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FEDERAL ELECTION REFORM
HEARINGS
BEFORE THE
SUBCOMMITTEE ON ELECTIONS
OF THE
COMMITTEE ON HOUSE ADMINISTRATION
HOUSE OF REPRESENTATIVES
NINETY-THIRD CONGRESS
FIRST SESSION
ON
H.R. 7612
TO IMPROVE THE CONDUCT AND REGULATION OF FED-
ERAL ELECTION CAMPAIGN ACTIVITIES AND TO PROVIDE
PUBLIC FINANCING FOR SUCH CAMPAIGNS
S. 372
TO AMEND THE COMMUNICATIONS ACT OF 1934 TO RE-
LIEVE BROADCASTERS OF THE EQUAL TIME REQUIRE-
MENT OF SECTION 315 WITH RESPECT TO CANDIDATES
FOR FEDERAL OFFICE, TO REPEAL THE CAMPAIGN COM-
MUNICATIONS REFORM ACT, TO AMEND THE FEDERAL
ELECTION CAMPAIGN AOT OF 1971, AND FOR OTHER
PURPOSES
(AND RELATED ELECTION REFORM BILLS)
OCTOBER 2, 10, 16, 25; NOVEMBER 14, AND 29, 1973
0
Printed for the use of the Committee on House Administration
U.S. GOVERNMENT PRINTING OFFICE
25-239 0 WASHINGTON: 1973
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $3.30
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COMMITTEE ON HOUSE ADMINISTRATION
NINETY-THIRD CONGRESS
WAYNE L. HAYS, Ohio, Chairman
FRANK THOMPSON, JR., New Jersey WILLIAM L. DICKINSON, Alabama
JOHN H. DENT, Pennsylvania SAMUEL L. DEVINE, Ohio
LUCIEN N. NEDZI, Michigan JAMES C. CLEVELAND, New Hampshire
JOHN BRADEMAS, Indiana JAMES HARVEY, Michigan
KENNETH J. GRAY, Illinois ORVAL HANSEN, Idaho
AUGUSTUS F. HAWKINS, California PHILIP M. CRANE, Illinois
TOM S. GETTYS, South Carolina JOHN WARE, Pennsylvania
BERTRAM L. PODELL, New York BILL FRENZEL, Minnesota
FRANK ANNUNZIO, Illinois CHARLES E. WIGGINS, California
JOSEPH M. GAYDOS, Pennsylvania JAMES F. HASTINGS, New York
ED JONES, Tennessee HAROLD V. FROEHLICH, Wisconsin
ROBERT H. MOLLOHAN, \Vest Virginia
EDWARD I. KOCH, New York
DAWSON MAThS, Georgia
JOHN T. WALKER, staff Director
SUBCOMMITTEE ON ELECTIONS
JOHN H. DENT, Pennsylvania, Chairman
KENNETH J. GRAY, Illinois JAMES HARVEY, Michigan
ED JONES, Tennessee JOHN WARE, Pennsylvania
ROBERT H. MOLLOHAN, West Virginia BILL FRENZBL, Minnesota
DAWSON MATHIS, Georgia
RICHARD OLESZEWSKI, Clerk
(II)
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CONTENTS
Hearings held on- Page
October 2 1
October 1O~ 151
October 16 191
October25 227
November 14 267
November 29 383
Text of bills-
H.R. 7612 2
S. 372 36
Statements of-
Jencks, Richard W., corporate vice president, Columbia Broadcasting
System, Inc 111
Cole, Joseph, national finance chairman, Democratic National Com-
mittee, accompanied by Terence O'Connell 131
Anderson, Hon. John B., a Representative in Congress from the
State of Illinois 191
Prepared statement of Hon. John B. Anderson, a Representative
in Congress from the State of Illinois 219
Gardner, John W., chairman, Common Cause, accompanied by Jack
Conway, president of Common Cause, and Fred Wertheimer,
legislative director, Common Cause, and director, Campaign
Finance Monitoring Project 383
Prepared Statement of John W. Gardner, chairman, Common
Cause - 384
Nelson, Robert R., director, Legislative Department, United Mine-
workers of America 460
Planck, Mrs. Jane, citizen 469
Prepared statement of Mrs. Jane Planck 469
Stanton, Hon. James V., a Representative in Congress from the State
of Ohio, accompanied by Sanford Watzman, administrative
assistant 151
Prepared statement of Hon. James V. Stanton, a Representative
in Congress from the State of Ohio - 152
Young, Hon. Samuel H., a Representative in Congress from the State
oflllinois 172
Regula, Hon. Ralph S., a Representative in Congress from the State
of Ohio 184
Prepared statement of Hon. Ralph S. Regula, a Representative
in Congress from the State of Ohio 188
Conable, Hon. Barber B., Jr., a Representative in Congress from the
State of New York 267
Giaimo, Hon. Robert N., a Representative in Congress from the
State of Connecticut 274
Smith, Hon. Neal, a Representative in Congress from the State of
Iowa 285
Obey, Hon. David R., a Representative in Congress from the State of
Wisconsin 293
Prepared statement of Hon. David R. Obey, a Representative in
Congress from the State of Wisconsin 294
Mitchell, Hon. Donald J., a Representative in Congress from the State
of New York 309
Gunter, Hon. Bill, a Representative in Congress from the State of
Florida 313
(III)
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Statements of-Continued Page
Kramer, A. Ludlow, Secretary of State, State of Washington 321
Prepared statement of A. Ludlow Kramer, Secretary of State,
State of Washington 326
Udall, Hon. Morris K., a Representative in Congress from the State of
Arizona 227
Prepared statement of Hon. Morris K. tidall, a Representative
in Congress from the State of Arizona 227
Bennett, Hon. Charles E., a Representative in Congress from the
State of Florida 252
Stratton, Hon. Samuel S., a Representative in Congress from the
State of New York 257
Statistical tables and charts-
Chart 1.-Area of dominant influence by congressional districts,
WCBS-TV, New York City 116
Chart 2.-Election prime time requirements 117
Table 1.-Congressional campaign finances, 1972 415
Table 2.-Election costs compared to winners' margins. - - 416
Table 3.-Average expenditures 416
Table 4.-Average finances for House candidates in 1972 417
Table 5.-The most expensive races for the House of Representatives 417
Table 6.-importance of incumbency in campaign financing-Senate 421
Table 7.-Ten most expensive Senate races-impact of incumbency on
financing 422
Table 8.-General election races without an incumbent-Senate 423
Table 9.-Contributions and expenditures for all November 1972
House races compiled by the Common Cause campaign monitoring
project 423
Table 10.-A preliminary study of public campaign financing poten-
tial 477
Additional statements inserted in the record at this point-
Prepared statement of Everett H. Erlich, senior vice president and
general counsel, American Broadcasting Companies, Inc 479
Prepared statement of National Broadcasting Co 482
Prepared statement of the National Association of Manufacturers - - - 484
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FEDERAL ELECTION REFORM
TUESDAY, OCTOBER 2, 1973
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON ELECTIONS OF THE
COMMITTEE ON HOUSE ADMINISTRATION,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:06 n.m., in room
2253, Rayburn House Office Building, Hon. John H. Dent (chairman
of the subcommittee) presiding.
Present: Representatives Hays (chairman of the full committee),
Dent (chairman of the subcommittee), Jones, Mollohan, Mathis, and
Frenzel.
Also present: John T. Walker, staff director; John G. Blair, assist-
ant to the staff director; Ralph Smith, minority counsel, Committee
on House Administration; Richard Oleszewski, clerk, and Miss Bar-
bara Lee Giaimo, assistant clerk, Subcommittee on Elections.
[Texts of H.R. 7612 and S. 372 follow :]
(1)
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93D CONGRESS
1ST SEssioN I-I R 76 1 2
IN TilE HOUSE OF REPRESENTATIVES
M~ 9,1973
Mr. ANDERSON of Illinois (for himself and Mr. UD~LL) introduced the following
bifl; which was referred to the Committee on House Administration
A BILL
To improve the conduct and regulation of Federal election cam-
paign activities and to provide public financing for such
campaigns.
1 Be it enacted by the Senate and house of Representa-
2 tives of the United States of America in Congress assembled,
3 That this Act may be cited as the "Clean~Elections Act of
4 1973".
5 TITLE I-FEDERAL ELECTIONS COMMISSION
6 SEC. 101. Except as otherwise expressly provided, when-
7 ever in this title a. reference is made (by way of amendment,
8 repeal, or otherwise) to a section, title, or other provision,
9 the reference shall be considered to be made to a section,
I-0
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2
1 title, or other provision of the Federal Election Campaign
2 Actofl97l.
3 SEC. 102. (a) Title III (relating to disclosure of Fed-
4 oral campaign funds) is amended by redesignating sections
5 308 through 311 as sections 312 through 315, respectively,
6 and by inserting after section 308, as so redesignated by see-
7 tion 105 of this Act, the following new sections:
8 "ESTABLISHMENT OF COMMISSION
9 "SEc. 309. (a) There is hereby established, as an in-
io dependent establishment of the executive branch of the Gov-
11 ernment of the United States, a commission to be known as
12 the Federal Elections Commission, which shall be composed
13 of six members, not more than three of whom shall be mem-
14 bers of the same political party, who shall be chosen from
15 among persons who, by reason of maturity, experience, and
16 public service have attained a nationwide reputation for
17 integrity, impartiality, arid good judgment, are qualified to
18 carry out the functions of the Commission. Two members of
19 the Commission shall be appointed by the Speaker of the
20 United States House of Representatives, two shall be ap-
21 pointed by the President pro tempore of the Senate, and two
22 shall be appointed by the President for terms of six years;
23 except that the two members first appointed by the President
24 shall be appointed for terms of two years, and the two mem-
25 bers first appointed by the President pro tempore of the
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3
1 Senate shall be appointed for terms of four years, beginning
2 from the date of enactment of this Act, but their successors
3 shall be appointed for terms of six years each. Any individual
4 chosen to fill a vacancy shall be appointed only for the un-
5 expired term of the member whom he shall succeed. The
6 President shall designate one member to serve as Chairman of
7 the Commission and one member to serve as Vice Chairman.
8 The Vice Chairman shall act as Chairman in the absence or
9 disability of the Chairman or in the event of m~ vacancy in that
10 office.
11 "(`b) A vacancy in the Commission shall not impair the
12 right of the remaining members to exercise all the powers of
13 the Commission and four members thereof shall constitute
14 a quorum.
15 "(c) The Commission shall have an official seal which
16 shall be judicially noticed.
17 "(ci) The Commission shall at the close of each fiscal
18 year report to the Congress and to the President concerning
19 the action it has taken; the names, salaries, and duties of all
20 individuals in its employ and the money it has disbursed; and
21 shall make such further reports on the matters within its
22 jurisdiction and such recommendations for further legislation
23 as may appear desirable.
24 "(e) Members of the Commission shall, while serving
25 on the business of the Commission, be entitled to receive
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4
1 compensation at a rate fixed by the Director of the Office of
2 Management and Budget but not in excess of $125 per day,
3 iucluding t~aveltime; and while so serving away from their
4 homes or regular places of business they niay be allowed
5 travel expenses, including per diem in lieu of subsistence, as
6 authorized by section 5703 of title 5, United States Code.
7 "(f) The principal office of the Commission shall be in
8 or near the District of Columbia, but it may meet or exercise
9 any or all of its powers at any other place.
10 "(g) All officers, agents, attorneys, and employees of
11 the Commission shall he ~uhj~~t to the provisions of section 9
12 of the Act of August 2, 1939, as amended (the Hatch Act),
13 notwithstanding any exemption contained in such section.
14 "(h) The Commission shall appoint an Executive Di-
15 rector without regard to the provisions of title 5, United
16 States Code, governing appointments in the competitive
17 service, to serve at the pleasure of the Commission. The
18 Executive Director shall be responsible for the administrative
19 operations of the Commission and shall perform such other
20 duties as may be delegated or assigned to him from time to
21 time by regulations or orders of the Commission. However,
22 the Commission shall not delegate to the Executive Director
23 the making of regulations regarding elections.
24 "(i) The Chairman of the Commission shall, in accord-
25 ance with the provisions of title 5, United States Code, ap-
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1 point and fix the compensation of such personnel as the Corn-
2 mission deems necessary to fulfill its duties.
3 "(j) The Commission may obtain the services of ex-
4 perts and consultants iii accordance with section 3109 of
5 title 5, United States Code.
6 "(k) In carrying out its responsibilities under this title,
7 the Commission shall, to the fullest extent practicable, avail
8 itself of the assistance, including personnel and facilities, of
9 the General Accounting Office. The Comptroller General is
10 authorized to make available to the Commission such per-
11 sonnel, facilities, and other assistance, with or without reim-
12 bursement, as the Commission may request.
13 "POWERS OF COMMISSION
14 "SEc. 310. (a) The Commission shall have the power-
15 "(1) to require, by special or general orders, any
16 person to submit in writing such reports and answers to
17 questions as the Commission may prescribe; amid such
18 submission shall be made within such reasonable period
19 and under oath or otherwise as the Commission may
20 determine;
21 "(2) to administer oaths;
22 "(3) to require by suhpena the attendance and
23 testimony of witnesses and time production of all docu-
24 mentary evidence relatii~g to the execution of its duties;
25 "(4) in any proceeding Qr investigation to ç~der
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1 testimony to be taken by deposition before any person
2 who is designated by the Commission and has the power
3 to administer oaths and, in such instances, to compel
4 testimony and the production of evidence in the same
5 manner as authorized under paragraph (3) of this
6 subsection;
7 "(5) to pay witnesses the same fees and mileage
8 as are paid in like circumstances in the courts of the
9 United States;
10 "(6) to accept gifts and voluntary and uncompen-
11 sated services, notwithstanding the provisions of section
12 3679 of the Revised Statutes (31 U.S.C. 665 (b));
13 "(7) to initiate, prosecute, defend, or appeal any
14 court action in the name of the Commission for the pur-
15 pose of enforcing the provisions of this title through its
16 own legal representative; and
17 "(8) to delegate any of its functions or powers,
18 other than the power to issue subpoenas under para-
19 graph (3), to any officer or employee of the Corn-
20 mission.
21 "(b) Any United States district court within the juris-
22 diction of which any inquiry is carried on, may, upon petition
23 by the Commission, in case of refusal to obey a subpena or
24 order of the Commission issued under subsection (a) of this
25 section, issue an order requiring compliance therewith; and
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1 aiiy failure to obey the order of the court may be punished
2 by the court as a contempt thereof.
3 " (c) No person shall be subject to civil hal)ihty to any
4 person (other than the Commission or the United States)
5 for disclosing information at the reque~t of the Commission.
6 " (d) (1) Whenever the Commission submits any budget
7 estimate or request to the President or the Office of
8 Management and Budget, it shall concurrently transmit a
9 copy of that estimate or request to the Congress.
10 "(2) Whenever the Commission submits any legislative
11 recommendations, or testimony, or comments on legislation
12 to the President or the Office of Management and Budget, it
13 shall concurrently transmit a copy thereof to the Congress.
14 No officer or agency of time United States shall have author-
15 ity to require the Coimnissiori to submit its legislative recom-
16 niendations, or testimony, or comments on legislation, to
17 any officer or agency of the United States for approval, corn-
18 ments, or review, prior to the submission of such reconi-
19 mendations, testimony, or comments to the Congress.
20 "CENTRAL CAMPAIGN COMMITTEES
21 "SEC. 311. (a) Each candidate shall designate one pout-
22 ical committee as his central campaign committee. The cen-
23 tral campaign committee shall receive all reports made by~
24 any oilier political committee accepting contributions or mak-
25 ing expenditures for the purpose of influencing the nomina-'
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8
1 tion for election, or election, of the caiididate who designated
2 it as his central campaign coiniiiittee. No political conniiit-
~ tee may be designated as the central campaign committee
~ of more than one candidate.
"(b) Notwithstanding any other provision of this title,
6 each statement or report that a political committee is re-
~ quired to file with or furnish to the Commission under this
8 title shall, if that political committee is not a central cam-
~ paign committee, be furnished instead to the central cam-
10 paign committee for the candidates on whose behalf that
~ political committee is, or is established for the purpose of,
12 accepting contributions or making expenditures.
13 "(c) Each political committee which is a central cam-
14 paign committee shall receive all reports and statements filed
15 with or furnished to it by other political committees, con-
16 soiidate, and furnish the reports and statements to the
17 Commission, together with its own reports and statements,
18 in accordance with the provisions of this title and regulations
19 nrescribed by the Commission."
20 (b) Section 5316 of title 5, U~iited States Code, is
21 `mended by adding at the end thereof the following new
22 paragraph:
23 "(132) Executive Director, Federal Electio~is
24 Qommission."
25 (c) Upon the appointment of all the members of the.
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:1 Commission, the Comptroller General, the Secretary of the
2 Senate, and the Clerk of the House of Representatives shall
3 meet with the Commission and arrange for time traiisfer,
4 within thirty days after the date on which all such members
5 are appointed, of all records, documents, memorandums,
6 find other papers associated with carrying out their respon-
7 sibilities under title III as it existed on the day before the
8 date of enactment of this Act.
9 (d) Title III is amended by-
10 (1) amending section 301 (g) (relating to defLui-
ii tions) to read as follows:
12 " (g) `Commission' means the Federal Elections Corn-
13 mission ;".
14 (2) striking out "supervisory officer" in section
15 302 (d) and inserting "Commission";
16 (3) amending section 302 (f) (relating to olga-
17 nization of political committees) by-
18 (A) striking out "appropriate supervisory
19 officer" in the quoted matter appearing in paragraph
20 (1) and inserting "Federal Elections Commission";
21 (B) striking out `supervisory officer" in
22 subparagraphs (A) and (B) of paragraph (2) and
23 inserting "Commission";
24 (C) striking out "which has filed a report w'ithi
25 him" in paragraph (2) (A) and inserting "which
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1 has filed, or for which a report has been filed by a
2 central campaign committee, with it";
3 (4) amending section 303 (relating to registration
4 of political committees; statements) by-
5 (A) *striking out "supervisory officer" each time
6 it appears therein and inserting "Commission";
7 (B) striking out "he" in the second sentence
8 of subsection (a) of such section and inserting "it";
9 and
10 (C) by adding at the end thereof the following
ii new subsection:
12 "(e) In the case of a political committee which is
13 not a central campaign committee, reports and notifications
14 required under this section to be filed with the Commission
15 shall instead be filed with the appropriate central campaign
16 committee, in accordance with regulations prescribed by the
17 Commission under ~eotion 311";
18 (5) ~amending section 305, as so redesignated by
19 section 105 of this Act (relating to reports by political
20 committees and candidates), by-
21 (A.) striking out "appropriate supervisory of-
22 fleer" and "him" in the first sentence thereof and
23 inserting "Commission" and "it" respectively;
24 (B) striking out "supervisory officer" where it
25 appears in the second sentence of subsection (a)
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1 and in paragraph (13) of subsection (b), and in-
2 serting "Commission"; and
3 (C) adding at the end of subsection (a) the
4 following new sentence: "Each treasurer of a politi-
5 cal committee other than a central campaign corn-
6 mittee shall file the reports required under this
7 section with the appropriate central campaign corn-
8 mittee, in accordance with regulations prescribed by
9 the Commission under section 311.";
10 (6) striking out "supervisory officer" each place
11 it appears in section 306, as so redesignated by section
12 105 of this Act (relating to reports by others than p0-
13 litical committees), and section 307, as so redesignated
14 by section of this Act (relating to formal requirements
15 respecting reports and statements), and inserting "Corn-
16 mission";
17 (7) striking out "Comptroller General of the United
18 States" and "him" in section 308, as so redesignated by
19 section 105 of this Act (relating to reports on conven-
20 tion financing) and inserting "Federal Elections Com-
21 mnission" and "it", respectively;
22 (8) striking out "SUPERVISORY OFFICER" in the
23 caption of section 312 (as redesignated by subsection
24 (a) of this section) (relating to duties of the super-
25 visory officer) and inserting "Co1~n\IISSION";
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12
1 (9) striking oi4t "supervisory officer" in section 312
2 (a.) (as redesignated by subsection (a) of this section)
* the first time it appears and inserting "Comniission";
4 (10) amending section 312 (a) (as redesignated by
s~hsecbion (a) of this section) hy-
* (A) striking out "him" in paragraph (1)
7 and inserting "it or a central campaign committee";
8 (B) striking out "him" in paragraph (4) and
9 inserting "it"; and
10 (C) striking out "he" each place it appears in
ii paragraphs (7) and (9) and inserting "it";
(iii) ame~iding subsection (c) of section 312 (as
13 redesignated by subsection (a) of this section) by-
(A) striking out "Comptroller General" each
15 place it appears therein and inserting "Commis-
sion", and striking "his" in the second sentence of
such subsection and inserting "its"; and
18 (B) striking out the last sentence thereof;
(12) amending subsection (d) (1) of section 312
20 (as redesignated by subsection (a) of this section) by-
21 (A) striking out "supervisory officer" each
22 place it appeal's therein and inserting "Commis-
23 sion";
24 (B) striking out "he" the fh'Ft place it appears
25-239 O-73-----2
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13
1 in the second sentence of such sectioh and inserting
2 "it";and
3 (C) striking out "The Attorney Oenenil on
4 half of the United states" and inserting "The Cmli-
5 mission or the Attorney General on behalf of the
6 United States"; and
7 (13) striking out "a superi'isory bifleer" in sectiOn
S 313 (a) (as red~signat~d by subs~ction (a) of this see-
9 tion) (relating to statements filed with State officers)
10 and iilserting "the Commission".
11 (e) The Campaign Communications Reform Act is
1 2 amended by striking out "Comptroller General" where it
13 appears in paragraphs (3) (C), (4) (B), and (5) of see-
14 tion 104 (a), and in section 105, arId inserting in lieu
15 thereof "Federal Elections Commission".
16 AMOUNTS. TO BE IIEPORTED
17 SEc. 103. (a.) Section 302 (i'elating th oigaiiizatiön
18 of political coiniiiittees) is amended by-
19 (1) striking out "hi excess of $100 in amount" hi
20 subsection (d) and inserting "of $100 or more"; arId
21 (2) inserting "equals or" before "exceeds" iii siiIi~
22 section (d).
2~ (b) Section 305, as so redesignated by section 105
24 of this Act (relating to reports by political committees afid
25 candidates), is amended by-
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1 (1) striking out "$5,000" in subsection (a) and
2 inserting "$2,500"; and
3 (2) striking out "in excess of $100" each place it
4 appears in subsection (b) and inserting "of $100 or
5 more".
6 (c) Section 306, as so redesignated by section 105 of
7 this Act (relating to reports by others than political corn-
8 mittees), is amended by striking out "in excess of $100" and
9 inserting "of $100 or more".
(d) Section 315 (a) (7) (as redesignated by section
~ 102 (a) of this Act) is amended by striking out "in excess
12 of $100" and inserting "$100 or more".
13 TIME OF REPORTING
14 SEO. 104. (a) Section 302 (f) (2) (relating to publica-
15 tion of annual reports) is amended by striking out "March
16 10" and inserting "April 10".
17 (b) Section 305, as so redesignated by section 105 of
18 this Act (relating to time of reports), is amended by-
19 (1) inserting "(1)" immediately after "SEO. 304.
20 (a)";
21 (2) amending the second sentence thereof to read
22 as follows:
23 "Such reports shall be filed on the tenth day of April, July,
24 and October in each year, ~ind on the tenth day next
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1 preceding the date on which an election is held, and also
2 by the thirty-first day of January.";
3 (3) striking "forty-eight hours" in the third sen-
4 tence thereof and inserting "twenty-four hours"; and
5 (4) adding at the end thereof the following new
6 paragraph:
7 "(2) Upon a request made by a presidential candidate
8 or a political committee which operates in more than one
9 State, or upon its own motion, the Commission may waive
10 the reporting dates (other than January 31) set forth in
11 the second sentence of paragraph (1), and require instead
12 that such a candidate or political committee file reports not
13 less frequently than monthly. The Commission may not re-
14 quire a presidential candidate or a political committee op-
15 erating in more than one State to file more than eleven re-
16 ports (not counting any report to be filed on January 31)
17 under the provisions of this paragraph during any calendar
18 year. If the Commission acts on its own motion under this
19 paragraph with respect to a candidate or a political corn-
20 mittee, that candidate or committee may obtain judicial
21 review in accordance with the provisions of chapter 7 of title
22 5, United States Code."
23 SEc. 105. Title III is amended by redesignating sec-
24 tions 304 through 307 as sections 305 through 308, respec-
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.1. tively, and by inserting after section 303 the following new
2 section:
* "CERpIFI0A~UION OF CO~1MITTEES
4 "SE0. 304. (a) The chairman of any political organiza-
~ tion or party ~ihich had candidates for Federal oflice on the
6 ballot in ten or more States in the next previous Federal
7 election may file a statement with the Commission, in such
8 form and manner and at such times as it may require, de-
9 signattng the Official National Party Committee of such
10 party or organization. Such statement shall include the
11 information required by seetion 303 of this Act together with
12 such additional information as the Commission may require.
13 "(b) The chairman of a committee organized by the
14 flouse or Senate members of any political party having more
th~in 20 per centilm of the membership of either the Senate
16 or rouse of 1~epreseiitatives of the United Stutes, as the
17 ease may be, may file a statement with the Coiminmission, iii
is such form and manner and at such times as the Comniissioii
19 may require, designating the `Official Senate Canipaign Corn-
20 mittee~ or `Official Congressional Campaigmi Conirnittee', as
21 appropriate, of such political party. Suth statement shall in-
22 dude the information required by section 303 of this Act to-
23 gether with such additional information as the Commission
24 may require.
25 "(c) Upon receipt of a statement filed under subsections
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17
1 (a) or (b) the Commission shall promptly verify such state-
2 ment, according to such procedures and criteria as it may
3 establish, and certify not more than one official national party
4 committee, official Senate campaign committee or official
5 House congi~essional campaign committee, respectively, for
6 any party meeting the requirements of this section.
7 "(d) Every candidate for Federal office shall file, a state-
8 ment with the Commission, in such manner and form and
9 at such times as the Commission may prescribe, authorizing
10 any political committee organized primarily to support tIi~
11 candidacy of such candidate to either directly or indirectIy~
12 receive contributions, or make expenditures in behalf of, such
13 -~ candidate. No committee organized primarily to support a
14 single candidate for Federal office may, either directly or in-j
15 directly, receive contributions or make expenditures in be-
16 half of, such candidate without the written authorization of
17 such candidate as required by this subsection."
18 REPORTING OF COMPOSED CAMPAIGN DEBTS
19 SEc. 106. Section 305 (b) (12), as so redesignated by
20 section 105 of this Act (relating to reports by political
21 committees and candidates), is amended to read as follows
22 "(12)' the amount and nature of debts and obliga-
23 tions owed by or to the committee, in such form as the
24 Commission may prescribe, including (notwithstanding
25 the provisions of subsection (a) with respect to filing
PAGENO="0023"
19
18
1 dates) continuous reporting of such debts after the dcc-
2 *tion at such intervals as the Commission may require
3 until such debts are extinguished, together with a state-
4 ment as to the consideration for which any such debt is
5 extinguished or a statement as to the circumstances and
6 conditions under which any such debt is canceled;".
7 REPORTS BY CERTAIN MEMBERSHIP ORGANIZATIONS
8 SEC. 107. Section 305 (b), asso redesignated by section
9 105 of this Act (relating to reports by political committees
10 and candidates) is amended by redesignating paragraph
11 (13) as (14) and by inserting after paragraph (12) the
12 following new paragraph:
13 "(13) in the case of an organization whose princi-
14 pal activity is an activity other than attempting to inhlu-
15 ence the nomination for election, or election, of a candi-
16 date, the name and address (occupation and principal
17 place of business, if any) of each member or partner, if
18 the organization is a membership organization or a part-
19 nership, or of each director and officer, if the organiza-
20 tion is a corporation; and".
21 AUTHORIZATION OF APPROPRIATIONS
22 SEC. 108. Title III (relating to disclosure of Federal
23 campaign funds) is amended by adding at the end thereof
24 the following new section:
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20
19
1 "AUTHORIZATION OF APPROPRIATIONS
2 "SEC. 316. There are authorized to be appropriated to
3 the Commission such sums as may be necessary forit to carry
4 out its duties under this title."
5 DEFINITION OF MEDIA -
6 SEC. 109. Section 102 (1) of title I of 1the, Federal
7 Election Campaign Act of 1971 is amended by inserting
8 "direct mail" between the word "telephones" and the colon.
