The Evil of Access
The History of Money in Politics
excerpted from the book
How big corporate money buys
elections, rams through legislation,
and betrays our democracy
by Mark Green
Regan Books (HarperCollins)
* 0.1 percent of Americans who contribute $1000 or more to political
candidates have far more influence than the other 99.9 percent;
* senators from the ten largest states
have to raise an average of over $34,000 a week, every week, for
six years to stay in office;
* legislatively interested PAC money goes
7 to 1 for incumbents over challengers-and 98 percent of House
* most other democracies get a 70 to 80
percent turnout of eligible voters, while in the U.S. it's half
in presidential elections, a third in congressional elections,
and often only a fifth in primaries;
... is it a democracy if 0.1 percent pay the piper, if 80 percent
stay at home in primaries, if 98 percent of incumbents return
to a "permanent Congress"?
Joan Claybrook head of Public Citizen
" ... political money from the Enrons
and others bought loopholes, exemptions, lax law enforcement,
underfunded regulatory agencies, and the presumption that corporate
officials could buy anything they wanted with the shareholders'
when the Supreme Court in the 1976 v. Valeo decision struck down
the Federal Election Campaign Act's spending ceilings, the alms
race took off. Then-and now-the sky's the limit.
While in 1976 it cost an average of $87,000 to win a House seat
and $609,000 a U.S. Senate seat, those amounts grew by 2000 like
beanstalks to $842,000 for the House and $7.2 million for the
Senate-a tenfold leap (or more than threefold in current dollars).
And more money brought with it intended leverage. "We're
all tainted by this corrupt system," concludes Senator John
McCain (R-AZ), a national leader for cleaner elections.
... the scandal of strings-attached money corrupting politics
and government is the most urgent problem in America today-because
it makes it harder to solve nearly all our other problems.
The New York City system was good but flawed. So in 1998, I co-authored
a municipal campaign finance law that reduced the maximum gift
from $8500 to $4500 and increased the public funding match to
4 to 1 for contributions of up to $250 per resident (so $100 became
$500 or $250 became $1250), in order to better level the playing
field for City candidates.
... the current system of financing political campaigns, which
pits each candidate in a race to raise more than his or her opponents-and
enough to feed the broadcasting monster called airtime. And just
like professional athletes would see performance diminish if they
lost half their training time, elected officials who raise money
rather than legislate, read, travel, and meet with constituents
will underperform as well.
"Senators used to be here Monday through Friday; now we're
lucky to be in mid-Tuesday to Thursday, because Mondays and Fridays
are for fund-raisers," complained one midwestern senator,
requesting confidentiality. "Also, members are-loath to vote
on controversial issues because it'll be used against you when
you're raising money. And people wonder why nothing much happens
in the Senate."
"... Democrats became dependent on the rich to finance their
campaigns. It is difficult to represent the little fellow when
the big fellow pays the tab. The problem is not corruption. The
inhibition is more subtle. Democrats have come to sound like Republicans
because they rely on the same funders to make the same contacts
as the GOP."
... of twenty-four western democracies, we (U.S.) rank twenty-third
in voting turnout.
As the nineteenth century became the twentieth,
public outrage over backroom payoffs, outright vote buying, and
corporate corruption of the political process began to build.
The rise of the Progressives was partly a backlash against what
many Americans saw as the excessive influence of money in politics.
Recognizing the need to regulate corporate power, Progressives
advocated such economic and political reforms as antitrust laws,
fair labor standards, women's suffrage, and greater citizen participation
in and control of politics. Muckraking journalists, political
satirists, and Progressive advocates exposed the destructive power
of unrestrained monopolies and the corrupting influence of political
money. At the local and state levels, Progressives attempted to
reform the political process through secret and standardized ballots,
stricter voter registration procedures, restrictions on corporate
lobbying and campaign contributions, the use of the referendum,
and direct primaries.
