Despite Attempts, Loopholes In Law Remain Unplugged

By Jonathan D. Salant
CQ Staff Writer

The 35-year effort - sporadic and occasionally explosive - to refine the federal campaign finance statutes has produced a couple of sweeping overhauls, including one enacted in 1974 in the wake of the Watergate scandals that brought down President Richard M. Nixon.

Yet despite ample evidence that loopholes in the law are undermining its intent of limiting the influence of campaign contributors, Congress failed throughout the 1980s and so far in the 1990s to rewrite the legislation.

Campaign finance controversies during the early 1960s sparked the modern effort to improve the campaign finance statutes.

President John F. Kennedy, stung by allegations that his family's wealth bought his narrow victory in the 1960 election, created a campaign finance commission in 1961. The panel's 1962 recommendations included limiting contributions, providing tax credits for givers and requiring public disclosure of donations.

Kennedy's successor, Lyndon B. Johnson, hosted $1,000-a- plate "President's Club" dinners throughout his 1964 campaign. But the Democratic National Committee (DNC) declined to release the names of the members of the President's Club.

The DNC also charged $15,000 a page for advertisements in a political journal, with corporations able to deduct the cost of the ads from their federal taxes.

With controversy over these practices simmering, Johnson in 1966 proposed an overhaul of the law that governed financing of federal campaigns, the 1925 Federal Corrupt Practices Act. Though Johnson's bill and a weaker congressional proposal went nowhere, they paved the way for Congress to try to change the law.

Congress finally cleared a comprehensive bill that Nixon signed into law (PL 92-225) in 1972.

The law limited how much money candidates could contribute to their own campaigns and how much money they could spend on advertising.

"We have a crackerjack bill here," said Rep. Morris K. Udall, D-Ariz., a leader of the effort. "It will stop millionaires from buying Senate seats and the presidency. It brings this television monster under control."

The effort advanced with the enactment of the 1974 law, key provisions of which limited contributions to any federal campaign by an individual to $1,000 per election and set overall per-candidate spending limits on contests for federal office.

Yet things did not work out the way Udall and other advocates of change envisioned, largely because of a series of Supreme Court decisions.

The biggest blow came in 1976, when the court struck down the statutory limits on campaign expenditures as violations of the First Amendment right to free speech. Since then, lawmakers have been trying to develop incentives for candidates to hold down their spending voluntarily.

Generally, Democrats have called for public financing, while Republicans have tried to restrict the sources of campaign contributions by banning political action committees and requiring candidates to raise most of their money from their own congressional districts.

Legislative Timeline

The following is a history of efforts to change the way federal campaigns are financed:

--1966. The disclosures following Johnson's 1964 election led Sen. Russell B. Long, D-La., to propose the first public financing of federal elections. Long attached a provision to an unrelated tax bill (PL 89-809) that allowed taxpayers to earmark $1 of their federal income taxes ($2 for a married couple filing jointly) to finance presidential campaigns.

But a provision in an unrelated tax law enacted the next year (PL 90-26) suspended the public financing program, pending the implementation of rules governing the distribution of the money. The program was not revived until 1972.

A provision in another bill enacted in 1966 (PL 89-368) removed the tax deduction for corporations and individuals who bought advertisements in political party-sponsored journals or bought tickets to political dinners or programs. (1966 Almanac, p. 484).

--1970. The Citizens Research Foundation - headed by political science Professor Herbert Alexander, former executive director of Kennedy's commission - found that the costs of campaigning for all elective offices had risen from $140 million in 1952 to $300 million in 1968. Federal lawmakers tackled what they believed was the major cause of that increase: television and radio advertising.

Congress cleared legislation (S3637) limiting how much money candidates for president, vice president, senator, representative, governor and lieutenant governor, could spend on broadcast ads. But Nixon vetoed the bill, and the Senate fell four votes short of the two-thirds majority needed to override. (1970 Almanac, p. 831)

--1971. Federal lawmakers cleared a comprehensive revision of campaign finance laws. The measure, signed by Nixon in 1972, limited how much money candidates could contribute to their own campaigns and how much money they could spend on all advertising, not just radio and television commercials.