9 TECHNICAL AMENDMENT
10 SEC. 110. Section 301 of title III of the Federal Elec-
11 tion Campaign Act of 1971 is amended by striking out the
12 first line and inserting in lieu thereof the following:
13 "SEC. 301. When used in titles III and IV of this
14 Act-".
15 TITLE IT-FEDERAL MATCHING PAYMENT
16 ENTITLEMENT FLTND
17 SEC. 201. The Federal Election Campaign Act of 1971
18 is amended by redesignating title IV as title V; by redesig-
19 nating sections 401 through 406 as sections 501 through 506,
20 respectively; by striking out "section 401" where it appears
21 in section 506 (as is redesignated by this section) and in-
22 serting in lieu thereof "section 501"; and by inserting after
23 title III the following new title:
PAGENO="0025"
21
20
1 "TITLE IV-FEDERAL MATCHING PAYMENT
2 ENTITLEMENT FUND
3 CREATION OF FUND
4 "SEC. 401. (a) There is hereby established on the books
5 of the Treasury of the United States a special fund to be
6 known as the `Federal Matching Payment Entitlement Fund'
7 (hereinafter in this title referred to as the `ftmd'). The fund
8 shall remain available for expenditure without fiscal year limi-
9 tation and shall consist of such amounts as may be appro-
10 priated into it as provided in subsection (c).
11 "(b) The Secretary of the Treasury shall be the trustee
12 of the fund and shall report to the Congress not later than
13 March 1 of each year on the operation and status of the
14 fund during the preceding year.
15 "(c) `There shall be appropriated into the fund from
16 the Treasury of the United States such sums as may be neces-
17 sary to carry out the provisions of this Act.
18 ENTITLEMENTS
19 "SEc. 402. (a) Any candidate for the United States
20 House of Representatives or Senate or his central campaign
21 committee, a ca.ndidate for nomination for President or
22 Vice President, or an official national party committee, or
23 an official congressional or Senate campaign committee is
24 entitled, upon certification by the Commission, for pay-
25 ments from the fund, during any~ calander year, in an amount
PAGENO="0026"
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21
I equal to the amount of each contribution received by such
2 candidate or coiriinittce not in excess of $50.
3 "(b) To be eligible for the entitleiiient established by
4 subsection (a) , such candidate or committee shall submit
5 to the Commission, at such times and in such form and
mariner as the Commissioii may require, a matching pay-
7 nient entitlement voucher. Such voucher shall include the
8 full name of any person making a contribution together
9 with the. date, the exact amount of the contribution, the
10 complete address of the contributor and such other informa-
11 tion as the Commission may require.
"(c) Within three days of the receipt of such voucher
U the Commission shall-
1 4 "(1) imiake a determination, according to such pro-
15 cedures as it may establish, as to whether each contri-
16 bution enumerated on such voucher is consistent with
17 the provisions of sections 402 (a) and 40~ of this title;
18 and
19 "(2) certify for payment by the Secretary to such
20 candidate or committee an amount equal to the siuri of
21 the contributions enumerated on such voucher which
22 meet the requirements of subsection (c) (1).
23 "(d) Promptly upon certification, the Secretary shall
24 make a payment from time fund to such candidate or the
PAGENO="0027"
23
22
1 treasurer of such committee in the amount certified by the
2 Commission.
3 "(e) For the purposes of this section, the central com-
4 mittee of any candidate for the United States House of
5 Representatives or Senate or for nomination for President
6 or Vice President may submit an entitlement voucher pur-
7 suant to section 402 (b) in behalf of any authorized com-
8 mittee of such candidate, listing contributions received by
9 such committee eligible for payment under this title.
10 LIMITATIONS
11 "S~o. 403. (a) The Commission shall not certify pur-
12 suant to section 402 (c) (2) any contribution, or fraction
13 thereof, made by any person to a candidate or committee
14 entitled to payments under this title if-
15 "(1) the amount of such contribution, or fraction
16 the ,eof, in combination with any other contribution
17 mane by such person to such candidate or committee
18 in the same calendar year, is in excess of $50; or
19 "(2) payment from the fund of an amount equal to
20 the amount of such contribution, or fraction thereof, in
21 combination with any other payment from the fund to
22 such candidate or committee during the same calendar
23 year, is in excess of-
24 "(A) 10 cents multiplied by the number of
25 eligible voters, in the case of a candidate for the
PAGENO="0028"
24
23
1 United States Senate or House of Representatives
2 or a candidate for nomination for President or Vice
3 President;
4 "(B) $15,000,000 in the case of an official
5 national party committee together with its affiliated
6 congressional or Senate campaign committees; or
7 "(3) the candidate or committee to which such
8 contribution was made is subject to an action initiated
9 by the Commission pursuant to section 310 (a) (7) of
10 this Act.
11 "(b) The Secretary shall make no payment to a candi-
12 date or committee entitled to payments from the fund until
13 the Commission has certified contributions submitted by such
14 candidate or committee, pursuant to section 402 (b), in an
15 aggregate amount of-
16 "(1) $1,000 in the case of a candidate for the
17 United States House of Representatives;
18 "(2) $5,000 in the case of a candidate for the
19 United States Senate; and
20 "(3) $15,000 in the case of a candidate for nomi-
21 nation for President or Vice. President, or of an official
22 national party committee together with its affiliated
23 Senate and congressional campaign committees.
24 "(c) No candidate or the central committee of a candi-
25 date shall be eligible for the entitlement established by sec-
PAGENO="0029"
25 /
24
1 tion 402 (a) during any year in which tile candidate is not
2 a candidate for Federal elective office.
3 " (d) No contribution made by an official iiational coin-
4 mittee or an official congressional or Senate cainpaigil Coin-
5 inittee to a candidate or the central campaign committee of
6 a candidate shall be certified by tire Comrnissioii pursuant
7 to section 402 (c) (2).
8 "(e) The Commission shall make such rules and estab-
9 lish such procedures as may be necessary to carry out the
10 purposes of this title: Provided, That all such rules or proce-
11 dares are published in the Federal Register miot less thaii
12 thirty days prior to their effective date and are available to
13 the general public.
14 "(f) For the purposes of sectioii 403 (a) (2), the iium-
15 `ber of `eligible voters' in any State or congressional district
16 shall be the number certified to the Commission by the See-
17 retary of Commerce pursuant to section 104 (a) (5), as
18 amended by this Act."
19 TITLE Ill-LIMITATIONS ON POLITICAL
20 CONTRIBUTIONS
21 SEC. 301. Section 608 of title 18 of the United States
22 Code is amended by redesignating subsection (~) as subsec-
23 tion (f) and inserting in lieu thereof the following:
24 "~ 608. Limitation on contributions and expenditures
25 "(c) It is unlawful for any person, other than a candi-
PAGENO="0030"
26
1 date, an official national party committee, or any official
2 congressional or Senate campaign coimuittee to make, di-
3 rectly or indirectly, contributions to or expenditures on be-
4 half of, any candidate and the authorized committees of
5 such candidate, duriag any calendar year, in total aggregate
6 amount in excess of-
7 "(1) $2,500 in the case of a candidacy for Presi-
8 dent or Vice President of the United States; or
9 "(2) $1,000 In the case ef a candidacy for the
10 Ui~ited States Senate or Blouse of Representatives.
ii "(d) It is unlawful, except as otherwise provided in sub-
12 section (c) above, for any person to make, directly or in-
13 directly, contributions to, or expenditures in behalf of, any
14 political committee, in any calendar year iii excess of the
15 aggregate amount of $2,500.
16 "(e) For the purposes of subsection (a) of this section
17 the terms `official national party committee', `official con-
18 gressional campaign committee', `official Senate campaign
19 committee', and 4ai~thorized committee' of a candidate means
a committee certified by the Federal Elections Commission
21 under section 304 o~ the li~'ederal Election Campaign Act of
22 1071, as amended.
23 "(f) For the purposes of determining compliance with
24 tue requirements of subsection 403 (a) (1), the Commission
25 shall consider the sum of all contributions made by any per-
PAGENO="0031"
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26
1 son, during any calendar year, to a candidate and any of his
2 authorized committees.
3 TITLE TV-TAX INCENTIVES FOR CONTRIBU-
4 TIONS TO CANDIDATES FOR PUBLIC OFFICE
5 SEc. 401. Section 41 (b) (1) of subpart A of part IV
6 of subchapter A of chapter 1 of the Internal Revenue Code
7 of 1954 is amended to read as follows:
8 "(1) MAXIMUM CREDIT.-The credit allowed by
9 subsection (a) for a taxable year shall be limited to
10 $50 ($100 in the case of a joint return under section
11 6013)".
12 TITLE V-VOTER'S TIME
13 SEC. 501. The Federal Election Campaign Act of 1971
14 is amended by inserting after title V the following new title:
15 "TITLE VT-VOTER'S TIME
16 "POLITICAl1 BROADCASTS
17 "SEC. 601. It shall be the obligation of each television
18 station licensed under the Communications Act of 1934, and,
19 in instances explicitly specified, each television network, to
20 make available for the purpose of political broadcasts by can-
21 didates for President and Vice President of the United
22 States, or Senator or Representative jn, or Resident Com-
23 missioner to, the Congress of the United States, the use of
24 its facilities at the rates and times and in the amounts speci-
PAGENO="0032"
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27
1 fled in or under this title. Such air time for political broad-
2 casts shall be hereafter referred to as `Voter's Time.'
3 "ELIGIBILITY FOR VOTER'S TIMJ~
4 "SE0. (302. Voter's Time shall be available during gel-
5 eral election campaigns, as hereinafter provided, to candi-
6 dates of major parties, third parties, and minor parties
7 determined as follows:
8 "(1) In the case of political parties oflering candi-
9 dates for President and Vice President-
10 "(A) a major party shall be any party whose
ii candidate placed first or second in popular votes in
12 either of the last two previous elections;
113 "(B) a third party shall be any party whose
14 candidates received more than 15 per centum of
15 the popular vote in the last previous election; and
16 "(0) a minor party shall be any other party
17 whose candidates appear on the ballot in more than
18 thirty States in the current election.
19 "(2) In the case of political parties offering candi-
20 dates for the Senate and the House of Representatives-
21 "(A) a major party shall be any party whose
22 candidate for the Senate placed first or second in
23 popular votes in either of the last two previous dcc-
24 tions in the State;
25 "(B) a third party shall be any party whose
PAGENO="0033"
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~28
1 candidate for the Senate received more than 15 per
2 centum of the popular vote in the last pre\71ouS dee-
3 tioji in the State; and
4 " (C) a minor party shall be any party-
5 "(i) whose candidate for the Senate ic-
ceived more than 5 ~ centum of the vote in
7 the last previous ele~ti.on in the State; or
8 "(ii) which has filed, at least twenty days
9 prior to the thirty-fifth day preceding the l\Ion-
10 day before election day, a `Voter's Time Peti-
ii tjon' with the Federal Elections Commission
12 containing a nunTher of signatures of registered
13 voters equal to `5 per centum of the total number
14 of votes cast for the office of the United States
i5 Senator in the lest preceding election, including
16 the number of signatures from each congres-
17 sional district in the State equal to 2 per centum
18 of the votes cast for the office of United States
19 Senator in such districts in the last previous
20 election: Provided, That the Commission finds
21 that the signatures are valid and has (ertified
22 the party with the Federal Communications
23 Commission as eligible for the benefits of this
24 title.
25-239 O-73-----3
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29
1 "ALLOTMENTS AND USES OF VOTER'S TIME
2 "SEc. 603. (a) Beginning thirty-five days preceding
3 the Monday before a general election, television stations
4 shall make available Voter's Time to candidates as follows:
5 "(1) In the case of candidates for Vice President
6 or President of the United States-
7 "(A) each ticket of a major party shall receive
8 five one-half-hour blocks of air time: Provided, That
9 no more than one such block is used in any five-day
10 ` period;
11 "(B) each ticket of a third party shall receive
12 two one-half-hour blocks of air time: Provided, That
13 not more than one such block is used in any five-
14 dayperiod; and
15 "(0) each ticket of a minor party shall receive
16 one one-half-hour block of air time..
17 - "(2) Ii~ the case of eandidates for the United States
18 Senate-
19 "(A) each candidate of a major party shall
20 receive three one-half-hour blocks of air time: Pro-
21 vided, That no more than one such block is used
22 in any five-day period;
23 "(B) each candidate of a third party shall
24 receive one one-half-hour block of air time; and
PAGENO="0035"
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30
1 "(0) each candidate of a minor party shall re-
2 ceive one fifteen-minute block of air time.
3 "(3) In the case of candidates for the United
4 States House of iRepresentatives-
5 "(A) each candidate of a major party shall
6 receive two one-half-hour blocks of air time: Pro-
7 vided, That not more than one such block is used
8 in any ten-day period;
9 "(B) each candidate of a third party or of a
10 minor party shall receive one fifteeen-minute block
11 of air time:
12 "(b) All blocks of air time required by this section shall
13 be made available during prime time.
14 "(c) Voter's Time for broadcasts by candidates for
15 President and Vice President of the United States shall be
16 carried simultaneously by all networks and stations coy-
17 ered by this title.
18 "(d) Voter's Time for broadcasts by any candidate for
19 the United States Senate shall be carried-
20 "(1) simultaneously by all television stations within
21 the State involved; and
22 "(2) in the event that part or all of the State is
23 not within the broadcast range of a station located within
24 that State, by any station located within bordering
25 States, the broadcast range of which substantially covers
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31
1 the part or the whole of the State not serviced by any
2 station, that the Federal Communications Commission
3 may designate.
4 "(e) In the event that a station is designated by the
5 Federal Communications Commission for Voter's Time re-
6 sponsibilities in accordance with the provision of subsection
7 (d) (2), that station shall be exempted from Voter's Time
8 responsibility prescribed in subsection (d) (1) in an equal
9 amount.
10 "(f) It shall be the duty of the Federal Communications
11 Commission to assign responsibilities among television sta-
12 tions for the transmission of Voter's Time broadcasts by
13 House candidates as follows:
14 "(1) in districts in which one television station is
15 located that substantially serves such district, such sta-
16 tion shall be assigned responsibility to carry the Voter's
17 Time broadcasts of candidates from that district;
18 "(2) in districts in which two or more stations are
19 located ~that substantially serve such district, such sta-
20 tions shall be assigned responsibility to carry simultane-
21 ously the Voter's Time broadcasts by candidates from
22 that district: Provided, That any such station or sta-
23 tions do not substantially serve a part or whole of an
24 adjoining district otherwise not substantially served by
25 another station;
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32
1 " (3) iii districts in which no television station is
2 located-
3 "(A) a station from an adjoining district shall
4 be assigned to carry the Voter's Time broadcasts of
5 House candidates from such districts with prefer-
6 ence going to a station located in an adjoining dis-
7 trict already served by one or more other stations:
8 Provided, That any such station reassigned from an
9 adjoining district be given exemption from carrying
10 Voter's Time broadcasts of candidates from the dis-
11 trict in which it is located as prescribed in subsection
12 (f) (2) if that district is substantially served by
13 another station; or
14 "(B) in large metropolitan areas in which two
15 or inoi'e stations serve a broadcast market containing
16 a large number of House districts, the Federal Corn-
17 nmnications Commission may pool such districts
18 and divide responsibilities for the Voter's Time
19 broadcasts by House candidates from these dis-
20 triets evenly among the stations serving such
21 markets: Provided, That all such pooled broad--
22 casts shall be aired simultaneously by the participat-
23 ing stations: Provided further, That no two candi-
24 dates from the same district shall be scheduled in
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38
1 the same time period during any simultaneous
2 broadcast autho~ized by this subsection.
3 "(g) The Federal C~mmutheations Commission shall be
4 charged with supervising ~nd making final determinations of
5 Voter's Time responsibilities preseribed for television sta-
6 tions under this section.
7 "(h) As a condition of eligibility for Voter's Time, a
8 candidate's presentation sMil include-
9 "(1) substantial live appearance by the candidate;
10 and
ii "(2) formats intended to promote rational political
12 discussion, to illuminate campaign issues, and to give
13 the audience insights into the abilities and personal qual-
14 ities of the candidates.
15 "FINANCING OF VOTER'S TIME
16 "SEc. 604. (a) The charges made for Voter's Time by
17 television broadcasting stations to any candidate legally en-
18 titled to such time shall not exceed the prevailing unit
19 charge of the station for the same amOtll1t of program time
20 in the same time period.
21 "(b) Any candidate making use of any or all of the
22 Voter's Time for which he is legally qualified shall file with
23 the Commission a bill specifying the dates and amount of
24 Voter's Time used, the station or stations from which it was
PAGENO="0039"
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34
I purchased, and the rate charged, in a manner and time deter-
2 mined by time Registrar. Upon receipt of the bill, the Coin-
3 mission shall verify the statement, by means of such pro-
4 cedures it may establish, and if the bill is found to be valid
5 and legal, shall certify it to the Secretary of the Treasury.
6 "(c) The Secretary of the Treasury is hereby author-
7 ized to pay in full amount, to candidates submitting them, all
8 such duly certified bills for Voter's Time not more than ten
9 days following receipt from the Registry of Election Finance.
10 "EXEMPTION FROM SEOTION 315 FOR VOTER'S TIME
11 "SEc. 605. The provisions of section 315 of the Corn-
12 munications Act of 1934 (47 U.S.C. 315) shall not apply
13 in the case of the use of facilities for Voter's Time as pro-
14 videcl in this title."
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36
93D CONGRESS -
1ST SEssIo~ 37'
IN THE HOUSE OF REPRESENTATIVES
AUGUST 2, 1973
Referred to the Committee on House Administration
AN ACT
To amend the Communications Act of 1934 to relieve broad-
casters of the equal time requirement of section 315 with
respect to candidates for Federal office, to repeal the Cam-
paign Communications Reform Act, to amend the Federal
Election Campaign Act of 1971, and for other purposes.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 That this Act may be cited as the "Federal Election Cam-
4 paign Act Amendments of 1973".
5 SrxJ. 2. (a) (1) Section 315 (a) of the Communications
6 Act of 1934 (47 U.S.C. 315 (a)) is amended by inserting
7 after "public office" in the first sentence thereof the follow-
8 lug: ", other than Federal elective office (including the office
9 of Vice President)
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2
(2) Section 315 (a) of such Act (47 U.S.C. 315 (a))
2 is further amended by-
(A) inserting "(1)" immediately after "(a) ";
4 and
(B) adding at the end thereof the following new
6 paragraphs:
7 "(2) The obligation imposed by the first sentence of
8 paragraph (1) upon a licensee with respect to legally quali-
~ fled candidates for Federal elective office (other than the
10 offices of President and Vice President) shall have been met
ii by such licensee with respect to such candidates if-
12 "(A) the licensee makes available to such candi-
13 dates not less than fifteen minutes of broadcast time
14 without charge during the period beginning ten days
15 after the last date, under applicable State law, on which
16 such candidates may file with the appropriate State
17 officer as candidates, and ending on the day before the
18 date of the election,
19 "(B) the licensee notifies such candidates during
20 the period beginning on the day after the filing date and
21 ending ten days thereafter, and
22 "(0) such broadcast will cover, in whole or in part,
23 the geographical area in which such election is held.
24 "(3) No candidate shall be entitled to the use of broad-
25 cast facilities pursuant to an offer made by a licensee under
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3
1. paragraph (2) unless such candidate notifies the licensee
2 in writing of his acceptance of the offer within ten days
3 after receipt of the offer.".
4 (b) Section 315 (b) of such Act (47 U.S.C. 315 (b))
5 is amended by striking out "by any person" and inserting
6 "by or on behalf of any person".
7 (c) (1) Section 315 (c) of such Act (47 U.S.C. 315
8 (c)) is amended to read as follows:
9 "(c) No station licensee may make any charge for the
10 use of any such station by or on behalf of any legally quail-
ii fled candidate for nomination for election, or for election,
12 to Federal elective office unless such candidate (or a person
13 specifically authorized by such candidate in writing to do
14 *so) certifies to such licensee in writing that the payment of
15 such charge will not exceed the limit on expenditures
16 applicable to that candidate under section 614 of title 18,
17 United States Code.".
18 (2) Section 315 (d) of such Act (47 U.S.C. 315 (d)) is
19 amended to read as follows:
20 "(d) If a State by law imposes a limitation upon
21 the amount which a legally qualified candidate for nomina-
22 tion for election, or for election, to public office (other than
23 Federal elective office) within that State may spend in
24 connection with his campaign for such nomination or his
25 campaign for ~lection, then no station licensee may make
PAGENO="0043"
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4
1 any charge for the use of such station by or on behalf of
2 such candidate unless such candidate (or a person spe-
3 cifically authorized in writing by him to do so) certifies to
4 such licensee in writing that the payment of such charge
5 will not violate that limitation.".
6 (d) Section 317 of such Act (47 U.S.C. 317), is
7 amended by.-
8 (1) striking out in paragraph (1) of subsection
(a) "person: Provided, That" and inserting in lieu
10 thereof the following: "person. If such matter is a
political advertisement soliciting funds for a candidate
12 or a political committee, there shall be announced at
13 the time of such broadcast a statement that a copy
14 of reports ified by that person with the Federal Elec-
15 tion Commission is available from the Federal Election
16 Commission, Washington, D.C., and the licensee shall
17 not make any charge for any part of the costs of mak-
18 ing the announcement. The term"; and
19 (2) by redesignating subsection (e) as (f),
20 and by inserting after subsection (d) the following new
21 subsection:
22 "(e) Each station licensee shall maintain a record of
23 any political advertisement broadcast, together with the
~ identification of the person who caused it to be broadcast,
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40
5
1 for a period of two years. The record shall `be available for
2 public inspection at reasonable hours.".
3 S~o, 3. The Campaign Communications Reform Act is
4 repealed.
5 SEc. 4. (a) Section 301 of the Federal Election Cam-
6 paign Act of 1971 (relating to definitions) is amended by-
7 (1) striking out ", and (5) the election of delegates
8 to a constitutional convention for proposing amend-
9 ments to the Constitution of the Tinited States" in
10 paragraph (`a), and by inserting `~and" before "(4)" in
11 such paragraph;
12 (2) striking out paragraph (d) and inserting in
13 lieu thereof the following:
14 ` "(d) `political committee' means-
15 "(1) any committee, club, association, or other
16 group of persons which receives contributions or
17 makes expenditures during a calendar yea.r in an
18 aggregate amount exceeding $1,000;
19 "(2) any national committee, association, or
20 organization of a political party, any State affiliate
21 or subsidiary of a national political party, and
22 any' State central committee of a political party;
23 and
24 "(3) any committee, association, or organiza-
PAGENO="0045"
41
6
1 tion engaged in the administration of a separate
2 segregated fund described in section 610 of title 18,
3 united States Code;";
4 (3) inserting in paragraph (e) (1) after "subscrip-
5 tion" the following: "(including any assessment, fee,
6 or membership dues)";
7 (4) striking out in paragraph (e) (1) "or for the
8 purpose of influencing the election of delegates to a
9 constitutional convention for proposing amendments
10 to the Constitution of the United States" and insert-
11 ing in lieu thereof the following: "or for the purpose
12 of financing any operations of a political committee,
13 or for the purpose of paying, at any time, any debt
14 or obligation incurred by a candidate or a political
is committee h~ ~onn~ction with any campaign for nomi-
16 nation for election, or for election, to Federal office";
17 (5) striking out subparagraphs (2) and (3) of
18 paragraph (e), and redesignating subparagraphs (4)
19 and (5) as (2) and (3), respectively;
20 (6) striking out paragraph (f) and inserting in
21 lieu thereof the following:
22 "(f) `expenditure' means-
23 " (1) a purchase, payment, distribution, loan,
24 advance, deposit, or gift of money or anything of
25 value, made for the purpose, of-
PAGENO="0046"
42
7
1 "(A) influencing the nomination for elec-
2 tion, or the election, of any person to Federal
3 office, or to the oflice of presidential and vice-
4 presidential elector;
5 "(B) influencing the result of a primary
6 election held for the selection of delegates to a
7 national nominating convention of a political
8 party or for the expression of a. preference for
9 the nomination of persons for election to the
10 office of President;
11 "(C) financing any operations of a political
12 committee; or
13 "(D) paying, at any time, any debt or
14 obligation incurred by a candidate or a political
15 committee in coni~ ith any campaign Mr
16 nomination for election, or for election, to Fed-
17 eral office; but
18 "(2) shall not mean or include those who vol-
19 unteer to work without conipensation on behalf of a
20 candidate;";
21 (7) striking "and" at the end of paragraph (h)
22 (8) striking the period at the end of paragraph
23 (i) and inserting in lieu thereof a semicolon; and
24 (9) adding at the end thereof the following new
25 paragraphs: .
PAGENO="0047"
43
8
1 "(j) "identification' means-
2 "(1) in the case of an individual, his full name
3 and the full address of his principal place of
4 residence; and
5 "(2) in the case of any other person, the full
6 name and address of that person;
7 "(k) `national committee' means the duly consti-
8 tuted organization which, by virtue of the bylaws of a
9 political party, is responsible for the day-to-day opera-
10 tion of that political party at the national level, as
11 determined by the Commission; and
12 "(1) `political party' means a political party which,
13 in the next preceding presidential election, nominated
14 candidates for election to the offices of President and
15 Vice President, ar~d the electors of which party re-
16 ceived in such election, in any or all of the States, an
17 aggregate number of votes equal in number to at least
18 10 per centum of the total number of votes cast through-
19 out the United States for. all electors for candidates for
20 President and Vice President in such election.".
21 (b) (1) Section 302(b) of such Act (relating to reports
22 of contributions in excess of $10) is amended by striking ",
23 the name and address (occupation and principal place of.
24 business, if any)" and inserting "of the contribution and
25 the identification".
PAGENO="0048"
44
9
1 (2) Section 302 (c) of such Act (relating to detailed
2 accounts) is amended by striking "full iiame and mailing
3 address (occupation and the principal p1a~e of business,
4 if any)" in paragraphs (2) and (4) and inserting in each
5 such paragraph "identification".
6 (3) Section 302 (c) of such Act is further amended l)y
7 striking the semicolon at the end of paragraph (2) and in-
8 serting "and, if a person's contributions aggregate more than
9 $100, the account shall include occupation, and the principal
10 place of business (if any) ;".
11 SEC. 5. (a) Section 303 of the Federal Election Cam-
12 paign Act of 1971 (relating to registration of political com-
1 ~ rnittees; statements) is amended by redesignating subsec-
14 tions (a) through (d) as (b) through (e), respectively,
15 and by inserting after "SEc. 303." the following new sub-
16 section (a)
17 "(a) Each candidate shall, within ten days after the
18 date on which he has qualified under State law as a candi-
19 date, or on which he, or any person authorized by him
20 to do so, has received a contribution or made an expendi-
21 ture in connection with his campaign or for the purpose
22 of preparing to undertake his campaign, file with the
23 Commission a registration statement in such form as
24 ihe CommissIon may Prescribe. The statement shall include-
25 "(1) the identification of the candidate, and any
PAGENO="0049"
45
10
1 individual, political committee, or other person he has
2 authorized to receive contributions or make expenditures
3 on his behalf in cormection with his campaign;
4 "(2) the identification of his campaign depositories,
5 together with the title and number of each account at
6 each such depository which is to be used in connection
7 with his campaign, any *safety deposit box to be used
8 in connection therewith, and the identification of each
9 individual authorized by him to make any expenditure or
10 withdrawal from such account or box; and
11 "(3) such additional relevant information as the
12 Commission may require.".
13 (b) The first sentence of subsection (b) of such section
14 (as redesignated by subsection (a) of this section) is
15 amended to read as follows: "The treasurer of each politi-
16 cal committee shall file with the Commission a statement
17 of organization within ten days after the date on which
18 the committee is organized.".
19 (c) The second sentence of such subsection (b) is
20 amended by striking oat "this Act" and inserting in lieu
21 thereof the following: "the Federal Election Campaign
22 Act Amendments of 1973".
23 (d) Subsection (c) of such section (as redesignated
24 by Sul)SectiOn (a) of this section) is amended by-
(1) inserting "be in such form as the Commission
25-239 O-73----4
PAGENO="0050"
46
11
1 shall prescribe, and shall" after "The statement of
2 organization shall";
3 (2) striking out paragraph (3) and inserting in
4 lieu thereof the following:
5 " (3) the geographic area or political jurisdiction
6 within which the conimittee will operate, aiid a general
7 descripticii of the committee's authority and activi-
8 ties;"; and
9 (3) striking out paragraph (9) and inserting in
10 lieu thereof the following:
11 "(9) the name and address of the campaign deposi-
12 tories used by that committee, together with the title
13 and number of each account and safety deposit box
14 used by that committee a.t each depository, and the
15 identification of each individual authorized to make
16 withdrawals or payments out of such account or box ;".
17 (e) The caption of such section 303 is amended by in-
18 serting "CANDIDATES AND" after "REGISTRATION OF".