Then occurred an event that shifted the
battle lines between corruption and reform: the assassination
of President McKinley in September 1901, only a few months into
his second term, which elevated Theodore Roosevelt, his war-hero
vice president, to the Oval Office. Roosevelt had been added to
the McKinley ticket partly because Republican political bosses
like Matthew Quay of Pennsylvania wanted him politically "out
of the way." On the McKinley funeral train from Buffalo to
Washington, Mark Hanna, now a U.S. senator, was heard cursing
the day McKinley chose him.
Roosevelt was exactly the kind of president
Hanna feared he would be. The Rough Rider's distaste for corporate
influence in politics in general, and his vigorous trust-busting
activities in particular, persuaded the usual corporate contributors
that Roosevelt would not faithfully represent their interests.
Hanna, still a Republican Party kingmaker, led the business opposition
to Roosevelt's reelection, and for a while hinted that he himself
might be their candidate. But Hanna died before the 1904 election,
and eventually corporate financiers realized that Roosevelt was
their only choice.
Any Progressive hopes for less corporate
influence in the 1904 campaign were also quickly shattered. Fearing
defeat, Roosevelt rejected pleas by Progressives to rely on small
individual contributions and turned instead for financial support
to the very bankers and industrialists who had only recently supported
Hanna as the most acceptable Republican candidate. Roosevelt especially
worried about losing in his native New York, but his campaign
operatives assured him victory could be had as long as "the
funds were furnished." Some of the country's richest men-Cornelius
Bliss, J. P. Morgan, and Andrew Carnegie among them-contributed
hundreds of thousands of dollars, and once it was known that the
President was accepting corporate money, other financiers flooded
the campaign with contributions, many of which were never publicized.
Roosevelt won the presidency by a landslide.
Roosevelt's reliance on corporate money
to finance his campaign was a topic of bitter controversy, and
eventually led to the first real attempts at comprehensive campaign
finance reform. In the final days of the race, Democratic nominee
Alton Parker charged that the Republican Party was whoring itself
to the corporations. At the same time, it was alleged that E.
H. Harriman had raised $250,000 for the Republican Party, of which
$50,000 came from his own pocket, in exchange for a promise by
Roosevelt to appoint New York senator Chauncey Depew ambassador
to France. "They are in a hole," Harriman bragged to
an aide, "and the President wants me to help them out."
Roosevelt vigorously denied the charge and Depew wasn't appointed,
but the President was never able to shake the presumption that
a quid pro quo had indeed been involved. Like Watergate seven
decades later, the general stink of corruption led to a national
call for reform.
Roosevelt himself was embarrassed by his
reliance on corporate money. "Sooner or later, unless there
is a readjustment," he complained to a reporter during the
campaign, "there will come a riotous, wicked, murderous day
of atonement." Nevertheless, Roosevelt was too calculating,
or too enamored of the presidency, to acknowledge the full corrupting
potential of big money in politics. "It is entirely legitimate
to accept contributions, no matter how large they are, from individuals
and corporations," he wrote in defense of his fund-raising
efforts, as long as funds were raised with an "explicit understanding
that they were given and received with no thought of any more
On the defensive, Roosevelt's first message
to Congress after his election included a call for the publication
of spending records by both political committees and candidates.
There was already a movement for legislation requiring the disclosure
of campaign expenditures by the National Publicity Law Association,
a citizens' lobbying group. New York adopted such a disclosure
law for state elections, but despite the President's endorsement
of the association's goal for a national law, Congress delayed
adopting any federal disclosure requirements for a decade.
At the local level, corruption continued
without pause. In 1905, as many as 170,000 votes were bought in
one district in Ohio. In New York City, an investigation revealed
that 26 percent of voters had sold their vote for cash. In fact,
vote buying was still so widespread that one Ohio woman defended
her husband's decision to sell her vote by saying "we thought
it was the law to pay us for our votes."
Public opinion was increasingly critical
of the pervasiveness of corporate funding of campaigns. The discovery
by New York State's Armstrong Committee of widespread attempts
by insurance companies to influence state politics with campaign
contributions caused a public outcry. When Charles Evans, counsel
for the committee, asked Republican State Senator Thomas Platt
if he felt morally obliged to work for the corporations that funded
his campaign, he replied, "That is naturally what is involved."
