What Is a Political Action Committee (PAC)?

Political action committees (PACs) are formed to privately raise money to donate to a political campaign in hopes of influencing the election. Super PACs can raise unlimited amounts of money to influence an election, but they are not permitted to donate directly to a campaign.

Understanding PACs

Corporations cannot contribute directly to a campaign; however, the 2010 Citizens United v. FEC case made it legal for corporations to support a PAC. The decision overruled the 2002 Campaign Reform Act, which prevented corporations, unions, and other entities from donating money to political campaigns. The new laws allow these entities to contribute a limited amount of money to a PAC, which can, in turn, be donated to a campaign. In the case of Super PACs, a corporation can contribute an unlimited amount of money, and despite the fact that this money can't be directly given to a campaign, it can be spent to indirectly influence an election.

Limits of PACs

An organization is considered to be a PAC at the federal level when it raises $2,600 intended to influence a campaign; state requirements depend on that state's election laws. There are limits to the amount of money a PAC can contribute to a political campaign:

  • $5,000 to a candidate per election
  • $15,000 to a party per year
  • $5,000 to another PAC per year

PACs are also required to disclose information about their donors; however, in many cases, these names are not disclosed until after the election, when votes have already been cast.

Types of PACs

There are two official types of PACs, connected and non-connected. However, independent-expenditure only committees (or Super PACs) are now considered to be a third type.

Connected PACs are established by businesses, unions, and other entities and they collect donations from a "restricted class," usually company managers and shareholders or organization members. Non-connected PACs are formed by a group with a specific mission and can accept funds from any source.

Super PACs were born in 2010 after the Citizens United v. FEC and Speechnow.org v. FEC court cases, which allowed for deregulation of political funds. While Super PAC funds cannot be donated directly to a campaign, Super PAC managers and political candidates are permitted to collaborate and discuss strategy. Since their inception, Super PACs have quickly grown to be one of the largest influencing forces in American politics. In fact, it is estimated that in the 2012 Republican primaries, Super PACs spent more money than the candidates' campaigns. Much of this money was donated by individuals rather than businesses.