19 SEC. 6. (a) Section 304 of the Federal Election Cam-
20 paign Act of 1971 (relating to reports by political com-
21 mittees and candidates) is amended by-
22 (1) inserting " (1)" after "(a)"in subsection (a)
23 (2) striking out "for election" each place it ap-
24 pears in the first sentence of subsection (a) and in-
PAGENO="0051"
47
12
1 serting in lieu thereof in each such place "for nonilna-
2 tion for election, or for election,";
3 (3) striking out the second sentence of subsection
4 (a) and inserting in lieu thereof the following: "Such
5 reports shall be filed on the tenth day of April, July,
6 and October of each year, on the tenth day preceding
7 an election, and on the last day of January following an
8 election. Notwithstanding the preceding sentence, the
9 reports required by that sentence to be filed during April,
10 July, and October by or relating to a candidate during
a year in which no Federal election is held in which lie
12 is a candidate, may be filed on the twentieth day of each
13 month.";
14 (4) striking out everything after "filing" in the
15 third sentence of subsection (a) and inserting in lieu
16 thereof a period and the following: "Any contribution
17 of $3,000 or more which is received after the closing
18 date of the last report required to be filed prior to any
19 election shall be reported within twenty-four hours after
20 its receipt. If the person making any anonymous con-
21 tribution is subsequently identified, the identification of
22 the contributor shall be reported to the Commission
23 within the reporting period within which it is ideniti-
24- fled.": ari(I
PAGENO="0052"
48
-1")
10
1 (5) adding at the end of subsection (a) the follow-
2 ing iiew paragraph:
3 "(2) Upon a request made by a Presidential candidate
4 or a political committee which operates in more than one
5 State, or upon its own motion, the Commission may waive
6 the reporting dates (other than January 31) set forth in
7 paragraph (1) and require instead that such candidates 01.
8 political committees file reports not less frequently than
9 monthly. Tile Commission may not require a Presidential
10 candidate 01. a political committee operating in more than
11 one State to file more than eleven reports (not counting any
12 report to be flied on January 31 and special reports of coii-
13 tributions of $3,000 or more as required in paragiapli (1)
14 above) during any calendar year. If the Commission acts
15 on its own motion under this paragraph with respect to,: a
16 candidate or a political committee, that candidate or commit-
17 tee niay obtain judicial review in accordance with the plo-
118 visions of chapter 7 of title 5, United States Code.".
19 (b) (1) Section 304 (h) of such Act (relating to reports
20 by political committees aiid camididates) is amended by
21 striking "full iiame aiid mailing address (occupation and
22 the principal place of business, if any) " in paragraphs (9)
23 and (10) and inserting in lieu thereof in each such para-
24 graph: "identification".
PAGENO="0053"
49
14
1 (2) Subsection (b) (5) of such section 304 is amended
2 by striking out "lender and endorsers" and inserting in lieu
3 thereof "lender, endorsers, and guarantors".
4 (c) Subsection (b) (12) of such section is amended by
~ inserting before the semicolon the following: ", together
`3 with a statement as* to the circumstances and conditiomis
7 under which any such debt or obligation is extinguished
~ and the consideration therefor".
9 (d) Subsection (b) of such section is amended by-
10 (1) striking the "and" at the end of paragraph
ii (12) ; and
12 (2) redesignating paragraph (13) as (14), and by
13 inserting after paragraph (12) the following new
14 paragraph:
15 " (13) such information as the Commission may ic-
16 qmre for the disclosure of the nature, amount, source,
17 and designated recipient of any earmarked, cncum-
18 bered, or restricted contribution or other special fund
19 and".
20 (e) The first sentence of subsection (c) of such section
21 is amended to read as follows: "The reports required to he
22 filed by subsection (a) shall be cumulative during the eaTen-
23 dar year to which they relate, and during such additional
24 periods of time as the Commission may requireS".
PAGENO="0054"
50
15
1 (f) (1) Such section 304 is amended by adding at the
2 cud thereof the following new subsections:
3 "(d) This section does not require a Member of Con-
4 gress to report, as contributions received or as expendi-
5 tures made, the value of photographic, matting, or record-
6 ing services furnished to him before the first day of January
7 of the year preceding the year in which his terni of office
8 expires if those services were furnished to him by the
9 Senate Recording Studio, the house Recording Studio,
10 or by any individual whose pa~T is disbursed by the Secre-
11 tary of the Senate or the Clerk of the House of Repre-
12 scntativcs and who furnishes such services as his primary
13 duty as an employee of the Senate or House of iRepre-
14 sentatives, or if such services were paid for by the Republi-
15 can or 1)emocratic Senatorial Campaign Committee, the
16 Democratic National Congressional Committee, or the
17 National IR epublican Congressional Committee.
18 " (e) Every pcison (oilier than a political committee or
19 candidate) who makes contributions or expenditures, other
20 than by contribution to a polutical committee or candidate,
21 in an aggregate amount in excess of $100 within a calen-
22 dar year shall file with the Commission a statement con-
23 taming the information required by this section. State-
24 ments required by this subsection shall be filed on the
PAGENO="0055"
51
16
1 dates on which reports by political conimittees are filed,
2 but need not be cumulative.
3 "(f) (1) For purposes of this subsection-
4 "(A) `Member of Congress' means Senator or Rep-
5 resentative in, or Delegate or Resident Commissioner
6 to, the Congress;
7 "(B) `income' means gross income as defined in
8 section 61 of the Internal Revenue Code of 1954;
9 "(C) `security' means sccurity as defined in section
10 2 of the Securities Act of 1933, as amended (15 U.S.C.
11 77b)
12 "(D) `commodity' means commodity as defined in
13 section 2 of the Commodity Exchange Act, as amended
14 (7U.S.C.2);
15 " (E) `dealings in securities or commodities' meaiis
16 ~, any acquisition, holding, withholding, use, transfer, dis-
17 position, or other ~transaction involving any security or
18 commodity; and
19 " (F) `candidate' means aiî individual who seeks
20 nomination for election, or election, to Federal office,
21 whether or not such individual is elected, and, for pur-
22 poses of this subsection, an individual shall be deemed to
23 seek nomination for election, or election, if he has (1)
24 taken the action necessary under the law of a State to
25 qualify himself for nomination for election, or election, to
PAGENO="0056"
52
17
Federal office, or (2) received contributions or made
2 expenditures, or has given his consent for any other per-
3 son to receive contributions or make expenditures, with
4 a view to bringing about his nomination for election, or
5 election, to such office.
6 "(2) Each candidate for election to Congress (other
7 than a candidate who is a Member of Congress) shall file
8 with the Commission a financial disclosure report for the
9 calendar year immediately preceding the year in which he is
10 a candidate. Such report shall be filed not later than thirty
Ii days after the individual becomes such a candidate.
12 "(3) Each individual who has served at any time dur-
13 ing any calendar year as a Member of Congress shall file with
14 the Commission a financial disclosure report for that year.
15 Such eport shall be filed not later than May 1 of the year
16 immediately following such calendar year.
17 "(4) Each financial disclosure report to be filed under
18 this subsection shall be made upon a form which shall be
19 prepared by the Commission and furnished by it upon re-
20 quest. Each such report shall contain a full and complete
21 statement of-
22 "(A) the amount and source of each item of income,
23 other than reimbursements for expenditures actually in-
24 curred, and each gift or aggregate of gifts from one
25 source of a value of more than $100 (other than gifts
PAGENO="0057"
53
18
1 received from any relative or his spouse) received by
2 him or by him and his spouse jointly during the pre-
3 ceding calendar year, including any fee or other hono-
4 rarium received by him for or in connection with the
5 preparation or delivery of any speech or address, at-
6 tendance at any convention or other assembly of mdi-
7 viduals, or the preparation of any article or other compo-
8 sition for publication;
9 "(B) each asset held by him, or by him and his
10 spouse jointly, and the amount of each liability owed. by
11 him, or by him and his spouse jointly, as of the close of
12 the preceding calendar year;
13 (C) all dealings in securities or commodities by
14 him, or by him and his spouse jointly, or by any person
15 `~ acting on his behalf or pursuant to his direction during
16 the preceding calendar year; and
17 "(D) all purchases and sales of real property or any
18' interest therein by him, or by him and his spouse jointly,
19 or by any person acting on his behalf or pursuant to his
20 direction, during the preceding calendar year.
21 "(5) The Commission may provide for the grouping
22 of items of income, source& of income, assets, liabilities,
23 dealings in securities or commodities, and purchases and sales
24 of real property when separate itemization is not feasible
25 or is not necessary for an accurate disclosure of the income,
PAGENO="0058"
54
19
1 net worth, dealing in securities and commodities, or par-
2 chases and sales of real property of any individual.
3 "(6) All reports filed under this subsection shall be
4 maintained by the Commission as public records. Such re-
5 ports shall be available, under such i~egulations as the Com-
6 mission may prescribe, for inspection by the public.".
7 (2) Subsection (f) of such section 304, as added by
8 paragraph (1) of this subsection, shall apply with respect to
9 calendar years commencing on or after January 1, 1974.
10 (g) The caption of such section 304 is amended to read
11 as follows:
12 "REPORTS".
13 SEc. 7. Section 305 of the Federal Election Campaign
14 Act of 1971 (relating to reports by others than political
15 committees') is amended to read as follows:
16 "REQUIREMENTS RELATING TO CAMPAIGN
17 ADVERTISING
18 "SEc. 305. (a) No person shall cause any political ad-
19 vertisement to be published unless he furnishes `to the
20 publisher of the advertisement his identification in writ-
21 ing, together with the identification of any person an-
22 thorizing him to cause such publication.
23 "(b) Any published political advei~tisement shall con-
24 tam a. statement, in such form as the Commission may'
PAGENO="0059"
55
20
1 prescribe, of the identification of the person authorizing
2 the publication of that advertisement.
3 "(c) Any publisher who publishes any political adver-
4 tisement shall maintain such records as the Commission
5 may prescribe for a period' of two years after the date of
6 pubhcation setting forth such advertisement and any
7 material relating `to identification furnished to him in
8 connection therewith, and shall permit the public to inspect
9 and copy those records at reasonable hours.
10 "(d) . To the extent that any person sells space in any
11 newspaper or magazine to a legally qualified candidate for
12 Federal elective office, or nomination thereto, in connection
13 with such candidate's campaign for nomination for, or elec-
14 tion to, such office, the charges made for the use of such
15 space in connection with his campaign shall not exceed the
16 charges made for comparal)le use of such space for other
17 purposes.
18 "(e) Any political committee shall include on the face
19 or front page of all literature and advertisements soliciting
20 contributions the following notice:
21 "`A copy of our report filed with the Federal Elec-
22 tion Commission is available for purchase from the
23 Federal Election Commission, Washington, D.C.'
"(f) As used in this section, the term-
25 "(1) `political advertisement' means any matter
PAGENO="0060"
56
21
1 advocating the election or defeat of any candidate or
2 otherwise seeking to influence the outcome of any dcc-
3 tion, but does not include any bona fide `news story
4 (including interviews, commentaries, or other works
prepared for and published by any newspaper, magazine,
6 or other periodical publication the publication of which
work is not paid for by any candidate, political commit-
8 tee, or agent thereof or by any other person) ; and
"(2) `published' means publication in a newspaper,
10 magazine, or other' periodical publication, distribution
* of printed leaflets, pamphlets, or other documents, or
12 display through the use of an~ outdoor advertising facil-
13 ity, and such other use of printed media as the Gommis-
14 sion shall prescribe.".
15 SEc. 8. Section 306 (c) of the Federal Election Cain-
16 paign Act of 1971 (relating to formal requirements respect-
17 ing reports and statements) is amended to read as follows:
18 "(c) The Commission may, by published regulation of
19 general applicability, relieve-
20 "(1) any category of candidates of the obligation
211 to comply personally with the requirements of. `section
22 304 (a) - (e), if it determines that such action will not
23 have any adverse effect on the purposes of this title, and
24 "(2) any category of political committees of the
PAGENO="0061"
57
22
1 ol)llgatioll to comply with such section if such corn-
2 mittees-
3 "(A) primarily support persons seeking State
4 or local office, and
5 " (B) do not operate iii more thaii one State
6 or do not operate oi~ a statewide basis.".
7 SEc. 9. (a) Title III of the Federal Election Campaign
8 Act of 1971 (relating to disclosure of Federal campaign
~ funds) is amended by redesignating section 308 as sectioii
10 312, and by inserting after section 307 the following new
11 sections:
12 "FEDERAL ELECTION COMMISSION
13 "SEc. 308. (a) (1) There is hereby establish~d, as an
14 independent establishment of the executive branch of the
15 Government of the United States, a~ commission to be known
16 as the Federal Election Commisshin.
17 "(2) The Commission shall be domposed of the Comp-
18 troller General, ex officio, with the right to vote, and six other
19 members who shall be appointed by the President by and
20 with the advice and consent of the Senate. Of the six other
21 members-
22 "(A) two shall be chosen from among individuals
* 23 recommended by the President pro tempore of the
24 Senate, upon the recommendations of the majority
PAGENO="0062"
58
23
I leader of the Senate and the minority leader of the
2 Senate; and
3 "(B) two shall be chosen from among individuals
4 reconnuended by the Speaker of the House of Repre-
5 sentatives, upon the recommendations of the majority
6 leader of the House and the minority leader of the
7 House.
8 The two members appointed under subparagraph (A) shall
- 9 not be affiliated with the same political party; nor shall the
10 two members appointed under subparagraph (B). The two
11 members not appointed under such subparagraphs shall not
12 be affiliated with the same political party.
13 "(3) Members of the Commission, other than the Comp-
14 troller General, shall serve for terms of seven years, except
15 that, of the members first appointed-
16 "(A) one of the members not appointed under sub-
17 paragraph (A) or (B) of paragraph (2) shall be
18 appointed for a term ending on the April thirtieth first
19 occurring more than six months after the date on
20 which he is appointed;
21 "(B) one of the members appointed under para-
22 graph (2) (A) shall be appointed for a term ending one
23 year after the April thirtieth on which the term of the
24 member referred to in subparagraph (A)~ `of this para-
25 graph ends;
PAGENO="0063"
59
24
1 "(C) one of the members appointed under para-
2 graph (2) (B) shall be appointed for a term ending two
:~ years thereafter;
4 "(D) one of the members not appointed under
5 subparagraph (A) or (B) of paragraph (2) shall' be
6 appointed for a term ending three years `thereafter;
7 "(E) one of the members appointed under para-
8 graph (2) (A) shall be appointed for a term ending
9 four years thereafter;
10 "(F) one of the members appointed under para-
11 graph (2) (B) shall be appointed for a term ending
12 five years thereafter; and
13 "(0) the Comptroller General shall serve during
14 his term of office as Comptrolk~r General.
15 "(4) Members shall be chosen on the basis of their°
16 maturity, experience, integrity, impartiality, and good judg-
17~ ment. A member may be reappointed to the Commission
18 only once.
19 "(5) An individual appointed to fill a. vacancy occur-
20 ring other than by the expiration of a. term of office shall
21 be appointed only for the unexpired term of the member he
22 succeeds. Any vacancy occurring in the office of member
23 of the Commission shall he filled in the manner in whicli
24 that office was originally filled.
25 "(6) The Commission shall elect a Chairman and a
PAGENO="0064"
60
25
1 Vice Chairman from among its members for a term of two
2 years. rllhe Chairman and the Vice Chairman shall not be
3 affiliated with the same political party. The Vice Chairman
4 ~hall act as Chairman in the absence or disability of the
5 ~hairman, or in the event of a vacancy in that office.
6 " (b) A vacancy~in the Commission shall not impair the
7 right of the remaining members to exercise all the powers of
8 tue Commission and four members thereof shall constitute
9 a quorum.
10 " (c)~ The Commission shall have an official seal which
ii shall be judicially noticed.
12 " (d) The Commission shall at the close of each fiscal
13 year report to the Congress and to the President concerning
14 the action it has taken; the names, salaries, and duties of all
io individuals in its employ and the money it has disbursed; and
16 shall make such further reports on the matters within its
17 jurisdiction and such recommendations for further legislation
18 as may appear desirable.
19 "(e) The principal office of the Commission shall be in
20 or near the District of Columbia, but it may meet or exercise
21 amiy or all its powers in a.ny State.
22 "(f) The Commission shall appoint a General Counsel
23 and an Executive Director to serve at the pleasure of time
24 Commission. The General Counsel shall be th~ chief legal
25 officer of the Commission. The Executive Director shall be
PAGENO="0065"
61
26
1 responsible for the administrative operations of the Commis-
2 51011 and shall perform such other duties as may be delegated
3 or assigned to him from time to time by regulations or orders
4 of the Commission. However, the Commission shall not dde-
5 gate the making of regulations regarding elections to tile
6 Executive Director.
7 " (g) The Chairman of the Commission shall appoint
8 and fix time compensation of such persormel as may be
9 necessary to fulfill the duties of the Commission in accord-
10 ance with time provisions of title 5, United States Code.
11 "(h) The Commission may obtain the services of experts
12 and consultants in accordance with section 3109 of title 5,
13 United States Code.
14 "(i) In carrying out its responsibilities under this title,
15 the Commission shall, to the fulle~t extent practicable, avail
16 itself of the assistance, including personnel and facilitic~,
17 of the General Accounting Office and the Department of
18 Justice. The Comptroller General and the Attorney Gen-
19 eral are authorized to make available to the Commission
20 such personnel, facilities, and other assistance, with or with-
21 out reimbursement, as the Commission may request.
22 ".(j) The provisions of section 7324 of title 5, United
23 States Code, shall apply to members of the Commission
24 notwithstanding the provisions of subsection (d) (3) of
25 such section.
25-239 O-73--------5
PAGENO="0066"
62
27
1 "(k) (1) Whenever the Commission submits any budget
2 estimate or request to the President or the Office of Man-
3 agemerit and Budget, it shall concurrently transmit a copy
4 of that estimate or request to the Congress.
5 "(2) Whenever the Commission submits any legislative
6 recommendations, or testimony, or comments on legisla-
7 tion requested by the Congress or by any Member of
8 Congress to the President or the Office of Management and
9 Budget, it shall concurrently transmit a copy thereof to
10 the Congress or to the Member requesting the same. No
~ officer or agency of the TJnited States shall have any
12 authority to require the Commission to submit its 1egis1~-
13 tive recommendations, or testimony, or comments on legis-
14 lation, to any office or agency of the United States for
15 approval, comments, or review, prior to the submission of
16 such recommendations, testimony, or comments to the
17 Congress.
18 "POWTERS OF COMMISSION
19 "SEC. 309. (a) The Commission shall have the power-
20 "(1) to require, by special or general orders, any
21 person to submit in writing such reports and answers to
22 questions as the Commission may prescribe; and such
23 submission shall be made within such reasonable period
24 and under oath or otherwise as the Commission may
25 determine;
26 "(2) to administer oaths;
PAGENO="0067"
63
28
1 "(3) to require by subpena, signed by the Chair-
2 man or the Vice Chairman, the attendance and testi-
3 mony of witnesses and the production of all documentary
4 evidence relating to the execution of its duties;
5 "(4) in any proceeding or investigation to order
6 testimony to be taken by deposition before any person
7 who is designated by the Commission and has the power
8 to administer oaths and, in such instances, to compel
9 testimony and the production of evidence in the same
io manner as authorized under paragraph (3) of this sub-
11 section;
12 "(5) to pay witnesses the same fees and mileage
13 as are paid in like circumstances in the courts of the
14 United States;
15 "(6) to initiate (through civil proceedings for in-
16 junctive relief and through presentations to Federal
17 grand juries), prosecute, defend, or appeal any court
18 action in the name of the Commission for the purpose
19 of enforcing the provisions of this title and of sections
20 602, 608, 610, 611, 612, 613, 614, 615, 616, and 617
21 of title 18, United States Code, through its General
22 Counsel; and
23 "(7) to delegate *any of its functions or powers,
24 other than the power to issue subpenas under paragraph
25 (3), to any officer or employee of the Commission.
PAGENO="0068"
64
29
1 "(b) Any United Sta.tes district court within the juris-
2 diction of which any inquiry is carried on, may, upon petition
3 by the Commission, in case of refusal to obey a subpena or
4 order of the Commission issued under subsection (a) of this
5 section, issue an order requiring compliance therewith; and
6 any failure to obey the order of the' court may be punished
7 by the court as a contempt thereof.
8 "(e) No person shall be subject to civil liability to any
9 person (other than the Commission or the United States)
10 for disclosing information at the request of the Commission.
"(d) Notwithstanding any other provision of law, the
12 Commission shall be the primary civil and criminal enforce-~
13 ment agency for violations of the provisions of this title, and
14 of sections 602, 608, 610, 611, 612, 613, 614, 615, 616,
15 and 617 of title 18, United States Code. Any violation of any
16 such provision shall be prosecuted by the Attorney General
17 or Department of Justice personnel only after consultation
18 ~~nit1i, and with the consent of, the Commission.
19 "(e) (1) Any person who violates any provision of this
20 title or of section 602, 608, 610, 611, 612, 613, 614, 615,
21 616, or 617 of title 18, United States Code, may be as-
22 sessed a civil penalty by the Commission under paragraph
23 (2) of this subsection of not more than $10,000 for each
24 such violation. Each occurrence of a violation of this title
25 and each day of noncompliance with a disclosure require-
PAGENO="0069"
65
30
1 ment of this title or an order of the Commission issued
2 under this section shall constitute a separate offense. In
3 determining the amount of the penalty the Cominissio~i
4 shall consider the person's history of previous violations,
5 the appropriateness of such penalty to the financial resources
6 of the person charged, the gravity of the violation, and the
7 demonstrated good faith of the person charged in attempting
8 to achieve ra.pid compliance after notification of a violation.
9 "(2) A civil penalty shall be assessed by tl~e Commis-
10 sion by order only after the person charged with a violation
ii has been given an opportunity for a hearing and the Corn-
12 mission has determined, by decision incorporating its findings
~ of fact therein, that a violation did occur, and the amount of
14 the penalty. Any hearing under this section shall be of record
15 and shall be held in accordance with section 554 of title 5,
16 United States Code.
17 " (3) If the person against whom a civil penalty is
18 assessed fails to pay the penalty, the Commission shall
19 file a petition for enforcement of its order assessing the
20 penalty in any appropriate district court of the United States.
21 The petition shall designate the person against whom the
22 order is sought to be enforced as the respondent. A copy
23 of the petition shall forthwith be sent by registered or cer-
24 tified mail to the respondent and his attorney of record, and
25 thereupon the Commission shall certify and file in such court
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I the record upon which such order sought to be enforced was
2 issued. The court shall have jurisdiction to enter a judgment
3 enforcing, modifyh~g, and enforcing as so modified, or setting
4 aside in whole or in part the order and decision of the Corn-
5 mission or it may remand the proceedings to the Commis-
6 sion for such further action as it may direct. The court may
7 consider and determine de novo all relevant issues of law
8 but the Oommission's findings of fact shall become final
9 thirty days after issuance of its decision order incorporating
i~ such findings of fact and shall not thereafter be subject to
ii judicial review.
12 "(f) Upon application made by any individual holding
13 Federal office, any candidate, or any political committee, the
14 Commission, through its General Counsel, shall provide with-
15 in a reasonable period of time an advisory opinion, with
16 respect to any specific transaction or activity inquired of,
17 as to whether such transaction or activity would constitute
18 a violation of any provision of this title or of any provision
~ of title 18, United States Code, over which the Commission
20 has primary jurisdiction under subsection (d) . Notwithstand-
21 hug any other provision of law, no candidate or political corn-
22 mittee shall be held or considered to have violated any suc~h
23 provision by the commission or omission of any act with
24 respect to which an advisory opinion has been issued to that
~ candidate or political committee under this subsection.
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1 "CENTRAL CAMPAIGN COMMITTEES
2 "SEC. 310. (a) Each candidate shah designate one
~ political committee as his central campaign committee. A
~ candidate for nomination for election, or for election, to
~ the office of President, may also designate one political
6 committee in each State in which he is a candidate as his
~ State campaign committee for that. State. The designation
8 shall be made in writing, and a copy of the designation,
~ together with such information as the Commission may
10 require, shall be furnished to the Commission upon the
~ designation of any such committee.
12 "(b) No political committee may lie designated as time
13 central campaign committee of more than one candidate.
14 The central campaign committee, arid each State campaign
15 committee, designated by a candidate nominated by a politi-
16 cal party for election to the office of President shall be the
17 central campaign committee and the State campaign coin-
18 mit.tees of the candidate nominated by that party for dcc-
19 tion to the office of Vice President.
20 " (c) (1) Any political committee authorized by a
21 candidate to accept contributions om make expenditures in
22 connection with his campaign for nomination or for election,
23 which is not a central campaign committee or a State cam-
24 paign committee, shall furnish each report required of it
25 under section 304 (other than reports required under the
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3$
1 last sentence of section 304 (a) and 311(b)) to that candi-
2 date's central campaign committee at the time it would,
3 but for this subsection, be required to furnish that' report
4 to the Commission. Any `report properly furnished to:. a
5 central campaign committee under this subsection shall he,
6 for purposes of this title, held and considered to have been
7 furnished to the Commission at the time at which it was
8 furnished to such central campaign committee.
9 * "(2) The Commission may, by regulation, require a~y
10 political committee receiving contributions or making ~j-
11 penditures in a State on behalf of a candidate who, under
12 subsection (a), has designated a State campaign committee
13 for that State to furnish its reports to that State campaign
14. committee instead of furnishing such reports to the central
15 campaign committee of that candidate.
16 "(3) The Commission thay require any political .com-
17 mittee to furnish any report directly to the Oonirnissiqn.
18 "(d) Each political committee which is a central cain-
19 paign committee' or a State campaign committee shall re-
20 ceive all reports filed with or furnished to it by other pohti-
21 cal committees, and consolidate and furnish the reports to the
22. Commission, together with its own reports and statements,
23 in accordance with the provisions of this title and regulations
24 prescribed by the Commission.
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1 "CAMPAIGN DEPOSITORIES
2 "SEC. 311. (a) (1) Each candidate shall designate one
3 or more National or State banks as his campaign depositories.
~ The central campaign committee of that candidate, and any
~ other political committee authorized by him to receive con-
6 tributions or to make expenditures on his behalf, shall main-
~ tam a checking account at a depository so designated by the
8 candidate and shall deposit any contributions received by
~ that committee into that account. No expenditure may be
10 made by any such committee on behalf of a candidate or to
~ influence his election except by check drawn on that account,
12 other than petty cash expenditures as provided in subsec-
13 tion (b).
14 "(2) The treasurer of each political committee (other
15 than a political committee authorized by a candidate to
16 receive contributions or to make expenditures on his behalf)
17 shall designate one or more National or State banks as cam-
18 paign depositories of that committee, and shall maintain a
19 checking account for the committee at each such depository.
~ All contributions received by that committee shall be de-
21 posited in such an account. No expenditure may be made by
22 that committee except by check drawn on that account, other~
23 than petty cash expenditures as provided in subsection (b).
24 "(b) A political committee may maintain a petty cash
fund out of which it may make expenditures not in excess
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1 of $100 to any person in connection with a single purchase
2 or transaction. A record of petty cash disbursements shall
3 be kept in accordance with requirements established by
4 the Commission, and such statements and reports thereof
5 shall be furnished to the Commission as it may require.
6 "(c) A candidate for nomination for election, or for
7 election, to the office of President may establish one such
8 depository in each State, which shall be considered by his
9 State campaign committee for that State and any other
10 political committee authorized by him to receive contribn-
11 tions or to make expenditures on his behalf in that State,
12 under regulations prescribed by the Commission, as his
13 single campaign depository. ~The campaign depository of
14 the candidate of a political party for election to the office
15 of Vice President shall be the campaign depository desig-
16 nated by the candidate of that party for election to the
17 office of President.".
18 (b) (1) Section 5314 of title 5, United States Code, is
19 amended by adding at the end thereof the following new
20 paragraph:
21 "(60) Members (other than the Comptroller Gen-
22 eral), Federal Election Commission (6) ."
23 (2) Section 5315 of such title is amended by adding at
24 the end thereof the following new paragraphs:
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1 "(98) General Counsel, Federal Election Corn-
mission.
* "(99) Executive Director, Federal Election Corn-
4 mission."
