Environmental policy, Economics and Law

The purpose of the volume Basic Documents in Federal Campaign Finance Law is to present that evolution of the meaning of money and politics in American governance, with a special focus on the regulations and norms which have shaped the current understanding of campaign finance in the United States. It is important to acknowledge the main reasons for federal legislation on campaign finance, its outcomes, and the ways in which issues have been challenged in the courts, focusing especially on the changing interpretations of the Supreme Court towards the issue. The book contains a short introduction to every important piece of legislation or Court decision, in which the authors have presented the background of the legislation and its main purposes and substance, as well as the facts leading to legal disputes over the legislation's constitutionality. Each introductory piece is followed by the most crucial excerpts from legislative acts or Supreme Court opinions on campaign finance, so that readers are able to analyze for themselves the substance and form of the regulations on the issue. According to the authors, all twenty nine documents presented in the volume (14 acts of Congress, and 15 Court decisions), should be considered the main legal source of the debate on the proper scope of money in federal election campaigns. Although most of the excerpts presented relate to federal laws, there are a few references to state laws when the issue at stake has a direct effect on the national discussion on campaign finance.

Summary

Although the F.E.C. v. Wisconsin Right to Life decision did not invalidate major pieces of federal campaign finance legislation, it revealed the opinions of particular Justices of the Supreme Court on the scope of the regulation of money in the electoral process. With five conservatives and four liberals, it seemed just a matter of time before the next challenge to the Bipartisan Campaign Reform Act regulations would enter the Court's docket. The discussion on the proper scope of expenditure limits or disclosure procedures was also present during legislative debates, but after BCRA the majority of Congressmen were reluctant to propose new legislation. Therefore, any changes to the meaning of campaign finance could be made by the judiciary as part of the process of the constitutional interpretation of money in the electoral process. Such a possibility occurred in connection with events that took place during the primary phase of the 2008 presidential elections, when a conservative corporation – Citizens United – was prevented from publicizing a movie concerning the suitability of Democratic candidate Hillary Clinton as a future president. The organization challenged the provisions of BCRA regarding electioneering communications, which were the source of limitations on the broadcast of a politically-oriented movie, arguing that their freedom of speech guarantees were violated by the legislation. The District Court denied the arguments of Citizens United, so the corporation appealed to the Supreme Court, which reached its decision in 2010.

Apart from the main issue raised by Citizens United about the constitutionality of regulations on electioneering communications, the Court recognized other important aspects of the Bipartisan Campaign Reform Act, which should be interpreted in accordance with the constitution, such as the scope of disclosure procedures, the role of campaign contributions as political speech, and, above all, the correctness of the McConnell holding. Five conservative Justices made the majority, underlining the democratic values of freedom of speech, especially referring to corporate communications and contributions in election campaigns, which constituted political speech. The majority acknowledged no difference between funding by individuals and corporations, which had to be protected in order to pursue the ideals of rule of law and democracy.

Summary

The issues raised in the California Medical Association decision, on the proper conduct of political action committees in election campaigns, were the subjects of many other cases decided by federal courts in the 1980s. One of the most important disputes was F.E.C. v. National Conservative Political Action Committee, argued and decided in the Supreme Court's 1984–1985 term. The National Conservative Political Action Committee (NCPAC), founded in 1975, became a major contributor to Republican Party candidates in their campaigns for Congress and the White House in the early 1980s. Recognized as a very influential political organization of the right side of the ideological sphere in the United States at that time, the committee supported conservative candidates by collecting funds for their campaigns, as well as preparing media advertisements attacking their political opponents.

The Federal Election Commission filed a suit against the conservative political action committee when it was revealed that the organization had spent more than $1,000 on the campaign supporting a candidate for the presidency, which was a violation of one of the provisions of the Federal Election Campaign Act. After a long battle in the lower courts, the highest judicial tribunal in the U.S. took the case in order to define the constitutionality of expenditure limits. In a 7–2 decision, announced by William Rehnquist, the Court used the freedom of speech argument to declare that parts of the Federal Election Commission Act violated the First Amendment, as such issues were beyond the power of the government. The decision underlined the important role of political action committees in the electoral process, defending their status as independent organizations which could openly participate in election campaigns.

