By: Rohan Bhagat
Campaign finance reform may seem like a dry political issue, but it could have a massive impact on how campaigns are run in the US. The phrase generally refers to the idea of stymying the influence of special interest groups and lobbyists by capping how much private citizens, corporations, and other groups can contribute to political campaigns.
The broad influence of these outside groups in campaigns can be traced back to the Jackson Presidency. Jackson made a number of changes to the political norms of the United States that had a profound effect on how our government operates today. Among them was his patronage system, in which a candidate would reward friends, family, donors, and party members with political office after winning an election (1).
As a result, wealthy individuals would donate large sums of money to candidates in order to effectively buy favorable legislation and a voice in the government, a process that still exists today as evidenced by the ubiquity of lobbyists and special interest groups. This form of legal bribery was concerning to many, as it corrupted the democratic process of American politics.
First Attempts at Change
The first real efforts at combating this problem were during the Progressive Era. The rise of big business following the Industrial Revolution led to the creation of antitrust laws and legislation restricting corporate lobbying and campaign contributions. Despite accepting large donations from corporations (2) , President Teddy Roosevelt signed into law the Tillman Act of 1907, the first federal effort at regulating campaigns. The act prohibited corporations from making direct contributions to federal candidates but was virtually unenforceable and failed.
However, further efforts were soon made. The Federal Corrupt Practices Act of 1910 required disclosure of spending by political parties in House general elections, and was amended in 1911 to include Senate general elections and to set spending limits for candidates in both chambers (3). The Seventeenth Amendment, which stipulated that US Senators would be voted into office rather than appointed by state legislators, many of whom were frequently bribed, was ratified in 1913. The 1939 Hatch Act, which barred certain federal employees from partaking in certain political activities, was amended a year later to include a campaign spending limit on political parties and a contribution limit on donors (4).
Comprehensive Reform
Those efforts, as well as several others, were largely ineffective, and spending limits were frequently ignored. But in 1971, the Federal Election Campaign Act, or FECA, was passed, and required the complete disclosure of campaign contributions and expenditures. Following the Watergate Scandal and the subsequent resignation of President Richard Nixon in 1974, the American public demanded greater transparency in the political process, prompting the passage of far-reaching amendments that would establish the Federal Election Commission, which would become the top federal agency on the enforcement of election laws. Further amendments would also create a system of matching funds, where certain private donations may be matched by the federal government, for Presidential primaries, intended to decrease private funding of elections and mitigate the risk of corruption (3).
Constitutional Challenges
As with virtually all campaign finance reform laws, many of the 1974 amendments to the FECA were alleged to be unconstitutional and resulting legal challenges would lead to Buckley v. Valeo in 1976. The case struck down the provision of the Federal Election Campaign Act that limited campaign expenditures, although it held up many limits on campaign contributions. The Supreme Court ruled that limits on campaign expenditures were unconstitutional as they violated the First Amendment right to freedom of speech, by limiting spending on voicing political opinions, and thus indirectly limiting the voice of campaigns (5).
More Comprehensive Reform
In the past few decades, attempts at campaign finance reform were led by the late Senator John McCain (R-AZ). His focus was eliminating “soft money” from our political process. Soft money is defined as political contributions to a political party, political action committee (PAC), or Super PAC, that is supposed to be used for non-federal campaigns, but is transferred to national organizations to influence national elections, without explicitly going to a specific candidate. By going through this process, soft money circumvents virtually every limitation on financing and, most importantly, renders the limit on campaign contributions by individual donors created by the FECA in 1974, and upheld by Buckley v. Valeo in 1976, useless.
Together with Senator Russell Feingold (D-WI), Senator McCain introduced legislation to eliminate soft money in 1997, only to have the bill blocked by a Republican filibuster. McCain and Feingold persevered, and in 2002, sponsored a version of the Bipartisan Campaign Reform Act (BCRA) in the Senate, while Representatives Christopher Shays (R-CT) and Marty Meehan (D-MA) sponsored the version in the House. The bill was chiefly intended to prohibit the use of soft money, limit campaign spending, and block the airing of political issue advertisements that name a candidate within 60 days of a federal general election. The bill was the most comprehensive piece of campaign finance reform legislation since the FECA, and the Shays-Meehan version of the bill passed both chambers of Congress in 2002, narrowly avoiding a filibuster after a 60–40 vote in the Senate (6). However, like the FECA, the BCRA was quickly undone by a series of legal challenges in the next two decades.
More Constitutional Challenges
In 2003, in McConnell v. FEC, the Supreme Court struck down the provision of the BCRA that prevented political parties from making both coordinated and independent expenditures on behalf of their candidate, as well as the BCRA’s ban on political contributions from minors. (7).
The BCRA’s power was further diminished only a few years later. After arguments in 2009, the Supreme Court ruled in 2010 in Citizens United v. FEC that the restrictions on independent expenditures for political communications by corporations, labor unions, and other organizations in the BCRA violated the First Amendments protection of freedom of speech (8).
In 2014, the BCRA took its final blow in McCutcheon v. FEC, which stated that the FECA aggregate limits on campaign contributions that an individual can make over a two-year period was in violation of the First Amendment (9). In short, this meant that although individual donors were barred from donating more than a certain amount to any individual political party, campaign, or committee, they were free to contribute to as many of these organizations as they want (10).
McCutcheon effectively overturned the remaining parts of the BCRA by reintroducing soft money to our political process. Wealthy donors are more free to make large contributions to a party and buy their influence in the government than any time in the past half century. As a result, campaigns have become dominated by PACs and joint fundraising committees that take away from America’s democratic ideals.
The Rise of the Super PAC
In 1980, the total amount of money in the Presidential election was just about $225 million (11). In 2020, that number was over $6.6 billion (12), nearly a 3000% increase. This increase in money has been driven by campaigns’ increasing dependence on large donors who pour in millions through PACs. Super PACs in particular have become much more influential throughout the past decade. They pool money from individuals, corporations, labor unions, and other PACs to push a political agenda (13). And although they are not legally allowed to associate themselves with a particular campaign or coordinate campaign efforts with an individual campaign, they all do, using legal loopholes to easily evade what remains of campaign financing law.
What will President-Elect Biden Do?
So what will Joe Biden’s Presidency mean for campaign financing? Biden opposed the Supreme Court’s ruling in Citizens United and his website claims that he supports “reduce the corrupting influence of money in politics” and strongly believes that “we could improve our politics overnight if we flushed big money from the system and had public financing of our elections” (14).
Despite this, Biden took in millions from large donors, and his campaign applauded the Priorities USA Super PAC (15). Biden also publicly supports public financing, a term that refers to the complete or partial elimination of private political contributions in favor of government subsidization of elections via the income tax. This would likely be achieved through matching funds or the allotment of a certain amount of money to each American voter to be used for campaign contributions. However, such a system would likely face stronger constitutional challenges than any other attempt at reform.
The fact of the matter is that although President-Elect Biden supports comprehensive campaign finance reform to get “big money” out of politics, the likelihood that he would be able to pass such legislation is extremely low. And the likelihood that such legislation would not infringe on the First Amendment and would be upheld by the Supreme Court is close to zero. Our nation is caught choosing between two evils. Without campaign finance reform, our elections and our politicians will be corrupted by the power of influential corporations and organizations, and will be forced to put the interests of donors ahead of the interests of the people they represent, threatening the stability of American democracy. But with it, we threaten the strength and validity of the First Amendment, and the freedoms that come with it.