5 (c) Until the appointment and qualification of all the
6 membOrs of the Federal Election Commission and its Gen-
eral COunsel and until the transfer provided for in this sub-
*8 section, the Comptroller General, the Secretary of the
9 Senate, and the Clerk of the House of Representatives shall
continue to carry out their respOnsibilities under title I and
* title III Of' the* Federal ElectiOn Campaign Act of 1971 as
12 such titles~ existOd on the `day before the date of enactment of
13 this' Act. UpOn the appointment of all the members of the
14 Commission and its General Counsel, the Comptroller Gen-
15 cral, the Secretary of the Senate, and the Clerk of the House
16 of Re~resOntatives shall meet with the Commission and ar-
17 range for the transfer, within thirty days after the date on
18 which all such membei~s and the General Counsel are ap-
19 pointed, `of all records, documents, memorandums, and other
20 papers associated with carrying out their responsibilities
21 * finder title I and title III of the Federal Election Campaign
22 Actofl97l.
23 ` (d) Title III of the Federal Election Campaign Act of
24 1971 is amended by-
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1 (1) amending section 301 (g) (relating to defini-
2 tions) to read as follows:
3 "(g) `Commission' means the Federal Election Commis-
4 sion;";
5 (2) striking out "supervisory officer" in section
6 302 (d) and inserting "Commission";
7 (3) striking out section 302 (f) (relating to or-
8 ganization of political committees)
9 (4) amending section 303 (relating to registration
10 of political committees; statements) by-
11 (A) striking out "supervisory officer" each
12 time it appears therein and inserting "Commis-
13 sion"; and
14 (B) striking out "he" in the second sentence
15 of subsection (h) of such section (as redesig-
16 nated by section 5 (a) of this Act) and inserting
17 "it";
18 (5) amending section 304 (relating to reports by
19 political committees and candidates) by-
20 (A) striking out "appropriate supervisory offi-
21 cer" and "him" in the first sentence thereof and in-
22 serting "Commission" and "it", respectively; and
23 (B) striking out "supervisory officer" where it
24 appears in the third sentence ~f `subsection (a) and
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I in paragraphs (12) and (14) (as redesignated
2 by section 6 (d) (2) of this Act) of subsection (b),
3 and inserting "Commission";
4 (6) striking out "supervisory officer" each place it
5 appears in section 306 (relating to formal requirements
6 respecting reports and statements) and inserting "Com-
7 mission";
8 (7) striking oat "Comptroller General of the United
9 States" and "he" in section 307 (relating to reports on
10 convention financing) and inserting "Federal Election
11 Commission" and "it", respectively;
12 (8) striking out "SUPERVISORY OFFICER" in the
13 caption of section 312 (as redesignated by subsection
14 (a) of this section) (relating to duties of the supervisory
is officer) and inserting "COMMISSION";
16 (9) striking out "supervisory officer" in section
17 312 (a.) (as redesignated by subsection (a) of this
18 section) the first time it appears and inserting "Coin-
19 mission";
20 (10) amending section 312 (a) (as redesignated by
21 subsection (a.) of this secti'on) by-
22 (A) striking out "him" in paragraph (1) and
23 inserting "it";
24 (B) striking out "him" in paragraph (4) and
25 inserting "it"; and
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1 (C) striking out "he" each place! it appears in
2 paragraphs (7) aiid (9) and insertinj "it".
3 (11) striking out "supervisory officer" in section
4 312 (b) (as redesignated by subsection (a) of this sub-
5 section) and inserting "Commission";
6 (12) amending subsection (c) of section 312 (as
7 redesignated by subsection (a) of this section) by-
8 (A) striking out "Comptroller General" each
9 place it appears therein and inserting "Commis-
10 sion", and striking "his" in the se'cond sentence
11 of such subsection and inserting "its"; and
12 (B) striking out the last sentence thereof; and
13 (13) amending subsection (d) (1) of section 312
14 (as redesignated by subsection (a) of this section)
15 by-
16 (A) striking out "supervisory officer" each
17 place it appears therein and `inserting "Commis-
18 sion";
19 (B) striking out "he" the first place it appears
20 in the second se~itence of such section and inserting
21 "it"; and
22 (C) striking out "the Attorney General on
23 behalf of the United States" and inserting "the
24 Commission".
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1 SEC. 10. Section 312 (a) (~) (as redesignated by this
2 Act) of the Federal Election Campaign Aet of 1971 (re-
3 lating to duties of the supervi4ry officer) is amended to
4 read as follows:
"(6) to compile and nLintain a cumulative index
6 listing all statements and r~ports filed with the Com-
7 mission during each caiend~ir year by political com-
8 mittees and candidates, which the Commissioll shall
9 cause to be published in th~ Federal ~Register no less
frequently than monthly dui~ing even-numbered years
ii and quarterly in odd-numbered years and which shall
12 be in such form and shall include such information as
13 may be prescribed by the Commission to permit easy
14 identification of each statement, report, candidate, and
15 committee listed, at least as to their names, the dates
16 of the statements amid reports, and the number of pages
17 in each, and the Commission shall make copies of
18 statements and reports listed in the index available for
19 sale, direct or by mail, at a price determined by the
20 Commission to be reasonable to the purchaser;".
21 SEC. 11. Title III of the Federal Election Campaign
22 Act of 1971 is amended by inserting after section 312 (as
23 redesignated by this Act) the following new section:
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41
1 "SUSPENSION OF FRANK FOR MASS MAILINGS IMMEDI-
2 ATELY BEFORE ELECTIONS
3 "SEC. 313. No Senator, Representative, Resident Corn-
4 missioner, or Delegate shall make any mass mailing of a
5 newsletter or mailing with a simplified form of address under
6 the frank under chapter 32 of title 39, United States Code,
7 during the sixty days immediately preceding the date on
8 which any election is held in which he is a candidate."
9 SEC. 12. Section 309 of the Federal Election Campaign
10 Act of 1971 (relating to statements filed with State officers)
11 is redesignated as section 314 of such Act and amended by-
12 (1) striking out "a supervisory officer" in subsection
13 (a) and inserting in lieu thereof "the Commission";
14 (2) striking out "in which an expenditure is made
15 by him or on his behalf" in subsection (a) (1) and in-
16 serting in lieu thereof the following: "in which he is a
17 candidate or in which substantial expenditures are made
18 by him or on his behalf"; and
19 (3) adding the following new subsection:
20 "(c) There is hereby authorized to be appropriated to
21 the Coimnission in each fiscal year the sum of $500,000, to
22 be made available in such amounts as the Commission deems
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42
1 appropriate to the States for the purpose of assisting them
2 in complying with their duties as set forth in this section.".
3 SEc. 13. Section 310 of the Federal Election Campaign
4 Act of 1971 (relating to prohibition of contributions in name
5 of another) is redesignated as section 315 of such Act and
6 amended by inserting after "another person", the first time
7 it appears, the following: "or knowingly permit his name to
8 be used to effect such a contribution".
9 S~c. 14. Section 311 of the Federal Election Campaign
10 Act of 1971 (relating to penalty for violations) is amended
11 to read as follows:
12 "PENALTY FOR VIOLATIONS
13 "SEc. 316. (a) Violation of the provisions of this title
14 (other than section 304 (f)) is a misdemeanor punishable
15 by a fine of not more than $10,000, imprisonment for not
more than one year, or both.
16
17 "(b) Violation of the provisions of this title (other
18 than section 304 (f)) with knowledge or reason to know
that the action committed or omitted is a violation of this
19
20 Act is punishable by a fine of not more than $100,000, im-
21 prisonment for not more than five years, or both.
22 "(c) Any person who willfully fails to ifie a report
23 required by section 304 (f) of this Act, or who knowingly
24 and willfully files a false report under such section, shall
25 be fined $2,000 or imprisoned for not more than one year,
26 or both.".
25-239 O-73----6
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4~3 S
SE~c. ~5. Title III of the Federal Election Campaign
2 Act of 1q71 is amendOd by adding at the end thereof the
~ following new section~s:
~ "APPROVAL OF PRESIDENTIAL CAMPAIGN EXPENDITURES
5 BY NATIONAL COMMITTEE
6 "Si~c. 317. (a) No expenditure in excess of $1,000 shall
be made by or on behalf of any candidate who has received
8 the nomination of his political party for President or Vice
President unless such expenditure has been specifically ap-
10 proved by the chairman or treasurer of. that political party's
~ national committee or the designated representative of that
12 national committee in the State where the funds are to be
13 expended.
14 "(b) Each national committee approving expenditures
15 under subsection (a) shall register under section 303 as a.
16 political committee and report each expenditure it approves
17 as if it had made that expenditure, together with the name
18 and address of the person seeking approval and making the
19 expenditure.
20 "(c) No political party shall have more than one na-
21 tional committee. S
22 "USE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES
23 "SEC. 318. Amounts received by a candidate as con-
24 tributions that are in excess of any amount necessary to de-
25 fray his campaign expenses, and any other amounts
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44
1 contributed to an individual for the purpose of supporting
2 his activities as a holder of Federal office, may be used by
3 that candidate or individual, as the case may be, to defray
4 any ordinary and necessary expenses incurred by him in
5 connection with his duties as a holder of Federal office, or
6 may be contributed by him to any organization described
7 in section 170 (c) of the Internal Revenue Code of 1954.
8 To the extent any such contribution, amoant contributed, or
9 expenditure thereof is not otherwise required to be disclosed
10 under the provisions of this title, such contribution, amount
11 contributed, or expenditure shall be fully disclosed in accord-
12 ance with regulations promulgated by the Commission. The
13 Commission is authorized to promulgate such regulations
14 as may be necessary to* carry out the provisions of this
.15 section.
16 "AUTHORIZATION OF APPROPRIATIONS
17 "Sne. 319. There are authorized to be appropriated to
18 the Commission, for the purpose of carrying out its functions
19 under this title, and under chapter 29 of title 18, United
20 States Code, not to exceed $5,000,000 for the fiscal year
21 ending June 30, 1974, and not to exceed $5,000,000 for
22 each fiscal year thereafter.".
23 SEc. 16. Section 403 of the Federal Election Campaign
24 Act of 1971 is amended to read ns follows:
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45
1 "EFFECT OX STATE LAW
2 "SEC. 403. The provisions of this Act, and of regulations
~ promulgated under this Act, supersede and preempt any
4 provision of State law with respect to campaigns for nomina-
~ tion for election, or for election, to Federal office (as such
6 term is defined in section 301 (c) ) .".
7 SEC. 17. (a) Paragraph (a) of section 591 of title 18,
s United States Code, is amended by-
(1) inserting "or" before" (4) "; and
10 (2) striking out "and (5) the election of dde-
gates. to a constitutional convention for proposing amend-
12 ments to the Constitution of the United States".
13 . (h) Such section 591 is amended by striking out para-
14 graph (d) and inserting in lieu thereof the following:
15 "(d) `political committee' means-
16 "(1) any committee, club, association, or other
17 group of persons which receives contributions or makes
18 expenditures during a calendar year in an aggregate
19 amount exceeding $1,000;
20 "(2) any national committee, association, or orga-
21 nization of a political party, any Stat.e affiliate or sub-
22 sidiary of a national political party, and any State cen-
23 t.ral committee of a political party; and
24 "(3) any committee, association, or organization
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46
1 engaged in the administration of a separate segregated
2 fund described in section 610 ;".
3 (c) Such section 591 is amended by-
4 (1) inserting in paragraph (e) (1) after "subscrip-
5 tion" the following: "(including any assessment, fee, or
6 membership dues)";
7 (2) striking out in such paragraph "or for the pur-
8 pose of influencing the election of delegates to a consti-
9 tutional convention for proposing amendments to the
10 Constitution of the United States" and inserting in lieu
11 thereof the following: "or for the purpose of financing
12 any operations of a political committee, or for the pur-
13 pose of paying, at any time, any debt or obligation in-
14 curred by a candidate or a political committee in con-
15 nection with any campaign for nomination for election,
16 or for election, to Federal office"; and
17 (3) striking out subparagraphs (2) and (3) of
18 paragraph (e) and redesignating subparagraphs (4)
19 (5) as (2) and (3), respectively.
20 (d) Such section 591 is amended by striking out para-
21 graph (f) and inserting in lieu thereof the following:
22 "(f) `expenditure' means-
23 "(1) a purchase, payment, distribution, loan
24 (except a~ loan of money by a national or State bank
25 made in accordance with the applicable banking laws
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47
and regulations, and in the ordinary course of business),
2 advance, deposit, or gift of money or anything of value,
made for the purpose of-
4 "(A) influencing the nomination for election,
or the election, of any person to Federal office, or
6 to the office of presidential and vice presidential
7 elector;
8 " (B) influencing the result of a primary dcc-
tion held for the selection of deiegates to a national
nominating convention of a political party or for the
11 expression of a preference for the nomination of
12 persons for election to the office of President;
13 "(C) financing any operations of a political
14 committee; or
"(D) paying, at any time, any debt or obliga-
16 lion incurred by a candidate or a political committee
17 in connection with any campaign for nomination
18 for election, or for election, to Federal office; but
19 "(2) shall not mean or include those who volim-
20 teer to work without compensation on behalf of a
21 ca.ndidate ;".
22 SEC. 18. (a) (1) Subsection (a) (1) of section ~3O8 of
23 title 18, United States Code, is amended to read as follows:
24 "(a) (1) No candidate may make expenditures froni
25 his pers~na1 funds, or the personal funds of his immediate
PAGENO="0087"
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48
1 family, in connection with his campaigns for nomination for
2 election, and for election, to, Federal office in excess, in the
3 aggregate during any calendar year, of-
4 "(A) $100,000, in the case of a~ candidate for the
office of President or Vice President;
6 "(B) $70,000, in the case of a candidate for the
7 office of Senator; or
8 "(C) $50,000, in the case of a caiididate for the
office of Representative, or Delegate or Resident Corn-
10 missioner to the Congress."
(2) Subsection (a) of such section is amended by add-
12 ing at t.he end thereof the following new paragraphs:
13 "(3) No candidate or his immediate family may make
14 loans or advances from their personal funds in connection with
15 his campaign for nomination for election, or election, to
16 Federal office unless such loan or advance is evidenced by a
17 written instrument fully disclosing the terms and conditions
18 of such loan or advance.
19 "(4) For purposes of this subsection, any such loan or
20 advance shall be included in computing the total amount of
21 such expenditures only to the extent of the balance of such
22 loan or advance outstanding and unpaid."
23 (1)) Subsection (c) of such section is amended by
24 striking out "$1,000" and inserting in lieu thereof "$25,-
25 000", and by striking out "one year" and inserting in lieu
26 thereof "five years".
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49
1 (c) (1) The cap(3on of such sectioii 608 is amended by
2 adding at the end thereof tiie following: "out of candidates'
3 personal and family funds".
4 (2) The table of sections for chapter 29 of title 18,
5 United States Code, is amended by striking out the item
6 ielating to section ~3O8 and inserting in lieu thereof the
7 following:
"GOS. Limitations on contrjbutions and expenditures out, of candidates'
personal and family funds.".
8 (d) Notwithstanding the provisions of section 008 of
~ title 18, United States Code, it shall not be unlawful for
10 any individual who, as of the date of enactment of this
~ Act, has outstanding. any debt or obhgation incurred on
12 his behalf by any political coinnilttee in connection with
13 his campaigns prior to January 1, 1973, for nomination for
14 election, and for election, to Federal office, to satisfy or dis-
15 charge any such debt or obligation out of his own personal
16 funds or the personal funds of his immediate family (as such
17 term is defined in such section 608).
18 SEc. 19. Section 611 of title 18, United States Code,
19 is `amended by adding at `the end thereof the following
20 new paragraph:
21 "It shall not constitute a violation of the provisions
22 of this section for a corporation or a labor organization
23 to estabhsli, administer, or solicit contributions to a sepa-
24 rate segregated fund to be utilized for political purposes
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50
1 by that corporation or labor organization ii the establish-
2 ment and administration of, and solicitation of coiitributions
3 to, such fund do not constitute a violation of section GlO."
4 SEc. 20. (a) Chapter 29 of title 18, United States Code,
5 is amended by adding at the end thereof the following new
6 sections:
7 `~ 614. Limitation on expenditures generally
8 "(a) (1) Except to the extent that such amounts are
9 increased under sui)section (d) (2) , no candidate (other
10 than a candidate for nomination for election to the office
1 1 of President) may make expenditures in connection with
12 his primary or primary runoff campaign for nomination
13 for election to Federal office in excess of the greater of-
14 " (A) 10 cents multiplied by the voting age popula-
15 tion (as certified under subsection (e) ) of the geo-
16 gra.phical area in which the election for such riomina-
17 tion is held, or
18 "(B) (i) $125,000, if the Federal office sought is
19 that of Senator, Delegate, Resident Commissioner, or
20 Representative from a State which is entitled to only
21 OflO Representative, or
22 "(ii) $90,000, if the Federal office sought is that~
23 of Representative from a State which is entitled to
24 more than one Representative.
25 - "(2) Except to the extent that such amounts are in-
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51
1 creased under subsection (d) (2), no candidate (other than
2 a candidate for election to the office of President) may
3 make expenditures in connection with his general or spe-
4 cial ölection campaign for election to Federal office in excess
~ of the greater of-
6 "(A) 15 cents multiplied by the voting age popu-
7 lation (as certified under subsection (e) ) of the geo-
8 graphical area in which the election is held, or
9 "(B) (i) $175,000, if the Fedei~al office sought is
10 that of Senator, Delegate, Resident Commissioner. or
ii Representative, from a State which is entitled to only
12 one Representative, or
13 " (ii) $90,000, if the Federal office sought is that
14 of Representative from a State which is entitled to
15 more than one Representative.
16 "(b) (1) No candidate for nomination for election to~
17 the office of President may make expenditures in any State
18 in connection with his campaign for such nomination in
19 excess of the amount which a candidate for nomination for
20 election to the office of Senator from that State (or for
21 nomination for election to the office of Delegate, in the
22 case of the District of Columbia) might expend within the
23 State in connection with his campaign for that. niomina-
24 tion. For purposes of this subsection, an individual is a
25 candidate for nomination for election to the office of IPresi-
PAGENO="0091"
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52
1 dent ii he makes (or aiiy other person niakes on his behalf)
2 an expenditure on behalf of his candidacy for any political
~ ~ nomination for election to the office of President.
4 "(2) No candidate for election to the ofhce of President
5 may make expenditures in any State in connection with his
6 campaign for election to such office in excess of the amount
7 which a candidate for election to the office of Senator (or for
8 election to the office of Delegate, in the case of the District
9 of Columbia) might expend within the State in connection
10 with his campaign for election to the office of Senator (or
11 Delegate).
12 " (c) (1) Expenditures made on behalf of any candidate
13 shall, for the purpose of this section, be deemed to have l)een
14 made by such candidate.
15 "(2) Expenditures made by or on behalf of any candi-
16 date for the office of Vice President of the United States shall,
17 for the purpose of this section, be deemed to have been made
18 by the candidate for the office of President of the United-
19 States with whom he is running.
20 " (3) For purposes of this subsection, an expenditure
21 shall be held and considered to have been made on behalf
22 of a candidate if it was made by-
23 "(A) an agent of the candidate for the purposes
24 of making any campaign expenditure, or
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"(B) any person authorized or requested by the
2 candidate to make expenditures on his behalf.
3 "(d) (1) For purposes of paragraph (2)
4 "(A) The term `price index' means the average
5 over a calendar year of the Consumer Price Index (all
items-United States city average) published monthly
7 by the Bureau of Labor Statistics.
8 "(B) The term `base period' meaiis the calendar
9 year 1970.
10 "(2) At the beginning of each calendar year (com-
11 mencing in 1974), as there become available necessary data*
12 from the Bureau of Labor Statistics of the Department of
13 Labor, the Secretary of Labor shall certify to the Federal
14 Election Commission and publish in the Federal Register the
15 per centum difference between the price index for the twelve
16 months preceding the beginning of such calendar year and
17 the price index for the base period. Each amount determined
18 under subsection (a) shall be increased by such per centum
19 difference. Each amount so increased shall be the amount in
20 effect for such calendar year.
21 "(e) During the first week of January 1974, and every
22 subsequent year, the Secretary of Commerce shall certify to
23 the Federal Election Commission and publish in the Federal
24 Register an estimate of the voting age population of each
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1 State and congressional district as of the first day of July
2 next preceding the date of certification.
3 "(f) (1) No person shall render or make any charge for
4 services or products knowingly furnished to, or for the benefit
5 of, any candidate in connectiomi with his campaign for nomni-
6 nation for election, or election, in an amount in excess of $100
7 unless the candidate (or a person specifically authorized by
8 the candidate in writing to do so) certifies iii writing to the
9 persofl making the charge that the payment of that charge
10 will not exceed the expenditure limitations set forth in this
11 section.
12 "(2) Any person making an aggregate expenditure in
13 excess of $1,000 to purchase services or products shall, for
14 purposes of this subsection, be held and considered to be
15 making such expenditure on behalf of any candidate the
16 election of whom would be influenced favorably by the use
17 of such products or services. No person shall render or make
18 any charge for services or products furnished to a person
19 described in the preceding sentence unless that candidate (or
20 a person specifically authorized by that candidate in writing
21 to do so) certifies in writing to the person making the
22 charge that the payment of that charge will not exceed the
23 expenditure limitation applicable to that candidate und~er
24 this section.
95 "(g) The Federal Election Commission shall prescribe
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1 regulations under which -ally expenditure by a candidate for
2 Presidential nomination for use in two or more States shall be
- 3 attributed to such candidate's expeiidit-ure limitation in each
4 such State, based 011 the number of persons iii Stlch State
5 who caii reasonably be expected to be reached by such
6 expenditure. -
7 " (h) Any person who knowingly or willfully violates
8 the provisions of this section, other than subsections (c),
~ (d), a-nd (e), shall be puhisliable by a fine of $25,000,
10 imprisomnent for a period of xiot more than five years, or
~ both. If a-ny candidate is convicted of violating the provi-
12 sions of this section because of any expenditure made on
13 his behalf (as determined under subs?ction (c) (3)) by a
14 political. committee, the treasurer of that committee, or
15 any other person authorizmg such expenditure, shall be
16 punishable by a fine of not to exceed $25,000, imprisonment
17 for not to exceed five years, or both, if such person knew,
18 or had reason to know, that such expenditure was in excess
19 of the limitation applicable to such candidate under this
20 section.. -
21 "~ 615. Limitations on contributions by individuals and on
22 expenditures by certain other persons
23 "(a) No individual shall make any contribution during
24 any calendar year to or for the benefit of any candidate
25 which is in excess of- - -
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1 " (1) in tile case of contributions to or for
2 the benefit of a candidate other than a candidate for
3 nomination for election, or for election, to the office
4 of President, the amount which, when added to the
total amount of all other contributions made by that
6 individual during that calendar year to or for the belle-
fit of a particular candidate, would equal $3,000; or
8 "(2) in the case of contributions to or for the
benefit of a candidate for nomination for election, or
10 for election, to the office of President, the amount which,
ii when added to the total amount of all other contributions
12 made by that individual during that calendar year to or
13 for the benefit of that candidate, would equal $3,000.
14 "(b) No individual shall during any calendar year
15 make, and no person shall accept, (1) any contribution to
16 a political committee, or (2) any contribution to or for the
17 benefit of any candidate, which, when added to all the other
18 contributions enumerated in (1) and (2) of this subsection
19 which were made in that calendar year, exceeds $25,000.
20 "(c) (1) No person (other than an individual) shall
21 make any expenditure during any calendar year for or on
22 behalf of a particular candidate which is in excess of the
23 amount which, when added to the total amount of all other
24 expenditures made by that person for or on behalf of that
25 candidate during that calendar year, would equal-
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"(A) $3,000, in the case of a candidate other than
2 a candidate for nomination for election, or for dcc-
3 tion, to the office of President; or
4 "(B) $3,000, in the case of a candidate for nomi-
5 nation for election, or for election, to the office of
6 President.
7 "(2) This subsection shall not apply to the central cam-
8 paign committee or the State campaign committee of a
~ candidate, to the national committee of a political party, or
10 to the Republican or Democratic Senatorial Campaign Com-
~ mittee, the Democratic National Congressional Committee,
12 or the National Republican Congressional Committee.
13 "(d) The limitations imposed by subsection (a) (1)
14 and by subsection (c) shall apply separately to each primary,
15 primary runoff, general, and special election in which a can-
16 didate participates.
17 "(e) (1) Any contribution made in connection with a
18 campaign in a year other than the calendar year in whic1i
~ the election to which that campaign relates is held shall,
20 for purposes of this section, be taken into consideration
21 and counted toward the limitations imposed by this section
22 for the calendar ye~tr in which that election is held.
23 "(2) Contributions made t.o or for the benefit of a
24 candidate nominated by a political party for election to
25 the office of Vice Pre~ident shall be held and considered,
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1 for purposes of this section, to have been made to or for
2 the benefit of the candidate nominated by that party for
3 election to the office of Presideiit.
4 "(f) For purposes of this section, the term-
5 "(1) `family' means an individual and his spouse
6 and any of his children who have not attained the age
7 of eighteen years; and
8 "(2) `political party' means a political party which
9 in the next preceding presidential election, nominated
10 candidates for election to the offices of President and
11 Vice President, and the electors of which party received
12 in such election, in any or all of the States, an aggregate
13 llUml)el' of votes equal in number to at least 10 per
14 centum of the total number of votes cast throughout the
15 United States for all electors for candidates for Presi-
16 dent and Vice President in such election.
17 "(g) For purposes of the limitations contained in this
18 section, all contributions made by any person directly or in-
- 19 directly on behalf of a particular candidate, including contri-
20 butions which are in any way earmarked, encumbered, or
21 otherwise directed through an intermediary or conduit to
22 that candidate, shall be treated as contributions, from that
23 person to that candidate.
24 "(h) Violation of the provisions of this section is punish-
25 able by a fine of not to exceed $25,000, imprisonment for
26 not to exceed five years, or both.
25-239 O-73--------7
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1 "~ 616. Form of contributions
2 "It shall be unlawful for any person to make a contri~
~ bution to or for the benefit of any candidate or political corn-
~ mittee in excess, in the aggregate during any calendar year,
of $50 unless such contribution is made by a written instru-
6 ment identifying the person making the contribution. Viola-
tliin of the provisions of this section is punishable by a fine of
8 not to exceed $1,000, imprisonment for not to exceed one
~ year, or both.
10 "~ 617. Embezzlement or conversion of political contribu-
tions
12 "Whoever, being a candidate, or an officer, employee,
13 or agent of a political candidate, or a person acting on be-
14 half of any candidate or political committee, embezzles,
15 knowingly converts to his own use or the use of another, or
16 deposits in any place or in any manner except as authorized
17 by law, any contril)utions or campaign funds entrusted to
18 him or under his possession, custody, or control, or uses any
19 campaign funds to pay or defray the costs of attorney fees
20 for the defense of any person or persons charged with the
21 commission of a crime; or
22 "Whoever receives, conceals, or retains the same with
23 intent to convert it to his personal use or gain, knowing it
24 to have been embezzkd or converted-
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GO
1 "Shall be fined not more than $25,000 or imprisoned not
2 more than ten years, or both; but if the value of such prop-
3 erty does not exceed the sum of $100, he shall be fined not
4 more than $1,000 or. imprisoned not more than one year,
~ or both. Notwithstanding the provisions of this section, any
6 surplus or unexpended i~ampaign funds may be cOntril)llted
7 to a national or State political party for political purpo~es, or
8 to educational or charitable organizations, or may be pre-
9 served for use in future campaigns for elective office, or for
10 any other lawful purpose.".
U (b) Section 591 of title 18, United States Code, is
12 amended by striking out `~and 611" and inserting in lieu
13 thereof "611, 614, 615, 616, and 617".
14 (c) The table of sections for chapter 29 of title 18,
15 United States Code, is amended by adding at the end
16 thereof the following new items:
"614. Limitation on expenditures generally.
"615. Limitation on coiitiibutions by individuals and on expenditures by
certain other persons.
"616. Form of contributions.
"617. Embezzlement or conversion of political contributions.".
17 SEc. 21. The Federal Election Campaign Act of 1971
18 is amended by redesignating title IV as title V, redesig-
19 nating sections 401 through 406, and all cross references
20 thereto, as sections 501 through 506, respectively, and by
21 inserting after title III of such Act the following new title:
PAGENO="0100"
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~ "TITLE TV-ASSISTANCE FOR VOTER REGJSTRA-
2 TION AND ELECTION ADMINISTRATION
3 "Si~c. 401. This title may be cited as the `Voter Regis-
4 tration and Election Administration Assistance Act'.
5 "DEFINITIONS
6 "Si~c. 402. As used in this title-
7 "(1) `Commission' means the Federal Election
s Commission;
"(2) `State' means each State of the United States,
10 the District of Columbia, the Commonwealth of Puerto
Rico, and any territory or possession of the United
12 States;
13 "(3) `political subdivision' means any city, county,
14 township, town, borough, parish, village, or other gen-
15 eral purpose unit of local government of a State, or an
16 Indian tribe which performs voter registration or dec-
17 tion administration functions, as determined by the Sec-
18 retary of the Interior; and
19 "(4) `grant' means grant, loan, contract, or other
20 appropriate financial arrangement.
21 "FUNCTIONS OF THE COMMISSION
22 "SEc. 403. (a) The Commission shall-
23 "(1) make grants, in accord with the provisions of
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62
1 this title, upon the request of State and local officials,
2 to States and political subdivisions thereof to carry out
3 programs of voter registration and election administra-
4 tion;
5 "(2) collect, analyze, and arrange for the publica-
6 tion and sale by the Government Printing Office of ui-
7 formation concerning voter registration and elections in
S the United States;
9 "(3) prepare and submit to the President and the
10 Congress on March 31 each year a report on the activi-
ties of the Commission under this title and on voter
12 registration and election administration in the States
13 and political subdivisions thereof, including recornmenda-
14 tions for such additional legislation as may be appropri-
15 ate; and
16 "(4) take such other actions as it deems necessary
17 and proper to carry out its functions under this title.
is "(b) The Commission shall not publish or disclose any
~ information which permits the identification of individual
20 voters.