MR. JUSTICE REHNQUIST delivered the opinion of the Court…

NCPAC is a nonprofit, non-membership corporation formed under the District of Columbia Nonprofit Corporation Act in August, 1975, and registered with the FEC as a political committee. Its primary purpose is to attempt to influence directly or indirectly the election or defeat of candidates for federal, state, and local offices by making contributions and by making its own expenditures.

Summary

Until the early 20th century, the Supreme Court rarely adjudicated in cases concerning the scope of campaign finance laws, as there was no legislation on the issue that would be thought of as controversial. The situation changed when Congress began to regulate money in the federal election process, as the new provisions limited some aspects of the financial participation of various campaign actors. It was a matter of time before these laws would be challenged in the courts, and the first important Supreme Court decision on the constitutionality of federal campaign finance legislation was made in 1921, in Newberry v. United States.

In Michigan in 1918 Republican Truman H. Newberry won the U.S. Senate would primary against Henry Ford. According to official data disclosed by his campaign committee, Newberry spent much more money than was permitted by the Federal Corrupt Practices Act. The law provided for spending limits in federal election campaigns according to the regulations set by particular states, whereas funds used during Newberry's campaign exceeded the Michigan-established limits by about 100 times. After the District Court convicted Newberry, he decided to appeal to the Supreme Court, which found the provisions concerning spending limits unconstitutional. In the Court's view, issues regarding primaries and other nomination processes were not elections for office, and were thus beyond the scope of congressional regulation. Such an approach was changed in the early 1940s, when the Court overruled the Newberry holding in United States v. Classic (1941).

MR. JUSTICE McREYNOLDS delivered the opinion of the Court…

If it be practically true that, under present conditions, a designated party candidate is necessary for an election – a preliminary thereto – nevertheless his selection is in no real sense part of the manner of holding the election. This does not depend upon the scheme by which candidates are put forward. Whether the candidate be offered through primary, or convention, or petition, or request of a few, or as the result of his own unsupported ambition does not directly affect the manner of holding the election. Birth must precede, but it is no part of, either funeral or apotheosis.

Summary

The problem of the growing participation of labor unions and organizations in campaign activities did not disappear after the implementation of the Hatch Act. Additionally, several strikes organized by the labor movement proved an effective tool in making labor leaders important actors in the political process. In order to limit their political power, in 1943 Congress passed the War Labor Disputes Act (or Smith-Connally Act). It was adopted over the veto of President Franklin D. Roosevelt, whose New Deal policies were backed by the representatives of the labor unions.

According to the most important provision of the Smith-Connally Act, the president was granted the power to seize industrial war plants if organized strikes endangered the war industry. From the perspective of campaign finance restrictions, labor unions were prohibited from contributing to federal election campaigns in the same manner as the Tillman Act banned banks and corporations. But the effectiveness of the bill was only temporary – it expired after the end of World War II, leaving the regulation of the problem of campaign contributions by labor unions to the next Congress.

An Act relating to the use and operation by the United States of certain plants, mines, and facilities in the prosecution of war, and preventing strikes, lock-outs, and stoppages of production, and for other purposes…

SEC. 9. Section 313 of the Federal Corrupt Practices Act, 1925 is amended to read as follows: “SEC. 313. It is unlawful for any national bank, or any corporation organized by authority of any law of Congress, to make contribution in connection with any election to any political officer, or for any corporation whatever, or any labor organization to make a contribution in connection with any election at which Presidential and Vice Presidential electors or a Senator or Representative in, or a Delegate or candidate, political committee, or other person to accept or receive any contribution prohibited by this section. Every corporation or labor organization which makes any contribution in violation of this section shall be fined not more than $5,000; and every officer or director of any corporation, or officer of any labor organization, who consents to any contribution by the corporation or labor organization, as the case may be, in violation of this section shall be fined not more than $1,000 or imprisoned for not more than one year, or both.

Summary

Despite the fact that most Supreme Court cases referred to the scope of federal campaign finance laws, there were also important disputes over the scope of state campaign regulations, which raised the problem of money as a form of expression, as well as donations made by corporations. Both of these issues occurred in Austin v. Michigan Chamber of Commerce, which was decided by the Supreme Court in 1990. From the analysis of judicial reasoning in such decisions, one can derive important arguments regarding the discussion over First Amendment guarantees with regard to financial participation in the electoral process.

