Any business that wants to be a political party needs to consider special rules for fundraising. First, federal political party committees cannot coordinate any money from any outside sources and restrictions on state and district committee activities are uniquely tailored to state laws.
Secondly, the U.S. government is fully committed to the U.S. Constitution and its limits on federal power, including its restrictions on political campaign spending. Federal election laws (FEA) govern many types of political activity, including spending on advertisements, collecting signatures, mailing out fliers, holding meetings, distributing leaflets and making telephone calls. The law is designed to limit these activities to legal political campaign activities (such as participating in a candidate forum), which require permission from local parties and their designated officials. The FEA also bars certain activity that can be done as an informal committee that is not technically a political campaign, but is used in conjunction with a formal campaign.
If a candidate or his committee violates any FEA requirements, the candidate or his supporters can be punished by suspension or expulsion from the party. These punishments are often severe and can include fines, suspensions or expulsion from the political party and the loss of party status. Often these sanctions are in place for repeated violations of the same or similar violation, and in extreme cases, such as when a party is involved in multiple violation cases, punishment can even include removal from office.
In addition to these penalties, some states also have laws restricting participation in political activity between candidates, which allows individual parties to run their own candidates and to conduct their own campaign. This is referred to as a straw poll. Such activities have become common practice and are becoming increasingly popular in some party circles.
However, the use of party funds in federal elections is prohibited under the Federal Election Campaign Act. This means that party members cannot raise any money for a candidate in the name of the party. So, if a party wanted to take advantage of the political revolution that has swept the country, it would need to establish its own independent political action committee to engage in this type of activity.
As the U.S. election cycle continues, we are likely to see a number of new challenges to the rules governing political fundraising for federal elections. This includes both state and federal campaigns.
The challenge will come when party members realize that they must first comply with the FECA before they can begin raising money for political campaign purposes. Once that hurdle has been cleared, most party members are more interested in building up the party and raising money for their down-ballot candidates.
The best way for most party members to make this transition is to allow a third party to do the fundraising for them. A fundraising committee will work closely with party members and serve as the liaison between them and their elected leaders. This group can then pass the collected funds along to the down-ballot candidates at the appropriate time.