Andrew Jackson, Teddy Roosevelt, Hillary Clinton and the Watergate Scandal: A Brief, Annotated History of Campaign Finance

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

I doubt in 1791, when the Founders wrote the First Amendment, they were thinking campaign finances, yet in 2010 it became applicable.

In 2008, a conservative group named Citizens United produced a movie critical of presidential candidate Hillary Clinton. Citizens United’s goal was to pay cable companies to make the movie free to watch on pay-per-view for any of its customers in the month leading up to the Democratic primaries.

However, the film was not shown as a District Court deemed it violated the Federal Election Campaign Act which, “prohibits corporations and labor unions from using their general treasury funds to make electioneering communications or for speech that expressly advocates the election or defeat of a federal candidate.”

This decision eventually made its way to the U.S. Supreme Court in 2010 as the case of Citizens United v. FEC. While the District Court had only cited the most recent 1974 law, it was actually standing on about 100 years of precedence.

While smear campaigns are as old as the nation, financing elections is much newer. In early elections, candidates were wealthy enough to spend their own money, and instead of asking others for donations they were expected to provide gifts, especially alcohol, to those coming to vote.

After Andrew Jackson organized parties, fundraising picked up over the years but only took off after the Civil War and in the Gilded Age with massive campaigns that included advertising and gift giving. Republicans dominated during the Gilded Age and much of the reason was because they had more money. Republicans positioned themselves as pro-business and expected help with their campaigns from business owners.

In 1904, when President Teddy Roosevelt campaigned for his second term, Democrats accused him of accepting large sums of money from corporations for the purpose of influencing his policies. Of course, Roosevelt denied the charges, but had to admit he did receive a great deal of money, making him look suspicious. To show he was above corruption, the president supported the passage of the 1907 Tillman Act which prohibited any corporation or bank from giving money to campaigns.

Between 1904 and the 1970s, several new laws were passed to limit and regulate election spending. Some of these were the 1910 Publicity Act which required parties to disclose all money spent on campaigns. In 1925, the law was amended to require quarterly financial disclosure reports. While these laws were on the books, they were difficult to regulate, and parties found ample loopholes to avoid them. For example, a candidate could simply claim he did not know what money his supporters spent.

The real change came in 1974, when five burglars were caught breaking into the Democratic headquarters at Washington D.C.’s Watergate Hotel. The investigation found several violations of the 1971 law, including paying the burglars with campaign funds. With such a major controversy, campaign finance laws were finally given some teeth.

The 1971 Federal Election Campaign Act required full reporting of all campaign contributions and expenditures. A new aspect was putting a spending limit on media advertisements. Because corporations and unions could not give money directly, the new law allowed them to use treasury funds to create separate voluntary groups to raise and donate money known as political action committees or PACs.

The Watergate scandal exposed holes in the FECA laws as lawmakers realized an independent body was required to oversee campaign finance laws. Congress amended the law in 1974 with the creation of such a body giving the government even more oversight. While tinkering, Congress also amended the law to allow for public matching funds for elections but also put stricter limits on both contributions and expenditures.

Back to 2010, the District Court used the 1974 FECA laws as its justification stopping Citizens United from showing the anti-Clinton movie. Yet the Supreme Court overturned 100 years of precedence with its 5-4 decision basically stating that donating money is freedom of speech and so is protected by the First Amendment, thus could not be limited.

The new rule specified that corporations, unions and other groups can give as much as they want as long as they do not coordinate with the campaign. Under this ruling, Citizens United acting alone can spend all the money they want. Then later in 2010 the case of SpeechNow.org v. FEC ruled that because of free speech, donors could give as much as they wanted to independent groups known as superPACs. Super-PACs cannot coordinate with campaigns nor give campaigns any money, but they can spend as much as they want.

While Congress has continued to try to pass campaign finance reform laws since 2010, not much has really changed as election spending has continued to grow each year with no real end in sight.

James Finck, Ph.D. is a professor of history at the University of Science and Arts of Oklahoma. He may be reached at HistoricallySpeaking1776@ gmail.com.