In 1971, in an attempt to curb the influence of money in politics, Congress passed the Federal Election Campaign Act (FECA). Strengthened in 1974 and amended in 1979, FECA remains the central legislation governing the financing of national elections. FECA set campaign spending limits and required public disclosure of the amount and source of campaign donations. The 1974 amendments set monetary limits on what people, political action committees (PACs), and political parties could contribute to political candidates, and established the Federal Election Commission (FEC) to enforce campaign finance rules.

The Supreme Court in 1976 overturned campaign spending limits as unconstitutional, arguing that such spending was a form of free speech protected by the First Amendment. They let stand contribution limits and disclosure requirements, however. Donations made to candidates and recorded by the FEC became known as “hard money.”

However, individuals, corporations, and labor unions...