How has Congress regulated money in elections?
Congress passed the first regulations early in the twentieth century. The Tillman Act, passed in 1907, prohibited corporations from making campaign contributions; the first disclosure law, passed in 1910, required candidates to publicly report who gave them how much money; and in 1911 Congress imposed a ceiling on congressional campaign expenditures.
These laws were passed in response to a scandal about the funding of the 1904 presidential election. People had long suspected that corporations were making campaign contributions, but no one knew for sure until insurance executives testified under oath in a 1905 investigation. The argument for the Tillman Act was that corporations are not citizens, do not have the political rights of citizens, and should stay out of elections. The purpose of the disclosure law was to tell voters who was paying for election campaigns. And the purpose of limiting congressional campaign expenditures was to make it easier for ordinary citizens to run for office.
In 1940, Congress imposed limits on contributions and set spending limits for presidential campaigns, and in 1947 it extended the ban against corporate contributions to cover labor unions. In 1971, Congress passed the first version of the current law, the FECA. The
1971 FECA strengthened disclosure requirements, but repealed limits on contributions and on most expenditures. It was this law that was in effect during the 1972 presidential election, the one that produced Watergate.12
Congress responded to Watergate by passing the 1974 FECA amendments, which revised the FECA so extensively as to be a new start for campaign finance reform. The 1974 reforms began a public financing program for presidential elections, restored and tightened limits on campaign contributions and expenditures, further strengthened disclosure requirements, and created the Federal Election Commission (FEC) to oversee and enforce the new laws.
Majorities of both parties in both houses of Congress voted for the 1974 amendments. But the opponents who lost in Congress took the battle to the courts, where they won a partial victory. In Buckley v. Valeo, the Supreme Court upheld most of the amendments, but agreed with the challengers' claim that political spending had the same First Amendment protection as political speech. It was on this ground that the justices struck down limits on all campaign expenditures, whether by candidates or by those spending on their behalf.