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The Legal Regulation of Campaign Financing in American Federal Elections
Published online by Cambridge University Press: 16 January 2009
Extract
1988 is a presidential election year in the United States. As in previous presidential and congressional campaigns, millions of dollars will be spent by candidates seeking elected office. Campaign financing in the United States, as in other western democracies, raises a question which strikes at the moral basis of the system of government. Thus, how do we secure and guarantee political equality in a society of deep-rooted economic inequality? It may well be that de Tocqueville was right when he wrote that “Democratic institutions awaken and foster a passion for equality which they can never entirely satisfy.” Yet the integrity of these institutions demands that control of economic resources does not permit domination of the political process on the simple expedient of unrestrained liberty for all in the political arena. If political equality is to mean anything in practice, the political machine must not be the preserve of the few who are ready, willing, and able to exploit private or personal economic resources. The purpose of this paper is to consider how this problem has been addressed in the United States. The paper traces the origins of the modern legislation and examines the tension between the legislative and the judicial branches of government. A particularly disturbing tendency has been the unwillingness on the part of the courts to sustain the legislation in the face of constitutional challenge, thereby facilitating the continued domination of the political process by moneyed interests. Given the growing movement for a Bill of Rights in Britain, these developments may yet be of some practical significance in this country.
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References
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Page 371 note 4 U.S. v. International Union, UAW, 352 U.S. 567 (1957)Google Scholar, per Justice Frankfurter at pp. 571–572; a seminal historical review of the legislation.
Page 371 note 5 Ibid., at p. 572.
Page 371 note 6 Act of January 26, 1907, Ch. 420, 34 Stat 864.
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Page 371 note 8 U.S. v. International Union, UAW, 352 U.S 567 (1957) at p. 575Google Scholar.
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Page 372 note 12 Ibid., s.2.
Page 372 note 13 Ibid.
Page 372 note 14 Ibid., s.5.
Page 372 note 15 Ibid., s.6.
Page 372 note 16 An Act to amend an act entitled “An act providing for publicity of contributions made for the purpose of influencing elections at which Representatives in Congress are elected” and extending the same to candidates for nomination and election to the offices of Representative and Senator in the Congress of the United States and limiting the amount of campaign expenses, 19 August 1911, Ch. 33, 37 Stat 25.
Page 372 note 17 Ibid., s.2.
Page 372 note 18 Ibid.
Page 373 note 19 An Act to prevent corrupt practices in the election of Senators, Representatives, or Delegates in Congress, 16 October 1918, Ch. 187, 40 Stat 1088.
Page 373 note 20 Federal Corrupt Practices Act, 1925, Ch. 368, 68 Stat 1070.
Page 373 note 21 256 U.S. 232 (1921).
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Page 374 note 23 This was an amendment to the well-known Hatch Act which was concerned mainly to limit the political activities of civil servants. The Act of 1940 (An Act to extend to certain officers and employees in the several States and the District of Columbia the provisions of the Act entitled “An Act to prevent pernicious political activities” [the Hatch Act] 19 July 1940, Ch. 640, 54 Stat 767) though also dealing with civil service political activity, dealt with a wide range of other issues as well.
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Page 375 note 27 Ibid., s.9
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Page 378 note 39 Ibid., at p. 121.
Page 378 note 40 Ibid., at p. 124.
Page 378 note 41 352 U.S. 567 (1957).
Page 378 note 42 Ibid., at p. 593.
Page 378 note 43 Ibid., at p. 592.
Page 378 note 44 Ibid.
Page 379 note 45 Buckley v. Valeo, 424 U.S. 1 (1976)Google Scholar.
Page 379 note 46 335 U.S. 106 (1948) at p. 144.
Page 379 note 47 Ibid.
Page 379 note 48 Ibid., at p. 145.
Page 379 note 49 Ibid., at p. 146.
Page 379 note 50 Ibid., at p. 155.
Page 379 note 51 Mr. Justice Douglas, the Chief Justice and Mr. Justice Black.
Page 379 note 52 352 U.S. 567 (1957).
Page 380 note 53 Ibid., at p. 593.
Page 380 note 54 Ibid., at p. 598.
