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Context of 'June 25, 1910: Major Campaign Finance Law Regulates Campaign Spending, Mandates Public Disclosure'

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Senator Benjamin Tillman, an ardent segregationist who once said, ‘My Democracy means white supremacy.’ Senator Benjamin Tillman, an ardent segregationist who once said, ‘My Democracy means white supremacy.’ [Source: Black Americans in Congress]President Theodore “Teddy” Roosevelt signs the Tillman Act into law. The Act prohibits monetary contributions to national political campaigns by corporations and national banks. Roosevelt, dogged by allegations that he had accepted improper donations during his 1904 presidential campaign, has pushed for such restrictions since he took office (see August 23, 1902 and December 5, 1905). [Federal Elections Commission, 1998; Center for Responsive Politics, 2002 pdf file; Moneyocracy, 2/2012] Senator Benjamin Tillman (D-SC), later described by National Public Radio as a “populist and virulent racist,” sponsored the bill. [National Public Radio, 2012] In 1900, Tillman was quoted as saying about black voters: “We have done our level best. We have scratched our heads to find out how we could eliminate every last one of them. We stuffed ballot boxes. We shot them. We are not ashamed of it.” [Atlas, 2010, pp. 205] Unfortunately, the law is easily circumvented. Businesses and corporations give employees large “bonuses” with the understanding that the employee then gives the bonus to a candidate “endorsed” by the firm. Not only do the corporations find and exploit this loophole, they receive an additional tax deduction for “employee benefits.” The law will be amended to cover primary elections in 1911 (see 1911). [Campaign Finance Timeline, 1999]

Entity Tags: Benjamin Tillman, Theodore Roosevelt, Tillman Act

Timeline Tags: Civil Liberties

The Federal Corrupt Practices Act (FCPA), also called the Publicity Act, is passed. It will remain the backbone of American campaign finance regulation until expanded in 1925 (see 1925). It expands upon the Tillman Act’s prohibition against corporate and bank donations to federal election campaigns (see 1907) by enacting campaign spending limits on US House election campaigns. It also requires full disclosure of all monies spent and contributed during federal campaigns. In 1911, the FCPA will be amended to cover Senate elections as well, and to set spending limits on all Congressional races. However, the bill fails to provide for enforcement and verification procedures, so the law remains essentially useless. [Federal Elections Commission, 1998; Campaign Finance Timeline, 1999; Center for Responsive Politics, 2002 pdf file; Moneyocracy, 2/2012] The law is rendered even less powerful after the Supreme Court overturns its provision limiting House and Senate candidate spending. [Pearson Education, 2004]

Entity Tags: Federal Corrupt Practices Act, Tillman Act

Timeline Tags: Civil Liberties

Lawmakers concerned with political reform push for amendments to the Tillman Act (see 1907) and Federal Corrupt Practices Act (FCPA—see June 25, 1910) that would extend those laws’ campaign finance restrictions to primary elections. Particularly strong in their support are reformers in the new Western and old Northern Republican-dominated states, who resent the Southern Democrats’ grip on their region of the country. Democrats have a powerful grip on the South, largely because few Southerners will countenance voting or campaigning as a Republican due to the Republican Party’s support for Reconstructionist policies after the Civil War. Southern Democrats are outnumbered in Congress, and unable to prevent the amendments from being passed. [Campaign Finance Timeline, 1999] The amendments will be found unconstitutional four years later (see 1921).

Entity Tags: US Congress

Timeline Tags: Civil Liberties

1921: Supreme Court Weakens Campaign Finance Laws

In US v. Newberry, the Supreme Court finds some amendments to campaign finance laws (see 1911) unconstitutional, weakening the body of campaign finance law even further. The campaign finance laws in force (see 1907 and June 25, 1910) were already ineffective and rarely enforced by state attorneys general. And corporations and other special interests find it quite simple to circumvent the laws via loopholes. The case involves a Northern Republican primary race for the US Senate. Popular and powerful businessman Henry Ford (R-MI) lost the race due to enormous campaign expenditures and advertising by his opponent, and asked the US attorney general to intervene. The case stemming from Ford’s request results in the Court decision. The Court finds that the amendments are invalid because neither political parties nor election primaries are mentioned in the Constitution. The Founders had not considered having a two- or three-party system in place, and had envisioned the US as being governed by a single party that represented all interests. A two-party system did not emerge in American politics on a national scale until 1828. The Court, by maintaining a strict constitutional interpretation, sorely weakens campaign finance regulation. [Campaign Finance Timeline, 1999]