21 "ADVISORY COTJNCJL ON VOTER REGISTRATION AND
22 ELECTION AT)MINTSTRATION
23 "SEc. 404. (a) There is hereby estal)liShed an Advisory
24 Council on Voter Registration and Election Administration,
25 consisting of the Chairman of the Commission, who shall be
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(33
1 Chairman of the Council, and sixteen members appointed by
2 the Chairman of the Commission without regard to the civil
3 service laws. Four of the appointed members shall be selected
4 from the general public, and four each shall be selected from
5 the chief election officers of State, county, and municipal
6 governments, respectively. No more than two of the ap-
7 pointed members in each category shall be members of the
S same political party.
9 "(b) Each appointed member of the Council shall hold
10 office for a. term of four years, except that any member
ii appointed to fill a vacancy prior to the expiration of the
12 term for which his predecessor was appointed shall he ap-
13 pointed for the remainder of such term, and except that the
14 terms of office of the members first taking office shall expire.
15 as designated by the Chairman of the Commission at the
16 time of appointment, four at the end of the first year, four
17 at the end of the second year, four at the end of the third
18 year, and four at the end of the fourth year after the date of
19 appointment. An appointed member shall not be eligible to
20 serve continuously for more than two terms.
21 "(c) The Council shall advise and assist the Commission
22 in the preparation of regulations for, and as to policy matters
23 ari.sing with respect to, the administration of this title, in-
24 eluding matters arising with respect to the review of appli-.
25 cations for grants under this title.
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64
1 "GRANTS TO DEFRAY COSTS OF EXISTING VOTER REGISTRA-
2 TION AND ELECTION ACTIVITIES
3 "SEC. 405. The Commission is authorized to make
4 grants to any State or political subdivision thereof for the
5 purpose of carrying out voter registration and election ad-
6 ministration activities. A grant made under this section in
7 a.ny fiscal year shall not be in excess of 10 cents multiplied
8 by the voting age population of the State or political sub-
9 division receiving the grant, and the total amount of grants
10 to any State and the political subdiyisions thereof in any
11 fiscal year shall not be in excess of 10 cents multiplied by the
12 voting age population of the State.
13 "GRANTS TO IMPROVE VOTER REGISTRATION AND
14 ELECTION ADMINISTRATION PROCEDURES
15 "SEC. 406. (a) The Commission is authorized to make
16 grants to any State or political subdivision thereof to estab-
17 lish and carry out programs to improve voter registration and
18 election administration. Such programs may include, hut
19 shall not be limited to:
20 "(1) programs to increase the number of registered
21 voters or to improve voter registration, such as expanded
22 registration hours and locations, employment of deputy
23 registrars, mobile registration facilities, employment of
24 deputy registrars, door-to-door canvass procedures, elec~
25 tion day registration, ~-reg~st~tiou progr~nis, and pro-
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1 grams to coordinate registration with other jurisdictions;
2 "(2) programs to improve election and election
3 day activities, such as organization, planning, and evalu-
4 ation of election and election day activities and responsi-
5 bilities; improvements in ballot preparation, in use of
6 absentee ballot procedures, and in voter identification,
7 voting and vote-counting on election day; coordination
8 of State and local election activities; and establishment
9 of administrative and judicial mechanisms to deal
10 promptly with election and election day difficulties;
11 "(3) education and training programs for State
12 and local election officials;
13 "(4) programs for the prevention and control of
14 fraud; and
15 "(5) other programs designed to improve votel-
16~ registration and election administration and approved by
17 the Commission.
18 "(b) A grant made under this section may be up to 50
19 per centum of the fair and reasonable cost, as determined by
20 the Commission, of establishing and carrying out such a pro-
21 gram. A grant made under this section in any fiscal year
22 shall not be in excess of 10 cents multiplied by the voting
23 age population of the State or political subdivision receiv-
~ ing the grant, and the total amount of grants to any State
25 and the political sul)diVisiOfls thereof in any fiscal year shall
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1 not be in excess of 10 cents multiplied by the voting age
2 population of the State.
3 "GRANTS TO MODERNIZE VOTER REGISTRATION AND
4 ELECTION ADMINISTRATION
S "SEC. 407. (a) The Commission is authorized to make
6 grants to any State for planning and evaluating the use of
7 electronic data processing or other appropriate procedures
S to modernize voter registration or election administration
9 on a centralized statewide basis. A grant made under this
10 section shall not be in excess of one-half cent multiplied by
111 the voting age population of the State receiving the grant, or
12 $25,000, whichever is greater.
13 "(b) The Commission is authorized to make grants to
14 any State for designing, programing, and implementing a
115 centralized statewide voter registration or election admin-
16 istration system as described in subsection (a) of this
17 section. A grant under this subsection shall not be in excess
18 of 10 cents multiplied by the voting age population of the
19 State receiving the grant.
"GRANTS FOR VOTER E1)TJCATION S
21 "SEC. 408. The Commission is authorized to make
22 grants to any State or political subdivision thereof for the
23 purpose of carrying out nonpartisan citizen education pro-
24 grams in voting and voter registration. A grant made under
25 this section in any fiscal year shall not be in excess of 10
PAGENO="0106"
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1 cents multiplied by the voting age population of the State
2 or political subdivision receiving the grant, and the total
3 amount of grants to any State and the political subdivisions
4 thereof in any fiscal year shall not be in excess of 10 cents
5 multiplied by the voting age population of the State.
6 "TECHNICAL ASSISTANCE AND FRAUD PREVENTION
7 "SEC. 409. The Commission is authorized to make avail-
8 able technical assistance, including assistance in developing
9 programs for the prevention and control of fraud, to any
10 State or political subdivision thereof for improving voter
11 registration, election administration and voter participation.
12 Such assistance shall be made available at the request of
13 States and political subdivisions thereof, to the extent praeti-
14 cable and consistent with the provisions of this title.
15 "APPLICATIONS FOR GRANTS
16 "SEC. 410. Except as otherwise specifically provided,
17 grants authorized by section 405, 406, 407, or 408 of this
18 title may be made to States, political subdivisions, or combi-
19 nations thereof. Such grants may be made only upon appli-
20 cation to the Commission at such time or times and containing
21 such information as the Commission may prescribe. The
22 Commission shall provide an explanation of the grant pro-
23 grams authorized by this title to State or local election oil-
24 cials, and shall offer to prepare, upon request, applications
25 for such grants. No application shall be approved unless it-
PAGENO="0107"
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1 "(a) demonstrates, to the satisfaction of the Corn-
2 mission, that the applicant has a substantial responsibil-
3 ity for voter registration or election administration within
4 its jurisdiction, and that the grant will not involve
5 duplication of effort within the jurisdiction receiving the
6 grant or the development of incompatible voter registra-
7 t.ion or election administration systems within a State;
8 "(b) sets forth the authority for the grant under
9 this title;
10 "(c) provides such fiscal control and fund account-
11 ing procedures as may be necessary to assure proper dis-
12 bursement of and accounting for Federal funds paid to
13 the applicant under this title, and provides for making
14 available to the Commission, books, documents, papers,
15 and records related to any funds received under this title;
16 and
17 "(d) provides for making such reports, in such form
18 and containing such information, as the Commission
19 may reasonably require to carry out its functions under
20 this title, for keeping such records, and for affording
21 such access thereto as the Commission may find neces-
22 sary to assure the correctness and verification of such
23 reports.
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1 "REGULATIONS
2 "SEc. 411. The Commission is authorized to issue such
3 rules and regulations as may be necessary or appropriate to
4 carry out the provisions of this title.
5 "AUTHORIZATION OF APPROPRIATIONS
6 "SEC. 412. For the purpose of carrying out the provi-
7 sions of this title, there is authorized to be appropriated, for
8 the fiscal year ending June 30, 1974, and for the two sue-
9 ceeding fiscal years, the sum of $15,000,000 each year for
10 sections 405, 406, 407, and 408.".
11 SEC. 22. (a) Any candidate of a political party in a
12 general election for the office of a Member of Congress who,
13 at the time he becomes a candidate, does not occupy any
14 such office, shall file within one month after he becomes a
15 candidate for such office, and each Member of Congress, each
16 officer and employee of the United States (including any
17 member of a uniformed service) who is compensated at a
18 rate in excess of $25,000 per annum, any individual occupy-
19 ing the position of an officer or employee of the United
20 States who performs duties of the type generally performed
21 by an individual occupying grade GS-16 of the General
22 Schedule or any higher grade or position (as determined by
23 the Federal Election Commission regardless of the rate of
PAGENO="0109"
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1 compensation of such individual), the President, and the
2 Vice President shall file annually, with the Commission a
3 report containing a full and complete statement of-
4 (1) the amount and source of each item of income,
5 each item of reimbursement for any expenditure, and
6 each gift or aggregate of gifts from one source (other
7 than gifts received from his spouse or any member of
8 his immediate family) received by him or by him and
9 his spouse jointly during the preceding calendar year
10 which exceeds $100 in amount or value, including any
11 fee or other honorarium received by him for or in con-
12 nection with the preparation or delivery of any speech
13 or address, attendance at any convention or other as-
14 sembly of individuals, or the preparation of any article
15 or other composition for publication, and the monetary
16 value of subsistence, entertainment, travel, and - other
17 facilities received by him in kind;
18 (2) the identity of each asset held by him, or by
19 him and his spouse jointly which has a value in excess
20 of $1,000, and the amount of each liability owed by him
21 or by him and his spouse jointly, whièh is in excess of
22 $1,000 as of the close of the preceding calendar year;
23 (3) any transactions in securities of any business
24 entity by him or by him and his spouse jointly, or by
25 any person acting on his behalf or pursuant to his direc-
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1. tion during the preceding calendar year if the aggregate
2 amount involved in transactions in the securities of such
3 business entity exceeds $1,000 during such year;
4 (4) all transactions in commodities by him, or by
5 him and his spouse jointly, or by any person acting on
6 his behalf or pursuant to his direction' during the pre-
7 ceding calendar year if the aggregate amount involved in
8 such transactions exceeds $1,000; and
9 (5) any' purchase or sale, other than the purchase
10 or sale of his personal residence, of real property or any
11 interest therein by him, or by him and his spouse jointly,
12 or by any person acting on his behalf or pursuant to his
13 direction, during the preceding calendar year if the value
14 of property involved in such purchase or sale exceeds
15 $1,000.
16 (b) Reports required by this section (other than reports
17 so required by candidates of political parties') shall be filed
18 not later than May 15 of each year. In the case of any per-
19 son who ceases, prior to such date in any year, to occupy the
20 office or position the occupancy of which imposes upon him
21 the reporting requirements contained in subsection (a) shall
22 file such report on the last day he occupies such office or
23 position, or on such later date, not more than three months
24 after such last day, as the Commission may prescribe.
25 (c) Reports required by this section shall be in such
PAGENO="0111"
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72
1. form and detail as the Commission may prescribe. The Corn-
2 mission may provide for the grouping of items of income,
3 sources of income, assets, liabilities, dealings in securities or
4 commodities, and purchases and sales of real property, when
5 separate itemization is not feasible or is not necessary for an
6 accurate disclosure of the income, net worth, dealing in secu-
7 rities and commodities, or purchases and sales of real prop-
8 erty of any individual.
9 (d) Any person who willfully fails to file a report re-
10 quired by this section or who knowingly and willfully files a
ii false report under this section, shall be fined $2,000, or irn-
12 prisoned for not more than five years, or both.
13 (e) All reports filed under this section shall be main-
14 tamed by the Commission as public records which, under
15 such reasonable regulations as it shall prescribe, shall be
16 available for inspection by members of the public.
17 (f) For the purposes of any report required by this
18 section, an individual shall be considered to have been Presi-
19 dent, Vice President, a Member of Congress, an officer or
20 employee of the United States, or a member of a uniformed
21 service, during any calendar year if he served in any such
22 position for more than six months during such calendar year.
23 (g) As used in this section-
24 (1) The term "income" means gross income as defined
25 in section 61 of the Internal Revenue Code of 1954.
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1 (2) The term "security" means security as defined in
2 section 2 of the Securities Act of 1933, as amended (15
3 U.S.C.77b).
4 (3) The term "commodity" means commodity as de-
5 fined in section 2 of the Commodity Exchange Act, as
6 amended (7 U.S.C. 2).
7 (4) -The term "transactions in securities or commodities"
8 means any acquisition, holding, withholding, use, transfer,
9 or other disposition involving any security or commodity.
10 (5) The term "Member of Congress" means a Senator,
11 a Representative, a Resident Commissioner, or a Delegate.
12 (6) The term "officer" has the same meaning as in
13 section 2104 of title 5, United States Code.
14 (7) The term "employee" has the same meaning as in
15 section 2105 of such title.
16 (8) The term "uniformed service" means any of the
17 Armed Forces, the commissioned corps of the Public HeaAth
18 Service, or the commissioned corps of the National Oceanic
19 and Atmospheric Administration.
20 (9) The term "immediate family" means the child,
21 parent, grandparent, brother, or sister of an individual, and
22 the spouses of such persons.
23 (h) Section 554 of title 5, United States Code, is
24 amended by adding at the end thereof the following new
25 subsection:
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1 "(f) All written communications and memorandums
2 stating the circumstances, source, and substance of all oral
3 communications made to the agency, or any officer or em-
4 ployee thereof, with respect to any case which is subject to
5 the provisions of this section by any person who is not an
6 officer or employee of the agency shall be made a part of
7 the public record of such case. This subsection shall not apply
8 to communications to any officer, employee, or agent of the
9 agency engaged in the performance of investigative or prose-
10 outing functions for the agency with respect to such case."
11 (1) The first report required under this section shall
12 be due on the fifteenth day of May occurring at least thirty
13 days after the date of enactment.
14 (j) Effective on the day after the date of enactment of
15 this~ Act-
16 (1) section 304 (f) of the Federal Election Cam-
17 paign Act of 1971 is repealed;
18 (2) section 6 (1) of this Act is amended-
19 (A) by striking out the paragraph designation
20 "(1)", and
21 (B) by striking out paragraph (2) of such
22 section;
23 (3) section 306 (c) (1) of the Federal Elec-
24 tion Campaign Act of 1971 is amended by striking
25 out"(a)-(e)";and
25-239 O-73--------~
PAGENO="0114"
110
75
1 (4) section 316 of the Federal Election Campaign
2 . Actof 1971 is amended-
3 (A) by striking out of subsections. (a) and
4 (b) the phrase "(other than section 304 (f))"
5 wherever it appears; and
6 (B) by striking out subsection (c).
7 Any action taken under any provision of law repealed or
8 struck out by this subsection shall have no force or effect on
9 or after such day.
10 SEc. 23. It is the sense of the Congress that the salaries
11 of Members of Congress, members of the President's cabinet,
12 and members of the Federal judiciary shall not be increased
13 in excess of the annual wage guidelines so long as wage and
14 price controls continue.
Passed the Senate July 30, 1973.
Attest: FRANCIS IL VALEO,
Secretary.
PAGENO="0115"
111
OPENING STATEMENT OF CHAIRMAN DENT
Mr. DENT. The hearing will come to order, the hearing on S. 372,
the Federal Election Campaign Act Amendments of 1973 and related
legislative proposals.
I am sorry that we are unable to get a quorum to have a formal
meeting this morning, at which time we have one vote to take on the
postcard registration bill. All the work has been done on it. The com-
mittee is ready to act' but we could not get a quorum. However, under
the rules, it is only necessary to have two present to take testimony in
hearings. I should hope we can get through our witnesses today so
that we can expedite this legislation by giving it to the full committee
at the earliest possible moment. We hope to set a hearing for next
Wednesday morning if the calendar of enough members is clear so that
we may do so at that time. We shall again attempt to move the post-
card bill.
It is very difficult at this time to hear as you all know, `all the com-
mittees are calling hearings and meetings, executive meetings, in order
to expedite the legislation and work on changes demanded by vetoes
on legislation that has already been worked on. But it takes us twice
as long to do things now as it used to because we have to do them once
and then do them again.
So you will pardon us. I hope that you will bear with us during
these hearings which are very important to the people.
The first witness this morning is Mr. Richard W. Jencks, corporate
vice president of the Columbia Broadcasting System, Inc.
If you have anybody with you, you may have them at the ~bi~Tf~~
you wish.
STATEMENT OP RICHARD W. 3~ENCKS, CORPORATE VICE
PRESIDENT, COLUMBIA BROADCASTING SYSTEM, INC.
Mr. JENOKS. Thank you very much, Mr. Chairman.
I appreciate the opportunity to appear here today to present the
views of CBS on the Clean Elections Act of 1973, H.R. 7512, and on
the Federal Election Campaign Act Amendments of 1973' which has
already passed the Senate as 5.372.
Each of these bills reflects thoughtful concern for the preservation
of the integrity of the electoral process, as well as for finding ways to
provide citizens with more and better information relating to candi-
dates, parties, and issues. These are critically important objectives.
Turning first to H.R. 7612, we bring no expertise to titles I through
IV, which provide for improving the conduct and regulation of cam-
paign `activities, and for public financing campaigns. I therefore have
no comments on these titles, which the Congress itself is uniquely in
the best position to assess. Title 1/, however, the so-called "voter's
time" proposal, deals with a subject matter to which we can bring a
special knowledge and outlook.
In our judgment, the "voter's time" proposal does not further the
objectives of the Clean Elections Act of 1973. It is tangential to `and
entirely separable from the other titles and should not be enacted in
its present form, if at all.
PAGENO="0116"
112
The "voter's time" proposal would require every broadcast licensee-
probably excluding educational licensees, but certainly including all
commercial licensees-to provide a fixed amount of broadcast time to
candidates for Federal elective office. These appearances would be
scheduled in prime time during the 5-week period preceding a general
election. The time would be paid for by Federal funds. The time so
purchased would amount to five 30-minute blocks of time for each
major party ticket of candidates for the Presidency and Vice Presi-
dency, three 30-minute blocks of time for each major party candidate
for the U.S. Senate, and two 30-minute blocks of time for each major
party candidate for the House of Representatives.
Lesser time allotments are made for third party candidates and
minor party, defined as those of a party which received more than 15
percent, or more than 5 percent, respectively, of the vote in the last
previous election.
Complicated formulas are provided to determine which stations
are to carry the "voter's time" broadcasts of which candidates and, in
the case of large metropolitan areas, the Federal Communications
Commission is given the option of dividing "voter's time" broadcasts
"evenly among the stations serving such markets." All "voter's time"
broadcasts must include u "substantial live appearance by the candi-
date" and be in a format "intended to promote rational political dis-
cussion, to illuminate campaign issues, and to give the audience in-
sights into the abilities and personal qualities of the candidate."
The Federal Communications Commission is given major respon-
sibilities in this scheme-with power to decide which congressional
candidate appears on which station and at what time, to determine
whether the format and content of the proposed political program is
or is not entitled to "voter's time" and, implicitly, to determine which
portions of the network or station prime time programing to pre-
empt for "voter's time" broadcasts.
The most arresting feature of the proposal, and to many the most
disturbing, is that the "voter's time" broadcasts would be scheduled
simultaneously. Let me make that explicit. Whenever a Presidential
candidate uses "voter's time," every television station and television
network in the United States must carry that same broadcast simul-
taneously. Whenever a senatorial candidate uses "voter's time," every
television station in his State must carry that same broadcast simul-
taneously. And whenever any House of Representatives candidate
uses "voter's time," every station providing substantial service to his
district must either be carrying that same broadcast or must simul-
taneously carry the "voter's time" broadcast of another House candi-
date to whose district it provides substantial service.
Thus, the central concept of the "voter's time" proposal is to force
the electorate to watch and hear political candidates by the expedient
of insuring that all television stations to which a citizen has access are
simultaneously devoted to the presentation of "voter's time" broad-
casts. This concept has grave political, social, and constitutional over-
tones. While it stops short of requiring that citizens watch and listen
to these programs, its underlying concept is to deny the citizen any
real freedom of choice.
Moreover, this force feeding would not in our judgment fulfill the
purpose of the legislation. Rather, it would be counterproductive.
PAGENO="0117"
113
Indeed, to the extent that broadcasting has become a valuable instru-
ment for political candidates to communicate their positions on public
issues-whether through appearances on news and public affairs broad-
casts or through paid time-I submit that the impact of such appear-
ances would be substantially lessened by the candidate saturation of
the airwaves brought about by "voter's time." This would bear heavily
against the campaigns of gubernatorial and other statewide candidates
and of municipal candidates, and campaigning for State and local bal-
lot issues, none of which are entitled to "voter's time," but whose com-
munications with the voters could well be inundated by it.
One cannot, however, really appreciate how counterproductive the
bill would be until one examines its impact in the Nation's large metro-
politan areas. In making such an examination we start first with the
fact that in the 5 weeks preceding a general election-on the basis of
31/2 prime time hours each evening-each station has about 123 hours
of prime time, depending on how the phrase "prime time" might be
interpreted under the bill. The "voter's time" provided under the bill
must be scheduled within those 123 hours.
Let us consider the impact of this proposal on a big city station. As
an example, we have taken our station in New York City, WCBS-TV.
The impact is rather complicated to explain in words, so to facilitate
matters we have prepared two charts.
Let me interject that while we do not have the charts in the hearing
room, there is attached to the testimony at the end of it the two charts
I am referring to.
Chart 1, which shows congressional districts surrounding our station
in New York, the outlined and shaded areas, shows that the station
substantially serves, and "substantially serves" is the language of the
"voter's time" bill, at least 40 congressional districts in three States.
Let me pause there to note that we have been very conservative in esti-
mating only 40 districts, because we have included only the congres-
sional districts where a majority of the television viewing is of New
York City stations. There would be districts outside the shaded area,
which we have not included, where viewing of New York City sta-
tions might be as high as 49 or 50 percent, but which we have not
included.
For these 40 House districts we can conservatively estimate, based
on prior election experience, that in 197G there would be 3 Presidential
candidates, 7 senatorial candidates, and 90 candidates for the House
of Representatives who would be entitled to "voter's time" under this
bill; 212 30-minute blocks of time would have to be made available to
these candidates-a total of 106 of the 123 hours of prime time that are
available in the 5-week period.
Chart 2, also at the end of the testimony, shows our estimate of can-
didates entitled to "voter's time" on New York City stations.
For every New York station to carry 106 hours of "voter's time"
would be preposterous on its face. However, as I have previously noted,
the drafters of the bill have provided that in large metropolitan areas
the FCC may-I emphasize "may" because it is not required to do so-
the FCC may divide the "voter's time" responsibilities. Bear in mind
not for Presidential or senatorial, but only for House candidates,
among the various stations in the area.
PAGENO="0118"
114
Let us suppose that the FCC chose to divide that burden among the
six commercial VHF stations in New York City, ignoring, as I shall
assume it would, the city's UHF stations which have statistically insig-
nificant audiences. Even dividing the House "voter's time" responsibil-
ities six ways, each New York VHF would still have to broadcast more
than 12 30-minutes blocks of "voter's time" programing each week.
Again, I stress that these blocks would be scheduled simultaneously
on all the stations involved, and viewers would be unable to make any
other program choices even though the statistical likelihood of any
viewer having a voting interest in a particular "voter's time" period
is about 15 percent.
Yet this displacement of the normal schedule by "voter's time"
broadcasts would not by any means exhaust the amount of political
preemptions of normal programing during that 5-week period. The
station still may have to accommodate gubernatorial and other state-
wide candidates. It may have to accommodate mayoral and other
municipal candidates.
It may have to accommodate campaigns for statewide and local ballot
propositions. And if a Presidential ticket or a senatorial candidate
desires time-as seems probable-ui addition to the "voter's time"
allocation, the stations may have to accommodate that additional time.
Incidentally, our estimate assumes no increase in the number of
parties and candidates over what has prevailed in the recent past. But
the bait of Government-subsidized time on major metropolitan sta-
tions may attract candidates of additional parties, which can obtain
free "voter's time" by submitting a petition signed by 5 percent of the
voters.
Parenthetically, I might note that in our estimate of the number of
House candidates who probably would be entitled to "voter's time" in
1976, which was 90, compares with 131 actual House candidates from
those same districts last fall, but many of those, of course, would not
have been entitled to "voter's time" but possibly through the petition
process under the bill could have petitioned for it, had they obtained
enough signatures.
Although New York concededly is the most extreme example, a
similar situation would hold true in all of the Nation's major metro-
politan areas. Chicago, for example, has upward of 25 congressional
districts within the coverage area of its stations and Los Angeles sta-
tions serve 28 or more congressional districts. The three areas combined
represent about 19 percent of the Nation's television households. But
the impact of the "voter's time" proposal would not be confined to
large metropolitan areas.
Since stations across the country would be forced to preempt net-
work broadcasts for "voter's time" during periods which might differ
from c'ity to city, a checkerboard effect could be created which might
lead some national advertisers to cancel their sponsorship of network
programing. In the light of that possibility, each network would have
to consider whether it would not make sense to discontinue a con-
siderable part of its programing for the 5-week period. Even a niiui-
mum cancellation of 6 hours per network per week-the amount our
estimate shows would be preempted in New York, which is 10 percent
of the national television audience, would involve the cancellation of
some 90 hours of network program production altogether. Such a
PAGENO="0119"
115
cancellation would of course have a nationwide impact in large and
small markets, not just in the large markets.
For all these reasons, the proposal for "voter's time" should be care-
fully reconsidered. I must emphasize again that H.R. 7612, title V-the
"voter's time" title-is entirely separable from the other titles of the
bill and has no necessary connection with them. The primary objectives
of the bill on campaign reform and Government financing of political
campaigns can be achieved without any inclusion in the "voter's time"
concept.
I now turn to S. 372. Its vital contribution, from our point of view,
is its proposed repeal of the equal time provisions of section 315 of
the Communications Act with respect to the Offices of President and
Vice President. As you know, section 315, by mandating equal time
for all qualified candidates, however, insignificant, has made it impos-
sible for television to make adequate free time available to major
candidates. The wisdom of repeal has been amply proved by the results
in the 1960 election when the Congress did suspend section 315 for
Presidential and Vice Presidential candidates.
In that election, as you know, the networks were able to give sub-
stantial amounts of free time to the major candidates without making
equal time available to fringe candidates. It is, I believe, most relevant
to emphasize-to an Elections Subcommittee considering ways to en-
courage greater public participation in election campaigns-that the
1960 election produced the highest percentage turnout of voters in
the Nation's history.
I might note that that percentage was 64 percent, compared, for
example, to last fall's 55 percent.
Mr. DENT. I do not think broadcasting had much to do with that
percentage last year.
Mr. JENCXS. Perhaps not all of it, although I would suggest that
had there bee.n more television coverage of confrontations between
the candidates that there would have been more voting interest.
As a matter of principle, we would desire the repeal of section 315
with respect to all candidates for public office. In 5. 372, however,
the elimination of equal time obligations in connection with a can-
didacy for a Senate or House seat has been accompanied by a proviso
which would require the licensee to first offer a certain amount of
free time to each and every candidate for such seat, including fringe
candidates. We oppose this provision. If, as we believe, there is merit
to the proposition that the public would be better served by permitting
the broadcast press to cover political contests without anachronistic
equal-time obligations, we do not believe that purpoFe is furthered by
a proposal which, in effect, mandates a set amount of free broadcast
time for anyone who claims to be running a campaign for Congress-
however minimal that campaign might be.
In urging the repeal of section 315, then, we would prefer that it be
repealed for all Federal, State, and local offices now covered by the
section. Recognizing, however, the difficulties such proposals have en-
countered in the past, CBS is willing to support vigorously a bill-
like the original version of S. 372 as introduced by Senator Pastore-
which repeals the "equal time" requirement for the presidential and
vice presidential campaigns only. We would hope that experience
might induce a future Congress to extend repeal to all other public
offices.
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In closing, let me stress that in proposing the old straitj:acket which
section 315 places on the ability of broadcasters to adequately cover
political campaigns, and in opposing as well the new straitjacket which
the "voter's time" proposal would apply to both broadcasters and
candidates, we by no means minimize the contribution made by broad-
casting to the electoral process. In these troubled times, more than
ever, broadcasting must take a leading role in bringing about an alert
and informed electorate, through coverage of the candidates and
issues, including direct presentations by the candidates themselves.
Freed from arbitrary restrictions, we are confident that broadcasters
will be enabled to more completely fulfill that role.
As we approach the next presidential election in 1976-and the
200th anniversary of our Nation's birth-let us create the conditions
which will permit an historic high point of citizen participation in
American public life.
[The charts referred to in the testimony follow :]
CHART 1
WCBS~TV NEW YORK
AREA OF DOMINANT INFLUENCE
BY CONGRESSIONAL DISTRICTS
(As Per Nov 1972 ARB Study)
CONN.