Page 380 note 55 101 F.Supp 869 (1951).
Page 380 note 56 Ibid., at p. 875.
Page 381 note 57 Ibid., at p. 876.
Page 381 note 58 Ibid.
Page 381 note 59 236 F.Supp 849 (1964).
Page 381 note 60 Ibid., at p. 853.
Page 383 note 61 172 F 2d 854 (1949).
Page 383 note 62 Ibid., at p. 856.
Page 383 note 63 193 F.Supp 504 (1961).
Page 383 note 64 Ibid., at p. 507.
Page 384 note 65 Op. cit., n.24 (supra), p. 4.
Page 384 note 66 Buckley v. Valeo, 519 F 2d 821 (1975) at p. 837Google Scholar.
Page 384 note 67 For details of corporate involvement, see Heard, , The Costs of Democracy (1960)Google Scholar and Alexander, , Money in Politics (1972)Google Scholar.
Page 384 note 68 Sabato, op. cit., n.24 (supra), p. 4.
Page 384 note 69 Ibid., p. 5.
Page 385 note 70 See again, for a review of the background, U.S. v. International Union, UAW, 352 U.S. 567 (1957)Google Scholar.
Page 385 note 71 407 U.S. 385 (1973).
Page 385 note 72 Ibid., at p. 401.
Page 386 note 73 Ibid., at p. 413.
Page 386 note 74 Ibid., at p. 414.
Page 386 note 75 Ibid., at p. 415.
Page 386 note 76 Ibid., at p. 414.
Page 386 note 77 Ibid., at pp. 415–416.
Page 386 note 78 Ibid., at pp. 406–407 (emphasis deleted).
Page 387 note 79 Federal Election Campaign Act of 1971, Public Law 92–225, 86 Stat 3.
Page 387 note 80 On permitted methods of raising funds, see FEC v. National Education Association, 457 F.Supp 1102(1978)Google Scholar.
Page 387 note 81 See especially Buckley v. Valeo, 424 U.S. 1 (1976)Google Scholar.
Page 388 note 82 Federal Election Campaign Act Amendments of 1974, Public Law 93–443, 88 Stat 1263.
Page 388 note 83 Buckley v. Valeo, 519 F 2d 821 (1975) at p. 837Google Scholar.
Page 388 note 84 Ibid.
Page 388 note 85 Ibid.
Page 388 note 86 Ibid.
Page 388 note 87 Ibid., at p. 838.
Page 388 note 88 Op. cit., n. 24 (supra) p. 5.
Page 388 note 89 A person is defined broadly to include an individual, partnership, committee, association, corporation, or any other organisation or group of persons.
Page 389 note 90 Individuals were free to support any number of candidates by $1,000 expenditures, though contributions could not exceed $25,000 in total.
Page 389 note 91 Buckley v. Valeo, 424 U.S. 1 (1976) at p. 46Google Scholar.
Page 390 note 92 On the background to the Fund, see Buckley v. Valeo, ibid., at p. 85, footnote 114.
Page 390 note 92A As adjusted by the Consumer Price Index. In 1988 this had risen to $46.1 million for campaign costs. New York Times, 7 August 1988.
Page 391 note 93 Buckley v. Valeo, 519 F 2d 821 (1975) at p. 849Google Scholar.
Page 391 note 94 Buckley v. Valeo, 519 F 2d 821 (1975) at pp. 888–889Google Scholar.
Page 391 note 95 424 U.S. 1 (1976).
Page 391 note 96 519 F 2d 821 (1975). See also Wright, “Politics and the Constitution: Is Money Speech?” (1976) 85 Yale Law Journal 1001Google Scholar.
Page 392 note 97 519 F 2d 821 (1975) at p. 837.
Page 392 note 98 Ibid.
Page 392 note 99 Ibid., at p. 838, note 32.
Page 392 note 1 Ibid., at p. 840.
