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The Longest Campaign — Part Three (cont.)

Almost immediately, however, the new version of the FECA came under challenge as unconstitutional. In January 1975, one day after the law took effect, Senator James Buckley of New York, a member of his state’s Conservative Party, and former Democratic Senator Eugene McCarthy of Minnesota, joined by an unusual coalition of liberal and conservative groups, went to court to challenge the law, arguing that the spending limits violated the First Amendment guarantee of freedom of speech. McCarthy also specifically charged, at a press conference prior to the lawsuit, that public financing discriminated in favor of the two major parties and was “the same as saying the country is going to have two established religions.”

These and other objections brought the case—Buckley v. Valeo (the latter, Francis R. Valeo, the secretary of the Senate )—to the Supreme Court. In January 1976, it generally upheld the contribution limits but ruled that limits on spending were constitutional only if agreed to voluntarily by candidates. It also said that expenditures by independent groups could not be limited.  At oral argument, Justice Potter Stewart had summed up the principle by stating, “Money is speech, and speech is money, whether it is buying television or radio time or newspaper advertising, or even buying pencils and paper and microphones.”

Congress responded to Buckley v. Valeo by amending FECA in time for the 1976 election. Certain contribution ceilings also were revised or added, and stronger reporting requirements were instituted. And candidates receiving the federal subsidy had to win at least 10 percent of the vote in two consecutive primaries to remain eligible for the matching funds, a provision that would winnow down the field as the primaries progressed. The Buckley decision also caused a revision in how members of the Federal Election Commission were chosen. Originally selected jointly by the president and congressional leaders, the method was rejected by the Court as invalid because the congressional appointees would be exerting executive powers. Congress then changed the law to have all six commissioners appointed by the president.

The changes came to be known as the Watergate reforms. The federal subsidy particularly was instrumental in encouraging a large field of Democrats to enter the 1976 state caucuses and primaries. Twelve of them, and the two major Republican candidates as well—President Ford, elevated from the vice presidency to the Oval Office by Richard Nixon’s resignation, and former California Governor Ronald Reagan—qualified for the matching funds, and were happy to accept the spending limits. Indeed, the subsidy enabled a long-shot Democratic candidate, former Governor Jimmy Carter of Georgia, to win his party’s nomination and the election that year.

The reforms placed heavy obligations on the candidates, their campaigns, and on other political committees to report their financial activities to the FEC. Accordingly, in 1979 the campaign-finance amendments were revised to make them less burdensome.

And quickly, political operatives started finding ways to open the back door and let the money flow freely once again.