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117
CHART 2
1976 Election Primetime Requirements, for WUBS-TV New York Under
H.R. 7612 (In 35 days prior to Election Day)
Number of
half-hours
Presidential (and vice presidential) candidates- 3 parties 11
Senate candidates, New York, 3 parties 9
Senate candidates, New Jersey, 2 parties 6
Senate candidates, Connecticut, 2 parties 6
House candidates, New York, 64 candidates' 128
House candidates, New Jersey, 22 candidates' 44
House candidates, Connecticut, 4 candidates1 8
Total half hours 212
1 The FCC may but is not required to divide the House candidates broadcast obligation
equally among the local TV stations. If the time for these House candidates is divided
among the 6 VHF stations, the individual station obligation would be 30 half-hours. In
that case, the obligation of WCBS-TV New York would total 62 half-hours.
Mr. DENT. Thank you very kindly, Mr. Jencks.
I yield to Mr. Jones for questions while I go down and make a
quorum for another committee.
Mr. JONES. Thank you very much, Mr. Chairman.
Mr. Jencks, I have no questions, but I do want to compliment you
on the very splendid statement that you have made here today.
Mr. JENCKS. Thank you, sir.
Mr. JONES. I think you really pointed out some of the problems
that we have in these two bills. Quite honestly `and frankly, I have to
admit that I concur with a lot of what you said here today.
Mr. JENOKS. Thank you, sir.
Mr. JONES. We appreciate very much your being here with us.
Bill, I will yield to you.
Mr. FRENZEL. Thank you.
Mr. Jeneks, thank you for your testimony.
Did I understand you to say in the beginmng of your testimony
that the House and Senate candidates are treated differently with
respect to stations or network time?
Mr. JENOKS. Yes.
Mr. FRENZEL. This is in the Anderson-TJdall bill.
Mr. JnNOKS. That is right. House candidates for major parties have
received 2½ hours of time and Senate candidates of the major parties
have received 31/2 hours of time and, further-
Mr. FRENZEL. How about with respect to the networks or the station
size within the district?
Mr. JENOKS. In the case of the Senate candidates, every station,
every television station in the State would have to carry the "voter's
time" of the Senate candidates, whereas of course in the case of House
candidates, only stations which provide substantial service to his dis-
trict would carry his broadcast.
Mr. FRENZEL OK. So, if I am running in my little district in the
Minneapolis area, my "voter's time" is carried on each of the stations
that serves my district?
Mr. JENCE~S. That would be the `basic rule, yes. Every station that
provides substantial service to your constituency would carry your
"voter's time" broadcasts, yes.
Mr. FRENZEL. And-
Mr. JENCKS. TJnless the FCC chose, as it may, but it is not required
to under the bill, to divide the House "voter's time" responsibilities
among the various stations in the metropolitan area.
PAGENO="0122"
118
Mr. FRENZEL. That could be a real drag, because we have one sta-
tion that dominates the area and a couple of others that are not so
important.
Mr. JENCKS. That is right; it would be.
Mr. FRENZEL. The FCC could assign me one of the crumby ones,
one of the lO-watters?
Mr. JENOKS. That is right.
Mr. FRENZEL. That is a bad scene.
Mr. JENOKS. It would be politically sensitive, indeed, because, for
example, in New York City, of the six stations, you have a station like
ours which, let's say, regularly averages in prime time about 30 per-
cent of the audience that is viewing, and might well, one candidate
might well be assigned to another station which might average as little
as 5 percent of the audience.
Mr. FRENZEL. We have that problem in my area.
Do you have any figures that show television audience at the begin-
ning of a political half -hour and also at the end?
Mr. JENCKS. Well, of course, whenever-whenever during campaigns
we have purchased political time, we ultimately receive audience re-
search reports, so-called Nielsen's, which give us the audience data.
While I do not have data for representative broadcasts with me this
morning, basically, of course, it shows that viewing trails off very
markedly and I would say as a general rule it is rare that a paid
political broadcast on the network approaches half the normal network
audience of the program displaced, very rare.
Mr. FRENZEL. It seems to me if you really want to ruin a guy's can-
didacy, you give him a half-hour, as this bill does. Would you not
think 5 minutes would certainly plumb the depths of knowledge of
most of us.
Mr. JENCKS. Well, I do not know that I would want to comment on
that.
Mr. FRENZEL. OK. It does seem to me to be an unrealistic scheme
which seems to have been tailored to somebody's idea of what television
is like, but television is not like anything, because it is the difference
in every market.
Mr. JENOKS. Yes.
Mr. FRENZEL. What would happen if I went on my half-hour of
prime time and said all you network viewers out there, I am not going
to abuse you, I am going to surrender my time to Portia Faces Life
or to Superbowl?
Mr. HAYS. To your opponent?
Mr. FRENZEL. I would get a Tot more points.
Mr. JENOKS. You would. The bill prevents you from doing that.
Mr. FRENZEL. You mean I have to stand there silently?
Mr. JENOKS. It says there has to be a subst.antial live appearance by
the candidates and that the program has to be designated to illuminate
issues and to display your qualities.
Mr. FRENZEL. To get a little deeper into this, what is prime time?
Mr. JENOKS. That is a-prime time is a particular phrase under
the Commission's rulings, the Federal Communications Commission,
and is part of the jargon of broadcasting. I am not certain what prime
time is, to tell you the truth. although I have been in broadcasting
for many years.
PAGENO="0123"
lilO
Mr. FRENZEL. Neither am I.
The reason I ask is, if you assume it is between 8 and 10 of an
evening in a particular market, the listenership to any station in my
district varies in a ratio of 2 to 2. So if I get 8 o'clock on Tuesday night
on the CBS affiliate and it is after a hot show at 7:30, I may be show-
ing a rating of x, if I get assigned the next evening on the same station
after some left-over cold potatoes, a rerun or something, I will get a
rating of x over 2. It seems to me that, however fair this bill has
tried to be, it doe,s not understand that we have a fairly complicated
market.
Mr. JENOKS. That is right, and that viewers-
Mr. FRENZEL. There is no way to equate the exposure that each can-
didate will get.
Mr. JENCKS. That is right, no way at all.
If you assume, as I think you have to assume, that some "voter's
time" broadcasts would be scheduled to follow a preceding "voter's
time" broadcast-
Mr. FRENZEL. Oh, that `would be deadly.
Mr. JENCKs: I think it can hardly be imagined the level to which
audience-viewing might go because, take between our New York ex-
ample, with 40 districts, you start with the proposition that less than
3 percent of the electorate will be in the constituency that a House
candidate is trying to reach. Ninety-seven percent of the potential
audience would be in the ot'her 39 districts, better than 97 percent. So
in view of that, even if he gets a fair representation in `his own con-
stituency, the total viewing will hardly be measurable in normal
standards.
Mr. DENT. Would you yield?
That saves `me millions of dollars `because I never broadcast, be-
cause I do not have any television stations that give me more than
two percent. It is very nice, but I think we ought to bar it all and let
the people figure it out the best way they can.
I can reach my people without it and have for 4'2 years. How come?
Mr. JENCKS. We feel very strongly that candidates should be able
to make up their own minds as to how they will reach their con-
stituencies.
Mr. DENT. That is right.
Mr. JENCKS. They should not be told how to do it or bamboozled into
how to do it.
Mr. FRENZEL. The committee would agree with that.
Do you remember in t'he Democratic primary a couple of years ago
where you had public service time and you had eight or nine can-
di'dates lined up in a row? As I remember, one candidate was less
than serious and had `with him a rubber du'ck as a symbol of his
candidacy, and yet that is all that anyone ever remembers from that
particular thing, which is what happens when you line up candidate
after candidate. If there is any way to turn off a voter, it is to have a
whole `bunch of candidates.
In my area I figure if you only have two parties on the main station,
you would have 40 people, you would have to handle the'm in 35
days' time. Heaven knows how the prime time would be assembled.
The public would be so sick of us that we would have to drag them
to the polls in a paddy wagon, I would think.
PAGENO="0124"
120
Mr. JENOKS. We find in dealing with political purchases of network
time that both political parties have always been very sensitive to
what program they were knocking out or preempting.
Mr. DENT. Yes.
Mr. JENCKS. And the candidate who finds himself, let's say, displac-
ing a half-hour of Monday night football might find himself in some
difficulty.
Mr. DENT. My wife tells me that "Joe's Other Wife" or somebody
pushed Watergate off the air.
Mr. FRENZEL. I think that is about right.
Mr. DENT. Soap operas, have taken over.
If I could get soap opera time, it would be fine.
Mr. FRENZEL. I have great reservations about the way the public
service time is structured in the Anderson-TJdall bill, but I do like
the idea of public service time which you people make available. And
I think one of the things that has stimulated this kind of bill is the
fact that you guys really do a fairly lousy job of making public serv-
ice time available.
I know at home, for instance, whenever the Vikings are blacked out,
and of course that does not happen any more, and everybody is listen-
ing to it on the radio or gone to the stadium to see it. that is when
the public service TV time or the public service radio time is granted,
or at about 4 a.m. on Sunday morning, that sort of thing. I think if
your network and others and other stations did a more conscientious
job of allocating public service time, there would not be these kinds
of suggestions which are terribly well-motivated and make a lot of
sense conceptually but do not seem to be able to be put into a usable
form that would really work for us.
Mr. JENCKS. Let me, if I may, Mr. Frenzel, say that first, as to local
public service time on television stations, I can only speak for the five
stations operated and owned by CBS and iiot for our affiliated sta-
tions, over which we have no control.
From the standpoint of network news and public affairs broadcast-
ing, allow me to note that we broadcast between 500 and 600 hours a
year of news and public service time on the CBS television network
and that in an election year this amount of time generally increases to
between 600 and 700 hours a year.
Further, let me note that over the years, in seeking the repeal of
section 315 as it applies to Presidential and Vice Presidential can-
didates, we have pledged to make time available, free time, to the
Presidential candidates and tickets, and Dr. Stanton, in testifying be-
fore the Pastore committee earlier this year, repeated that pledge,
which was to make 8 prime time hours available to the Presidential
candidates in the next Presidential election, if, section 315 is repealed.
Parenthetically, in 1960, when we did have a repeal of section 315
in addition to the famous broadcast featuring Mr. Kennedy and
President Nixon, there was a great deal of other time provided and
indeed, on our television and radio networks combined in 1960, we
made 321/2 hours of time available to the Presidential candidates and
their supporters.
So on the question of making enough available, we would like to
make more available.
PAGENO="0125"
121
Mr. FRENZEL. Good. You are repeating that bribe then, if we will get
rid of 315 or the equal time, you will make scads of time available to
the Presidential candidates?
Mr. JENCKS. Yes.
Mr. DENT. Ask him if the Presidential candidate will be able to
mention me once in a while? Would he be able to?
Mr. FRENZEL. Could he say he is a close friend of John Dent's?
Mr. DENT. And not violate his time?
Mr. JENCKS. That is perfectly all right.
Mr. FRENZEL. I would comment that I think your statement on 372
seems to make sense to me. I think if we repeal, we ought to repeal
right across the board without condition. And I hope that that is what
this body will consider rather than to mess it up with a lot of rules
which are strangely not unlike the Anderson-Udall.
Mr. JENOKS. Right.
Mr. FRENZEL. Which became unmanageable and unfair district to
district simply because we are such a diverse country in terms of media
within the district.
I thank you for your testimony.
Mr. JENOKS. Thank you.
Mr. DENT. I will put my questions off until last.
Pick their minds first and then I will work on you.
Mr. MOLLOHAN. I have no questions.
Mr. DENT. Mr. Mathis?
Mr. MATHIS. Thank you.
Did I understand you, Mr. Jencks, to say that CBS was now pro-
viding between 600 and 700 hours of public service-
Mr. JENCKS. News, public affairs and-yes, news and public affairs
programing on the CBS television network. We provide over 500
hours a year in normal years and, as I said, much more than that in
election years.
Mr. MATHIS. What is the breakdown between news and public
service? You are talking in terms of the 6 o'clock and 6:30 Cronkite
show as being a part of this time?
Mr. JENUKS. That is right. I do not know that I could, offhand,
supply that breakdown. I would be very glad to supply it when I have
the data.
I would suppose that our regular news broadcasts would represent
perhaps 350 hours of that time and that the additional time would be
taken up by broadcasts like "Sixty Minutes", special broadcasts.
Mr. MATHIS. Like Watergate?
Mr. JENCKS. Watergate or Presidential addresses.
Mr. DENT. That is public interest?
Mr. JENOKS. Face the Nation, a variety of broadcasts of all kinds.
Now this does not include, of course, when I mentioned that a num-
ber of hours, it does not include the public affairs and news and public
service time which our local stations and other local stations provide.
Mr. MATHIS. I have had a minimal amount of experience with broad-
casting and share many of the reservations that you have expressed in
your testimony, which was to me very eloquent, and I, like Mr. Jones,
appreciate the fact that you have been here today and have presented
your thoughts and those of the network.
PAGENO="0126"
122
You have outlined, I think, extremely well the things that you would
not as a network be willing to accept. What would you be willing to
accept as a part of what I believe to be your primary responsibility,
as a Government licensee, to provide time to poltical candidates?
Mr. JENCKS. Well, first of all, the only part of the Anderson-Udall
proposal that we have undertaken to oppose here, of course, is Title V.
The other titles do provide, of course, substantial Federal financing,
which the candidates can use in any way they see fit, direct mail, tele-
vision, radio, billboards, anything, and while we are not here to express
an opinion on the very delicate and difficult subject of either whether
there should be substantial Federal financing of campaigns or how it
should be done, there is i~o doubt that that part of the bill would help
candidates `a great deal in purchasing media availabilities.
We do recognize that it is our obligation, at the network level `as to
national candidates, at the station level as to local candidates, to make
not only time available to the candidates in suitable formats, but also
to adequately cover the candidates in news and public affairs broad-
casts.
We think our record is pretty good in covering them. I have already
adverted to our standing offer to provide `at least 8 free hours for the
Presidential candidates on the network, should 315 be repealed. That
was referred to jocularly as a bribe, but let me note that without the
repeal the average number of Presidential candidates in the last four
or five Presidential elections has been as-has varied from 11 to 13.
Without repeal, our offer of course would mean we would have to fur-
nish 4 hours to each and every one of those candidates.
So we, in answer to your question, we do recognize that it is our
responsibility in the public interest and as trustees of the public in-
terest to cover political campaigns and to do so adequately. Obviously
in the very large metropolitan areas when you have a situation like
New York, it is very difficult to give as much time as you would like
to individual congressional races, very difficult.
Mr. FRENZEL. Would the gentleman yield?
Mr. MATins. Yes.
Mr. FRENZEL. I would like to ask unanimous consent to delete the
word "bribe" where it appeared in my statement, unwisely and faceti-
ously, and insert in lieu thereof the word "inducement."
Mr. DENT. it is only spelled differently.
Without objection, it is so ordered.
Mr. MATHIS. Mr. Chairman, I would just simply like to say to Mr.
Jencks that I personally have great reservations about the repeal of
315 without some modification of it. I think we have to protect the
broadcasters by assuring that only the major candidates have access
to this great amount of time. But I am quite frankly more concerned
about the House and Senate campaigns than I am about the Presiden-
tial campaigns. I am concerned an inadequate amount of time is being
made available to the vast majority of candidates for the House and for
the Senate.
We are all very much concerned about the escalating cost factor in-
volved in being elected to Congress. One of the most spectacular in-
creases in the cost has been through the use of the electronic media.
I think that the industry, of which I was proud to be a part for a large
number of years, might well prepare itself to accept some kind of man-
PAGENO="0127"
123
datory requirement that they allocate time to candidates of the major
parties, because we are going to have to do something I think in the
Congress to insure that the average citizen has the right again to par-
ticipate in the electoral processes of Government.
Mr. JENCKS. Well, perhaps so. I think as to mandatory allocation of
time, our view would be that you get right back into the kind of diffi-
culties that 315 has presented us with over the years, in which you
really prevent the media from doing as well by you as it ought to do,
by having a mechanistic rule.
As to the expenditures in television, I might note that there is one
bit of cheering news on that front in that the data that the FCC has
collected for 1972 shows that the total political expenditures in tele-
vision hardly rose at all between 1968 and 1972. So at least that seems
to be some cessation in the escalation of television expenditures.
Mr. MATIJIS. That is encouraging.
Thank you.
Thank you, Mr. Chairman.
Mr. DENT. We are fortunate to have Chairman Hays of the House
Administration Committee with us who has devoted, to my knowledge,
more time and thought to election reform than any Member of the
Congress in my lifetime of service, and some of us believe his original
proposals, if they would have been accepted a few years ago, there
would not have been as much trouble as we have run into.
Mr. Hays, the floor is yours.
Mr. HAYS. Thank you, Mr. Chairman.
I apologize for not being here on time, Mr. Jencks. I had a long-
standing engagement with Senator Javits to present a committee re-
port that we worked on for 2 years concerning the North Atlantic
Treaty Organization. So I did not hear your prepared statement and
I have not had a chance to read all of it.
But do I understand that you would like to have eliminated as it
applies to local candidates as well as the Presidential ones
Mr. JENCKS. We would like to see it eliminated across the board,
but as I state in the statement we would be, in view of the difficul-
ties that that proposal has always encountered, we would vigorously
support a repeal even were it limited only to the Presidential and
Vice-Presidential candidates, believing that if experience showed that
we could be trusted with that repeal, that Congress at some future time
would repeal as to other candidates as well.
Mr. HAYS. Mr. Jeneks, you are asking, as I understand-well, you
are not asking, you are pledging to provide time to major candidates, is
that correct?
Mr. JENOKS. Right, yes.
Mr. HAYS. What makes you think that somebody will not go to court
and force you to provide time?
You cannot discriminate, in my judgment. I do not legislate or
vote because I think the Supreme Court is going to declare it un-
constitutional. If I had listened to that argument, I would have voted
against every bill that has come up in the 25 years I have been here.
On the other hand, I am very much aware that the court has dis-
crimination very much on its mind these days.
How are you going to stave off a lawsuit which says in effect, or
alleges that when you provide the Democrat and the Republican candi-
PAGENO="0128"
124
date and do not provide, say, a third party candidate equal time, that
you are not discriminating or a fourth party or a fifth party?
Mr. JENOKS. Well, the only way I can answer that, Mr. Chairman, is
to say that while it may be true that the broadcast press does not have
as full a first amendment position as the print media, nevertheless, the
Supreme Court has on numerous occasions, including earlier this year
in the De?mocr~atic National Uomn-~ittee case, recognized that it is pro-
tected by the first amendment and that it can exercise its journalistic
responsibilities independently.
Now, over a period of 40 years or more we have, in fact, if you
please, made discriminating judgments on the basis of newsworthiness
between candidates. We do not usually in a Presidential campaign
devote much attention to the "green-back" candidate for President or
the "prohibitionist" or the "peace and freedom" candidate or the "vege-
tarian" candidate. Yet to my knowledge, it has never been contended
in the courts, at least, that we were wrong in making these distinctions.
Mr. HAYS. I think if Gallup took a poli, a great many people might
think in the last election it would have been better if you had picked
one of them and devoted more time to him.
You want 315 repealed for local offices too. I do not think you are
ever going to get this committee to report that attitude, for the same
reasons they did not the last time, which were adequately debated on
the floor and which got me a nasty letter from a couple of my television
station managers. The facts of the matter are, notwithstanding, that it
does not seem to me that Congress is quite ready to allow a station
to give time to one candidate and refuse it to another.
Mr. JENOKS. We share your estimate of what is likely to come out.
Of course, Senator Pastore did, too, when he confined his original bill
to the Presidency and Vice Presidency. I recognize that there does exist
concern among Members of the Congress and among candidates who
do not become Members of the Congress, for that matter, that their
local station might be unfair.
Allow me to say, however, Mr. Chairman, that, as you know, news
broadcasts and news interview broadcasts have been exempt from
section 315 since 1959, in the wisdom of the Congress. I am not aware
of any case in which a congressional candidate or anyone else has
pressed a fairness complaint against the broadcaster which has been
upheld. Indeed, I am not aware of any significant number of fairness
complaints made by candidates concerning the way broadcasters
handle candidates in these exempt. broadcasts.
I think that offers some testimony on behalf of the industry that
they would be fair if they were given a complete exemption.
Mr. HAYS. Did I understand you to say that you consider your news
broadcasts to be a public service?
Mr. JEN0K5. I was asked a question concerning public service broad-
casting by Mr. Mathis and I construed the question, I hope correctly,
as relating in general to news and public affairs.
Mr. HAYS. Do you have any advertising in your news programs?
Mr. JENCKS. Yes, indeed.
Mr. HAYS. Then it is not quite the free public service on your part,
is it? You have revenue coming in from it, do you not?
Mr. JENOKS. Perhaps so, but it is public service. Our news opera-
tions as a whole are not productive of net revenue. They are very ex-
PAGENO="0129"
125
pensive when you consider the total output of CBS and its network
and station operations in news and public affairs, it is not something
that a person who was interested in money making alone would do to
the extent that we do.
Mr. HAYS. Well, it has been my experience in some .stations in Ohio,
for example, they charge a higher rate before, during, and after, im-
mediately after news broadcasts than almost any other time in the
day. So they must consider it a fairly productive thing.
Mr. JENCKS. Let me make it very clear, I am not saying there are
not news broadcasts that are successful financially. Many local news
broadcasts are, most local broadcasts are. But in the whole spectrum
of news and public affairs broadcasting, including the maintenance
of the network news department, it is terribly expensive and the rev-
enues and sponsors do not cover the costs.
Mr. HAYS. Thank you very much.
Mr. DENT. I will pick him right up at that point. I doubt you would
have a viewer on your tube if you did not have news broadcasts too.
I think there is a little more to it than public service. It is a com-
modity, as you and I know.
Mr. JENCKS. ViewerS are interested in news. There are indeed-cven_~~~
parts of the country where the Cronkite news is the top-rated pro-
gram in the community, as it is, for example, in Burlington, Vt.
Mr. HAYS. What does Burlington have to do with this? Why did
you throw that in there?
Mr. JENOKS. Well, just as eyid~nce to Chairman Dent's point that
news, notwithstanding what I had said earlie~ isavery popular
commodity and I say in some areas it is the most popular commodity.
Mr. HAYS. Is Burlington, Vt., the only place where it is the most
popular commodity?
Mr. JENOKS. It is one of the very few places that it is.
Mr. HAYS. That says something for Burlington, Vt., but I do not
know exactly what.
Mr. DENT. Mr. Jencks, as I read the proposal, as well as your posi-
tion, I want to say you have been very frank with us, laying your cards
on the table where we can read them. As I read the practical situation
and what I would say the result, if we were to just repeal 315, just for
the Vice Presidential and Presidential candidate, and leave in its
stead the good will of the radio networks to make time available
to the major candidates, and if a minor party is considered to be one,
the third party which is the head of the minor party-there could
never be a minor party-if the major party is measured as having had
15 percent return in the last election, then what you are doing is
sealing the fate of all independent candidate movements in this
country for the Presidency or the Vice Presidency, because in my
memory, I think from my knowledge who ran on a third party that
ever received anywhere near 15 percent or over. That would be LaFol-
lette and Teddy Roosevelt in the Bull Moose campaign.
At that time there were no televisions. Now if there had been an
added advantage for the major parties at that time to have had free
time in any limit that the stations, according to whom they favored,
could give, even if it was equal time, I do not think either one of them
would have ever come near getting 15 percent, as popular and as well-
known and as publicized as they were.
25-239 O-73----9
PAGENO="0130"
126
Now Mr. Wallace, with a well-financed campaign, a very definite
public appeal, great hordes of people were running all over tl~e
country wearing his bumper stickers, pushing for him, a lot of other
people who did not like their prejudice to show on top, yet he only
got 11 million, less than 15 percent.
I do not think the Congress in good conscience could possibly cir-
cumvent the constitutional rights of citizens of this country by prac-
tically eliminating any possibility whatsoever of ever building a third
party, because to be able to have had 15 percent in a previous election,
you must have been on the ticket before, and how do you get on?
You say by 5 percent of the voters, significant in some instances;
2 percent for Congress. I find that while we are talking about voter
participation, are we not closing the door to candidate participation
with any hope of running?
Now we have gone along with independent parties just coming
up out of the blue, fringe candidate's just coming out of everywhere.
Somehow or other, the major parties pretty well held on without these
advantages that are now proposed for them. I took a dim view of the
mpeal of the set-aside of 315 in 1960, but the conditions were a little
different at that time, if you will remember. They always are.
I am more disturbed over the so-called $50,000 primary and $50,000
general election allowance for television broadcast media, expense,
for an office that only pays $85,000 if you win it. That alone in my
opinion has reduced the number of potential candidates who have any
idea that they can win. Now they might be able to win in rural coun-
ties, areas such as mine, probably Mr. Hays', where we have no major,
at least I do not have major television stations that I could call my
own, since I have no set-up within my district whatever, yet I run in
the jurisdiction where there are five major television set-ups. Any
candidate from that particular section would be considered a home
candidate and there is no question about what would happen in that
instance.
Now I am very much. convinced that with all of the talk we are
doing about reforming, maybe we had better look toward tightening
up some of the spending, tightening right at your end of it, the first
point, because I do not believe that any ordinary citizen of this coun-
try will ever be elected to the Congress of the United States if there is
within that area that he is running television time available for a
candidate who has the money. I would think as far as the free time,
I also take a very long-studied look at free money, out of the Treasury.
I just wonder if people are going to stand still for me being a candidate
and then pay for it through their taxes.
I do not like it myself, paying taxes to finance somebody else run-
ning. I do not know whether we would be in just as big a can of worms
on that `as what I conceive, in trying to tie down prime time 35 days
before election on a given amount of time to each candidate. A lot
of candidates would not go on television. I might have when I was
younger, but I do not think I would now. If they see me now, I would
be out on old age without even a chance.
But seriously, Mr. Jencks, I think that your own group ought to
become aware of the fact that what we are doing here is making it
possible for well-known movie stars, or at least pubhc figures of some
kind, a guy that gets away wi.th a good murder or something like
PAGENO="0131"
127
that, to have a better chance to run for office than anybody, including
incumbents. This idea that the incumbents have such a great advan-
tage, we have something that no candidate has. We have a record.
That record can be more devastating than all the money that you
might be abe to raise in your `behalf.
I am very much of the opinion that we are set up, under the Con-
stitution, very wisely thought out, the House of Representatives by
population and the Senate by States, figuring that the districts then
would be represented by people who took first and foremost interest
in that which was for the welfare of their district.
If we all do that, we then get the majority of the districts of the
United States doing that which is for the greater good for the greatest
number of people. If we have something go wrong, then we have the
Senate, giving the little States the same consideration as any other
State, California, New York. We cannot tinker too much with the
fundamental rights of all people, when we start putting money limita-
tions, when we start putting in this legislation other than a reasonable
percentage of the amount that might be spent for the candidate
through a single committee. I am very much opposed to the multiple
committee suggestions, I think it is a very serious matter. It probably
got us into the trouble we are in now. But the broadcasting companies
or the broadcasting media is not one that I think should become the
prime, I would say the prime factor in the election of a candidate to the
Congress or the Presidency of the United States.
I very seriously doubt if I could I would again vote for a $100,000
allowance besides all the other money that you could spend. It might
do good if we send you a copy of Roll Call showing these expenses.
There is a suspicion in the minds of people that if anyone spends
$280,000 to get elected to the Congress for a job paying $85,000, that
"there must be something juicy here that they do not want us to get
a look at."
I have not heard any proposal from you of cutting down that
$50,000 primary and geiieral election figure. Do you think that is a
reasonable figure to permit to be spent by candidates for the Congress
of the United States?
Mr. JENCKS. I am certainly not an expert on that; I suppose that
the amount that is necessary for a candidate to spend to reach a con-
stituency of roughly 450,000, half a million people, will differ greatly
according to the nature of the district that he has; whether the popu-
lation is somewhat scattered, whether it is urban, rural, and so forth,
and the efficiency of the media that he has to rely on. So I really do
not know whether, you know, you can name a figure that would work
well in Alaska and would work well in North Dakota and would also
work well in Pennsylvania.
Mr. DENT. Now that is the point. I think that the Constitution en-
visioned that, the early Founding Fathers also envisioned there would
be different districts. But there is one thing sure now, that each of us
represents approximately the same number of bodies in a congressional
district. In the old days when you had 1 million people and another
fellow had 210,000-I probably came the closest to being defeated in
my lifetime, in ~a primary, with a gentleman who spent $280,000 and
he spent the great portion of it, as much as he was allowed, plus some
friends spending some more, on TV. Yet, I do not have any station
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128
that has more than 2 or 3 percent coverage of my whole district. Yet,
I put that money in there. I was supposed to, in self-defense, and was
solicited to do so many times by the station agent, to come in and spend
counterpart money to put away the influence he was creating. Now it
had some effect, and we are a rural county.
I came the closest to being defeated in my life. He got to be a house-
hold word, had real good manufactured films, looked like he was 10
to 20 years younger, whereas he was 10 years older than I was. You
people should come up with some recommendations of your own as to
what you would think. But you would hesitate to take a contract, in
my opinion, from an advertiser coming into your station who has $85,-
000 worth of product to sell and offers to give you $100,000 to advertise
it. You would get your cash on hand, would you not, before you do it,
like you do with us?
