ESSAY –Short History of Campaign Finance Reform

Matthew Pinsker offered this overview of American campaign finance history for the Christian Science Monitor in March 1997.  The more things change…



American politicians began shaking the money tree long before President Clinton or Newt Gingrich, but campaign finance reformers (and defenders) seem to regard anything pre-Watergate as the dark ages. That’s unfortunate, because earlier customs can shed new light on current complaints.  Campaign finance practices fall into five eras, each spanning roughly 50 years:

Treating (1776-1827). Treating began in colonial Virginia. Candidates for the House of Burgesses paid for election day parties out of their own pockets to demonstrate respect toward fellow gentlemen.  Treating, however, often meant “bumbo” or rum punch and led to occasionally raucous polls. James Madison objected to the practice and refused to treat during one election contest. He lost. Treating eventually fell out of favor because it proved too elitist and impractical for a growing republic.

Patronage left many 19th-century observers disgusted. Whig opponents of Jackson introduced the first campaign finance reform measure in 1839, a provision to forbid macing of federal employees. Although the custom would not be completely outlawed until 1939, reformers passed a limited prohibition on macing in 1867, the first successful example of campaign finance reform.

Fat-frying (1868-1906). Big money entered American politics during the Gilded Age. Corporate fund-raisers like John Wanamaker of Philadelphia compared the process of raising political money to frying the fat out of food. The master fat-fryer was Mark Hanna, a Republican party boss who raised millions to finance the unprecedented distribution of campaign literature during William McKinley’s 1896 presidential bid.

In 1904, McKinley’s successor, Theodore Roosevelt, was accused of allowing his party’s fat-frying efforts to compromise his trust-busting policies. Investigations after the election revealed that a handful of companies exempted from antitrust regulation had given the Republican Party more than $2 million. A chastened president then issued a call for widespread campaign finance reform.

Modern fund-raising (1907-1955). Reform arrived in 1907 with a measure to ban corporate contributions to federal candidates. This early reform movement culminated in the Federal Corrupt Practices Act (FCPA) of 1925 that established new rules for contributions, disclosure, and even spending limits for federal candidates. There was one problem, however. The rules weren’t enforced. Congress neither published campaign expense information nor prosecuted violators.

Post-modern fund-raising (1956-present). Frustration with this Alice-in-Wonderland system led to greater scrutiny like the 1956 Senate investigating committee chaired by Albert Gore, Sr. and a subsequent presidential commission appointed by John Kennedy. After several false starts, Congress finally acted, passing the Federal Election Campaign Act (FECA) of 1971, which required publication of campaign expense information.

Following Watergate, Congress strengthened FECA to include most of the provisions in the current system: the Federal Election Commission (FEC), political action committees (PACs), limits on federal campaign contributions, and public financing of presidential elections. Congress also passed limits on campaign spending, but the Supreme Court rejected those as infringements on free speech in Buckley v. Valeo (1976).

What lessons does the history of campaign finance suggest?

  • The grass isn’t always greener. Every change in campaign financing began as a reform. Macing offered an antidote to the elitism of treating. Fat-frying promised an end to patronage abuse. Modern (and post-modern) fund-raising rules outlined supposedly clean guidelines. Especially for those now advocating amendments to the Constitution, like former Sen. Bill Bradley, history suggests prudence.
  • Time is money. Changes in campaign finance have always increased the time required to raise needed funds. Treating was elitist, but quick. Macing was automatic. Fat-frying required a small, albeit wealthy, network of donors. Today, candidates spend an inordinate amount of time courting an infinite number of donors. Any reform that lowers contribution limits (or closes “soft” money loopholes) without providing spending relief will exacerbate the time problem and make campaigning even more perpetual.
  • The medium is the message. What becomes most evident is that the price of communication drives campaign finance. TV ads cost more than bonfires, hence the additional pressure. Ironically, this represents the nation’s best hope for reform. Cable and the Internet promise easier and cheaper access to voters.

“The use of money is wrong,” Abraham Lincoln said, “but for certain objects, in a political contest, the use of some is both right, and indispensable.” Such wisdom is sorely needed as the nation slouches toward a new era in campaign finance.


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