References: In 1975, Congress created the Federal Election Commission (FEC) to administer and enforce the Federal Election Campaign Act (FECA) - the statute that governs the financing of federal elections. The majority of state secretaries monitor campaign finance contributions and expenditures at the state and local level. See: [ LINK ] and [ LINK ].

Peer Review Comments: I would add that the Federal Election Commission enforces limits on contributions to political parties by individuals and political action committees at the national and state levels.

See: [ LINK ]

References: Citizens may contribute no more than $2,300 per federal candidate per election. Other limits exist that restrict contributions to and from political parties and political action committees. See "Contribution Limits-2007-08," FEC, [ LINK ]

References: Federal election law prohibits "any national bank, or any corporation organized by authority of any law of Congress, to make a contribution or expenditure in connection with any election to any political office." TITLE 2. THE CONGRESS, Chapter 14Federal Election Campaigns Subchapter 1Disclosure of Federal Campaign Funds, § 441b.

References: There are no limits on expenditures by parties (although parties must disclose expenditures). TITLE 2. THE CONGRESS, Chapter 14, Federal Election Campaigns , Subchapter 1,Diclosure of Federal Campaign Funds. An exception pertains to presidential candidates who agree to accept matching federal campaign funds. However, the high cost of presidential elections means it is increasingly common for candidates to forego these funds in order to spend whatever amount they deem necessary to win. Source: Interview with Candice Nelson, co-author of "The Money Chase: Congressional Campaign Reform," Brookings Institution Press, 1990.

References: The FEC and state election offices require financial disclosure of campaign contributions. See: [ LINK ] and [ LINK ]. According to a Center for Public Integrity report on state campaign finances, "nearly half the states received a failing grade for the campaign finance disclosure required of state-level political party organizations." "Undisclosed," September 26, 2002

References: The campaign finance law permits the Commission to conduct an audit of any political committee. The Commission generally conducts such audits when a committee appears not to have met the threshold requirements for substantial compliance. [2 U.S.C. §438(b)] The audit determines whether the committee complied with the limitations, prohibitions and disclosure requirements of the Federal Election Campaign Act. In addition, the Commission is required by law to audit presidential campaigns and convention committees that accept public funds. FEC Enforcement Matters, [ LINK ].

References: As noted above, the Federal Electoral Commission monitors the political financing process. [ LINK ]

References: Numerous financial loopholes exist to allow contributions to one official to be redirected through political action committees to another candidate. Source: Interview with Candice Nelson, co-author of "The Money Chase: Congressional Campaign Reform," Brookings Institution Press, 1990. Also see: M.E. Sprengelmeyer, "Hefley aims to do away with 'leadership PACs'," Rocky Mountain News, July 19, 2006. Even with the new changes to congressional ethics laws, members of Congress will be able to accept invitations from lobbyists to events that are widely attended, including receptions and charity golf tournaments. "Congressman, It's (Still) on Us: The Ethics Law's Many Loopholes," Washington Post, August 11, 2007

References: The 2004 presidential election witnessed many cases of "bundling", in which high-level corporate executives encourage their employees to contribute to the same candidate. See: Source: Interview with Candice Nelson, co-author of "The Money Chase: Congressional Campaign Reform," Brookings Institution Press, 1990. See also, "Office politics: banned from making political donations, companies harvest them from employees instead," CFO The Magazine for Senior Financial Executives, July 2004.

Also, a recent Supreme Court decision allows corporations and labor unions to fund political advertising leading up to an election, thwarting efforts to restrict the practice. "POLITICAL ADS; A horrible ruling; Court decision could mean a return to the days of attack ads funded by corporations and unions just before an election." Milwaukee Journal Sentinel, June 26, 2007

On a positive note, new congressional ethics rules require lawmakers to disclose the names of lobbyists who raise $15,000 in contributions in a six-month period through the bundling of donations. CONGRESS VOTES TO TIGHTEN RULES ON LOBBYIST TIES, New York Times, August 3, 2007; "Tougher Rules Change Game for Lobbyists," New York Times, August 7, 2007

References: N/A There are no expenditure limits.

References: Democracy 21, an elections watchdog group, calls the FEC a "failed agency." Its report asserts "structural problems of the FEC are compounded by the extraordinarily cumbersome enforcement procedures built into the statute - what Congressional Quarterly referred to as 'procedures mandated by Congress and designed to protect incumbents and challengers from overly aggressive investigators.'" Democracy 21 Report: "No Bark, No Bite, No Point," 2002. Candice Nelson confirms this assessment.

References: The FEC imposes fines in cases of finance irregularities in federal elections, although many have criticized the agency as being too lax (in part because its commissioners comprise an equal number of Democrats and Republicans, often leading to stalemates). Candice Nelson believes the fines offer little deterrent value, as most campaigns adopt the attitude of "If you get fined you get fined; it's the cost of doing business." She also notes that it is the campaign treasurer who gets fined, because the campaign is over and the organization has disbanded by the time the FEC acts. Also see: Jim Drinkard, "Agency that referees elections protects parties first," USA Today, November 11, 2002; and "The FEC's Reluctant Regulators; The agency's inaction means Congress ought to step in," Washington Post editorial, June 9, 2006, p. A22.

References: According to the Democracy 21 report, "The Commission cannot make its own findings that a violation occurred, cannot seek court injunctions to halt illegal activity while it is occurring, and cannot conduct random audits of campaigns. In short, Congress created an enforcement agency that, on its own, can do little to actually enforce the law. Although the agency, by a mandated process of conciliation, can attempt to settle cases and negotiate the payment of civil penalties by respondents, it has (with limited exceptions) no power to actually adjudicate complaints itself or to require that violators face sanctions." "No Bark, No Bite, No Point," p. 13.

References: The FEC requires parties and campaigns to disclose their contributions and expenditures once per quarter. Ref. §434, Reporting Requirements ([ LINK ]). It should be noted that this disclosure requirement also has a political benefit, in that campaigns can demonstrate the strength of their support through public disclosures.

References: The FEC makes financial reports available on its Web site. [ LINK ]

References: The FEC makes financial reports available on its Web site. [ LINK ]