The History and Evolution of Campaign Finance Regulation in the United States

Campaign finance regulation has always been a prominent feature of U.S. election campaign management. The policies surrounding this legislation have a long history in the United States. During the times of British rule in the United States, these laws were already in use. This regulation continued in the U.S. post-independence. Numerous laws have been passed attempting to address issues related to political donations and other means of financial influence over candidates running for public office. The history behind these regulations is both complicated and controversial, including discussions about whether large-scale spending should be curtailed or even outlawed as it relates to our electoral process.

In the 1970s, significant strides were taken toward changing the landscape of campaign finance protocol. Lawmakers agreed to pass the Federal Election Campaign Act. This historical document outlined the new regulatory framework governing contribution limits and financial reporting. The Act also created the Federal Elections Commission. The FEC is a critical organ of the CFR; it has the authority to investigate, oversee and enforce campaign finance legislation. The constitutionality of the FEC has often been debated among scholars and within the courts.

Federal Elections Campaign Act History

In 1971, the U.S. congress approved The Federal Election Campaign and Revenue Act as an amendment to Election laws. These two separate Acts were crucial for regulating campaign finance. The law required political parties to submit their financial reports surrounding campaign contributions and expenditures.

Pre-Federal Elections Campaign History

In 1757, the first campaign finance restriction laws were enacted. George Washington had enticed his friends with $195 worth of alcohol to vote for him in the election. The legislature was passed to ensure that candidates and those who speak on their behalf do not bribe their voters. Electoral bribery included providing supporters with drinks, meat, money, or provision. This law meant aspiring candidates were not allowed to gift, reward or entertain any voters before an election.

In 1867, Congress deliberated and approved an appropriations bill targeting naval employees. With the introduction of this bill, it became a punishable offense for government officials to solicit naval yard workers into their campaign for money. This event is widely known as the first officially recognized attempt to regulate campaign finance by the government.

In 1883, Theodore Roosevelt presided over the introduction of The Pendleton Civil Service Reform Act. This blanket law was created to prevent government officials from using any civil service workers for their political campaigns, even if they were being reimbursed. Civil servants could only be awarded voluntary positions that were based on merit. Prior to the introduction of this Act, government employees had to support the reelection of their seniors to prevent the loss of their jobs.

In 1905, President Theodore Roosevelt was at the forefront of demanding high-level measures against political corruption. He argued that the conglomerate businesses in the country were contributing to political parties as a bribe. He stated the need for Legislation that would make it illegal for corporations to provide resources for any political committee.

In 1907, the U.S. Congress approved the Tillman Act. This critical piece of Legislation banned corporations and national banks from sponsoring federal political candidates. The Act was passed with good intentions but brought relatively few results. The difficulty came in enforcing it as corporations and banks found ways around this through legal loopholes.

In 1910, Congress signed Legislation called the Federal Corrupt Practices Act. These regulations outlined the need for House candidates to disclose their assets in the interest of public transparency. Their financial statements were meant to be declared for public scrutiny. In 1911, Congress expanded the law to ensure that Senate and primary candidates were also required to report their assets for public scrutiny. The law also added expenditure limits for all congressional candidates.

In 1921, the famous historical case of Newberry v. United States was put before the U.S. Supreme Court. This significant case passed the ruling that the Federal Corrupt Practices Act was undermining the U.S. constitution. Newberry’s defense argued this Act was unconstitutional as the Constitution does not explicitly grant power over political parties to Congress. They do not possess the authority to regulate the finances of political parties, nor can they intervene in federal primary elections. The outcome of this ruling meant that the spending limits applied to political parties were abolished for Congressional elections.

In 1925, Congress redrafted the Federal Corrupt Practices Act. The legislators sought to abolish corporations from donating to federal campaigns politicians. Any amount donated which is higher than $50 needed to be declared. This had the result of reducing patronage as the aspiring Senate candidates had a maximum spend of $25,000. This figure translated to $0.03 for each voter. The candidates seeking election to the House could spend a maximum of $5,000.

In 1935, Congress outlawed public utility companies from donating funds to the federal campaign of a candidate. The Public Utilities Holding Act was seen as an answer to requests for a level playing field as leaders of parastatals were funding their campaigns for office.

In 1939, Congress outlawed federal employees from donating money to national campaigns. It also prohibited these employees from participating in political activities or movements. This controversial document was known as The Hatch Act.

In 1943, employee unions were banned from spending their money on political campaigns. The Smith-Connally Act canceled the practice of unions spending membership dues on federal campaigns.

In 1967, The U.S. Congress showed its determination to regulate campaign finance by officially starting to collect and investigate federal campaign finance reports. The law that required this was already 50 years old when they began to enforce it.