Campaign Finance Corruption History

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The history of campaign finance in the United States is a long, winding road paved with attempts to balance free speech with concerns about corruption and undue influence. From the very beginning, wealthy individuals have sought to sway political outcomes, often through financial contributions.

Early concerns centered on patronage and outright bribery. The Pendleton Civil Service Reform Act of 1883 aimed to curb patronage by establishing a merit-based system for federal jobs, but it didn’t directly address campaign finance. The Tillman Act of 1907 was the first significant federal legislation, prohibiting corporations and national banks from contributing to federal campaigns. This arose from anxieties about the growing power of corporations during the Gilded Age and their perceived control over political processes.

The Federal Corrupt Practices Act of 1925 consolidated existing regulations, but it proved largely ineffective due to weak enforcement and loopholes. During the mid-20th century, the rise of labor unions and the increasing cost of campaigning led to calls for comprehensive reform. The Watergate scandal, with its revelations of illegal corporate contributions and abuse of campaign funds, proved to be a watershed moment.

In response, Congress passed the Federal Election Campaign Act (FECA) of 1971, significantly amended in 1974. FECA established contribution limits for individuals and political committees, mandated disclosure of campaign finances, and created the Federal Election Commission (FEC) to enforce the law. However, the Supreme Court’s 1976 ruling in Buckley v. Valeo struck down FECA’s limits on independent expenditures and candidate’s personal spending, arguing that these restrictions violated the First Amendment’s free speech clause. This decision laid the groundwork for the concept that money equals speech in the context of political campaigns.

The rise of soft money – unregulated contributions to political parties for “party-building activities” – became a major source of concern in the 1990s. These funds, often from corporations and unions, were used to influence federal elections indirectly. The Bipartisan Campaign Reform Act (BCRA) of 2002, also known as McCain-Feingold, attempted to address this issue by banning soft money contributions to national parties and restricting issue ads that mentioned candidates close to an election.

However, BCRA’s impact was quickly challenged. The Supreme Court’s 2010 decision in Citizens United v. FEC dramatically altered the landscape, ruling that corporations and unions have the same First Amendment rights as individuals and can spend unlimited amounts of money independently to support or oppose candidates. This decision led to the proliferation of Super PACs and other outside spending groups that can raise and spend unlimited funds. The Citizens United ruling and subsequent court decisions have further blurred the lines between campaign finance and free speech, leading to an environment where money plays an increasingly prominent, and controversial, role in American politics. Concerns persist about the potential for corruption or the appearance of corruption, and the undue influence of wealthy donors on policy decisions.