that seven out of ten Americans want to impose limits on the amounts that individuals or organizations can contribute to political campaigns.