Campaign Money: Prospects for Reform

By Ronald P. Kriss

As another election draws near, the voice of the moneyman is heard again in the land. There are consultants and computer programmers to be paid, speechwriters and pollsters, landlords and airlines, and--heaven help the penurious politician--the telephone and electric companies. In 1972, some $250 million was spent on federal elections in the U.S. and this year, even with no presidential campaign, the figure could approach $100 million. To raise each of those dollars, some candidate somewhere will have to give up a bit of time, a bit of energy and, in all too many cases, a bit of integrity.

Hardly anybody is happy with the way Americans pay for their elections. The public does not like it--particularly in the wake of Watergate, with its repellent disclosures of arm twisting and fund laundering, briefcases stuffed with $100 bills and blatant influence peddling. "Money, money, money is what has got the people of this country disgusted with politics and politicians," laments Pennsylvania's Republican Senator Hugh Scott. Hubert Humphrey calls fund raising "the most demeaning, disgusting, depressing and disenchanting" chore in public life. Those who are tapped like it no better.

The pressure for reform is thus considerable --but, as in the past, it may not prove strong enough. As far back as 1907, Theodore Roosevelt suggested tax-supported campaigns; though the idea got nowhere in the U.S., roughly half of the Western industrial democracies subsequently adopted some form of public financing. For 46 years, campaign financing in the U.S. was governed by the Corrupt Practices Act of 1925, but not a single member of Congress was ever punished for transgressing it. The Federal Election Campaign Act of 1971 sought to remedy the old law's defects by insisting on more thorough disclosure of the sources of campaign money. Another 1971 act took the first step toward public financing with a provision that enabled taxpayers to earmark $1 (or $2 on joint returns) on income tax forms for the party of their choice. But President Nixon gutted the provision by giving it little publicity and requiring taxpayers to fill out a separate tax form. The checkoff had the potential of raising $113 million; it raised $4 million.

Watergate's assorted bunglers, burglars and bagmen have prompted Congress to move, albeit ponderously, toward adopting a new act. Last week the Senate choked off, by a 64-to-30 vote, a filibuster led by conservative Alabama Democrat James Allen, who abhors public financing. Two days later, by a 53-to-32 vote, the upper chamber passed a wide-ranging bill calling for public financing of all congressional and presidential elections, primary and general. But the House is likely to rule out public funding for congressional elections. And even if the House does approve public financing of presidential races, Richard Nixon has served notice that he will veto such legislation as "a raid on the public treasury."

In any bill, four major areas must be covered if campaign financing is to be genuinely reformed:

PUBLIC FINANCING. "Public confidence in the electoral system is so low," says Stephen Hess, a former Nixon aide and now a senior fellow of the Brookings Institution, "that federal financing should be given a try." But many incumbents, particularly in the House, mortally fear such subsidies as a free ride for challengers. Some conservatives fret that public financing, especially if it is combined with strict limitations on private contributions, would give a big edge to liberal, issue-oriented candidates who can mobilize unpaid volunteers--students, housewives, union members. As Herbert E. Alexander, director of the nonprofit Princeton-based Citizens' Research Foundation, points out: "For a person with money, it's easier to write out a check than it is to give time."

Nonetheless, Congress is likely to approve some degree of public financing. The Senate bill permits a candidate to opt for completely public financing of a congressional or presidential general-election campaign or for a mix of public and private funding; the bill also calls for matching public and private funds in primaries. The House bill, which makes public financing mandatory for presidential elections but prohibits it entirely for congressional races, is languishing in Ohio Democrat Wayne Hays' Administration Committee. A bill submitted by Nixon limits individual giving and tightens disclosure but opposes any public financing on the grounds that it is wrong "to make millions of Americans pay [for] the political activities of individuals and parties with which they might totally disagree." This argument overlooks the fact that electing public officials is a public function and that millions of taxpayers already support activities with which they may totally disagree: farmers help pay for mass-transit systems, city dwellers for milk subsidies, pacifists for defense budgets.