Page 392 note 2 Buckley v. Valeo has spawned an enormous literature. See, for example, Clagett, and Bolton, , “Buckley v. Valeo, Its Aftermath, and Its Prospects: The Constitutionality of Government Restraints on Political Campaign Financing” (1976) 29 Vanderbilt Law Review 1327Google Scholar; Cox, , “Constitutional Issues in the Regulation of the Financing of Election Campaigns” (1982) 31 Cleveland State Law Review 395Google Scholar; Gillen, , ”Buckley v. Valeo: Federal Election Campaign Reform at the Expense of First Amendment Rights” (1977) 4 Ohio Northern University Law Review 77Google Scholar; Nicolson, , “Buckley v. Valeo: The Constitutionality of the Federal Election Campaign Act Amendments of 1974” (1977) Wisconsin Law Review 323Google Scholar; Polsby, , “Buckley v. Valeo: The Special Nature of Political Speech” (1976) Supreme Court Review 1Google Scholar; Scneider, , ”Buckley v. Valeo: The Supreme Court and Federal Campaign Reform” (1976) 76 Columbia Law Review 852CrossRefGoogle Scholar; Wright, op. cit. (note 96).
Page 392 note 3 424 U.S. 1 (1976) at p. 58.
Page 392 note 4 Ibid., at p. 84.
Page 392 note 5 Ibid., at p. 108. The Court did, however, hold that the method of appointment of the members of the FEC was unconsitutional, as violating the separation of powers clause in the constitution.
Page 393 note 6 Ibid., at p. 19.
Page 393 note 7 Ibid., at pp. 19–20.
Page 393 note 8 Ibid., 31 p. 40.
Page 393 note 9 Ibid., at p. 20.
Page 393 note 10 Ibid., at p. 21.
Page 393 note 11 Ibid., at p. 55.
Page 393 note 12 Ibid.
Page 394 note 13 Ibid., at p. 58, footnote 66.
Page 394 note 14 Ibid., at p. 55.
Page 394 note 15 Ibid., at p. 22.
Page 394 note 16 Time, 25 October 1982.
Page 394 note 17 New York Times, 3 April 1982.
Page 395 note 18 Ibid.
Page 395 note 19 Ibid.
Page 395 note 20 The Economist, 1 March 1986.
Page 395 note 21 For accounts of the PACs in U.S. politics and the problems connected therewith, see Adamany, , “PACs and the Democratic Financing of Politics” (1981) 22 Arizona Law Review 569Google Scholar; Adamany, “Political Action Committees and Democratic Politics” (1983) Detroit College of Law Review 1013Google Scholar; Budde, , “The Practical Role of Corporate PACs in the Political Process” (1981) 22 Arizona Law Review 553Google Scholar; Chiles, , “PACs: Congress on the Auction Block” (1984) 11 Journal of Legislation 193Google Scholar; Elliott, , “Political Action Committees—Precincts of the ‘80’s” (1981) 22 Arizona Law Review 355Google Scholar; Vandegrift, , “The Corporate Political Action Committee” (1980) 55 New York University Law Review 422Google Scholar; Wertheimer, , “The PAC Phenomenon in American Politics” (1981) 22 Arizona Law Review 603Google Scholar.
Page 395 note 22 The figures for 1987 are drawn from the New York Times, 7 June 1987. The other figures are provided in Sabato, op. cit., n.24 (supra).
Page 395 note 23 Time, 25 October 1982.
Page 395 note 24 Sabato, op. cit., n.24 (supra).
Page 395 note 25 Time, 25 October 1982.
Page 396 note 26 New York Times, 3 April 1983.
Page 396 note 27 New York Times, 19 January 1983.
Page 396 note 28 New York Times, 7 June 1987.
Page 396 note 29 424 U.S. 1 (1976).
Page 396 note 30 Ibid., at p. 64.
Page 396 note 31 Communist Party v. Subversive Activities Control Board, 367 U.S. 1 (1961), quoted in Buckley at p. 66Google Scholar.
Page 397 note 32 Buckley v. Valeo, 424 U.S. 1 (1976) at p. 67Google Scholar.
Page 397 note 33 Ibid.
Page 397 note 34 Ibid., at p. 68.
Page 397 note 35 459 U.S. 87 (1982).
Page 397 note 36 For a discussion of the problems facing minor parties, see Esch, , “Minor Political Parties and Campaign Disclosure Laws” (1978) 13 Harvard Civil Rights—Civil Liberties Law Review 475Google Scholar.
