Internet Fundraising and Campaigning

Internet Fundraising and Campaigning

Professor Rick HasenLoyola Law School, Los Angeles

http://electionlawblog.org

COGEL ConferenceDecember2008

Professor Rick HasenLoyola Law School, Los Angeles

http://electionlawblog.org

COGEL ConferenceDecember2008

OutlineOutline

1. What issues does the proliferation of Internet-based fundraising and campaigning raise for campaign finance regulators?

2. The coming (and arrived) explosion of Internet-based small donor fundraising: data and disclosure issues

3. The convergence of Internet and television: dangers of regulatory drag and obsolescence

Issues Raised for Regulators by Internet-Based Campaigning and Regulating

Issues Raised for Regulators by Internet-Based Campaigning and Regulating

Treatment of candidate and other committee web advertising

Treatment of candidate and other committee communications (solicitations, value of email lists, posting of video material)

Use of corporate/union owned computers, servers, etc.

My focus: small donor issues and internet-television convergence

Small Donation Issues: The Obama phenomenon and the shape of things to come

Small Donation Issues: The Obama phenomenon and the shape of things to come

Perhaps the most important way that the Internet has affected fundraising and campaigning is through a dramatic lowering of costs associated with small donation issue.

Cheap speech and proliferation of credit/debit card internet based commerce has caused an explosion of small donation fundraising on the internet

Presidential small donation fundraising during primary seasons, 2000, 2004, 2008 (small donor data from Campaign Finance Institute reports)

Presidential small donation fundraising during primary seasons, 2000, 2004, 2008 (small donor data from Campaign Finance Institute reports)

Figure 5. Total Millions of Dollars Raised During Primary Season in Amounts Under $200 by

Eventual Party Nominees

0

50100

150200

250

Gore(2000)

Bush(2000)

Kerry(2004)

Bush(2004)

Obama(2008)

McCain(2008)

candidate

$ (m

illi

on

s)

Percentage of money raised in micro-donations, 2000, 2004, 2008

Percentage of money raised in micro-donations, 2000, 2004, 2008

2000 primary season

Al Gore 20%George W. Bush 16%

2004 primary seasonJohn Kerry37%George W. Bush 31%

2008 Primary seasonBarack Obama 53%John McCain 31%(Hillary Clinton 36%)

The sheer volume of donations raise data collection and processing issues for regulators

The sheer volume of donations raise data collection and processing issues for regulators

With presidential candidates attracting up to millions of donors, campaign regulators face problems dealing with mountains of data.

As public gets more comfortable with internet-based giving, more of it will take place on the sub-presidential level.

Micro-donors give <$200 in the aggregate during a federal campaign, and currently are itemized information not reported to FEC.

Special issues involving micro-donorsSpecial issues involving micro-donors

Amount raised from micro-donors, 2008 primary season

Amount raised from micro-donors, 2008 primary season

Figure 7. Total Millions of Dollars Raised From Micro-Donors (Giving Under $200 in the Aggregate) by Eventual Party Nominees

0

50

100

150

Kerry (2004) Bush (2004) Obama (2008) McCain (2008)

candidate

$ (m

illi

on

s)

More on Micro-Donor Fundraising in 2008 Primary Season

More on Micro-Donor Fundraising in 2008 Primary Season

Candidate Amount raised in millions from micro-donors

% of individual contributions raised from micro-donors

Kerry $43.1 20%

Bush (2004)

$64 25%

Obama $117.7 26%

McCain $42.9 21%

Some in public raised concerns about illegal contributions (illegal source or excess contributions)

Possible congressional move to expand disclosure

Disclosure of small donors raises both administrative and constitutional issues.

My alternative: disclosure to FEC, not public, with mandatory audits of this aspect of all campaigns

Concern over Lack of Reporting Requirements for Micro-Donors

Concern over Lack of Reporting Requirements for Micro-Donors

The coming convergence of television and the InternetThe coming convergence of television and the Internet

A number of special laws apply only to television and radio advertisements (e.g., federal limits on corporate and union spending on “electioneering communications”)

As people begin to get more of their “television” content through their computers, cell phones, and iPods, what is to become of existing regulations?

Possible pathsPossible paths

1. Obsolescence (law doesn’t change, but practices become unregulated)

2. Law is updated to comport with changed usages

a. Resistance (FEC regulatory example)b. Drafting difficulties

3. Unintended consequences (Law does not function as it should because it is applied in a new area)

Choosing an ApproachChoosing an Approach

Regulators should

1. Figure out goal existing law was meant to meet2. Confirm relevant constituency still wants this

goal met.3. Consider how rise of Internet-based campaign

activity might interfere with achieving goal.4. Determine whether it is possible to meet goal

through (1) existing law; (2) revised law/regulations; or (3) repeal of existing law.