The legislation banned corporations and unions from contributing directly to federal campaigns. The bill authorized the groups instead to set up political action committees (PACs), funded by voluntary contributions from employees and members.

--1974. In the wake of Watergate, President Gerald R. Ford signed legislation (PL 93-443) that limited campaign contributions to $1,000-per-individual per election, set spending limits for federal campaigns, limited how much candidates could give to their own campaigns, provided federal funding for national party conventions and set up a pool of matching public funds for presidential primary campaigns.

The law established new contribution disclosure requirements, repealed the limits on media expenditures enacted in 1972 and set up the Federal Election Commission (FEC) to oversee the new campaign finance system.

Lawmakers rejected proposals to expand public financing to congressional campaigns. "The promise of clean elections cannot be fulfilled by using public money," said Rep. Bill Frenzel, R- Minn.

--1976. The Supreme Court, in the case of Buckley v. Valeo, ruled that spending limits for individual candidates were unconstitutional, as were restrictions on how much money candidates could contribute to their own campaigns.

--1979. Though a major overhaul bill was given priority designation as HR1, it failed to get out of the House Administration Committee.

The House did add a provision to the FEC authorization bill (S832) that would have reduced PAC contributions to an individual campaign from $10,000 a cycle to $6,000 a cycle and stopped candidates from taking in more than $70,000 in PAC money every two years.

But the measure failed in the Senate when Republicans threatened a filibuster.

Congress did clear and President Jimmy Carter signed a measure (PL 96-187) allowing political parties to raise money for get-out-the-vote efforts and voter registration drives. These funds, known as "soft money," eventually would be tapped for millions of dollars in unregulated, issue-oriented advertising aimed at influencing targeted House and Senate campaigns.

--1988. Senate Majority Leader Robert C. Byrd, D-W. Va., held a record-setting eighth cloture vote in an attempt to bring to the floor legislation that would have set voluntary spending limits for Senate campaigns, offered public funds to candidates who abided by the limits and restricted PAC contributions.

His effort failed to overcome epic stalling tactics by Republican opponents of the measure, who particularly attacked the public financing provisions.

One of the Republican leaders was freshman Sen. Mitch McConnell of Kentucky, who today continues to act as a leading opponent of campaign finance overhaul.

--1992. In the wake of scandals involving the House bank and post office, the Democratic-controlled Congress finally cleared campaign finance legislation.

The bill (S3), merged separately passed House and Senate bills, creating different campaign rules for each chamber. Senate candidates who agreed to abide by spending limits would have received taxpayer-financed vouchers to allow them to buy television time. House candidates would have gotten federal matching funds.

In any case, President George Bush vetoed the legislation, objecting to the public financing provisions.

With voter dissatisfaction with "Washington insiders" nearing its boiling point, Democratic presidential nominee Bill Clinton promised to sign campaign finance overhaul legislation.

--1994. With Clinton in the White House and Democrats still running Congress, each chamber passed its own campaign finance bill.

Negotiators then agreed to lower PAC contributions from $10,000-an-election-cycle to $6,000, offer cut-rate television time to Senate candidates and provide vouchers for advertising and postage costs to House candidates who abided by spending limits, ban most soft money and stop incumbents from sending out taxpayer-financed mass mailings in election years.

Senate Republicans, however, filibustered the procedural motion to formally go to conference. Led by McConnell, they killed the bill.

--1995. At a joint forum in New Hampshire in June, Clinton and House Speaker Newt Gingrich, R-Ga., shook hands on a deal to name a blue-ribbon commission to look at ways to change the campaign finance system. No commission was formed.

--1996. A new bipartisan coalition, led by Sens. John McCain, R-Ariz., and Russell D. Feingold, D-Wis., introduced legislation to ban PACs and soft money and encourage congressional candidates to abide by voluntary spending limits by providing free or discounted television time and reduced mailing rates.

The senators managed to get their bill (S1219) to the floor only after Majority Leader Bob Dole, R-Kan., resigned from the Senate to concentrate on his campaign as the Republican presidential nominee against Clinton.

Even then, McCain and Feingold failed to get the 60 votes needed to end debate and bring the bill up for a vote.

"I wouldn't think we're going to win," McCain said at the time, "but the issue is not going away."

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