In 1907 Congress finally responded with
the first really significant campaign finance reform law, the
Tillman Act. It outlawed campaign contributions and expenditures
by banks and corporations- something that a century later many
states, including New York, Illinois, and Florida, have still
failed to do. The same year Congress also strengthened the Pendleton
Act by prohibiting campaign participation by civil servants. Also
in 1907, Teddy Roosevelt became the first president to propose
caps on individual contributions, full disclosure of campaign
funding and expenditures, and public financing of campaigns. "The
need for collecting large campaign funds," Roosevelt said,
"would vanish if Congress provided for an appropriation for
the proper and legitimate expenses of each of the two great national
Reform continued, and so did scandal.
In 1908, for the first time in the nation's history, both presidential
candidates volunteered to disclose their campaign funding sources
and expenditures. This disclosure revealed that the Republicans
spent $1.7 million and the Democrats spent $629,000. The same
year two U.S. senators were charged with buying their seats from
their respective state legislatures.
With Progressive legislators pushing continually
for reform, the movement to require public disclosure of campaign
funding and expenditures finally succeeded in 1910 with passage
of the Publicity Act. Then, in 1911, Congress took the extraordinary
step of limiting campaign contributions and expenditures for Senate
and House campaigns to $ 10,000 and $5000, respectively; although
the First Amendment had been around for more than a century, no
commentators thought to claim that such restrictions on money
violated the free speech of the rich. And finally, due to widespread
public disgust over the buying of Senate seats through state legislatures,
in 1913 the states ratified the Seventeenth Amendment, requiring
that Senate elections be decided by popular vote.
Despite these essential reforms, money
continued to pervade politics. Why? First, as the mass-advertising
style of political campaigning invented by Mark Hanna became the
predominant way to run for office, media costs and hence campaign
costs continued to climb. Second, both the direct election of
senators and the concurrent move to a direct primary as the prevalent
method for choosing party candidates increased campaign costs.
The passage in 1920 of the overdue Nineteenth Amendment granting
suffrage to women also raised costs of reaching these new voters.
It was the price of democracy, but it didn't come cheap.
After the 1907 prohibition on campaign
contributions by banks and corporations, both parties simply relied
more heavily on contributions from the heads of corporations.
In fact, so much money was being spent on just the nomination
of the GOP presidential candidate in 1920 that a special Senate
committee was formed to investigate whether there was a plot to
buy the nomination. Even though the committee found no such plot,
the scandal undermined the Republican front-runner, Leonard Wood,
and led to the nomination of Warren Harding instead. When all
was said and over, it was revealed that the Republicans spent
$6 million and the Democrats $ 1.4 million on the 1920 campaign.
In 1921, the Supreme Court ruled in Newberry
v. United States that Congress had no constitutional authority
to regulate spending in the primary process. (This overly restrictive
view of federalism remained the law of the land until 1941, when
in United States v. Classic the Court reversed Newberry and ruled
that Congress did have the authority to regulate primaries wherever
a state's election law influenced the general election. Congress
did not assert its newly confirmed authority until three decades
later.) Under Newberry, money was so pervasive and corruption
such a fear that Calvin Coolidge felt compelled to declare in
his speech accepting the 1924 Republican presidential nomination
that "no individuals may expect any governmental favors in
return for party assistance." Apparently, this had not been
previously made clear.
The next year saw the passage of the Federal
Corrupt Practices Act, the most ambitious attempt at reform to
date. The act-provoked by the Teapot Dome Scandal where the company
leasing the oil reserve bribed a leasing official and contributed
huge amounts to retire the Republican Party's 1920 campaign debt-required
candidates to report all receipts and expenditures in federal
congressional campaigns but exempted presidential races. The law
also imposed caps on federal campaign expenditures. As with previous
attempts at reform, however, the act was full of loopholes and
provisions without teeth. For one thing, the limits on expenditures
were easily avoided by the claim that any excessive expenses were
incurred without the candidate's "knowledge or consent."