The controversy concerned the actions of the Michigan Chamber of Commerce, which intended to publish – even though its ad discussed the issues – materials promoting a candidate to the state legislature. Classified as independent expenditure, it was also prohibited by state law (Michigan Campaign Finance Act of 1976). The law allowed corporate expenditures only if they were made from independent sources, known as ‘segregated funds,’ but the Michigan Chamber of Commerce used its general funds instead. In a 6–3 decision, the Supreme Court upheld the Michigan regulations, arguing that there was a compelling interest of the state to control the financial participation of corporations in a campaign election. The Justices stated that despite First Amendment protection, the government should manage the process whereby political candidates were controlled by corporate entities. According to the majority, the fact that the Michigan law provided for independent expenditures by corporations reduced the threat of corruption in the system. In a dissenting opinion Justice Antonin Scalia pointed out that the Court should have interpreted the First Amendment free speech guarantees from an originalist perspective and acknowledged a right to political speech by corporations. In 2010, the Supreme Court overruled the Austin decision permitting corporate funding in Citizens United v. F.E.C.

MR. JUSTICE MARSHALL delivered the opinion of the Court

In this appeal, we must determine whether § 54(1) of the Michigan Campaign Finance Act violates either the First or the Fourteenth Amendment to the Constitution. Section 54(1) prohibits corporations from using corporate treasury funds for independent expenditures in support of or in opposition to any candidate in elections for state office. Mich.

Summary

There are at least two controversies over putting the Williams-Yulee Supreme Court decision among other documents relating to federal campaign finance laws. Firstly, it refers to rules which were created by the Florda Bar and applied to the professional conduct of lawyers within the state of Florida. Secondly, the election process, which became of the Court's interest, was a judicial election and action undertaken by a candidate for Florida county court, not the legislative or executive departments. Still, there is a necessity to include the decision, as it also concerns the general problem of conducting electoral campaigns, and the Court's argumentation is connected with the interpretation of the First Amendment's freedom of speech clause. Additionally, it is important to acknowledge that, despite the existence of a conservative block on the Court, Chief Justice John Roberts, jr. decided to move towards a more liberal approach, and delivered the majority opinion, thus revealing possible divisions in Justices’ ideology in future campaign finance cases.

Lanell Williams-Yulee participated in the judicial election campaign in Florida, during which she decided to personally solicit campaign donations, which was inconsistent with the rules of the Florida Bar. She also made some inaccurate statements in the media during her campaigning process, misleading public opinion about her opponent in the judicial race. Although there was a possibility of ending the disciplinary procedure against her with a formal reprimend, William-Yulee decided to file a suit, in which she claimed that her freedom of speech rights were infringed by the rules of the Florida Bar. When the case reached the Supreme Court, five Justices ruled against Williams-Yulee, arguing that the ban on personal solicitation of campaign funds by candidates for judicial posts was consistent with compelling state interest. The majority underlined the value of freedom of speech, especially in election campaigns, but the Justices wanted to protect the integrity and sovereignty of the judicial department, which was endangered by such conduct as Williams-Yulee's. Therefore the Court, despite harsh criticism from four conservatives, demonstrated that the interpretation of campaign finance regulations depends mainly on the individual approaches of the Justices towards the scope of First Amendment guaranteees, as well as the meaning of ‘compelling state interest’, which may be different in cases regarding different branches of government.

Summary

It seemed that after major changes in the original version of the Federal Election Campaign Act, which, among other reasons, resulted from a judicial review of the law by the Supreme Court, there would be no serious challenge to the constitutionality of campaign finance law. The analysis of the political and legal history of the 1980s and 1990s, however, reveals quite an opposite situation. In these two decades there were several suits in the federal courts, which raised various problems on the scope of the legislation, both from the procedural as well as substantive perspectives. One of the first important cases regarding the constitutionality of FECA was California Medical Association, et al. v. F.E.C., decided by the Supreme Court in 1981.

The petitioners, a non-profit medical organization, had created in the mid 1970s a political action committee (the California Medical Political Action Committee), the goal of which was to support candidates in legislative elections. As a formal committee, it was subject to the limitations imposed on similar organizations, stemming from the provisions of Federal Election Campaign Act. When the Federal Election Commission, responsible for overseeing the enforcement of federal campaign finance laws, found out that the committee had exceeded the acceptable contribution limits, it filed a lawsuit against the California Medical Association. After winning in the District Court, and losing in the Court of Appeals, the association brought the case to the Supreme Court. The issue was similar to the earlier challenges of the campaign finance laws, as it referred to the accordance of the Federal Election Campaign Act with the First Amendment's freedom of speech guarantees. The Court found that free speech was not violated by the contribution limits set by FECA, arguing that such limits served a compelling state interest: the protection of the integrity of the electoral process. The precedent was reached by a 5–4 margin, proving that the Justices were divided over the meaning of campaign finance restrictions, and the scope of the First Amendment's protection of candidates and other participants of the process.

