In Politics, Money Talks--and Keeps Talking, Despite Reforms

If you wanted a position with the federal government in the 1800s, it was customary to donate to a politician running for office. If he won, a job was your reward.

The practice was so commonplace that in the 1880s one enterprising man took out a newspaper ad: “WANTED--A GOVERNMENT CLERKSHIP at a salary of not less than $1,000 per annum. Will give $100 to any one securing me such a position.”

These unseemly donations were banned a few years after this ad saw print, but the change only prompted candidates to raise political capital elsewhere. When that new source of money dried up, politicians replaced it with another one.

This process of attempting to limit the influence of money on politics--and then finding ways to evade the limits--has gone on for more than a century. It’s almost an American institution. In fact, some historians argue, the cycle is partly a product of the democratic system, the unfortunate price of having politicians hunt for votes.

So when the House and Senate passed a bill last month to force certain tax-exempt political committees to divulge their expenditures and donors, the response was predictable: Some critics of the legislation, which President Clinton signed July 1, immediately wondered how to get around it.

It’s a pattern repeated over and over in our history. When Sen. John McCain of Arizona, who championed campaign finance reform during his failed bid for the Republican presidential nomination, declared that “the American people perceive the Congress as controlled by the monied special interests,” he was echoing complaints voiced for generations.

Reform Begins in 1883

The first significant attempt to curb the influence of money on politics was the Pendleton Act of 1883. It said that a federal worker was under no obligation to “contribute to any political fund, or to render any political service, and that he will not be removed or otherwise prejudiced for refusing to do so.”

With the exception of a few thousand policy-level appointments, nearly all federal jobs are still protected under what became known as the Civil Service system. The Pendleton Act is best remembered for these provisions, although it also warned against hiring a “person habitually using intoxicating beverage to excess.”

The Pendleton Act was prompted partly by revulsion over the assassination of President James A. Garfield by Charles Guiteau, a disgruntled and unbalanced job-seeker. Guiteau had written to Garfield insisting that he would soon marry an heiress and could “represent the United States Government at the court of Vienna with dignity and grace.”

Guiteau got neither the girl nor the ambassadorship, and shot Garfield on July 2, 1881. Garfield’s successor, President Chester A. Arthur, signed the Pendleton Act.

Thus started the cycle noted by Gil Troy, a McGill University history professor and author of “See How They Ran: The Changing Role of the Presidential Candidate.” Troy writes: “But the law of unintended consequences took hold: by barring federal assessments, the Pendleton Act increased parties’ need for corporate money.”

The corporations were happy to meet the need. Their influence was strongest in 1896 when Marcus Alonzo Hanna, a wealthy Cleveland industrialist who made his money in iron and coal, raised about $4 million for William McKinley--in today’s dollars the equivalent of nearly $82 million.

It was a staggering sum--some historians even put the amount closer to $7 million--and it fueled a sophisticated campaign. The candidate’s face appeared everywhere--on posters, pamphlets and signs--while McKinley waged what became known as the Front Porch Campaign, receiving visitors at his home in Canton, Ohio. (The homey touch was reinforced by his wife, Ida, who served lemonade to the thirsty crowds.)

The money helped propel McKinley to the White House and raised the profile of Hanna, who was described as “a lovable character” by Thomas Platt, a New York Republican leader of the era. The People’s Party Paper took a darker view, calling him “the most vicious, carnal and unrelenting oppressor of labor and crusher of its organizations.”

Even less radical observers could tell fund-raising was getting out of control. In 1907 Congress passed the Tillman Act, prohibiting corporations and national banks from contributing to federal campaigns. The law was named for Sen. Benjamin “Pitchfork Ben” Tillman of South Carolina, a fiery Democrat who was once censured for assaulting a colleague on the Senate floor.

These days, proponents of campaign finance reform, such as Sen. Russell D. Feingold (D-Wis.), argue that the Tillman Act has become meaningless because of “soft money,” loosely regulated donations to the parties that are supposedly intended for “party-building,” not specific candidates.

Hoping to get the Tillman Act invalidated, a Pennsylvania businessman accused of illegally giving money to the 1996 campaigns of President Clinton and Republican challenger Bob Dole sued the government. Renato P. Mariani argued that the law was irrelevant because soft money could support “issue ads”--thinly veiled attacks that stop short of directly supporting a candidate by name.

In May of this year, a federal appeals court ruled against Mariani, saying the Tillman Act was indeed constitutional. The court said that Mariani could appeal to the Supreme Court--an option he is considering--and that “any reform in this area must be sought from Congress.”

It is Congress, however, that has produced campaign finance laws filled with exceptions or loopholes.

For example, three years after the Tillman Act, Congress passed the Publicity Act, which required House candidates to fully disclose all campaign spending and contributions. The loopholes: Disclosure was required only after the election, and the law only applied to the House. Congress amended it a year later to cover the Senate as well.

Other laws intended to stem the flow of money--or at least identify where the money was coming from--were passed periodically throughout the 20th century. More than once, the law of unintended consequences took hold, as when the Smith-Connally Act of 1943 barred labor unions from contributing to federal candidates.

In response, the Congress of Industrial Organizations--one of the precursors to the AFL-CIO--formed the first political action committee in 1944 to help reelect President Franklin D. Roosevelt. PACs have been with us ever since.

They’ve also evolved into a prime source of soft money. According to the Center for Responsive Politics in Washington, D.C., PACs in this election cycle have made soft money donations totaling $120 million--so far.

Other campaign finance laws have been enacted over the years, most notably after the excesses of the 1972 presidential campaign and Watergate. Those laws created the Federal Election Commission; required greater disclosure of campaign donations and expenses; and fashioned the fund for public financing of presidential elections. Taxpayers are reminded of this every year when they see the little box on their tax forms that asks if they want to contribute.

In recent years, many advocacy groups and some public officials, principally Sens. McCain and Feingold, have continued to push for more reforms--mainly to control soft money.

A Democratic Dilemma

It’s doubtful, however, that money will ever be separated from politics. Whether the candidate is William McKinley or William Jefferson Clinton, running for office costs money.

It would be easy to see the link between money and politics as the great American flaw. But Troy, the history professor, views it differently: “I would also argue that equating money with speech reflects the peculiarly American commitment to liberty at almost all costs, and a very pragmatic reading of politics that acknowledges not just that power is money but the power of money, in almost any society.”

It’s a uniquely democratic dilemma, he added, because “like it or not, rich people also have the freedom to throw their money around just as the masses have the freedom to throw their collective power around.”

Reform advocates counter that collective power isn’t always so powerful. A report by the Center for Responsive Politics noted that in 1998, the candidates who spent the most had a tremendous advantage. The top spenders won 96% of contested races in the House and 91% in the Senate.

“All that money talked pretty loudly on Election Day,” the report said.