Moreover, by limiting expenditures by candidates themselves or
by their political party only, the act later encouraged the creation
of the first political action committees, through which campaign
funds could be legally laundered. Not only was no auditing of
campaign funding or expenditures required, but campaign financial
statements filed with the clerk of the House of Representatives
were virtually inaccessible, unintelligible, and very rarely made
public. By almost all accounts, the act was essentially meaningless.
The weakness of federal law governing
campaigns was vividly demonstrated in a 1926 Illinois Senate campaign
by Republican candidate Frank M. Smith. He defeated the incumbent
Republican by engaging him in a spending war in which each candidate
illegally spent over half a million dollars. It was revealed that
half of Smith's contributions came from public utilities executives
who had cases pending before the Illinois Commerce Commission,
of which Smith was the chairman. The Senate eventually refused
to seat Smith or his Democratic opponent.
Also, in 1926, William Vare, a Republican
congressman from Pennsylvania, seized on Newberry to start a spending
war to defeat the incumbent in his party's Senate primary, and
then went on to win the seat while flagrantly accepting illegal
postprimary contributions. A formal investigation by the Senate
Committee on Privileges and Elections revealed contributions by
industrialists more than half a million dollars over the $10,000
limit set by the Corrupt Practices Act (and complied with by Vare's
Democratic opponent). In response, the Senate refused to allow
Vare to occupy the office. But corruption won out when the governor
appointed Joseph Grundy, an industrialist who had himself illegally
contributed more than half a million dollars to Vare's campaign.
Vare was never prosecuted under the act's enforcement provisions.
In fact, no one ever was.
The ineffectual Corrupt Practices Act
would serve as the nation's only federal campaign finance regulation
for the next forty-six years.
Embarrassed by media attention on the excesses of political money
in the 1968 and 1970 campaign cycles, and spurred by newly formed
citizens' lobbying groups like Common Cause and Public Citizen,
Congress finally decided to act. In 1971, in a period of two months,
it attempted to regulate campaign finance in a systemic way for
the first time since the Federal Corrupt Practices Act of 1925.
The landmark Federal Election Campaign Act (FECA) and the Revenue
Act revolutionized campaign finance-at least on paper.
First, the FECA required far more disclosure
than any previous reform effort, by compelling candidates and
political committees to make detailed, periodic reports of contributions
and expenditures and by making the information more accessible
to the public. Every contribution of $ 100 or more had to be reported.
(Needless to say, campaign coffers were filled with checks for
Second, it limited the amount a candidate
could contribute to his or her own campaign. Presidential candidates
were limited to $50,000 in personal and family contributions,
senators to $35,000, and representatives to $25,000.
Third, the act limited the expenditures
candidates could make for media purposes during any stage of the
campaign process. House candidates were limited to $50,000, or
10 cents for every eligible voter in the district, whichever was
greater. Senate candidates were limited to $50,000, or 10 cents
for every eligible voter in the state. Limits on media expenditures
by presidential campaigns were also calculated at 10 cents per
The Revenue Act gave taxpayers a choice
to receive either a tax deduction or a tax credit for political
contributions made to a campaign at any of the three levels of
government. It also created a system allowing taxpayers to help
subsidize a presidential campaign by checking off a box on their
tax form indicating that they wished to participate.
One immediate effect of this reform effort
was to start an all-out race to fill party war chests with as
much unregulated cash as possible before the FECA went into effect
on April 7, 1972. Between January and April, President Nixon's
reelection campaign engaged in a concerted program to raise $10
million in unregulated and unreported contributions. In an effort
eerily similar to Mark Hanna's corporate assessment scheme almost
a century earlier, Nixon's campaign managers established a "conduit
system" that assessed corporations 0.5 percent of their net
worth. As one fund-raising letter put it, "The standard of
giving is !/2%, more or less of net worth . . . [and] we have
a deadline of April 7th . . . because this is the effective date
of the new Federal Campaign Finance Law [sic] which will require
reporting and public disclosure of all subsequent campaign contributions
in excess of $ 100, which we all naturally want to avoid."