Page 397 note 37 470 U.S. 480 (1985).
Page 398 note 38 Ibid., at p. 494.
Page 398 note 39 Ibid., at p. 493.
Page 398 note 40 Ibid., at p. 496.
Page 398 note 41 Buckley v. Valeo, 424 U.S. 1 (1976) at p. 47Google Scholar.
Page 398 note 42 93 L Ed 2d 539 (1986).
Page 399 note 43 Ibid., at p. 546.
Page 399 note 44 See text accompanying note 87, supra.
Page 399 note 45 Thus, the Court said, at pp. 552–553:
“If it were not incorporated, MCFL's obligations under the Act would be those specified by s. 434(c), the section that prescribes the duties of ‘[e]very person (other than a political committee)’. Section 434(c) provides that any such person that during a year makes independent expenditures exceeding $250 must: (1) identify all contributors who contribute in a given year over $200 in the aggregate in funds to influence elections, s434(c)(l); (2) disclose the name and address of recipients of independent expenditures exceeding $200 in the aggregate, along with an indication of whether the money was used to support or oppose a particular candidate, s.434(fc)(6)(B); and (3) identify any persons who make contributions over $200 that are earmarked for the purpose of furthering independent expenditures, s.434(c)(2)(C). All unincorporated organizations whose major purpose is not campaign advocacy, but who occasionally make independent expenditures on behalf of candidates, are subject only to these regulations.
Because it is incorporated, however, MCFL must establish a ‘separate segregated fund’ if it wishes to engage in any independent spending whatsoever, ss.441b(a), (6)(2)(C). Since such a fund is considered a ‘political committee’ under the Act, s.431(4)(B), all MCFL independent expenditure activity is, as a result, regulated as though the organization's major purpose is to further the election of candidates. This means that MCFL must comply with several requirements in addition to those mentioned. Under s.432, it must appoint a treasurer, s.432(a); ensure that contributions are forwarded to the treasurer within 10 or 30 days of receipt, depending on the amount of contribution, s.432(b)(2); see that its treasurer keeps an account of: every contribution regardless of amount, the name and address of any person who makes a contribution in excess of $50, all contributions received from political committees, and the name and address of any person to whom a disbursement is made regardless of amount, s.432(c); and preserve receipts for all disbursements over $200 and all records for three years, ss.432(c), (d). Under s.433, MCFL must file a statement of organization containing its name, address, the name of its custodian of records, and its banks, safety deposit boxes, or other depositories, ss.433(a), (b); report any change in the above information within 10 days, s.433(c); and may dissolve only upon filing a written statement that it will not longer receive any contributions nor make disbursements, and that it has no outstanding debts or obligations, s.433(d)(1).”
Page 400 note 46 93 L Ed 539 (1986) at p. 554.
Page 400 note 47 Ibid., at p. 556.
Page 400 note 48 Ibid.
Page 401 note 49 Ibid., at p. 557.
Page 401 note 50 See, for example, California Medical Association v. Federal Election Commission, 453 U.S. 182 (1981)Google Scholar; Bread Political Action Committee v. Federal Election Commission, 455 U.S. 577 (1982)Google Scholar; Federal Election Commission v. National Right to Work Committee, 459 U.S. 197 (1982)Google Scholar.
Page 402 note 51 New York Times, 7 June 1987. Other proposals are discussed in New York Times, 3 February 1983.
Page 402 note 52 The Economist, 1 March 1986.
Page 402 note 53 For discussions of reform, see Alexander, “The Obey-Railsback Bill: Its Genesis and Early History” (1981) 22 Arizona Law Review 653Google Scholar; Alexander, , “The Future of Election Reform” (1983) 10 Hastings Constitutional Law Quarterly TilGoogle Scholar; Bevier, , “Money and Politics: A Perspective on the First Amendment and Campaign Finance Reform” (1985) 73 California Law Review 1045CrossRefGoogle Scholar.
Page 402 note 54 These problems are not confined to the United States. For problems in Canada following the introduction of the Charter of Rights and Freedoms, see Ewing, , “The Legal Regulation of Campaign Financing in Canadian Federal Elections” [1988]Google ScholarPublic Law (forthcoming).