The Role of Money in
U.S. Elections for
House of Representatives
and the Senate

A History in Campaign Financing

One of the first pieces of legislation that took aim at curbing corporate donations to political campaigns was the Tillman Act of 1907. This law passed just after the election of Theodore Roosevelt, which was Congress' response to the President's call for a ban on corporate donations to political campaigns. 

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In 1943 the Smith-Connelly Act was passed that prohibited unions from donating to federal candidates, partially because they were using dues for political contributions. In response, the labor unions found a loophole and created one of the first PACs. So long as they didn't use dues, it wasn't illegal.

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Four short years later and Congress passes yet another law, the Taft-Hartley Act, that forbids corporations and unions from even making independent expenditures in federal campaigns. While there were laws dictating what could and couldn't be done with regard to the financing of political campaigns, there wasn't any body that was responsible for the oversight and compliance of them.

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In 1971 the Federal Election Campaign Act (FECA) was passed, which was the first major piece of legislation that shaped the way campaigns could be financed for the next forty years. FECA also made clarifications regarding the disclosure of contributions and expenditures to campaigns. The FECA was amended after the Watergate scandal, which included the establishment of contribution limits, the development of public funding for presidential elections, the development of the separate segregated funds, which allowed corporations to once again form PACs. As a follow-up, Congress created the Federal Election Commission (FEC), which is responsible for oversight and compliance of these laws.

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The Supreme Court case Buckley v. Valeo in 1976 was the first successful challenge to some of the provisions laid out in the Federal Election Campaign Act, specifically that they violate the First Amendment. The Supreme Court ultimately agreed that limits on campaign spending, and candidate and family donations to their own campaign were unconstitutional, as were limits on independent expenditures.

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In 2002 the Bipartisan Campaign Reform Act (BCRA), co-sponsored by senators McCain and Feingold, was the next large piece of legislation to be passed in three decades. It sought to limit the use of soft money contributions to political parties because funds that were supposed to be spent only on party building measures were being used as direct contributions to a candidates campaign via commercials, and also because the amount of soft money that could be raised was unlimited. They needed to find a way to close yet another loophole.

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BCRA was also tested with a Supreme Court case in 2010, Citizens United v. FEC, where years of precedent were abandoned after the Justices' decision to hold that independent expenditures by corporations and labor unions are protected by the First Amendment. 

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Most recently in 2014, the McCutcheon v. FEC case argued that aggregate contribution limits that cap the total amount of money an individual can give to candidates and party committees was unconstitutional, and the majority of the Supreme Court agreed. The ramifications for this decision are that precedent continues to be set in a way that engenders more and more corporate spending in future elections. The bulk of a candidate's campaign funds continue to shift in balance from individual donations to large corporate donations via PACs. It will be more difficult in future years to create legislation that addresses the issues caused by a few wealthy donors that also acts in accordance with laws and preceduent set by these Supreme Court decisions.

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