Summary

After a series of pieces of legislation concerning labor unions and their impact on political campaigns, a number of initiatives designed to reform campaign finance were brought up in Congress in the 1960s, with the most serious proposal coming from Louisiana Senator Russel B. Long. He pressed for new measures which would limit the amount of money pumped into federal campaigns, which would be essential in reducing the inequality stemming from the participation of rich donors in the electoral process. His argument rested on the concept of creating a system of public funding of elections, i.e. collecting subsidies for political parties which could be spent on political campaigns. He proposed establishing a special fund, called the Presidential Election Campaign Fund, financed from tax check-offs from federal taxes. Unfortunately for Long, his initiative did not survive strong opposition in Congress, and was defeated in 1967.

The concept of public funding through reform of the taxation system offered by Long remained one of the key ideas in the next Congress, which resulted in the passing of the Revenue Act of 1971, which was the first regulation to grant public subsidies to institutions and candidates involved in election campaigns. The Act created a system of voluntary tax check-offs for public funding programs, as well as minimum tax deductions for those who decided to give small contributions to candidates for federal offices. It established a system of public funding of presidential elections based on Long's Presidential Election Campaign Fund, and determined the circumstances of public and private contributions in these races. The issue of public funding was further reformed in 1974 when Congress adopted amendments to the Federal Election Campaign Act.

An Act to provide a job development investment credit, to reduce individual income taxes, to reduce certain excise taxes, and for other purposes…

SEC. 801. PRESIDENTIAL ELECTION CAMPAIGN FUND ACT

The Internal Revenue Code of 1954 is amended… CHAPTER 95—PRESIDENTIAL ELECTION CAMPAIGN FUND

For purposes of this chapter-

Summary

Among the various arguments raised by critics of the growing impact of money in the electoral process, one of the most frequently made concerns the dangerous influence of corporations on the system, sometimes to the extent of their being described as the main source of corruption and bribery. Such an approach resulted in the passage of different laws and regulations by many states, aimed at restricting the financial activities undertaken by corporations before and during election campaigns. An example of such measures could be found in 1970s in Massachusetts, where the legislature established an act banning corporations from funding ballot initiatives if they had no direct interest in such a contribution. The controversy over the scope of the restrictions led to a lawsuit which ended in the Supreme Court in 1978, known as First National Bank of Boston v. Bellotti.

The First National Bank of Boston was subject to the restrictions provided by The Bay State law, and it could not freely participate in a campaign before a state referendum on taxation issues, so the bank's representatives challenged the state restrictions in court. On appeal, the issue was brought to the Supreme Court, which, in a 5–4 ruling, declared Massachusetts’ regulation unconstitutional as it violated the right of corporations to participate in various stages of the non-candidate election campaign. The majority opinion stated that corporations were protected by the free speech clause of the First Amendment, which was similar to the argumentation used by the Justices in the Buckley opinion. Despite the fact that the Bellotti decision referred mainly to state law, the argumentation used by the Justices became crucial for most of the 21st century cases concerning campaign finance, which cite Bellotti's reasoning almost as often as Buckley's.

MR. JUSTICE POWELL delivered the opinion of the Court

The statute at issue, Mass.Gen.Laws Ann., ch. 55, § 8 prohibits appellants, two national banking associations and three business corporations, from making contributions or expenditures “for the purpose of… influencing or affecting the vote on any question submitted to the voters, other than one materially affecting any of the property, business or assets of the corporation.”