Entity Tags: US Supreme Court, Henry Ford

Timeline Tags: Civil Liberties

The federal government revises and expands the Federal Corrupt Practices Act (FCPA—see June 25, 1910), a campaign finance law that lacks any enforcement or verification mechanisms, in the wake of the Teapot Dome corruption scandal. The amended version codifies and revises the expenditure limits and disclosure procedures for US Congressional candidates. It will replace the original FCPA as well as its predecessor, the Tillman Act (see 1907), and will remain the backbone of American campaign finance law until 1971. All campaign spending is strictly regulated, with contributions of $50 and over during a calendar year mandated to be reported. Senatorial candidates can spend no more than three cents for each voter in the last election, to a maximum of $25,000. House candidates may also spend up to three cents per voter in the last election, up to a $5,000 maximum. Offers of patronage and contracts are banned, as is any form of bribery. Corporate contributions of all kinds are banned. However, the power of enforcement is entirely vested within Congress, and thusly is routinely ignored. [Campaign Finance Timeline, 1999; Center for Responsive Politics, 2002 pdf file; Pearson Education, 2004; National Public Radio, 2012] In 1966, President Lyndon B. Johnson will refer to the FCPA as “more loophole than law.” [Connecticut Network, 2006 pdf file; National Public Radio, 2012]

Entity Tags: Tillman Act, Federal Corrupt Practices Act

Timeline Tags: Civil Liberties

The New York Times calls today’s ruling in the Citizens United case (see January 21, 2010) “disastrous,” saying that “the Supreme Court has thrust politics back to the robber-baron era of the 19th century.” The Court has used the excuse of the First Amendment (see January 21, 2010) to “pave… the way for corporations to use their vast treasuries to overwhelm elections and intimidate elected officials into doing their bidding.” The Times recommends that Congress should “act immediately to limit the damage of this radical decision, which strikes at the heart of democracy.” In essence, the Times writes, lobbyists for corporate, labor, and special interests now have the power to sway elections in the directions they prefer. And the ruling gives those same interests the power to intimidate and even coerce candidates. “If a member of Congress tries to stand up to a wealthy special interest,” the Times writes, “its lobbyists can credibly threaten: We’ll spend whatever it takes to defeat you.” The Times notes that since the inception of the nation, its founders have “warned about the dangers of corporate influence. The Constitution they wrote mentions many things and assigns them rights and protections—the people, militias, the press, religions. But it does not mention corporations.” Corporate money has been banned from elections since 1907 (see 1907), and that ban has been in place, in one form or another (see June 25, 1910, 1925, 1935, 1940, June 25, 1943, June 23, 1947, March 11, 1957, February 7, 1972, 1974, May 11, 1976, January 30, 1976, January 8, 1980, March 27, 1990, March 27, 2002, and December 10, 2003), until today. The Times accuses the Court of “overreach[ing],” using “a case involving a narrower, technical question involving the broadcast of a movie that attacked Hillary Clinton during the 2008 campaign (see January 10-16, 2008). The Court elevated that case to a forum for striking down the entire ban on corporate spending and then rushed the process of hearing the case at breakneck speed. It gave lawyers a month to prepare briefs on an issue of enormous complexity (see June 29, 2009), and it scheduled arguments during its vacation” (see September 9, 2009). The Times says the ruling is “deeply wrong on the law,” particularly in declaring corporations as equivalent to people, with the same First Amendment rights. “It is an odd claim since companies are creations of the state that exist to make money. They are given special privileges, including different tax rates, to do just that. It was a fundamental misreading of the Constitution to say that these artificial legal constructs have the same right to spend money on politics as ordinary Americans have to speak out in support of a candidate.” And the Times derides the statement in the Court’s majority opinion that says independent corporate expenditures “do not give rise to corruption or the appearance of corruption,” citing Senator John McCain (R-AZ)‘s characterization of the Court’s reasoning as being plagued by “extreme naivete.” The Citizens United case is, the Times writes, “likely to be viewed as a shameful bookend to Bush v. Gore (see 9:54 p.m. December 12, 2000). With one 5-to-4 decision, the Court’s conservative majority stopped valid votes from being counted to ensure the election of a conservative president. Now a similar conservative majority has distorted the political system to ensure that Republican candidates will be at an enormous advantage in future elections.” The only two ways to rectify the situation, the Times concludes, are to overturn the ruling via Congressional legislation and have a future Court—with a different makeup—overturn the decision itself. [New York Times, 1/21/2010]

Entity Tags: John McCain, Hillary Clinton, US Congress, New York Times, US Supreme Court

Timeline Tags: Civil Liberties

Republican presidential frontrunner Mitt Romney (R-MA) tells MSNBC reporter Chuck Todd that wealthy donors should be able to give unlimited amounts directly to candidates in lieu of donating to “independent” organizations such as super PACs (see March 26, 2010, June 23, 2011, and November 23, 2011). The US history of campaign finance law (see 1883, 1896, December 5, 1905, 1907, June 25, 1910, 1925, 1935, 1940, February 7, 1972, 1974, May 11, 1976, January 30, 1976, January 8, 1980, March 27, 1990, March 27, 2002, and December 10, 2003), including the 2010 Citizens United decision (see January 21, 2010), has always put stringent limitations on what donors can contribute directly to candidates. Asked if he thinks the Citizens United decision was a poor one, Romney responds: “Well, I think the Supreme Court decision was following their interpretation of the campaign finance laws that were written by Congress. My own view is now we tried a lot of efforts to try and restrict what can be given to campaigns, we’d be a lot wiser to say you can give what you’d like to a campaign. They must report it immediately and the creation of these independent expenditure committees that have to be separate from the candidate, that’s just a bad idea.” Ian Millhiser, a senior legal analyst for the liberal news Web site Think Progress, responds: “It’s not entirely clear from this interview that Romney understands what happened in Citizens United. That decision emphatically did not follow any ‘interpretation of campaign finance laws that were written by Congress.’ Rather, Citizens United threw out a 63-year-old federal ban on corporate money in politics.… [I]t was not a case of judges following the law. More importantly, however, Romney’s proposal to allow wealthy donors to give candidates whatever they’d ‘like to a campaign’ is simply an invitation to corruption (see October 17, 2011). Under Romney’s proposed rule, there is nothing preventing a single billionaire from bankrolling a candidate’s entire campaign—and then expecting that candidate to do whatever the wealthy donor wants once the candidate is elected to office. Romney’s unlimited donations proposal would be a bonanza for Romney himself and the army of Wall Street bankers and billionaire donors who support him, but it is very difficult to distinguish it from legalized bribery.” Millhiser notes that Romney had a different view on the subject in 1994, saying then that when you allow special interest groups to buy and sell candidates, “that kind of relationship has an influence on the way that [those candidates are] going to vote.” [Think Progress, 12/21/2011]

Entity Tags: Willard Mitt Romney, Charles David (“Chuck”) Todd, Ian Millhiser

Timeline Tags: Civil Liberties, 2012 Elections

The Republican National Committee (RNC) files a court brief calling the federal ban on direct corporate donations to candidates unconstitutional, and demanding it be overturned. Such direct donations are one of the few restrictions remaining on wealthy candidates wishing to influence elections after the 2010 Citizens United decision (see January 21, 2010). The brief is in essence an appeal of a 2011 decision refusing to allow such direct donations (see May 26, 2011 and After). The RNC case echoes a request from Senator Mike Lee (R-UT) that he be allowed to form and direct his own super PAC (see November 23, 2011), and recent remarks by Republican presidential frontrunner Mitt Romney (R-MA) calling for donors to be allowed to contribute unlimited amounts to candidates (see December 21, 2011). The RNC brief claims: “Most corporations are not large entities waiting to flood the political system with contributions to curry influence. Most corporations are small businesses. As the Court noted in Citizens United, ‘more than 75 percent of corporations whose income is taxed under federal law have less than $1 million in receipts per year,’ while ‘96 percent of the 3 million businesses that belong to the US Chamber of Commerce have fewer than 100 employees.’ While the concept of corporate contributions evokes images of organizations like Exxon or Halliburton, with large numbers of shareholders and large corporate treasuries, the reality is that most corporations in the United States are small businesses more akin to a neighborhood store. Yet § 441b does not distinguish between these different types of entities; under § 441b, a corporation is a corporation. As such, it is over-inclusive.” Think Progress legal analyst Ian Millhiser says the RNC is attempting to refocus the discussion about corporate contributions onto “mom and pop stores” and away from large, wealthy corporations willing to donate millions to candidates’ campaigns. If the court finds in favor of the RNC, Millhiser writes: “it will effectively destroy any limits on the amount of money wealthy individuals or corporation[s] can give to candidates. In most states, all that is necessary to form a new corporation is to file the right paperwork in the appropriate government office. Moreover, nothing prevents one corporation from owning another corporation. For this reason, a Wall Street tycoon who wanted to give as much as a billion dollars to fund a campaign could do so simply by creating a series of shell corporations that exist for the sole purpose of evading the ban on massive dollar donations to candidates” (see October 30, 2011). [United States of America v. Danielcytk and Biagi, 1/10/2012 pdf file; Think Progress, 1/11/2012] The RNC made a similar attempt in 2010, in the aftermath of Citizens United; the Supreme Court refused to hear an appeal of its rejection. [New York Times, 5/3/2010; Tom Goldstein, 5/14/2012] Over 100 years of US jurisprudence and legislation has consistently barred corporations from making such unlimited donations (see 1883, 1896, December 5, 1905, 1907, June 25, 1910, 1925, 1935, 1940, March 11, 1957, February 7, 1972, 1974, May 11, 1976, January 30, 1976, January 8, 1980, March 27, 1990, March 27, 2002, and December 10, 2003). Shortly after the Citizens United ruling, RNC lawyer James Bopp Jr. confirmed that this case, like the Citizens United case and others (see Mid-2004 and After), was part of a long-term strategy to completely dismantle campaign finance law (see January 25, 2010).

Entity Tags: Republican National Committee, Halliburton, Inc., ExxonMobil, Ian Millhiser, Michael Shumway (“Mike”) Lee, Willard Mitt Romney, US Supreme Court, US Chamber of Commerce, James Bopp, Jr

Timeline Tags: Civil Liberties, 2012 Elections

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