History of Campaign Finance Laws
Prior to the Civil War, there were no laws regulating campaign finance contributions. Early American politicians, such as Thomas Jefferson and John Adams, ran for office in much the same manner as current politicians. Campaigning, however, was considered undignified. Candidates stood for office and individuals wrote tracts in newspapers to either support or denounce them.
In the early nineteenth century, the spoils system was instituted, under which election winners rewarded their supporters with lucrative government jobs in return for their support. Government employees were then taxed an "assessment" to fund the political campaigns of the elected leaders and the political party in power. This led to the birth of modern political campaigns, in which politicians travel the state or country attempting to persuade citizens to vote for them. In order to succeed in these larger platforms, such campaigns required additional financial contributions from supporters.
The first attempt to regulate campaign finance came in 1837, when Congressman John Bell of Tennessee, a member of the Whig Party, introduced a bill prohibiting assessments. Congress, however, did not vote on it.
The first successful campaign finance regulation was passed in 1867. Written into that year's naval appropriations bill, the regulation prohibited military officers and government employees from demanding money from naval yard workers.
Substantial reform, however, did not occur until the Pendleton Civil Service Reform Act of 1883, which banned the assessment system altogether and established the United States Civil Service Commission. Under the act, government employees were no longer expected to pay for the incumbent party's political campaigns, and most federal government jobs became classified as civil service positions to be filled on merit. Over the next forty years, progressive politicians sought, with limited success, to further limit the corruption created by political contributions.
In 1905, President Theodore Roosevelt asked Congress to ban all corporate contributions. In 1907, Congress passed the Tillman Act, which banned corporations and national banks from contributing to candidates. In practice, however, the act did little to stop contributions, because there was no enforcement mechanism or penalties for noncompliance. In 1910, Congress passed the Federal Corrupt Practices Act (FCPA), which required congressmen to disclose the names of campaign contributors. The act also limited the amount of money politicians could spend, but again, no enforcement was written into the law. The FCPA remained in force until 1971, when it was repealed by the Federal Election Campaign Act.
Throughout the 1940s, Congress limited campaign contributions by labor unions, regulated the amount individuals could donate to candidates and banned businesses working for the federal government from donating to campaigns. In order to circumvent campaign finance laws, labor unions established the first political action committees (PACs). A PAC collects money from individual contributors, such as union members, then distributes it to a particular candidate.
Between the late 1940s and the 1970s, few new campaign finance laws were introduced. In 1971, however, Congress passed the Federal Election Campaign Act (FECA), which established regulations for federal primary races and general elections. These regulations included limits to individual contributions and increased public disclosure of campaign receipts.
Following the Watergate scandal and the resignation of President Richard Nixon, Congress amended FECA in 1974, severely limiting the amount individuals could contribute to federal candidates and placing spending limits on federal elections. In addition, the law established the creation of the Federal Election Commission (FEC) to enforce election laws and to establish a public financing program for federal candidates.
In 1976, the United States Supreme Court struck down sections of the FECA in Buckley v. Valeo, finding that Congress could not limit the amount of money candidates spend on their own campaigns, because such restrictions violated the First Amendment's guarantee of free speech. In 1979, Congress amended the FECA, prohibiting candidates from using excess campaign contributions for personal expenses.
During the 1980s and 1990s, PACs became increasingly important, since donors could contribute more money to PACs than to individual campaigns and political parties. PACs became a method for candidates to gain an advantage over their opponents. Critics argued that PACs created a political environment in which corporate donors were given more power than individual voters.
In the mid-1990s, Republican Senator John McCain and Democratic Senator Russell Feingold spearheaded a movement in Congress to reform campaign finance laws. Although initially met with resistance, Congress passed the Bipartisan Campaign Reform Act, also known as the McCain-Feingold bill, in 2002. The act banned soft money contributions to national parties and restricted candidate-specific advertising by private interest groups. In addition, the act increased the amount individuals could donate to specific candidates. These contributions, known as hard money, are regulated by the FEC.