What is a Political Action Committee?

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In the United States, a political action committee (PAC) is a 527 organization that pools campaign contributions from members and donates those funds to campaigns for or against candidates, ballot initiatives, or legislation. The legal term PAC has been created in pursuit of campaign finance reform in the United States. This term is quite specific to all activities of campaign finance in the United States. Democracies of other countries use different terms for the units of campaign spending or spending on political competition (see political finance). At the U.S. federal level, an organization becomes a PAC when it receives or spends more than $1,000 for the purpose of influencing a federal election, and registers with the Federal Election Commission (FEC), according to the Federal Election Campaign Act as amended by the Bipartisan Campaign Reform Act of 2002 (also known as the McCain-Feingold Act). At the state level, an organization becomes a PAC according to the state's election laws.

History:

The political action committee emerged from the labor movement of 1943. The first PAC was the CIO-PAC, formed in July 1943 under CIO president Philip Murray and headed by Sidney Hillman. It was established after the U.S. Congress prohibited unions from giving direct contributions to political candidates. This restriction was initially imposed in 1907 on corporations through the Tillman Act. The Smith-Connally Act extended its coverage to labor unions in 1943.[10] A series of campaign reform laws enacted during the 1970s facilitated the growth of PACs after these laws allowed corporations, trade associations, and labor unions to form PACs