There are three main ways in which private entities can influence the political system through the means of spending money.
While most individuals are free to make political contributions, three categories of individuals are prohibited by law from making contributions: foreign nationals, federal government contractors and, in some instances, minors. These and other prohibitions on contributions are explained below.
Foreign nationals may not make contributions in connection with any election Federal, State or local. This prohibition does not apply to foreign citizens who are lawfully residence in the United States (those who have "green cards").
Federal government contractors may not make contributions to influence federal elections. For example, if you are a consultant under contract to a federal agency, you may not contribute to federal candidates or political committees. Or, if you are the sole proprietor of a business with a federal government contract, you may not make contributions from personal or business funds. But, if you are merely employed by a company (or partnership) with federal government contracts, you are permitted to make contributions from your personal funds.
The law also prohibits contributions from corporations and labor unions. This prohibition applies to any incorporated organization, profit or nonprofit. For example, the owner of an incorporated "mom and pop" grocery store is not permitted to use a business account to make contributions. Instead, the owner would have to use a personal account. A corporate employee may make contributions through a nonrepayable corporate drawing account, which allows the individual to draw personal funds against salary, profits or other compensation.
Contributions made in the name of another are prohibited. For example, an individual who has already contributed up to the limit for a candidate's election may not give money to another person to make a contribution to the same candidate. Similarly, a corporation is prohibited from using bonuses or other methods of reimbursing employees for their contributions.
Finally, contributions that exceed the law's limits are prohibited.
For more information concerning campaign contributions rules, see: