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1974

The Senate Watergate committee, in its final report, warns that one of the most important lessons from the scandal is that campaign finance must be vigorously regulated “if our free institutions are to survive.” But campaign finance reform has some powerful opponents, including the disgraced Nixon’s newly ascended replacement, President Gerald Ford, and Democratic Representative Wayne Hays of Ohio, the influential chairman of the Committee on House Administration, who manages to stall legislation for months. (Two years later, Hays will resign from Congress after The Washington Post breaks the story that he employs his mistress as a secretary, even though she admittedly is unable to type.)

Nevertheless, reform-oriented minds ultimately prevail, and Congress passes a group of sweeping amendments to the Federal Election Campaign Act of 1971, which Ford reluctantly signs into law. (“Can you imagine what the reaction would be if he vetoed a campaign finance bill this year?” a Republican legislator tells The New York Times.) The old restrictions on media spending are eliminated and replaced by overall limits on campaign spending. Presidential candidates are limited to spending no more than $10 million during the primaries, with the additional restriction that in any particular state primary they can’t exceed $100,000 or $0.08 per voter in expenditures, whichever is greater. During the general election, White House hopefuls can spend an additional $20 million. The spending limits are indexed to account for inflation, and candidates are allowed to spend an additional 20 percent to cover fundraising expenses.

Additionally, for the first time, Congress restrains individual contributors, limiting them to $1,000 per candidate and no more than $25,000 to all candidates in a given election. Political action committees can give no more than $5,000 to any candidate. And to keep the FECA from being ignored, as previous attempts at campaign finance regulation have been, a new agency, the Federal Election Commission, is created to enforce the contribution and spending ceilings. (At the same time, however, legislators also take pains to shield themselves from prosecutorial zeal, quietly reducing the statute of limitations on criminal violations of FECA from five years to just three.)

But the most dramatic innovation by far is the creation of a public financing system for presidential elections, financed by voluntary contributions that taxpayers make by checking a box on their income tax returns. Presidential candidates who raise at least $5,000 in contributions of $250 or less from at least 20 states are eligible to receive matching funds for the first $250 of each contribution, up to $5 million.