# The SCAM PAC Act: What It Actually Does

This bill is designed to stop political action committees (PACs) from funneling money to businesses owned by the people who run them. Right now, there's a potential loophole where someone could manage a PAC, then have that PAC pay their own consulting firm, marketing company, or other business for services. The bill would make this practice illegal by prohibiting PACs from sending money to any business owned or controlled by the people with power over the PAC—including the PAC's managers, fundraisers, and employees who provide campaign or strategy advice. The rule also extends to immediate family members like spouses, children, and parents, so someone couldn't just put a business in their spouse's name to get around the restriction.

There are a few important exceptions built into the bill. It doesn't apply to official candidate committees, political party committees, or corporate and labor union PACs. Additionally, if a PAC can prove that most of its money goes toward actual campaign work rather than administrative costs and salaries, the restriction doesn't kick in. This exception is meant to protect legitimate campaign spending while targeting PACs that primarily exist to enrich their operators.

The practical effect is that PAC managers and operators would need to be more transparent about where money goes and couldn't use their position to personally profit through their own businesses. For donors, it means their contributions are less likely to end up lining the pockets of PAC insiders. The bill would take effect 90 days after it becomes law, giving PACs time to adjust their practices.

SCAM PAC Act

Malinowski, Tom

Stopping Corrupt Actors from Making Political Action Committees Act or the SCAM PAC Act This bill generally prohibits a political committee from disbursing funds to an entity that is owned or controlled by an individual, or the immediate family member of an individual, who has authority to carry out specified activities for the committee (e.g., soliciting funds) or is employed by the committee to provide it with professional services. This prohibition does not apply to (1) a political committee that certifies that a majority of the funds disbursed by the committee were for expenses other than administrative costs, fundraising costs, and employee salaries; or (2) an authorized committee of a candidate, a committee of a political party, or a separate segregated fund of a corporation or labor organization. Further, the bill prohibits a political committee from employing these individuals or allowing them to volunteer on its behalf if the related entity accepted funds from a political committee.