Summary

The form and character of corporate participation in the electoral process was defined by the Supreme Court in the Citizens United case of 2010. Three years later, the judiciary once again found itself at center of political discussion over the scope of the Bipartisan Campaign Reform Act's regulations. This time the issue concerned the restrictions the law imposed on contributions, both from the perspective of the amount of individual funds given to candidates for federal elections, and the amount of contributions donated in the two-year election cycle, called aggregate limits or overall limits. An Alabama businessman, Shaun McCutcheon, who was deeply involved in contributing to Republican candidates in state and federal elections, challenged the aggregate limits; this prevented him from donating more funds in the 2011–2012 electoral cycle. The McCutcheon v. F.E.C. dispute was first adjudicated by the District Court, which found for the Federal Election Commission, upholding the BCRA provisions, and later by the Supreme Court, which announced its verdict in 2014.

Voting along ideological lines, the Justices declared the unconstitutionality of the aggregate limits imposed by the Bipartisan Campaign Reform Act, using similar arguments to those in the Citizens United decision. According to the conservative majority, freedom of speech prohibited the government from setting strict limits on twoyear election cycle contributions, as it did not serve a compelling state interest, which is to protect the system from corruption and an uncontrolled flow of money. The Justices argued that aggregate limits had no direct relation to the purposes of the campaign finance laws, and their functioning endangered the proper operation of the electoral process as they did not allow contributors to donate to all of the candidates they wanted, thus impairing the right to equal participation in election campaigns. Importantly, one of the Justices, Clarence Thomas, underlined in a concurring opinion the necessity remove all limitations to campaign contributions, which was at the heart of American democracy. Such an approach was criticized by liberals on the Court, who saw in the majority decision a danger to the integrity and effectiveness of the electoral process, and a serious limitation of the right of ordinary citizens to participate equally in the process with rich contributors.

Summary

The McConnell v. F.E.C. decision upheld all the major provisions of the Bipartisan Campaign Reform Act, including those regarding the electioneering communications restrictions and the prohibition of those advertisements which directly promoted certain candidates for federal offices. Before the elections of 2004, the Wisconsin Right To Life corporation publicized three advertisements in which citizens were encouraged to try and influence U.S. Senators in their political activities concerning judicial nominations. According to BCRA, electioneering communications could not be presented less than 60 days before the election, which limited the possibility of the corporation to run their advertisement during that period. Wisconsin Right to Life challenged the law in the District Court, which agreed with their argumentation, and the case was appealed to the Supreme Court, which reached its verdict in 2007.

The organization argued that their ads referred to issues and not to direct advocacy of a candidate for federal office, whereas the Federal Election Commission stated that the controversial advertisements were aimed at influencing the results of the election. The Supreme Court supported Wisconsin Right to Life, construing a five-vote majority of conservative Justices (Sandra Day O'Connor was replaced in 2005 by Samuel Alito, who signed the majority decision). The Court agreed that the advertisements at stake promoted issues not candidates, and, therefore, did not violate the BCRA, whereas the prohibited advertisements had to leave no doubts as to the intent of the authors connected with the supporting of a concrete candidate. The Justices did not find any interest of the government in restricting the publication of advertisements which only indirectly referred to the conduct of federal election campaigns.

MR. JUSTICE ROBERTS announced the judgment of the Court…

Section 203 of the Bipartisan Campaign Reform Act of 2002 (BCRA), 116 Stat. 91, 2 U. S. C. §441b(b)(2) (2000 ed., Supp. IV), makes it a federal crime for any corporation to broadcast, shortly before an election, any communication that names a federal candidate for elected office and is targeted to the electorate.

Summary

The Tillman Act did not address all of the important issues concerning the regulation of campaign finance on the federal level, such as spending limits, and pre-election disclosure of contributions by political committees. From 1907, numerous representatives and Senators had pressed for the implementation of further campaign finance regulations, which would provide the system with greater transparency and accountability. As a result, three years later the Republican-led Congress created a new law, which established the system of public disclosure of campaign funds. However, not all committees contributing to the electoral process were subject to this legislation.

The problem was that The Federal Corrupt Practices Act of 1910, also known as The Publicity Act, made campaign committees operating in two or more states report their House of Representatives’ campaign receipts and expenditures. But as it did not require that the disclosure be made before the election and was limited only to election years, it was amended a year later. In 1911 Congress expanded the regulation, now demanding the revelation of both House and Senate campaign funds before and after elections, both primary and general. The 1911 amendment also established the first ever limits to campaign spending on the federal level, setting it at a total of $5,000 for House and $10,000 for Senate candidates. The law was in force until the early 1920s, when the Supreme Court struck down some of its key provisions in Newberry v. United States.

