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Introduction
Before the year 2000 even began, 14 presidential hopefuls had already spent a combined
total of over $157,800,000 on the 2000 election. Many concerned citizens are alarmed at
the tremendous amounts of money flowing into the hands of political parties in an effort
to help their candidates get elected.
Politicians make laws that affect us every day. All of us are affected by the
combination of politics and money.
Political Scientist Robert Lineberry wrote in 1981 that the $1.2 billion spent on the
presidential campaign in 1980 was only slightly larger that the total amount spent by
Americans each year for lawn mowers and less than that spent on microwave ovens. His
conclusion was that money spent on elections, while undeniably a huge amount, is a
“bargain” and the price we pay for learning more about individual candidates.
Beginnings of U.S. Political Campaigns
The country’s founders could not have anticipated the development of today’s
political system which pits candidates against each other in a battle to raise millions of
dollars in order to be elected. They hoped that those running for office would be like
George Washington who left the comforts of his home to lead the nation in war and to
launch a new government. As the constitution was being written, the idea of “the
public good” was popular. James Madison envisioned a government which protected the
“permanent and aggregate interests of the community” rather than those of
individual factions. In the New World, elections would be determined by citizens and won
by leaders who would consider what was best for the whole society rather than what was
best for their own individual interests.
By the early 1800s, however, the realities of American politics and society bore almost
no resemblance to Madison’s vision of government. Disagreements arose over fiscal and
economic policy issues, leading to the country’s first political parties. The parties
turned to the public for financial support and steadily increased the dollar amounts they
spent on elections. When Abraham Lincoln was elected president, Democratic and Republican
parties spent a combined total of $150,000, a tremendous amount of money in 1860.
At the close of the nineteenth century, William McKinley spent over $3 million and won
the presidency over his opponent, William Jennings Bryan, who spent $675 thousand. During
that election, a Republican fundraiser recommended that banks and other businesses
contribute a specified amount to the McKinley campaign.
The first $20 million presidential campaign came in 1960, with the advent of big
dollars spent on television advertising, and had reached record-breaking amount of $91
million by 1972.
By the turn of the century, laws were being considered to regulate campaign
contributions. The first federal campaign contribution law was passed in 1907. It
prohibited contributions by corporations to candidates for federal office. In 1910, a law
was passed requiring disclosure of campaign contributions. An individual’s
contribution was limited to $5,000 by the Hatch Act of 1940 and labor unions were banned
from contributing to federal campaigns in 1947.
More Campaign Finance Changes
The Federal Election Campaign Act (1971) limited contributions by presidential candidates
or their immediate families to $50,000. The bill restricted money spent on media and
required public disclosure of campaign contributions of $100 or more. The act also
established a policy of public financing of presidential campaigns, and allowed taxpayers
to contribute one dollar of their annual income tax to the fund. Politicians who accepted
public funds were prohibited from accepting campaign contributions from any other source.
The Watergate scandal focused considerable attention on campaign financing. Two
individuals had contributed over $1 million to Richard Nixon’s campaign and the
Watergate special prosecutor discovered that a number of U.S. corporations had made
illegal contributions during the 1972 campaign.
Reacting to the disclosures, Congress passed the Federal Election Campaign Act
Amendments of 1974 which set a $1,000 limit on individual contributions to a candidate for
each primary, runoff, or general election, and cash contributions of more than $100 were
outlawed. Contributions from organizations, political committees, and national and state
party organizations to a federal candidate were limited to $5,000. The Amendments also
established the Federal Election Commission (FEC), which is responsible for administering
laws on campaign finances, and set spending limits of $10 million per candidate in the
presidential primaries and $20 million in the general election.
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