Political Action Committee (PAC): Definition, Laws & Examples

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  • 0:00 What Is a Political…
  • 0:36 Types of PACs
  • 2:52 Federal Regulation of PACs
  • 4:18 Lesson Summary
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Lesson Transcript
Instructor: Andrea Stephenson

Andrea has a Juris Doctor and has spoken at legal conferences on government transparency.

This lesson will define a political action committee, or PAC for short. Additionally, it will discuss the federal laws that govern how PACs operate and give examples of PACs.

What Is a Political Action Committee?

Politicians cannot typically support their campaigns by their own net worth, so they receive contributions. Federal law, however, regulates who can contribute to a political campaign. Campaigns can receive contributions from individual taxpayers, but what about corporations, unions, or other similar entities? Well, that is where the political action committees come into play.

A Political Action Committee, or PAC for short, is a group formed for the purpose of contributing money to the campaigns of federal politicians or to support politicians' campaigns indirectly.

Types of PACs

There are three types of PACs: separate segregated funds (SSFs), nonconnected committees and Super PACs. The difference between the types of PACs stems from how they are created, where they get donations, and how they can contribute their money.

Corporations, trade unions, and other entities are barred by law from contributing directly to the campaign of a candidate. However, these entities can create a PAC. SSF PACs are created and operated by either a corporation, labor union, trade association, or another membership organization. SSFs, however, still cannot receive money directly from such corporations or organizations. Instead, SSFs receive money from individuals associated with the organizing or sponsoring entity of the PAC. These associated individuals are typically people such as employees of the corporation or members of the labor union. Examples of SSFs are the National Beer Wholesalers Association PAC (created by the National Beer Wholesalers Association, a trade association) and the Realtors Political Action Committee (created by the National Association of Realtors, a trade association).

Nonconnected committees are PACs not created by or connected to a corporation, labor union, trade association, or other membership organization. Since a nonconnected committee is not connected to a specific entity or organization, it is free to solicit and accept contributions from the general public. Examples of nonconnected committees are the Constitutional Rights PAC and the National Right to Life PAC.

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