An Act Providing for publicity of contributions made for the purpose of influencing elections at which Representatives in Congress are elected

Be it enacted by the Senate and House of Representatives of the United States of America in Congress Assembled, That the term “political committee” under the provisions of this Act shall include the national committees of all political parties and the national congressional campaign committees of all political parties and all committees, associations, or organizations which shall in two or more States influence the result or attempt to influence the result of an election at which Representatives in Congress are to be elected…

Summary

Buckley v. Valeo, decided by the Supreme Court in 1976, had a significant impact not only on defining campaign contributions as a form of political speech, but also on the creation of so-called 527 organizations. The name comes from Section 527 of the Internal Revenue Code, which refers to income tax-exempt organizations attempting to influence the election or appointment of candidates to offices at all administrative levels in the United States. As a result, the exemption covered all federal and state political action committees, as well as political party committees involved in the electoral process in American states and on the federal level, which were registered by the Federal Election Commission. Conversely, the law did not require the disclosure of political activities of Section 527 organizations, which were not under the control of the federal agency. In 2000, Congress implemented amendments to the Tax Code, establishing the rule that unregistered organizations would also have to report on their contributions to federal election campaigns.

An Act to amend the Internal Revenue Code of 1986 to require 527 organizations to disclose their political activities

SECTION 1. REQUIRED NOTIFICATION OF SECTION 527 STATUS

(a) In General – Section 527 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (i) Organizations Must Notify Secretary That They Are Section 527 Organizations – (1) In general – Except as provided in paragraph (5), an organization shall not be treated as an organization described in this section – (A) unless it has given notice to the Secretary, electronically and in writing, that it is to be so treated, or (B) if the notice is given after the time required under paragraph (2), the organization shall not be so treated for any period before such notice is given. (2) Time to give notice – The notice required under paragraph (1) shall be transmitted not later than 24 hours after the date on which the organization is established… (5) Exceptions – This subsection shall not apply to any organization – (A) to which this section applies solely by reason of subsection (f)(1), or (B) which reasonably anticipates that it will not have gross receipts of $25,000 or more for any taxable year.

Summary

The first campaign finance legislation on the national level was the provision in The Naval Appropriations Bill of 1867, which banned political contributions from workers of the navy yards. The law did not, however, change the character of the Gilded Age civil service, which was built on patronage and the so-called spoils system. The awarding of governmental posts often resulted in the funding of political parties by levies on the salaries of federal workers. After the assassination of President James Garfield, and particularly the midterm congressional election of 1882, civil service system reform became a leading issue in Congress. This led to the passage of The Civil Service Act in 1883, known as the Pendleton Act from the name of its sponsor, Senator George Pendleton.

The main purpose of the legislation was to create a new category of federal employees, who would be appointed through competitive selection on the basis of their qualifications for office. The establishment of entrance exams for the civil service hopefuls was aimed at building a more efficient and competent bureaucracy, loyal first and foremost to their office or government agency and not to politicians, to whom they would no longer owe their positions. Although, at the beginning, the Act referred to only 10% of federal workers, its scope broadened in the following decades to cover more than half of employees by the turn of the 20th century. It also forbade this class of employees from donating money to political campaigns. Based on the merit system, the Act was intended to lessen political power over the civil service. The Pendleton Act was the first serious regulation to reform the administration of elections, reduce the impact of political parties on federal employees, and aim at the de-politicization of government officers in the United States.

An act to regulate and improve the civil service of the United States…

SECOND. And, among other things, said rules shall provide and declare, as nearly as the conditions of good administration will warrant, as follows:

First, for open, competitive examinations for testing the fitness of applicants for the public service now classified, or to be classified hereunder.

Summary

The Revenue Act was not the most important legislation of 1971 regarding campaign finance reform. From the late 1960s Congress had been preparing a thorough reform of the system, and the scandals of Bobby Baker and Thomas Dodd involving financial issues, as well as the increasing amount of money spent by candidates in every presidential election, only confirmed the necessity of the reform. The ineffectiveness of the earlier regulations, and the financial situation of the Democratic Party after the 1968 election cycle during which it generated huge debt, sped up the decision of the legislators to announce the largest campaign finance bill up to that point.

