The Soft Money Problem

Soft money is the huge, unlimited contributions from corporations, labor unions and wealthy individuals that political parties raise and spend on campaign attack ads and other activities designed to influence elections. The soft money system undermines campaign finance laws that limit contributions and restrict the sources of funds that can be spent on federal campaigns. It provides corporations, labor unions, and wealthy individuals a way to circumvent federal election laws and flood campaigns with tens of millions of special interest dollars, even though corporations and unions have been banned from contributing or spending their treasury funds to influence federal elections since 1907 and 1947, respectively. Individuals can contribute to federal campaigns through parties and candidates, but only in limited amounts.

The Democratic and Republican parties raised $262 million in soft money for the 1996 elections. The parties raise soft money under the guise that it will be used for general party-building activities. In reality, soft money pays for campaign ads masquerading as issue discussion, phonebanking, political research, polling, fundraising, and get-out-the-vote efforts — all of which affect the outcomes of federal elections.

Soft money was the source of the 1996 political fundraising scandals, including the selling of the Lincoln bedroom, White House coffees and the influx of foreign money into the presidential campaign.

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