Mr. JENCKS. Certainly would.
Mr. DENT. It is just silly, that is all we have to sell, regardless of
what anybody else calls it. I think this $50,000, Mr. Hays had a total
less than that for the whole ball of wax spending in his bill. What
recommendation would you have?
Would you care to talk it over with your colleagues and come up
with some recommendation within reason as to what a Member of Con-
gress ought to be permitted to spend on television? That is your line
and that is your area.
Mr. PJENCKS. I would certainly be glad to consider it. I doubt whether
the media, ourselves, or any other media should assay, should tell
Congressmen or Congress, you know, how elections should be con-
ducted. I would like to see-
Mr. DENT. I am sorry, but your whole testimony is telling us how.
Mr. JENCKS. Well, but our testimony, I hope, was calculated to pre-
sent a viewpoint as to a subject matter as to which we have a special
competence because we think we know something about broadcasting.
We do not know much about how a congressional candidate campaigns
or how much money he should spend to reach his constituency.
Let me observe that in the big metropolitan areas, as you well know,
Mr. Chairman, Congressmen very rarely buy big-city television time.
For example, in New York, which is the example I was talking
about, it is very rare that there is a single purchase of time on channel 2
by any Congressman in the New York metropolitan area. When that
happens every two or three elections, it is usually because he wanted to
mention in the New York Times that he had bought the time on
the station. So in a sense the Anderson-TJdall bill would create politi-
cal expenditures in those cities where there are none now, although
of course, with Federal money rather than the candidate's own money.
Mr. HAYS. Would you yield to me?
Mr. DENT. Certainly.
Mr. HAYS. Would you be surprised to know, Mr. Chairman and Mr.
Jencks, that the average amount of money spent last year by all candi-
dates was about in the range of $22,000 per candidate for Congress for
the House.
Mr. DENT. That is right.
Mr. HAYS. Now the great lobbying organizations around town who
thrive on money that people are foolish enough to send them and do
not publish any report of what they do with it or how much they pay
PAGENO="0133"
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their lobbyists or how much the head of it gets, they `are always talking
about incumbents, bills, and how much money was spent. But the
average was $22,000.
Now if that is true, and it is because we figured it out, what would
be wrong with a fiatout ceiling say of $35,000 or $40,000?
I came to Congress by spending $3,000 against a four-term incum-
bent. So it is not true that incumbents `always win. I know, I do not
remember what he spent now, but it must `be 5 or 10 times as much
as I spent.
Mr. JENCKS. Well, I am surprised by the figure. It seems very low,
but I am sure it is accurate and it suggests-
Mr. HAYS. Somebody has suggested that we give everybody who
wants to run in a primary $50,000.
Mr. DENT. That is right.
Mr. HAYS. I do not think my district is any different than any other
and I have at least a thousand fellows who would run and figure out
how to rip off $48,000 of it. I do not think the taxpayers are going
to `buy that, no matter how much the media might like it. He might
not have anything on for the month or so but candidates, but-
Mr. JENCKS. Speaking for the medium of communications I repre-
sent, we are not interested in drumming up more political business.
Mr. HAYS. I happen to know that what you say about candidates in
big cities is true because I have talked to most of the Members from
New York and they just say there is no way they can buy television
time because there are so many stations and they cover such a small
segment, at any given time, of their district that you know 95 or 98
percent of the money they spent is going to somebody who could not
vote for them anyway.
Mr. FRENZEL. Would you yield?
Mr. HAYS. Mr. Dent `has the floor.
Mr. DENT. I will yield to him.
Mr. FRENZEL. I wanted to pursue that thought which began with
your statement that we would create expenditures of money where
none are being made now. My research indicates that there are only
about 40 races in the House out of 435 that are hotly contested each"
year, and that 85 percent of the races are not really much of a race.
There may be a primary, a guy may run unopposed. I think in almost
20 percent of the races there was not even any opposition. Of the 40
strongly contested races, or maybe 50, at least half of them. occur in
what you might call the major media markets where television is
not a factor.
So you are probably talking no more than 20 to 25 House races where
television is important or is a significant expense to a congressional
candidate. So this bill is saying, OK, in all these 435 races we are going
to make it an expense; so we are `multiplying by 20, probably, what
now exists, and maybe in the whole process borrowing the public to
death. Is that reasonable or am I getting kind of deep?
Mr. JENOKS. That is certainly the way we see it. It creates a use of
television time by candidates that in the main did not exist before. It
does so at Government expense. It proposes, as you say, an extremely
wasteful expenditure of Government money because you are buying
a medium that can reach 12 million people to reach the voting popula-
tion of a congressional district which is, what-30 or 40,000 voters.
PAGENO="0134"
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Mr. DENT. What congressional district?
Mr. JEN0Ks. Voters in a congressional district.
Mr. DENT. Thirty or 40,000 in a congressional district?
Why, I have that in Podunk. I will have close to 200,000 in every
congressional race.
Mr. FRENZEL. 200 to 500,000.
Mr. JENOKS. A great many of those will be below voting age, will
they not?
Mr. DENT. No. We have 475,000 persons now in the congressional
district.
Mr. FRENZEL. Roughly 60 percent of them are eligible voters.
Mr. JENCK5. I stand corrected.
Mr. DENT. Yes. I think that is a good thought that you brought out;
there are a few votes in the congressional district. That is why I am
very much set on creating a financing bill that will take into considera-
tion the number of voters in the district and, by a certain figure of
money, multiply it by the number of voters or citizens within the
district, because they are all potential voters even if they are not
registered, over 18 years of age.
Make that the maximum that can be spent. In the districts, the 20
or more that you bring up, if you look at the record over at the Clerk's
Office, there were a lot more than 20 that spent the $50,000 on TV;
besides spending the $50,000 on TV, they spent anywhere from 1 to
3 times that amount on other expenses in the campaign. Some places iii
the country, you can get enough dishcloths and little plastic buckets to
last you until the next campaign if you go around to enough meetings.
I think the whole darned thing has gotten out of hand.
Some day, we are going to start at that one most important item,
that is the limitation of the amount of money that can be spent in a
campaign. If we do not get to that, all this other thing is just a bag of
wash that does not mean anything.
Mr. HAYS. You would include in that, would you not, the limitation
on the amounts that could be contributed by any one individual?
Mr. DENT. Absolutely, oh, absolutely. I think maybe we ought to
make $100 bills, crisp, illegal in campaigns.
I thank you on my behalf at least, and I am sure on the behalf of the
committee, for your presentation here this morning. It has given us
another view.
Did you testify, did anyone from your organization testify in the
Senate?
Mr. JENOKS. Frank Stanton testified before the Pastore committee
in March, I believe.
Mr. DENT. Along the same lines?
Mr. JENOKS. On 372, yes. Of course the Anderson-Udall----
Mr. DENT. I wanted to know, because we would have to review it
if there are any major differences in your testimony.
Mr. JENCKS: No. He did not testify with respect to the Anderson-
Udall bill, which had not acquired as much steam then as it may have
now.
Mr. DENT. As much what?
Mr. JENCKS. As much steam.
Mr. DENT. I fail to perceive it. There might be, somewhere around,
some steam. Anybody have any other questions?
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131
Mr. MAThS. Steam is nothing but hot air, Mr. Chairman.
Mr. DENT. That is right. There is a little water in it, too, because
you cannot make steam without the water.
Mr. HAYS. Maybe I should not tell this. I am sure my own fellow
statesman, Frank Stanton, did not tell you, but I told him a story
which he did not find very amusing. This was on the front page of
the London Times.
There was an Englishman who had this very good shepherd dog,
well-trained to keep the chickens out of the flower bed, trained to bring
in the cattle, good watchdog and everything like that. The farmer got
affluent enough to get a "telly" as they call it in England. Once he
had it set up in his house, the dog refused to go after the cattle, refused
to chase the chickens, refused to bark at strangers; it just sat and
stared at the television, which says something about the theory prev-
alent in this country that television is aimed at the minds of 10-year-
old children.
Mr. DENT. You do have to comment on that.
Mr. HAYS. Frank did not, either.
Mr. DENT. By the way, before you leave the stand, I want you to
carry with you one self-evident thought, and that is that no incum-
bent was born into the Congress, he had to run sometime. So let's quit
spanking incumbents.
Mr. JENCKS. I agree with that.
Mr. DENT. Our next witness, I am happy to say, is a gentleman whom
many of us know and like to see around. His thoughts ought to be very
interesting to some of us, at least on the left-hand side of this table;
Joseph Cole, national finance chairman of the Democratic National
Committee.
Mr. Cole, welcome to the committee. Thank you for having the
patience to listen to all our meanderings.
STATEMENT OF JOSEPH COLE, NATIONAL FINANCE CHAIRMAN,
DEMOCRATIC NATIONAL COMMITTEE, ACCOMPANIED BY TER-
ENCE O'CONNELL
Mr. COLE. Very interesting, Mr. Chairman, although it has been
such a fast morning I have not had a chance to read what I am sup-
posed to say. So I will go through it briefly and then provide you with
an opportunity to ask me some questions.
Mr. DENT. Yes, present it in any fashion that you wish.
Mr. COLE. Mr. Chairman and members of the committee, earlier this
year I testified before the U.S. Senate Committee on Commerce, Sub-
committee on Communications, concerning this legislation.
That hearing and this today I am glad to see are part of a con-
tinuing effort by the Members of Congress to enact legislation to pro-
tect the democratic election system, which I strongly support, am
strongly fighting for, with almost complete emphasis on the restric-
tion of campaign spending and campaign solicitation for campaign
contributions, from which I have suffered painfully.
I would like to commend this committee for the bill that has been
presented thus far and for your efforts, in sounding the warning long
before the need of this kind of legislation became as apparent as it is
today. I think it is a call for action that is being answered by the citi-
PAGENO="0136"
132
zens of this country and by businessmen like myself who have been and
are now involved in financing of political campaigns.
In my testimony at the Senate, I was very specific and provide a
number of specific proposals which are now part of the bill. So, nat-
urally, I am strongly in favor of them. It is not necessary for me to
repeat them. My comments at this point would be more of a general
nature.
The Senate proposal I felt was a sound basis for improving the
reform of the election process. They solicited opinions on further modi-
fications and worked very diligently to effect a bill that would guar-
antee open and fair elections while involving the maximum freedom
of operations possible for a candidate.
They were very much concerned with incumbents versus nonincum-
bents, limitations affecting States with large areas and small popu-
lations, and all manner of considerations were scrutinized. They called
upon some of us who testified and others to amplify and comment on
all of these ideas. As I said before, some of them have been accepted.
Now, in reading this bill over once, I must say that I am very much
impressed with the depth and scope of the legislation that is now being
considered.
The bill, S. 372, to my mind is a continuing effort to reform at the
financial end of the system.
I think the intention of both Houses is sincere and critical. I think
we are now providing leadership in this area which is very important.
Because the bill is comprehensive, in my opinion there is very little
additional suggestions that I need make at this time.
There are a few items, for example, on page 15, line 17, when we
talk about organizations involved in servicing, we should add after
"the Republican National Committee and/or the Democratic National
Committee."
Section (b) page 18 is a matter on which there has been a great deal
of dissension within the States regarding reporting who should be
included in reporting, wives, children, members of the family, or just
wives. This is a matter that I think you should carefully examine be.-
cause it is necessary to bring about a reasonable guide in this situation.
I suggest as a possibility the fact that we could require reporting,
in addition to the spouse of the candidate, any person or group to
whom assets greater than $1,000 have been transferred by the candi-
date during a previous calendar year. The reason for this speaks for
itself; because it eliminates another tool that somebody can use to
create conduit financing and avoid reporting of the actual contributor.
There is talk in the bill on section 4, page 24, line 15, with regard
to the appointment of a commission. I have serious question about
whether a commission member who has a 7-year term should be re-
appointed, ever again. Possibly if they start out with odd terms and
were appointed for 5 or 3, they could be appointed for an additional
term. But a 7-year term is long enough for anything, particularly in
this particular line of endeavor.
On page 72, line 25, I would add that members of uniformed serv-
ices' income, I ~would include in that, or add to that, their income be
determined by including the allowances they receive in addition to
their regular income. This allowance is a thing that makes somebody
affluent.
PAGENO="0137"
133
Mr. FRENZEL. What page was that on?
Mr. COLE. Page 72, line 25.
Now I really think it is critical at this time to work to restore the
faith of our people in our government to preserve the independ-
ence at the same time of our leaders. We have in this committee ex-
cellent examples of independent leadership that has not been spoiled
by the processes of financing elections as we have it today, such as
the chairman of this subcommittee and the chairman from the great
State of Ohio, chairman of the full committee.
I am sure all these people know, but in case you do not, they are
outstanding examples of independence and the kind of things you
have to preserve and can only preserve by finance reform. We have
to get away from the idea prevalent today that all politicians are
tools of special interest; and also with the idea that all businessmen
are evil and selfish. Neither one is the case.
To restore confidence in our government, we have to overcome that
feeling that exists today.
It is a statement of fact, businessmen and businesses, like everybody
else under the Government, has a vested interest in the function of
government. I spent many years, since 1958, just making an effort
to get businessmen involved in government. So that instead of com-
plaining about things, they can get involved in the parties, so they
can make contributions to the development and the conduct and the
direction of the parties.
Certainly in their relationship with the government and members
of the Senate and Congress, they should maintain a high code of
ethics which I think is done in most instances.
This legislation, I feel, would enable us to put the financial rela-
tionship between candidates and contributors on the table. I am sure
we have nothing to hide. V~Te can restore confidence; this restores con-
fidence and also creates a decent and proper relationship between
businessmen and their representatives.
I think that the Members of Congress and the President and the
Vice President are representatives of all the people, and I think all
the people are their constituents regardless of party, or race, or wealth,
or affluence.
That ends my prepared remarks. If you would like to ask any ques-
tions I would be glad to answer them as long as my voice holds out.
Mr. DENT. I ~vill yield to Mr. Jones first.
Mr. JONES. Thank you, Mr. Chairman.
I have no questions to ask Mr. Cole. I do want to thank you for
being here and I appreciate very much your remarks.
Mr. DENT. Mr. Frenzel?
Mr. FRENZEL. Thank you, Mr. Chairman.
And thank you, Mr. Cole, for your testimony and thank you for
your help in assisting the Senate to put together what is, I think, a
useful beginning. I hope that the House will choose to modify some
of this, but the Senate did it promptly and did its job rather well, I
think, in what I would consider untypical style.
I would like to call your attention to page 51 of the bill. In a general
election there is a maximum expenditure allowed for a Democrat
Senator in a district which contains only one House seat for $171S,000.
The House Member serving the same constituency is allowed $90,000.
PAGENO="0138"
134
Does your endorsement of this bill imply that the Democratic Party
values Senators at twice the raze of House Members?
Mr. DENT. Oh, more than that. .
Mr. Coi~. I am sure that was not the intention or the implication,
however true it might be. I do not believe that they do. It says here
from a State which is entitled to only one Representative.
Mr. FRENZEL. That is right. That means that the House Member
runs in exactly the same size district as the Senate Member, but the
Senate Member can spend twice as much.
Mr. COLE. No need for that.
Mr. HAYS. Would you yield to me?
Mr. FRENZEL. Surely.
Mr. HAYS. The language says just the opposite of that. It says:
"$175,000, if the Federal office sought is that of Senator, Delegate,
Resident Commissioner, or Representative, from a State which is
entitled to oniy one Representative, or
"$90,000, if the Federal office sought is that of Representative from
a State which is entitled to more than one Representative."
But if it is one, for example, Wyoming, he can spend the same as
the Senator, $175,000.
Mr. COLE. Congressman, this section was designed in that manner
just to answer that.
Mr. FRENZEL. I have to take back that statement and I thank the
Chairman for reading the bill for me correctly. I like your suggestions
on page 24. I agree with you that a single term is plenty for any
member of the Commission.
I note 2 years ago we had even longer terms for Commissioners.
I think that that was an error and if we are to have a Commission,
and I hope we will, I would certainly want to be supportive of the
concept of one term being plenty on that particular Commission.
I also notice that you are interested in proving that politicians are
not tools of special interests. But the Senate bill makes no limit 01 it
does not limit pooled interest groups from making contributions, just
the way political parties, which might expect to have broader interests,
would make them or individuals would make them.
Do you think it is a good idea to have groups where hundreds of
people may contribute money and one or two make the decision as to
where the money goes, be permitted to operate in election contests and
perhaps influence elections?
Mr. CoLE. That is a very difficult problem, like a major labor
organization.
Mr. FRENZEL. Sure, COPE would be, AMPAC would be one, BIPAC
would be, NCEC.
Mr. DENT. NAM along with a few others.
Mr. COLE. My personal opinion, I have not given much thought to
that, my personal opinion is there should be some limitation.
Mr. FRENZEL. They are limited as an individual is limited.
Mr. COLE. I think there should be some limitation.
Mr. FRENZEL. There is nothing in the bill to prevent them from put-
ting $3,000 on the nose of every candidate.
Mr. `COLE. Is the total limitation?
Mr. FRENZEL. Yes.
I would think it would `be a good idea if we would have only indi-
viduals contributing to the campaigns and candidates, even if they
PAGENO="0139"
135
chose to contribute through pooi groups, but that the individual would
be required to designate in that instance the candidates.
I think what we are trying to do, what I think we ought to be trying
to do is to stimulate individual participation and interest.
Mr. Ooi~. They do that.
Mr. FRENZEL. And when you pool your participation you sort of
drain the interest.
Mr. COLE. Some of the large corporations are doing that, to a degree,
in their contributions to a party; while the corporation may develop
the mechanism in which employees and even executives could make
contributions and report it properly and they indicate whether they
want the Democratic Party or Republican P'arty, that is being done.
Carrying that out to the candidates is a very difficult kind of thing to
do, when you think of the thousands of small contributions that go
into one of these major entities.
Mr. FRENZEL. OK.
I think it would be useful if we had only individuals and parties
making contributions. I think it would stimulate a great deal of
interest and I hope the House will take that on.
Let's get back to the $175,000-
Mr. H~rs. Would you yield to me right there?
Mr. FRENZEL. Yes.
Mr. HAYs. You would not have any devious motive in mind by `that,
knowing that most Republican contributors contribute in large
amounts and most Democrats in dollars or $10, would you?
Mr. FRENZEL. Well, if I remember the figures correctly, the average
Republican gift over the years has been slightly less than the average
Democrat gift. I believe that has been Dr. Alexander's testimony, of
the Citizens Research Foundation. I will say that probably it was
before the last couple of elections.
Mr. COLE. Yes.
Mr. DENT. Now, Mr. Frenzel, you are thinking about COPE, which
comes ~mder fire-which is a nonpartisan-because they happen to be
motivated by labor organizations. They give $1 apiece, maybe 1,000
members, and they spend more of that on what they call educational
pamphlets and things than they do in direct contributions to members.
I am considered a so-called labor man in Congress in my district and
probably everywhere else. I would say in all my 42 years of campaign-
ing that I have not received a total of direct labor contribution that
was over $12,000, $13,000; and I have run a hell of a lot of times. They
do ndt give you that much. I do not know about my Democratic col-
leagues. I never see fat envelopes coming from labor.
Mr. COLE. I have not seen it. I have heard a lot of campaign-
Mr. MAThS. I have never seen one come from anywhere.
Mr. DEx~r. You are even worse than I am, worse off.
Mr. FRENZEL. I did not mean to differentiate anybody.
Mr. DENT. I know you did not.
Mr. FRENZEL. I picked up the thought because the witness men-
tioned these special-interest implications and because I am particu-
larly interested in stimulating individual effort, I myself have been the
recipient of pooled contributions from the Medical Association.
Mr. DENT. That is correct.
Mr. FRENZEL. And from BIPAC, which is the NAM Political Ac-
tion Committee. I guess I would be happier if I knew who was giving
them to me.
PAGENO="0140"
136
Mr. DENT. I agree with you.
Mr. FRENZEL. The individuals. I just think it is something that this
committee ought to think about, and I hope it will. If I could then go
back to this $175,000 in a single Member district, there are, of course,
single Member districts which are quite a bit smaller than mine, and
I guess Delaware would be a little larger, but it would be somewhat
comparable. If I cannot get you on the Senate and House difference,
then why do you let the Congressman running in Delaware spend
twice as much as I can spend, or the guy in Alaska who probably has
a big airplane bill, hut he has a third as many people as I do?
How come he can spend twice as much or the guys in Nevada or
North Dakota?
Mr. COLE. Because that is based on the number of people that he
has to solicit.
Mr. FRENZEL. He has less people than I do, or John or anybody else.
Mr. DENT. I do not think there is any district in the country that
has more than 475,000 plus 3 percent.
Mr. FRENZEL. Some of the small States have less than 2 Members
and more than 1, there may be 6 or 7 now, but they are not twice as
big.
Mr. DENT. Hawaii is one example.
Mr. FRENZEL. They have two.
Mr. COLE. You run into conflict of people versus area.
Mr. FRENZEL. Delaware does not have an awful lot of area, does it,
or Vermont?
Mr. COLE. It has more than most. It depends on what districts.
Mr. HAYS. Would you yield to me again?
You remember the original bill that I introduced had kind a dif-
ferent provision in it. VVe finally compromised on $40,000, I guess. I
think I introduced it at $30 for each Member of Congress. Then in
a State where they had less than that for the Senate, we add so much
times the population, or we finally compromised at $50,000, whichever
is larger.
In other words, instead of pushing the House Member up we cut
the Senate Member back in those kinds of States.
Mr. FRENZEL. I am for that.
Mr. DENT. I think you ought to read his formula. It was not too bad.
Mr. FRENZEL. If I can proceed.
Again, do you believe that the limits in the Senate bill which are,
except for the exceptions that I have noted, $90,000 for a House race,
are reasonable limits?
Mr. Cou~. I believe they are high enough.
Mr. FRENZEL. They are high enough?
Mr. COLE. That is right.
Mr. FRENZEL. The chairman of this committee and this subcom-
mittee I think would like to see them no more than half as high,
but my personal feeling is they could be considerably higher; despite
the chairman's objection, I still feel incumbents have a sizable ad-
vantage in various ways and that to meet an incumbent in most dis-
tricts takes a litle dough. If we are going to impose these limitations,
it is going to be very hard to beat him.
Maybe that is not so bad because we do not beat them very much
anyway.
Mr. COLE. I think what you must look at, although an incumbent
may have an advantage, you look at what an opponent can do with the
money that he receives. If it is $175,000, that is enough money to put
on any kind of campaign to expose yours.
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137
Mr. FRENZEL. I think $175,000 is enough money to put on a cam-
paign. I do not think $90,000 is.
Mr. Coi~. Well, 90 might be because in a senatorial campaign, you
are talking about an entire State; in a congressional campaign you
are talking about a district.
Mr. FRENZEL. I would agree there are some House districts where
90 or 50 or 20 might be a good campaign amount. There are some
House districts where it might take 150. We are going to pick up some
arbitrary limit somewhere that we can get more than half the Mem-
bers of the Congress to agree to.
Mr. DENT. Will you yield?
Mr. FRENZEL. Sure.
Mr. DENT. If you set $175,000, the incumbent can spend that too.
Whatever other advantages he had are added to it. So if you reduce
it down to a reasonable figure that ordinary citizens can reach, the
incumbent still has those advantages but he cannot spend more than
a certain figure and neither can a candidate that cannot raise that
$175,000.
Mr. FRENZEL. I agree with you that the incumbent can spend the
same amount. I also will agree he can raise money more easily than the
challenger.
On the other hand, the money he spends does not~do much for him,
because you are buying, in a campaign, identity and recognition. The
incumbent already has that. He can spend $90,000 or 50 or 175 and he
is not going to raise his recognition factor very much. The challenger,
however, unless he happens to be Jack Kemp or Ronald Reagan or
anybody, is not as well known. What he is buying is identity and recog-
nition, which he does not have.
I would like to have a witness here a little later on, I hope we will
be able to get him, who has done an interesting study. His table shows
that for a House race, the challenger has to spend about $10 to get the
same result that an incumbent spends $1 to get.
Mr. HAYS. Could I intervene here?
I just want to put on the record before the time runs out that I
disagree completely that somebody is buying recognition. I think what
the people ought to be looking at is whether they are buying service
or not. I do not think it is difficult to beat an incumbent if he has not
been giving service to his constituents.
Mr. DENT. That is right.
Mr. HAYS. If he has and they are satisfied with him, it is very dif-
ficult to defeat him. That is the crux of the matter. Of the 25 highest
spenders in the last campaign, 9 of them were incumbents who were
defeated. So that must tell you something and I just do not think we
ought to open this whole thing up to-
Mr. DENT. The highest bidder.
Mr. HAYS. I agree recognition has a lot to do with it. John Glenn
ran for the Senate. He has not one single, solitary qualification on
earth to be a Senator, `but he got a lot of votes because he was on tele-
vision a lot. You know, his only qualification is that he allowed himself
to be put in a capsule and shot out into space, but lie got a lot of tele-
vision coverage. I do not think we ought to necessarily write this bill so
the fellow who can buy the most slick ads on television is going to be
the next Congressman or the next U.S. Senator.
PAGENO="0142"
188
I do not believe basically when you go out and talk to people they
want it that way, either. As a matter of fact, most people I talked to
across the country, and that is not confined to Ohio or my district-
I get into some States as Mr. Jones knows. They think $50,000 is a lot
of money to spend for a $42,000-a-year job. I think maybe they are
right.
While we are at it, if I can ask one more question, Mr. Cole, what do
you think about these organizations who are using outrageous tech-
niques to raise money? What do you think about including them in
here for public reporting?
I got a letter yesterday from my favorite outfit, Common Cause.
On the outside of the envelope, it said, "Your Government is for sale,
details inside." Now that is what it said on the outside of the envelope.
All they wanted was for some sucker to send them $15, so old man
Gardner can live in the lap of luxury and some more of his employees
draw high salaries for doing God knows what.
I think that is as bad as anything the administration has been
charged with.
Mr. COLE. Let me answer that and make another comment, both of
which are very relevant.
In that area, Congressman, you are right; there are tremendous
abuses in using media, newspapers, mass media, in which we are deeply
involved, the attempt to create-I saw one like that recently-subter-
fuge, without explaining the story, and, whenever anybody gets au
idea, they form a committee and they form an organization and they
start raising money by that type of method. I think they should report
how much money they raise.
You would be surprised when you see how much is sitting there and
what they use it for. When a guy has a selfish-and it may be a proper
and good-idea and wants to use it, but cannot put it across through
the proper channels, he comes up with a new organization and they
start a mail and solicitation campaign, they raise a lot of money.
I think that is something that should be controlled, if possible.
On an overall basis, I cannot resist making a comment based on
my own experience, 1964-I have been close to four or five Presidential
campaigns and this you have to really believe in, and I am sure you do.
I have sat next to the Presidential candidate, who was tired, who was
weary and concerned with the issues and not able to handle them,
not able to prepare, not able to think about them because he has to go
downstairs at 7 in the morning to shake hands with a guy from whom
he may get a large contribution.
It goes on all day long and all night long, and I was asked at the
Senate hearings how much time do you think a Presidential candidate
spends on fund-raising? And I said at least 70 percent of his time, and
I think all of his waking hours. It is really demeaning, demeaning to
go through it.
You gentlemen have to eliminate as part of the American scene,
regardless of party-and I have seen the tribulations of trying to
meet the expenses of a campaign. They do not have a chance really to
discuss the issues, to think about them. I think that is a contribution
that this committee and the Senate ought to make; you have to elimi-
nate the duress of that candidate.
Mr. HAYS. One final question, Mr. Cole: Do you think $15 million
is enough to run a Presidential campaign if both candidates are lim-
ited to that?
PAGENO="0143"
139
Mr. COLE. Congressman, aiway, both candidates, it is an equalizer.
It is only if you spend $40 or $50 million you have to waste a lot of
money, we have seen that. I think $15 million is plenty to run a cam-
paign, as long as the other guy only has $15 million to spend, you are
on equal terms. And you could reduce the cost by making the tele-
vision industry give them special rates for whatever time they do have
to buy.
Mr. HAYS. That is one of the things I think we ought to do, limit that
Presidential campaign to $15 million at the most, and $12 million
would be even better~ probably.
Mr. COLE. I also do not think it is necessary to try to do the entire
ball game the first time around, to get an effective bill. I do not think
it makes any difference whether it is $12 or $15 million, but you have to
restrict it down in that area. It is a great equalizer, when both men
have the same restrictions.
Mr. HAYS. The British limit their campaigns for Parliament to about
2 cents per citizen in the district.
Mr. DENT. That is right.
Mr. HAYS. Now, $12 million would be 6 cents times the population
of the United States, roughly, which is how I came up with the figure.
And the British seem to get by fairly well. They limit the amount of
time they can campaign. They get a lot of incumbents defeated over
there all the time.
Mr. COLE. And they have been doing it for a long time. We started
out at-we were talking about 10 cents.
