The first main attempt to regulate campaign financing occurred in 1971 with the Federal Election Campaign Act (FECA). The act set requirements for disclosure of contributions to federal campaigns, both presidential and congressional. The main regulation to financing occurred though after its amendment in 1974. After reports of big financial abuses in the 1972 presidential election and the Watergate scandal, people wanted more constraints on financing particularly those from special interest groups. The act required strict disclosure of campaign donations. Candidates had to name all contributors who donated more than $200 a year. They also set up contribution limits and expenditure limits. Individuals could not contribute more than $1,000 to a candidate and political action committees (PACs) could not contribute more than $5,000. There were also limits on expenditures from a candidate’s personal fund and on total campaign expenditures (The FEC, 2011).
For presidential elections, the FECA instituted a public financing system to level the playing field and limit the amount of money spent on campaigning. During the primaries, there is a matching program where the government will match up to $250 of each contribution made to eligible candidates. In return, they agree to limit their spending. The other program is during the general election; the president receives a lump sum of money and in return they do not accept any further private donations.
The major provision to the FECA that resulted from the misuse of money and Watergate scandal is the prohibition of donations directly from corporations, labor organizations, and national banks. There were also prohibitions against donations from government contractors, foreign nationals, cash contributions over $100, and contributions in the name of someone else (The FEC, 2011). The last thing the FECA established was the Federal Election Commission to ensure the laws of the act are followed.
In 1976, the Supreme Court heard the case of Buckley v. Valeo challenging the Federal Election Campaign Act. The main question was if the limits placed on electoral expenditures by the act violated the First Amendment’s freedom of speech and association clauses (The Oyez Project). The Court came to two conclusions. First it said the restrictions on individual contributions to campaigns and candidates did not violate the First Amendment. It actually said that it enhances the system of representative democracy by capping large contributions that could be potentially corrupting. The Court found that the FECA did violated the First Amendment in its restriction of independent expenditures in campaigns, expenditures by candidates from their personal resources, and on total campaign expenditures in both presidential and congressional elections. Since they found no harm or potential for corruption in these areas they did not deem it warranted to restrict free speech and association. In their decision, the Court came to...