FECA Amendments of 1976
The 1976 FECA amendments were designed to conform the law to the Buckley decision. That decision, in fact, gave Congress 30 days to transform the Federal Election Commission into a body entirely appointed by the president. President Ford wanted legislation that would simply remedy the FEC’s constitutional flaws, and he argued against Congress reopening the entire campaign finance reform debate. He did not get his wish, as Congress undertook significant revisions dealing with the FEC’s powers. A highly partisan clash over PACs ensued as labour, alarmed at a FEC decision favourable to the growth of corporate PACs, sought to limit the fund-raising ability of such committees.
The FEC, formally organized in April 1975, was created to centralize the administrative and enforcement functions that had been divided between three different congressional offices in the FECA legislation in 1971. From the outset, there was apparent potential for conflict between the new commissioners’ ties to Capitol Hill and their responsibility for impartial handling of campaign finance issues involving Congress: under the procedure ultimately ruled unconstitutional by the Supreme Court in 1976, four of the first six appointments to the commission were former U.S. House members.
Nonetheless, conflict soon erupted between some powerful members of Congress and their ex-colleagues on the Commission. In fact, Congress rejected the first two regulations proposed by the FEC.6
Meanwhile, in November 1975, barely two months before the Buckley decision, the FEC issued advisory opinion (AO) 1975-23 in the so-called SunPAC case. In a 4-2 decision, the FEC ruled that SunPAC, the Sun Oil Co.’s political action committee, could use corporate funds to solicit voluntary political contributions from employees and stockholders. Reassured by the FEC about the legal validity of corporate PACs, the business community soon recognized their potential as a means of competing with labour unions for political influence. Consequently, in the six months following the SunPAC decision, the number of corporate PACs more than doubled.
Labour, which had badly miscalculated how much the FECA Amendments of 1974 would benefit corporate PACs, counter-attacked when the FECA Amendments of 1976 reached the floor of Congress. Angered by FEC’s SunPAC opinion, labour lined up behind a Democratic Party proposal under which companies would be allowed to solicit PAC contributions only from stockholders and “executive or administrative personnel.”
But the Republicans, who saw in corporate PACs a major new ideological and financial ally, rushed to their defence, arguing that the Democrats’ proposal would tip the “partisan advantage” towards labour. President Ford hinted at a veto if the restrictions on corporate PACs remained in the Bill. Ultimately, a compromise was reached under which corporate PACs were permitted to seek contributions from all company employees, by mail, twice a year. Although the restrictions hardly pleased business interests, they did little to impede the continuing growth of corporate and trade association PACs during the decade that followed.
The 1976 PAC debate also provided another lesson in campaign finance reform’s law of unforeseen consequences. While the Republicans viewed corporate and trade association PACs as their natural allies, many of these PACs turned out to be far more pragmatic than ideological in their choice of candidates: a substantial portion of their donations were directed to Democrats in the years to come. This increasingly angered the Republicans as time went on, and, little more than a decade after the 1976 FECA amendments, a Republican president and Grand Old Party (GOP) congressional leaders were advocating an outright abolition of PACs. (See “Congressional Campaigns” in the next section for discussion of the PAC issue.)
To meet the constitutional objections raised by the Supreme Court, the 1976 FECA amendments also reconstituted the FEC as a six-member body appointed by the president and subject to confirmation by the Senate. Having lost the ability to directly appoint commissioners, Congress moved aggressively to make its own partisan recommendations to the President when seats on the Commission came open. (See “The FEC under Fire” in the following section.)
Congress also sought other means to keep the FEC on a tight leash. For example, it mandated that a vote of four Commission members would be necessary to issue regulations and advisory opinions, as well as to initiate civil actions and investigations. On a Commission that, under law, could contain no more than three members of the same political party, the effect of this was to give both the Democrats and the Republicans veto power over Commission actions. During the 1980s, this requirement has produced 3-3 stalemates on some of the most controversial questions facing the FEC; in two major instances, the Commission acted only after being faced with federal court orders.
FECA Amendments of 1979
By the time the FECA Amendments of 1976 were signed into law in May of that year, it was clear that the initiative in campaign finance regulation had passed from reformers and their allies in the media to those directly affected by the new rules of the game: incumbent legislators, political parties and major interest groups. President Jimmy Carter, who took office in January 1977, sought to make public financing of congressional elections a major legislative priority. But the proposal did not succeed in gaining a majority in either house of Congress during Carter’s term.
The one major piece of campaign-related legislation that did pass was the FECA Amendments of 1979, which were far more a response to the complaints of political candidates and operatives than to the visions of reformers. The 1979 FECA amendments were designed largely to reduce the paperwork burden on campaigns by easing the reporting requirements imposed on candidates and political committees. They thus represented a relaxation of some of the constraints that earlier reforms had placed on those in the political process.
During the late 1970s, there was considerable discussion regarding the impact of the FECA among those regulated by federal campaign law. In response, the House Administration Committee in August 1978 commissioned a study by Harvard University’s Institute of Politics. The assessment singled out three problems: it found that the law set individual contribution limits too low, it imposed burdensome reporting requirements on campaigns, and it weakened the role of political parties (Harvard University 1979). Several of the recommendations in the report were influential when possible revisions to FECA were taken up by the Senate Rules Committee in mid-1979.
Perhaps the greatest controversy during the debate over the 1979 FECA amendments centred around the conversion of excess campaign funds to personal use. The Senate wanted to ban such a practice; the House did not. In a compromise, the final legislation barred the conversion of campaign funds to personal use but exempted all House members in office at the time of the law’s enactment: 8 January 1980. They were given the prerogative of converting the campaign funds upon retirement.
This provision, which became known as the “grandfather clause,” did not end the controversy. Throughout the 1980s, there were calls to do away with that clause, as media stories focused on retiring House members who, in some cases, converted hundreds of thousands in campaign dollars to personal use. Finally, in a November 1989 pay-raise package, Congress repealed the grandfather clause as of January 1993, thereby giving senior House members several years to decide whether to retire and take personal advantage of campaign treasuries that in some cases exceeded half a million dollars.
Virtually overlooked amidst the grandfather clause debate were provisions in the FECA Amendments of 1979 that were to have far-reaching and often controversial effects during the 1980s.
In response to complaints that some of the law’s restrictions had eliminated the role of state and local parties in presidential contests, the 1979 law allowed state and local parties to underwrite voter registration and get-out-the-vote drives on behalf of presidential tickets without regard to financial limits. This provision also applied to campaign material used in volunteer activities, such as slate cards, sample ballots, palm cards, and certain buttons, bumper stickers, and brochures. In addition, the law permitted certain of these party- or ticket-oriented materials to make passing reference to a presidential candidate without it counting against the spending limits of the presidential contest.
The growth of these activities fuelled the “soft money” debate of the