Did Firms Profit from Soft Money?

The authors thank William Burke for his excellent research assistance. Professor Ansolabehere and Professor Snyder thank the National Science Foundation for its generous financial support. At its heart, the Bipartisan Campaign Reform Act seeks to limit the private benefits that firms receive from campaign contributions. A series of rulings by the Federal Election Commission created the opportunity for organizations and individuals to give funds to party accounts outside the system of direct contribution limits- so called soft money. Although little used before 1992, soft money ballooned during the 1990s. In the 2000 election, the two major parties raised approximately $500 million in soft money, most of which came from corporations in donations in excess of $ 1 00,000, at least ten times larger than the hard contribution limits set in the Federal Elections Campaign Act. Companies were widely alleged to have profited directly and substantially from their soft money donations. In the years leading up to the passage of BCRA, public interest groups and the press provided numerous examples of firms that benefited from public policies and were also large soft money donors- tobacco, pharmaceutical, and oil companies were especially featured in these reports. The most telling evidence, cited extensively by the majority opinion in McConnell v. FEC,