The Federal Election Campaign Act of 1971 (FECA), signed into law by President Richard Nixon in early 1972, addressed various issues referring to the proper conduct of election campaigns on the federal level of government. Its major provisions concerned two types of limits, which were set for the amount of contributions and the amount of spending for media advertising, depending on the type of election, the contributing entity, and the character of the contribution. For instance, for media campaigns candidates were now able to spend as much as 10 cents per voter of the eligible voting population. FECA also limited the amounts candidates and their immediate families could themselves contribute to their electoral efforts. The law provided for a more complex system of quarterly public disclosure of receipts and expenditures. It now required the inclusion of every expense of $100 or more, and on the donation side it asked for every receipt of $100 or more, including the donor's name, address, and occupation. The imposition of these restrictions was problematic, because in order to assure the enforcement of the laws, the Act gave the control over the disclosure system to various federal entities. House candidates were obliged to report to the Clerk of the House, Senate hopefuls to the Secretary of the Senate, and presidential candidates to the U.S. General Accounting Office (today the Government Accountability Office). In addition, candidates and campaign committees had to report to the appropriate secretary of state, depending on where the campaign funds were spent. It did not take long for this to prove ineffective.

Summary

After congressional legislative activity in the 1970s, which resulted in the establishment of a set of rules governing federal campaign finance, the pace of reform of the electoral process slowed down, and it was the Supreme Court which took the initiative in reshaping the meaning of certain regulations referring to campaign contributions and spending, as well as disclosure procedures. It would be a mistake, however, to consider that politicians did not try to argue in congressional debates on amending the Federal Elections Campaign Act, which was criticized especially during and after those electoral cycles which revealed the growing impact of money on the electoral process. The 1980s and 1990s saw an intensified operation of political action committees, both from the perspective of their number and the amount of funds they contributed to federal campaigns. Besides PACs’ and national political committees’ contributions, one of the major problems occurred with the increased role of so-called soft money, defined as funds which were not under the control of federal campaign finance, but served indirectly as an important source of candidates’ organization of election campaigns. Soft money was collected by numerous entities, such as corporations and labor unions, to cover administrative costs, voter turnout programs, grassroots activities or media advertisements, aimed at preparing and conducting political campaigns on the federal level. As more than $700 million was spent this way in the 1990s, soft money became a major target of the campaign finance reformers.

Proposals were prepared by Republicans and Democrats working together over and above political divisions, and aimed at limiting the role of soft money and restricting issue advertising, as well as enhancing the enforcement provisions of campaign finance regulations. After tensions in the House of Representatives and Senate, Congress finally adopted the new law in 2002, known as the Bipartisan Campaign Reform Act (BCRA). Among its many provisions, the Act banned political party committees from collecting and spending funds in connection with federal elections, if they were not subject to campaign finance regulations and limitations.

Summary

Usually, the reaction of Congress to a Supreme Court decision finding its legislation in part or in whole unconstitutional is immediate, if the majority of representatives and/or Senators believe that the legislative department, as being superior to the judicial branch, should directly or indirectly overrule the Court's precedent. In 1976, however, one could observe a quick, but positive reaction of House of Representatives and Senate to the Buckley holding, resulting in the implementation of new provisions, which amended the 1971 and 1974 laws. Congress was in a hurry, as its members wanted the reform to come into force before the 1976 elections.

Importantly, the legislation referred not only to the regulations on expenditure limits, and the appointment of the Federal Election Commission's employees (granted to the president, who acted with the advice and consent of the Senate), but also to the operation of political action committees (restricting the financing of PACs by labor unions and corporations), and to the public financing program for presidential elections. Furthermore, Congress decided to equip the Commission with broader powers, such as the power to prosecute civil violations of campaign finance regulations.

An Act to amend the Federal Election Campaign Act of 1971 to provide that members of the Federal Election Commission shall be appointed by the President, by and with the advice and consent of the Senate, and for other purposes…

SEC. 101. (a) (1) The second sentence of section 309(a)(1) of the Federal Election Campaign Act of 1971, as redesignated by section 105 (hereinafter in this Act referred to as the “Act”), is amended to read as follows: “The Commission is composed of the Secretary of the Senate and the Clerk of the House of Representatives, ex officio and without the right to vote, and 6 members appointed by the President of the United States, by and with the advice and consent of the Senate.” (2) The last sentence of section 309(a)(1) of the Act, as redesignated by section 105, is amended to read as follows: “No more than 3 members of the Commission appointed under this paragraph may be affiliated with the same political party.”

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