Readers of presidential tea leaves often look for several signs that someone is planning to run for the White House: trips to Iowa and New Hampshire, the release of non-controversial memoirs, and in recent years, the creation of various patriotically named political committees on his or her behalf.
At this early stage of the 2016 presidential race, no major candidates have actually declared their candidacies or set up their official presidential campaigns, but several possible contenders have established, or had established on their behalf, a variety of political organizations that might best be described as their “pre-campaign committees.”
Republican Gov. Scott Walker of Wisconsin launched a 527 called “Our American Revival” on Tuesday. Gov. Chris Christie created his “Leadership Matters for America” PAC on Friday. Jeb Bush launched his “Right to Rise” leadership PAC when he signaled his interest in running for president earlier this month, while his supporters launched a super PAC of the same name. Louisiana Gov. Bobby Jindal has a PAC too.
What’s with this jumble of acronyms and numbers? Here’s a guide on the advantages and restrictions placed on each type of group.
* Leadership PACs: These political action committees are established by individual politicians or aspiring candidates, allowing them to raise and spend money separate from an actual campaign account. Funds raised in a leadership PAC can be used to pay for various political expenses such as travel, polling, staff, and campaign contributions to state and local politicians across the country.
The funds are usually spent to cultivate relationships and curry favor with local power-brokers and activists with an eventual White House bid in mind. Leadership PAC funds cannot be spent directly on the sponsoring politician’s own presidential campaign activity and cannot be transferred later to a campaign account (beyond a $5,000 contribution limit).
Individual donors may contribute up to $5,000 per calendar year to a leadership PAC (or to any other political action committee). In turn, a leadership PAC may contribute up to $5,000 per year to an unlimited number of candidates and up to $15,000 a year to the national party. Leadership PACs were originally used primarily by members of the congressional leadership or those seeking leadership positions, but they are much more widely used today.
* 527s: So-called 527 groups are named for the section of tax code that created them. The full legal definition of a 527 encompasses a broad and unwieldy collection of political entities, but most public discussion on 527s has focused specifically on a subset of groups that can raise and spend unlimited amounts of money but cannot expressly call for the election or defeat of a particular candidate.
These groups rose in popularity among political operatives in the 2000s after the McCain-Feingold law set strict contribution limits on political parties. 527 groups must disclose their contributors and spending activity in regular filings. As with leadership PACs, 527 funds cannot be used specifically on presidential campaign activity and cannot be transferred to a presidential campaign account.
* Super PACs: A super PAC is a political action committee that can raise and spend unlimited amounts from individuals, corporations, and labor unions and, unlike traditional 527 groups, can call for the election or defeat of specific candidates. Super PACs, known officially as “independent expenditure-only commmittees,” were first created in the 2010 campaign cycle in the wake of a pair of Supreme Court decisions, including the Citizens United case. Super PACs are required to disclose their contributors and spending activity in regular filings. They may not make contributions to candidates, parties or other political committees.
* 501(c)4s: Like their 501(c)3 cousins, a 501(c)4 is a non-profit, tax-exempt organization regulated by the IRS. Unlike a 501(c)3 group, a 501(c)4 may engage in political activity, as long as politics is not the group’s primary purpose. This distinction is the subject of much debate. 501(c)4 groups, also known as a “social welfare” organizations, may raise and spend an unlimited amounts of money and are not required to disclose its donors.