Whatever formula is devised for federal financing, wouldn't a plump public kitty encourage frivolous fringe candidates? Certainly, unless some form of "trigger" or "threshold" mechanism is devised that would compel a candidate to raise a certain amount of private money before federal funds were doled out to him.

Under the Senate bill, before a presidential candidate qualifies for public funds, he will have to raise $250,000 on his own in private gifts of $250 or less (with $5,000 or more coming from at least 20 different states to ensure that he is a truly national candidate). For Senate candidates, the threshold ranges from $25,000 in the smallest states to $125,000 in the largest, to be collected in gifts of $100 or less; aspirants for the House will need $10,000 in gifts of $100 or less.

Senate experts figure that the total cost of election subsidies would be $358 million over a four-year period, or $89 million a year. Some of the funds could come from the tax checkoff; now that it is being adequately publicized and is easier to use (it appears on the first page of form 1040), the checkoff could produce up to $96 million by 1976--more than enough to cover the presidential primaries and general elections. Any shortfall could be made up from general revenues.

LIMITS ON GIVING AND SPENDING. Some reformers would entirely do away with private contributions once candidates were chosen in the primaries. Others would limit contributions to a pittance so as to dry up what Senators Scott and Edward Kennedy call "the underground rivers of private money that pollute politics." Still others would set ceilings on total campaign spending. Such limits, however, not only would be difficult to enforce, but might be unconstitutional as well. Incredibly complex questions are involved. Would Nelson Rockefeller's multimillion-dollar National Commission on Critical Choices for Americans be a violation of the private spending limits? Would a peace group--or the A.M.A.--be able to buy a newspaper ad supporting a particular position?

While it is conceivable that the Supreme Court might bar ceilings on private giving and on spending by candidates as unconstitutional abridgments of the First Amendment, Congress is likely to try to set some limits. In primaries, the Senate bill sets a $90,000 spending limit on House races; $125,000 on Senate races or 80 for each voting-age citizen, whichever is greater; and for the presidency, 80 for each voting-age citizen (the voting-age population should total nearly 150 million by 1976). In general elections, the Senate bill sets a spending limit of $90,000 for House contests;. $175,000 for the Senate or 120 for each voting-age citizen, whichever is greater (a candidate from California, with more than 14 million potential voters, would thus get roughly $1.7 million); and for the presidency, 120 for each voting-age citizen, which should mean about $17 million. The House bill sets much stingier limits for congressional races: $60,000 for a House or Senate election or 50 for every person in the district, whichever is greater; all privately financed. For the presidency, the limits are $20 million for the primaries, all from private funds, and the same for the general election, all from public funds.

The Senate's bill limits individual contributions to $25,000 to all candidates in a single election year, with a ceiling of $3,000 to any one candidate. (Candidates and their families are permitted to contribute more to their own campaigns: $50,-000 for a presidential or vice-presidential campaign, $35,000 for a Senate race, $25,000 for a House contest.) The House bill sets a $25,000-per-year limit on individual contributions.

Individuals can now contribute as much as they like but must pay gift taxes on any donation of more than $3,000 to a single candidate or committee. Yet in 1972, Mellon Heir Richard Scaife gave Nixon $990,000 and paid no gift taxes at all. How? By giving 330 separate gifts of $3,000 each to 330 separate committees (in 1972, more than 500 such dummy groups funneled funds to Nixon, and more than 700 to George McGovern). Had Scaife given one lump sum, he would have had to pay an additional $240,000 or more in gift taxes.

DISCLOSURE. The best safeguard against promiscuous giving or spending is a "sunshine law" that requires total disclosure of the sources of funds. The 1971 campaign law calls for the name, address and occupation of any person who gives more than $100 to a candidate, and the new Senate bill forbids cash donations greater than $100. In addition, the 1971 law requires periodic reports on contributions, plus supplementary reports 15 and five days before elections.

