Political Action Committee (PAC), organization established by businesses, labor unions, and other interest groups in the United States to channel financial contributions into political campaigns. PACs solicit contributions, pool the funds, and make donations to the campaigns of candidates for national, state, and local offices.

Labor unions organized the first PACs in the 1940s as a way to circumvent federal laws prohibiting the use of union dues to support political candidates. Businesses first formed PACs in the 1950s. However, these organizations remained in a legal limbo until the early 1970s, when changes in federal election law specifically authorized the creation of business and other kinds of PACs. Legislators believed these reforms in the rules governing campaign finance would limit the influence of money in political campaigns. However, these reforms led to the proliferation of PACs and to dramatic increases in campaign spending.

The terms of the 1971 Federal Election Campaign Act permit PACs to make larger contributions than individuals to any congressional candidate. While individuals may donate no more than $2,000 per election to a candidate, a PAC may donate up to $5,000. (Individuals may donate up to $5,000 per year to a PAC.) Moreover, allied or related PACs may coordinate their contributions, greatly increasing the amount of money a congressional candidate receives from the same set of interests and individuals. As a result, PACs have become very important in congressional races. PACs are also active in state and local election contests.

American presidential elections, by contrast, have historically depended more on public funding. In 2004, however, President George W. Bush and Democratic presidential candidate John Kerry both opted out of public funding during the presidential primaries to free themselves from spending limits. In all likelihood, future candidates will depend more upon private contributions—including PAC money—for their campaigns.

More than 4,500 PACs are registered with the Federal Election Commission, which oversees campaign finance. Despite concerns about the growing influence of PACs, their numbers have remained fairly constant since the mid-1980s. Most PAC money goes to incumbent candidates, who usually have a better chance to win than their challengers.

Nearly two-thirds of the PACs represent corporations, trade associations, and other business and professional groups. Alliances of bankers, lawyers, doctors, farmers, manufacturers, and merchants all sponsor PACs. One example is the National Beer Wholesaler's Association PAC, formerly known as “SixPAC.”

Labor unions also sponsor hundreds of PACs, as do ideological, public interest, and nonprofit groups seeking to advance a particular cause. The National Rifle Association and the Sierra Club are influential organizations that operate PACs. EMILY's List is a PAC that has raised and donated millions of dollars to women candidates for political office. The word EMILY is an acronym that refers to the phrase “early money is like yeast”—it makes the dough rise.

Congressional and party leaders have also established their own PACs. These high-profile PACs are often the source of controversy because of suspicions that they are simply tools for avoiding federal campaign spending limits. During the mid-1990s, the Federal Election Commission charged that GOPAC, a PAC chaired for many years by Republican Speaker of the House, Newt Gingrich, had violated campaign finance laws by failing to register its activities with the commission in a timely manner and by neglecting to reveal the sources of its money. However, in 1996, a federal judge dismissed the allegations against GOPAC.

In recent national elections, PAC contributions to candidates for the House and Senate have exceeded $500 million. Leading PAC contributors include the American Medical Association, the National Association of Realtors, the Association of Trial Lawyers of America, the Teamsters Union, the National Education Association, and the American Federation of State, County and Municipal Employees.

The importance of PACs increased with the passage of the Bipartisan Campaign Reform Act of 2002, popularly known as the McCain-Feingold Act after its sponsors, Senators John McCain and Russell Feingold. This law outlawed unregulated contributions to the national political parties. Prior to McCain-Feingold, these so-called “soft money” contributions had not been restricted by law, allowing wealthy individuals to make large contributions to the parties. These contributions, in turn, funded political candidates. Restrictions on these practices have made PAC contributions all the more important to candidates. In all likelihood, the number of PACs and their prominence in the political process will increase in the years to come.