The April 7 deadline also played a role
in the Watergate scandal, which exploded in the summer of 1972.
In fact, without campaign money and without the ability to maintain
unaudited accounts before the FECA took effect, Watergate would
not have been possible. "Watergate is not primarily a story
of political espionage," wrote John Gardner, the founder
of Common Cause, in April 1973, "nor even of White House
intrigue. It is a particularly malodorous chapter in the annals
of campaign financing. The money paid to the Watergate conspirators
before the break-in-and the money passed to them later- was money
from campaign gifts."
When Nixon's henchmen were arrested breaking
into the headquarters of the Democratic National Committee at
the Watergate Hotel on June 17, they were carrying $100 bills
that had been laundered partly by utilizing the pre-April 7 disclosure
grace period. A $25,000 cashier's check from Ken Dahlberg, the
President's campaign finance chair for the Midwest, was discovered
in one of the burglars' bank accounts. Also found in the account
was $89,000 from Manuel Ogarrio Daguerre, a prominent lawyer from
Mexico, which was later traced to $750,000 in campaign cash from
Texas fat cats that was contributed via a suitcase flown from
Texas, which arrived just prior to the April 7 deadline.
As reporters Bob Woodward and Carl Bernstein
disclosed only a month before Nixon's landslide reelection, the
FBI investigation revealed that "virtually all the acts against
the Democrats were financed by a secret, fluctuating $350,000-$700,000
campaign fund." Numerous other cash accounts were held in
safes by campaign operatives. Millions of dollars were laundered
through Mexico and Luxembourg, and hundreds of thousands more
deposited into the accounts of political committees that didn't
exist. And as the tape recordings of the President demonstrated
just four days before his resignation, Nixon knew that campaign
funds were being used to finance the Watergate break-in, and had
even agreed to help in a cover-up. Never before had the need for
spending caps and disclosure requirements been more forcefully
The [Watergate] scandal, and the attendant
revelations of massive contributions made during the 1972 campaign,
blew new wind into the sails of campaign finance reform. In 1974
Congress enacted a series of amendments to the FECA. These "Watergate
reforms" did the following:
* limited the amount an individual could
contribute to a federal candidate in an election cycle to $1000;
* limited the total amount an individual
could give to all federal candidates in a year to $25,000;
* limited PAC contributions to a candidate
to $5000 per election, with no aggregation cap;
* limited the amount a candidate or his
or her family could contribute to $50,000;
* limited spending per House seat to $140,000
and a sliding scale for Senate campaigns based on the number of
votes per state;
* established the Federal Election Commission
to monitor and enforce the new law.
For the first time in American history,
between 1971 and 1974 Congress had made a real effort to reduce
the influence of money in politics. Unfortunately, however, this
time the Supreme Court stepped in to defend the status quo and
to reinforce the marriage of money and democracy by declaring
several key provisions unconstitutional. Buckley v. Valeo set
the ground rules for the big-money game we still play today, and
it ensured that yet another generation of Americans would ~,e
forced to watch their pay-to-play democracy from the sidelines.
... Reforms to keep corrupt money out
of politics have been infrequent, inadequate, and evaded. Scandal
leads to reform that fails because of designed-in loopholes. Ergo,
But it's also important to recall that,
unlike a century ago, we have little if any vote buying. Contributions
that were once made in secret are now made public on-line, and
limits on hard and soft money have dammed up a lot of corrupt
influence. Progress has occurred- glacially perhaps, but it has
But as the volume and targeting of so-called
legislatively interested money increases-and corporate governance
and accounting scandals continue-so will the public clamor for
change more enduring than the laughable 1925 Federal Corrupt Practices
Act and even the laudable 1971 Federal Election Campaign Act.
When will the cycle of scandal and reform finally cease? When
members of Congress fear angry voters more than they fear overturning
the system that got them into Congress?