Properly enforced, this provision would not eliminate all abuses, but should sharply reduce them. Had Nixon's money managers known that those six-figure gifts from the milk producers, Howard Hughes and Robert Vesco would be exposed, for example, they might have acted differently.

ENFORCEMENT. At present the Justice Department is responsible for enforcing campaign laws. But given the close political relationship between most Attorneys General and Presidents, this may be like leaving the fox in charge of the chicken coop. In 1972, the General Accounting Office reported 30 "apparent" violations of the law in the presidential race, but Justice followed up only four. Complains Comptroller General Elmer Staats, head of the GAO: "We do not have subpoena powers. We have to ride with whatever information we can develop through open records. And we cannot prosecute."

The Senate proposes creation of a fully independent federal election commission, with complete powers of subpoena, investigation and prosecution. It would have seven members plus the Comptroller General, whose 15-year term guarantees him a large measure of independence. The House, however, would leave enforcement up to the Justice Department.

The greatest impetus--and opportunity--for reforming campaign financing in this century has come from Watergate. Yet 22 months have passed since the Watergate breakin, and nothing has been accomplished. Despite the Senate action, prospects for significant reform are still dim because of stonewalling by Wayne Hays (whose appetite for reform, in the words of the public lobby Common Cause, "is near zero") and the threat of a Nixon veto.

Hays, Nixon and other opponents of reform note that some of the proposals now being weighed will prove to be unwieldy or unworkable. Undoubtedly. But that is no reason for not adopting, and soon, the following:

> Public funding for general congressional and presidential elections, preferably in a mix with private contributions. The Senate bill may be overambitious in proposing public financing for primary elections as well; the program will be difficult enough to administer if limited to general elections, and it may be prudent to try it one step at a time.

> A spending floor for congressional and presidential elections, but not a ceiling. There are a number of persuasive arguments against such ceilings, aside from their questionable constitutionality. If challengers and incumbents have equal amounts of money to spend, it may be more difficult than ever to unseat those who are already in power and enjoy free publicity, free office space, Government-paid staffs and franking privileges. "Limitations," says Alexander, "tend to favor the status quo. To counteract the advantages of incumbency or of wealth, we need not enact questionable ceilings but rather look toward establishing floors." To be sure, this would enable moneyed candidates to outspend their rivals, but such attempts are not invariably successful (vide Norton Simon and Richard Ottinger, among others). Overspending can easily lead to oversaturation--too many TV spots, too much junk mail, too much, period. Because ceilings on individual donations may also be unconstitutional, it may be wise to avoid them as well. Excessive contributions might be reduced, if not eliminated, by compelling each candidate to set up a single finance committee to receive funds, and imposing heavy taxes on every private gift of more than $3,000. Such gift taxes would make it more expensive, and rigorous disclosure laws would make it more embarrassing, for big contributors to try to buy favors or ambassadorships.

> A disclosure law that requires the fullest and fastest pos sible accounting of contributions and expenditures. Such a law, combined with a guaranteed spending floor, would make it foolhardy for a candidate to accept tainted funds--the gamble would simply not be worth it. Of course, such detailed dis closure could be an onerous burden; when Pennsylvania's Republican Senator Richard Schweiker promised to report every penny he received, one of his constituents promptly mailed him a penny. But in view of past abuses, nothing less will do.

> An independent enforcement commission, as provided in the Senate bill. This is crucial to the effectiveness of any reform. To leave enforcement in the hands of the Justice Department, as Wayne Hays and Richard Nixon propose, would be to risk uneven enforcement--and to hamstring the law.

Are these proposals excessive? Not really, in view of the corrupting, degrading and distorting effect that campaign financing has had on U.S. politics. It would be Utopian and probably a bit simple-minded to expect that any reforms will be completely effective. But after Watergate, it would be utterly cynical--and ultimately harmful to the political system--not to venture a major change.

Ronald P. Kriss

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