Implications of Decentralized Autonomous Organization on Political Campaign Finance Regulations

Abstract

The Federal Election Commission (FEC) is the regulating authority over the monies that U.S. citizens are allowed to give to political candidates and parties. However, preexisting loopholes in FEC regulation allow for contributions to be made in situations that do not require donors to disclose their identity, a term coined as “dark money”. The increase of dark money in campaign financing and the ability of political spending to influence voter perspectives and decisions puts the credibility of the political finance system at stake. Additionally, with the introduction of blockchain, decentralized autonomous organizations (DAOs) and smart contracts to political financing these technologies collectively can serve as a new vehicle for bad actors to use. In this paper, the effects of blockchain and smart contracts on political finance are examined through four use cases to demonstrate how these technologies can extend anonymous, foreign interference in political campaign financing and further cripple public trust in it.