Campaign Finance: Federal Framework, Agency Roles and Responsibilities, and Perspectives

What GAO Found

The Federal Election Commission (FEC) reported that in 2017 and 2018, candidates, party committees, and political action committees raised about $8.6 billion and spent about $6 billion on activities associated with federal elections. Concerns about limiting the potential for political corruption and providing transparency to voters, while protecting free speech, have been at the heart of campaign finance law. Reports of foreign interference during the 2016 election have also focused attention on campaign finance issues in the United States.

Legal framework: The Federal Election Campaign Act (FECA) sets forth provisions governing campaign finance law. Since the enactment of FECA in 1971, subsequent legislation and court rulings have further shaped the campaign finance framework.

Roles and responsibilities of federal agencies and challenges faced:

• FEC: The FEC is responsible for civil enforcement of FECA, including administering the public disclosure system, promulgating regulations, and enforcing laws through audits, investigations, and civil litigation. The FEC is led by up to six appointed commissioners and most consequential agency activity requires affirmative votes of at least four commissioners. Officials reported challenges in administering and enforcing campaign finance laws, including obtaining complete and accurate information from filings, managing the backlog of enforcement matters, completing audits in a timely manner, and addressing staffing shortages, including the absence of a quorum of commissioners since August 2019.
• Department of Justice (DOJ): DOJ is responsible for investigating and prosecuting criminal violations of FECA’s provisions. Officials reported several challenges related to these responsibilities. For example, violations are often concealed and there is no complaining victim, and proving criminal intent is difficult because it requires proof that the alleged violator’s conduct was committed "knowingly and willfully.”
• Coordination between FEC and DOJ: While FEC and DOJ coordinate activities related to campaign finance, some of the agencies’ coordination activities are not reflected in their jointly signed Memorandum of Understanding (MOU), which has not been updated since it was signed in 1977. FEC officials stated that they consider the MOU to be the current guidance used to coordinate the two agencies’ enforcement efforts. However, DOJ officials stated that the MOU is no longer binding DOJ policy. Reviewing and updating, as appropriate, coordination practices between the FEC and DOJ, to include the MOU or other guidance, could help the agencies ensure consistent and effective coordination when enforcing campaign finance law.
• Internal Revenue Service (IRS): IRS is responsible for examining and enforcing tax-exempt organizations’ compliance with the applicable tax provisions related to political campaign intervention. Officials reported various challenges in carrying out these responsibilities, such as obtaining complete, timely, and accurate information from filers and navigating statutes and regulations in monitoring compliance.

Perspectives on the campaign finance framework: Our review of literature and interviews with selected organizations found a range of perspectives on key issues. For example, according to some sources in our review:

• Campaign finance laws have not kept up with the rapid expansion of campaign spending on the internet and do not regulate online political ads to the same extent as television, radio, and print ads.
• Campaign finance laws related to prohibited activities for foreign nationals do not fully address the types of activities in which they may engage to hide their influence in U.S. elections. For example, foreign nationals may use certain 501(c) organizations or limited liability companies, which historically have not been required to publicly report their funding sources, to hide their spending.
• While some sources view requirements to publicly disclose campaign funding sources as helping inform the electorate and prevent corruption, other sources view these requirements as oppressive or stigmatizing to those who may support unpopular candidates or organizations.

Why GAO Did This Study

GAO was asked to review issues related to the enforcement of campaign finance laws in federal elections. This report provides information on (1) the legal framework; (2) federal agencies’ roles and responsibilities, including challenges faced in enforcement efforts; and (3) the perspectives of literature and selected organizations on key aspects of the federal campaign finance framework. GAO reviewed relevant statutes and regulations as well as FEC, DOJ, and IRS policies and guidance. GAO also reviewed literature from 2016 through 2018, and interviewed officials from the FEC, DOJ, and IRS, and selected organizations representing a range of views on campaign finance issues.