CORRUPTION Syndromes of Corruption

Influence Markets 65
of 1971. That same year Congress enacted the Federal Election
Campaign Act (FECA). It mandated extensive disclosure of contributions
and expenditures in all federal campaigns, both primary and
general; placed limits upon spending from candidates’ personal funds;
and repealed the 1925 law. The Watergate scandal of the early 1970s
spurred another round of legislation in 1974; the Supreme Court’s ruling
in Buckley v. Valeo (424 US 1 1976) which, among other things, invalidated
campaign spending limits on First Amendment grounds, led to
more amendments in 1976. Court decisions and legislation in the late
1970s and 1980s made way for ‘‘soft money’’ – unlimited contributions to
parties for organization-building and get-out-the-vote activities – and
changed the process by which the Federal Election Commission issues
regulations (United States, Federal Election Commission, 1995: ch 1).
Major revisions, however, did not come until the Bipartisan Campaign
Reform Act of 2002 (BCRA), to be discussed below.
Contribution limits and public disclosure of data make up the core of
the system. Public funds are available only to presidential candidates
in the form of limited matching funds for individual contributions in
the pre-nomination phase and block grants for major-party nominees
(limited public funding is also available to parties to pay a portion of
their nominating convention costs). Those accepting public funds must
abide by spending limits, but candidates may reject public funds and
thus raise and spend as much as possible, a choice that is becoming
increasingly common. No public funds are provided for House and
Senate races, and thus no limits apply – a situation that, as we shall see,
tends to help incumbents. The 1974 amendments created Political
Action Committees (PACs) to encourage citizens to pool voluntary contributions,
but not surprisingly they are used primarily by organized
interests. The 2002 law capped individual contributions at $2,000 per
campaign, restoring about half the purchasing power of the old 1974
$1,000 maximum donation, and a total of $95,000 over a two-year
election cycle. PAC donations are limited to $5,000 per campaign but
not in toto. Contribution and expenditure data are regularly reported and
easily accessible (United States, Federal Election Commission, 2004a,
2004b), although as we shall see disclosure too can work against
challengers.
How well have the laws worked?
Taken on its own terms the system works well: contribution limits and
disclosure are widely accepted and obeyed, although they were increasingly
circumvented from the late 1980s by ‘‘soft money.’’ The FEC