Mr. HAYS. They allow roughly $1,500 per constituency, period.
Mr. COLE. As far as I am concerned, Mr. Chairman, you cannot go
too low. That is why I say anywhere you go from these levels, there
isno risk on the down side.
Mr. DENT. The committee staff has been working on different formu-
lae. We think at the right time we will have some alternatives to offer
that, I think, personally, might be interesting, at least; and probably
will be acceptable to a great number of Members of Congress, and I
would think also to the national parties.
The very serious thing, that no one mentions in either bill or any bill
yet, is causing our staff to do a great deal of work; that is the fact
that there are organizations now that were never in existence before.
There is no man voting in the Congress of the United States today
that can vote right. He just cannot do it, because there are organiza-
tions within organizations and each one of them will have one little
section of the bill they are against. So you get these reports going
out from Common Cause, Americans for Democratic Action, labor
organizations, business organizations, medical organizations, lawyers,
real estate operations. Now they spend much money.
Mr. COLE. Yes; they do.
Mr. DENT. If we are ever going to straighten it out, they are going
to have to make the same kinds of reports of sources, expenditure, that
amount that they spend be counted toward the candidate they favor
within the limitation, or you need not put a limitation on because all we
will do is slough it on to special organizations to do the spending. There
are some studies that say that if Mr. Nader's report would have gone
out of his biographies or whatever you call them-what were they
called?
PAGENO="0144"
140
Mr. MATHIS. Hatchets.
Mr. DENT. That is one word for them. If they had gone much more
time before they did hit the districts, it might have changed the com-
plexion of the whole Congress. Yet that was not considered a political
issue or a political effort. These are the kinds of things that have an
effect upon elections and cost money to the candidate to counteract.
I think they are as much a political organization as the Democratic
National Committee, as the Republican National Committee, or any-
body else; their whole purpose in being is to influence Congress.
Mr. COLE. That is right.
Mr. DENT. The easiest way to influence Congress is to be beneficially
helpful to the candidate no matter who he is. I think this is the deep
study this committee or some committee is going to have to make, what
influences in an election of a special interest group, how did they get
their money, how did they spend it? We never know.
Mr. COLE. Mr. Chairman, there are 2,500 such organizations engaged
in this kind of activity today. I do not understand what anybody
could have against complete disclosure of all their activities, all their
finances.
Mr. DENT. They are pitting their judgment, each one of the commit-
tees, these 2,500, they are pitting their judgment against the judgment
of the elected representative who has to face the public every 2 years in
Congress to get a new lease on his position, and yet they do not have
to run, they do not have to account for anything, and they can be devas-
tating if they do not like somebody. They can do a very rough job,
especially they only are interested in incumbents.
So the advantages we may have, as some say, of being incumbents
are easily wiped out as disadvantages in the hands of others. I think
the whole ball of action for the future has to be a reasonable limita-
tion on the total amount of money spent and all spending must be
done through one committee. I do not care whether there are 50 or 60
organizations, their contribution shall be in a measure of what they
spend on special organizations divided up among the candidates they
support.
I do not believe there is any other way you will ever get a limita-
tion that is worthwhile.
Mr. COLE. And Mr. Chairman, that would be very attractive. That is
the way it should go. When you talk about possibly $15 million limita-
tion in a Presidential campaign, I want you to know that I believe
that that can be collected in $5, $10, and $20 bills. That is what we are
doing. We are being forced into that position anyhow, because you are
unable to get a significant contribution in either party today from
anybody. They do not want to be involved.
We are practically now solely surviving on mail campaign, mass
media. It is a pleasure, you get $5's, $10's, $20's, you do not have to
worry about a guy, what his problems are. It is like a load off a can-
didate's mind.
Mr. HAYS. Mr. Chairman?
Mr. DENT. Mr. Hays.
Mr. HAYS. I am glad to hear you say that. I notice you mention one
other thing in there. I have one question and one statement actually.
You mention about election commission. What about having the
GAO just do it, like they are now, and extend it to every race? They
are set up. There is no question that they would be beholden to the
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141
President who appoints them; there could be no pressure on them.
W1i~at do you think about that?
Mr. COLE. I do not think the commission should be a commission
that is appointed by the President.
Mr. HAYS. But the bill has it that way.
Mr. COLE. I thought the bill had it that-
Mr. HAYS. Well, he has to get names, but presumably if you read
the bill, he has to get a list of names from the Speaker and then he
can pick from that. You get a fair amount of-
Mr. COLE. The mechanism that the GAO has set up, they are over-
burdened. What they are suffering from today is not only being over-
burdened, but having a lack of direction, `a lack of ability to under-
stand the regulations as they are today. But from what I have seen
of them, you know, it is a fine group.
Mr. HAYS. I do not think they have any lack of ability to under-
stand the regulations. They wrote them.
Mr. DENT. No matter what the cost may be to enlarge, or if neces-
sary, a special division of GAO to handle the campaigns for reporting
and all of the other duties that they will have to perform, it would
still be much less than naming an independent commission with 13
members, which will end up, if everything else is normal, in 10 years
with about 10 to 13,000 employees. That is the way they work.
Mr. HAYS. I am glad to hear you say about these $10 and $20 con-
tributions, Mr. Cole, because I would say offhand 90 percent of all
of the money I have ever raised in the 25 years I have been here has
been from `a fundraiser at which the tickets are $25 each `and which
last year we paid the hotel $11 for food that the people consumed at
the reception. So the committee had a net profit of roughly about $14
after a few `small expenses, like printing ti'ckets, were taken out. I have
never really felt obligated to anybody since I have been here. It is
a successful way `of raising money. I usually spend about $20,000 in
a campaign and we usually raise that much and sometimes have a little
left over.
Mr. COLE. Right now the `climate for this kind of legislation could
not be better. You are really not giving up much, because people do not
want to make major contributions `any more.
We did organize a group `of leading people from all over the country
really insisting-people representative of every area in this country,
insisting that the time is now to get this kind of bill and get it through.
I am telling you, the future of Presidential campaigns is mass con-
tributions, like TV, like the telethon, by mail, you know, small dollar
value fund raisings. That is the only way it can go and the `only way
it should go because that eliminates the real pressure.
Mr. HAYS. What do you think about another thing a lot of Members
ask me to include in the bill if we can, the preemption of State re-
porting laws and substituting for that that a copy of whatever reports
have to be made to what ever commission be sent to the election officer
of the State, instead of having to report under one set of laws for the
Federal and then another set of laws for the State, which gets very
complicated?
In the case of Ohio, prior to this law it was much more severe. I
reported much more in detail to Ohio than I had to under the old Cor-
rupt Practices Act, which led to a lot of comment in the press that
I sent one report to the State and another to the Federal.
24-239 O-73----1O
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142
Mr. COLE. I am sure they should be preempted because there is no
uniformity and there really has to be because there is really no way
to check, to know what is going on sometimes, particularly with regard
to Federal offices.
Mr. DENT. Your State is like mine, it has a reporting law that we
report to the county and the elections bureau, secretary of the Com-
monwealth, and in some instances we have a county law that is a little
different th'an the State; as long as it meets the requirements of the
State, they can add more to it. The peculiar thing is that your totals
never sum up to the same amount, because you have to report a $10
contribution in one jurisdiction and you do not have to report any-
thing under $100 in another jurisdiction. You get into the position
where some people think that candidate is a liar, and is trying to
just obey the various laws.
I think preemption, if we get a good sound law, preemption is vital
to this legislation for the future as any other feature of the act.
Mr. COLE. And the States would welcome it.
Mr. HAYS. Ours would.
Mr. COLE. Either the commission or the GAO, they have to be re-
sponsive to the Congress.
Mr. FRENZEL. I think the States would enjoy preemption. Our sec-
retary of State has so testified.
Mr. HAYS. As long as he gets `a copy of your report.
Mr. FRENZEL. Right, that is all he wants.
Mr. DENT. I think you must, whatever else you do, put the penalty
for violation and figure on violations because the biggest problem we
have is an opponent running; for instance, in a particular case I was
vitally interested in, the report that was to go in prior to the election,
he sent a telegram to the clerk and said he lost the forms. So he lost
the primary and he just lost interest. He never did report what he
spent. But we know what he spent because we tallied the radio sta-
tions `and so on and it was way over and `above `any allowance ever
allowed in the laws.
So we are going to have to place the responsibility on candidates,
not only on incumbents, `but candidates, no matter who they are. I
think that might be an interesting view. We can write the bill if we
take long enough to do it.
Let's be very frank about it, if we write a bad bill, Lord knows when
we will get to a good bill. We ought to take the time to do it and not
be rushed into another mistake like the last one.
That is my humble opinion.
Mr. FRENZEL. I had a question of Mr. Cole. He was talking about
the future of fundraising is in small amounts, by direct mail, `and by
telethon.
What is the retail value of Robert Goulet `and Carole Lawrence for
an evening of television?
Mr. DENT. Who?
Mr. `COLE. Repeat your question.
Mr. DENT. They would not `be worth much in mine.
Mr. HAYS. I can mention some names on the Women's Lib side
that would be more valuable than Robert Goulet.
Mr. COLE. What do you mean, the retail value of watching the show?
Mr. FRENZEL. No.
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143
I am saying if you wanted to buy Gertrude Lawrence `and Robert
Goulet for an evening on television, it would cost you many thousands
of dollars, would it not?
Mr. COLE. For fundraising?
Mr. FRENZEL. Yes.
Mr. COLE. Well, Gertrude Lawrence, you would have a tough time.
She is not living.
Mr. FRENZEL. All right, somebody else-Carol Lawrence.
Mr. COLE. Very expensive.
Mr. FRENZEL. And their time for these fundraisers comes free, does
it not?
Mr. COLE. Generally, yes; almost `all of it.
Mr. FRENZEL. So you are saying you are getting $20 contributions
but, in effect, you are getting enormous contributions of personal time
from people whose time comes very high.
Mr. DENT. That evens up; John Wayne goes on for your people.
Mr. COLE. You are getting time.
Mr. DENT. It does not matter.
Mr. FRENZEL. I am still trying to build a little base here, perhaps
in a very clumsy way.
The Senate bill, which you are testifying in favor of, says that
you can contribute no more than $3,000 to a House or Senate campaign,
but if I get Robert Goulet or somebody else to come to my district and
raise money for me, or if, in fact, I get a lawyer to give me a couple
of hundred hours as my campaign manager, or an advertising man
to volunteer his personal services to run my campaign, those people
are going to give me 5, 10, 15, $20,000 worth of their personal time.
How can you, under our Constitution, in equity allow them to
make that kind of contribution to me and tell the -feflow who may be
in a wheelchair or elderly that he can only give me $3,000.
Mr. COLE. You must separate, Congressman; you must separate
dollars from time, effort, energy, and mind. You start getting into
that `area, you know, someone may be contributing their intelligence.
Every citizen `has the right to support a candidate in any manner
that he wants, if he wants to support him with his time or his mind.
Mr. FRENZEL. But what is Robert Goulet's business, Mr. Cole?
Mr. COLE. Well, but he is giving of his spare time.
Mr. FRENZEL. He is giving his business, is he not?
Mr. DENT. He is giving popularity, his name.
Mr. COLE. It is a different kind of thing.
Mr. FRENZEL. What is a lawyer's `business?
Mr. COLE. But a lawyer may spend 50 hours a week in his profes-
sion and spend an extra 10 hours in endeavors that he wants to give
away to people to help a campaign. You cannot restrict the use of a
person's talent and brain or time at the same time. You cannot count it.
Mr. FRENZEL. At the same time you can reduce the man's ability
to contribute if he doe's not have the time or if he is not able to do
the kind `of things that uniquely happen to work in campaigns.
Mr. COLE. Yes. But you see, when you are contributing dollars,
money, cash, that is where the evils and problems come from.
Mr. FRENZEL. Do you mean to tell me-just a moment-you mean
to tell me if a guy gives me $5,000 in -personal services, you do not
listen to him, but I do if he gives me $5,000 in cash? What are you
talking about?
PAGENO="0148"
.144
You mean I am differently beholden?
Mr. CoLE. There is a difference in the texture of the gift. You are
in a very intangible psychological situation. I think there is a difference
in the texture of a gift of giving a guy $5,000 which is hired money,
versus giving him time, which I am able to give because I have 100
hours a week to use so I give 5 or 6 hours of this and 10 hours of that
and you just do not look at it in the same way.
Mr. FRENZEL. You mean the time that I use to earn my money,
because I translate it to money and give it to a candidate, makes it
dirty?
Mr. COLE. No-
Mr. FRENZEL. But if I give the same amount of time, doing the same
kind of services, I have been lifebuoyed or something?
Mr. COLE. Not in terms that you use, but that happens to be the
facts of life.
Mr. FRENZEL. It is not the facts of life.
Mr. COLE. Sure it is.
Mr. DENT. Are you not doing another thing? You are talking about
John Wayne; what is he worth on the air?
And a mechanic who works for me on Election Day?
Mr. FRENZEL. You are setting a double standard, for one man's
labor against another man's labor.
Mr. COLE. You are setting a double standard only if you think some-
one's time means the same thing as dollars. It is also a double standard
for which I cannot conceive any kind of cure.
Mr. FRENZEL. Just because you cannot cure it, do you think a double
standard should exist, Mr. Cole?
Mr. COLE. I do not think-
Mr. FRENZEL. Is that your party position?
Mr. COLE. No, I do not think it is a double standard.
Mr. DENT. I might say it is not.
Mr. FRENZEL. You think a person can give as much of his time or as
much value of his time or profession or his energy and at the same
time somebody else should be limited in what he can give?
Mr. COLE. I sure do, because I think it is two different things entirely.
Mr. DENT. Will you yield?
Let's say like most of my campaigns have been run, having a large
area to run in, I have hundreds of volunteers who go out and knock
on doors, put posters up, hand out cards for me. Probably if you meas-
ure that they were $10 an hour workers and add it all up, it would be
worth much more than what a movie star would be worth to you. I do
not think that is the case.
If you can get some movie star that is a friend of yours to come in,
he is giving his talent in that particular area to help you.
I have a fellow who is a good pole climber, good at putting up
posters. He has given me his talent. We are not going to clutter up that
bill with that kind of stuff.
Mr. FRENZEL. All I am saying is, you are placing one value on one
man's time and another value on another man's time.
At the same retail value, you are telling one guy he is dirty and the
other guy is clean.
Mr. DENT. But you cannot put that talent in your pocket if you
do not spend it.
PAGENO="0149"
145
Mr. COLE. The man that gives $5,000-everybody gives of their time.
A man gives you $5,000 and of his time at the same time; they are two
different ingredients. The time is an intangible, it is worth a lot but you
cannot price it the same way your price dollars.
Mr. DENT. The whole purpose of this act is to have people partici-
pate, to broaden the base of participation, of every citizen whether he
is in a high place or low place.
I think it is just as important for the banker in a town to have an
interest in the political situation as it is for a street cleaner. That is
the basis of what we are trying to do, to make it possible for that very
same street cleaner if he wants to to run for public office.
Mr. FRENZEL. Mr. Chairman, I endorse all street cleaners running
for public office.
Mr. DENT. I do, too. If they can raise $175,000.
Mr. FRENZEL. I also think we ought to have reasonable limits on
individual contributions. But I do believe that placing a $3,000 money
limitation makes some of us unequal and I do not know which of
us, but we are saying that some of us who can give legal talent or
statistical talent or financial accounting talent or fundraising talent
because of our celebrity status are going to be able to make larger
contributions under that restriction than those who can only give
money.
Mr. COLE. That would be true regardless of what the limit was.
Mr. FRENZEL. Not necessarily.
If you. made the limit more reasonable in terms of money, you would
come closer to equating them.
Mr. COLE. You cannot. If it was $10,000, someone else can still be
giving you $50,000 worth of services. That does not change it.
Mr. DENT. Is it not true that the only reason you use your telethons
or public meeting of any kind where you use a celebrity is not that
he is going to influence the voters, it is because he can help draw a
crowd for you to influence? It is a completely different aspect of
legislation.
I do not know of a movie star who can get me 10 votes in my
district.
Mr. FRENZEL. A movie star is the same as a billboard.
Mr. DENT. You can get all the billboards in my area and you can-
not stand the number of people in front of them that you can stand in
front of a movie star if she is pretty enough.
Mr. FRENZEL. I am all for pretty movie stars. We did get last year
an exemption for personal services, and that should be maintained.
On the other hand, we certainly should try to balance the financial
contributions with what might be a reasonable contribution of others
in the campaigns. That is the point I am trying to make.
In my judgment, 3,000 bucks is not enough..
Mr. COLE. The question of $3,000 being enough or not enough I
think is totally unrelated to the personal services.
Mr. FRENZEL. Do you think our salary is related to the amount that
we should spend?
My beloved chairman always says he cannot see why we spend so
much money for a job that is paying $85,000. If we were paid $150,000,
should we spend more or if we were paid $40,000 should we spend
less?
PAGENO="0150"
146
Mr. CoLE. No; I do not think it has any relation.
Mr. DENT. The question of salary has to have some interest in the
matter. You might be surprised if I told you I know Members of
Congress who live on their salaries, and have all their lives. I know
that to be true. They have no other profession.
Mr. FRENZEL. Sure, but they do not campaign on it.
Mr. DENT. No. But we must say you cannot make more money out of
the campaign than you can in your jobs, and that happens to be the
case in the minds of millions of American people, when they find you
spend $200,000, they do not believe you are honest, and I for one do-
I am not saying it about you as a person, I am using that as a coverall,
because I know that is wrong and everybody else knows it is wrong.
I can understand a higher limitation for the U.S. Senator, I can un-
derstand the Presidential situation but, my gosh, when you are talking
about a Member of Congress spending as much as half a million dol-
liars-I was on this committee and handled a campaign contest between
two candidates from New York and the one came in on the basis
that his opponent had spent $300,000-some, when we got down to the
meat of it he was campaigning because he had spent only $190,000. It
was just ridiculous.
If the other fellow spends 10 cents more than you, he is cheating,
although you can spend half a million dollars if you have it.
In the same way, a contest or campaign, if my good friend-I hope
he is a good friend for another couple of years-Arnie Palmer, my
next-door neighbor, if he agreed to run against me and me with all
the money in the world, he would not have to spend money. All he
needs is a hot putter.
Mr. FRENZEL. Can I ask one more question at the risk of wearing
out my welcome?
Mr. DENT. No. I need your vote.
Go ahead.
Mr. FRENZEL. I do not know what we can agree on yet here.
Mr. Cole, with respect to your statement that it wears out candi-
dates to ask for money, you used the statement something about de-
meaning to ask for money.
Do you think when a political candidate asks somebody to support
him that he somehow lowers himself?
Do you not think we are pretty good products? Do you think we
humiliate ourselves if we say, "I am a good man. I would like you to
contribute"?
Mr. COLE. To a degree, fine; no, that is fine. But when a guy has
to do it 15 hours a day, when he has to go back to the same guys, when
he is desperate, when it gets beyond the ordinary needs, it is demeaning.
Mr. FRENZEL. Sure. But under the situation of the limits that you
have imposed here, or even reasonable ones which would be a little
higher, would not that exhaustion be eliminated?
Mr. COLE. It would, it would; that is why I favor that.
Mr. FRENZEL. I am sorry. I get upset when people say it is demean-
mg, I think being a politician is a very noble profession. I prize it very
highly, myself. I call myself a politician, not a statesman, not a repre-
sentative, I am a politician and I am proud to sell other politicians
and to raise money in their behalf.
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Mr. COLE. It is just because I feel that way and agree, I happen to
think public service is the highest form of patriotism. I do not even
want to ~o into the tremendous time and sacrifices in money I have
spent trying to help people I think are qualified and decent and honor-
able people. That is why, when outstanding men like the men I have
been around, running for President, after a while, due to the tremen-
dous demands beyond all reason that are made for money and the use
of money, they get to the point where they have to start practically
begging the same people who have helped them over and over agam,
that is demeaning, demeaning for me to watch.
Mr. DENT. One of the most experienced candidates and one who has
had his ups and downs and probably as many heartaches as any of
our careers, candidate for President, candidate for Vice President,
he said long before the publicity surrounding Watergate or any-
thing else cropped up, I have heard him say on occasions for years,
that the most difficult part of a campaign and the most demeaning, and
that was the word he used, was the continued begging and imploring
and searching for finances, and that was Hubert Humphrey, for whom
I have a great respect.
I think he has devoted more time trying to raise money than any-
thing else in his campaigns and he will tell you so. I think it is de-
meaning. Really I do.
Mr. FRENZEL. OK.
Mr. COLE. It gets to a point where there is no pleasure. It is a ques-
tion of degree.
Mr. FRENZEL. I agree it is hard work, wearying, sometimes it diverts
you from other things you would rather do during your campaign.
But as far as being humiliating or demeaning-
Mr. COLE. Who do you go to first? You go to your friends. You
have to go back to your friends who you know have done practically
all they can and if you have to go back to them again, use whatever
words you like, but it is not a good feeling to have to do it again, after
a point.
Mr. FRENZEL. None of us like to sell our Christmas card list, but it
happens to all of us.
On the other hand, the people that you ask for money, some of them
have reached the age of majority and probably all of them have reached
the age at which they can make decisions and they do not have to con-
tribute, I guess, unless they believe in what you are trying to do.
Mr. DENT. I do not know how they ever elected Congress or how
we got so far when campaigns used to cost, I remember not too many
years ago, probably, I think I spent $400 to get elected to the State
Senate of Pennsylvania., and served there for 22½ years. And I do not
think much more than that has been spent in congressional campaigns.
I will tell you a story for the record.
I ran for the U.S. Senate and for Congress in the same election.
I came within 11/2 percent of winning the Senate race and I spent a
total for both races of $67,000. There was a hell of a lot of districts I
was not known in. Why?
I put the ingredients that I think honest, true politicians ought to
put into campaigns, personal contact, work, an understanding of the
problems at least to the best of your knowledge and the best of your
ability in presenting them. You do not have to present them over TV,
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148
because I think you get a bigger crowd at the Moose Hall than you
do on TV.
I do not like to see the labor unions-they do not have an easy time
getting a buck off to their people. The labor unions down in the rank
and file, and I happen to have been a labor union member as well as
an officer, they will tell you "Why the hell do I want to put money
into a campaign for a candidate, politician? Let him go somewhere
else."
If they could raise, you say $1 a month, if they got $1 a month, the
labor unions would be able to raise, with their present membership,
would raise $180 million a year.
Mr. FRENZEL. That is a lot of money.
Mr. DENT. Yes, it is a lot of money. And they could buy a lot of
elections. If they are not buying them, what do you need the money
for?
I am a hard-headed politician on this basis, I think the country
is closing its door on a lot of potentially good representatives in every
area of political life. They will be barred completely if we do not do
something about the spending of money in the campaigns.
Mr. COLE. Congressman, what do you think? Do you think the
limitation should be higher on individual contributions?
Mr. FRENZEL. Yes. I am satisfied with the $25,000 on Presidential.
I would not want to make that any higher. In fact, I would not mind
if somebody made that lower. But I think that $3,000 in a congres-
sional or senatorial campaign is too low because it does not seem to
equate in my judgment with personal services that somebody else can
give.
So I am troubled about that from a constitutional standpoint.
Mr. COLE. Is there any way we can make the Presidential limitation
retroactive to 1959 so I could get even?
Mr. FRENZEIJ. Mr. Cole, I wish I could help you out of that dilemma.
Mr. DENT. You would be surprised, one of the formulas we have
been working on is one that takes the congressional district, because it
is uniform in the United States and establishes a limit for a congres-
sional district and then it allows the U.S. Senator to spend as much as
the total number of districts within his senatorial jurisdiction times
the amount that you allow for a Congressman.
Then it allows the Presidential and Vice-Presidential campaign,
coupled as one, to allow them to spend as much as 100 times the 100
Members of the Senate times the amount of money that the Senators
are allowed to spend in their jurisdictions. You come with somewhere
5 and 6 cents a vote. I do not think that is outlandish.
I think it can be reached, with small contributions, and many of
them voluntary. Eighty percent of the contributions I got in my
senatorial race were less than $50.
Mr. COLE. I just want to tell you one thing again, I am very interest-
ed, I think this finance reform is critical to the country today. If there
is any way that I can help you in the future, in your deliberations,
with information or suggestions, I am anxious to do that with any
resources we can place at your level.
Mr. DENT. Let me tell you, if one of the major political parties
would take the stand publicly on the basis if a reasonable spending, the
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people will absorb it. They will take it, they will look at it and the
other party will not be able to run against it.
Mr. Coi~. I thought we took that stand.
Mr. FRENZEL. I think you have.
Mr. DENT. We can raise money. If we were in power we would have
had the Watergate, what the hell?
Mr. FRENZEL. I would not wish that on you.
Mr. DENT. I do not think we would have had it that bad, but we
would have had something. Sure, a party in power can raise an un-
limited amount of money, that `has been `the history whether you are
running for squire or county commissioner or anything else.
The people are just about fed up, because there are too many ways
and means of spending money today that were never in existence be-
fore. No one would ever think of raising the kind of money some
Members think they have to raise today because they found ways to
spend it.
You take six television stations in the jurisdiction of a Congressman,
he can spend half a million dollars and not get decent coverage. Some
people say they have to have it, but if the other fellow cannot get it,
if `being an incumbent is bad, then that fellow should not run for office
because he is `only going to run for one term.
Mr. FRENZEL. I do not want to clean them all out-just your side.
Mr. DENT. That has been the history. You can win an election if you
try and do a job and `do it right. It is not easy to drive over 600 miles
every weekend, but I do it and I have for some 40 years. I hate it. That
is ~hy I am going to quit, not because of anything else, but I am
going to quit because I do not want to drive any more.
Mr. CoLE. Get a driver.
Mr. DENT. I have a driver once in a while, but his time does not
always agree with mine. He has problems.
I think your contributions here, Mr. Cole, just offhand observations,
show that there is an awakening in the leadership `of both parties, I
think, to the necessity for a real honest reform. I do not know, but I
think from your remarks that the `basic reform must start from the
limitation of spending and the limitation of contributions. Once we get
those two agreed upon, the others will fall in line, I am sure.
Mr. COLE. Simple strategy, those two ba'sic issues.
Mr. DENT. I think Frenzel, when he gets a few more terms under his
belt, will realize incumbents are not that bad.
Mr. COLE. I think he appears to me to be a very attractive, intelli-
gent Representative.
Mr. DENT. He can get elected out there without spending any money.
He knows it.
Your personality will elect you. I am going to try to help you get
elected by giving you a good bill to vote for.
Mr. FRENZEL. Just do not come out and say anything good about me.
Mr. DENT. I have a `standing offer to any Member of Congress, I
will go into their district and talk either way, good or bad.
Thank you very kindly.
Mr. FRENZEL. Thank you.
Mr. DENT. We appreciate your attendance and your very alert at-
tention here this morning, because I think you are probably the an-
swer to the whole thing, that is the interest of the people, and you are
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150
the people of this Nation. Because if you want to save this democracy,
do not leave it all up to us. You have to take part. She needs saving
pretty bad, in my humble opinion.
Thank you very much.
The next meeting will be next Wednesday morning.
[Whereupon, at 12:30 p.m., the subcommittee recessed, to reconvene
Wednesday, Oct. 10, 1973.]
PAGENO="0155"
FEDERAL ELECTION REFORM
WEDNESDAY, OCTOBER 10, 1973
HOUSE OF REPRESENTATIVES,
SUBCOMMITrEE ON ELECTIONS OF THE
COMMITTEE ON HotrsE AD~iINIsa~n&TIoN,
Washington, D.C.
The subcommittee met, pursuant to adjournment, at 10:05 a.m., in
room 2253, Rayburn House Office Building, Hon. John H. Dent
(chairman of the subcommittee) presiding.
Present: Representatives Hays (chairman of the full committee),
Dent (chairman of the subcommittee), Jones, Mollohan, Mathis, Dick-
inson, Frenzel, and Cleveland.
Also present: John T. Walker, staff director; John G. Blair, assist-
ant to the staff director; Ralph Smith, minority counsel, Committee
on House Administration; Richard Oleszewski, clerk, and Miss Bar-
bara Lee Giaimo, assistant clerk, Subcommittee on Elections.
Mr. DENT. What we would like to do this morning is to open the
hearings on 5. 372 and all related legislation.
If we get a quorum during any point in the hearing, we will recess
the hearings for a moment and go to executive session to try to move
an important piece of legislation that is now before us and make a
decision as to what the destiny of that legislation shall be.
At this moment we are glad to have with us the Honorable James V.
Stanton, Congressman from Ohio, who will testify at this moment on
the legislation before us, known as "Election Reform." Jim, it is good
to have you with us.
STATEMENT OP THE HONORABLE TAMES V. STANTON, A REPRE-
SENTATIVE IN CONG~RESS PROM THE STATE OP OHIO, ACCOM-
PANIED BY SANFORD WATZMAN, A]1MINISTRATIVE ASSISTANT
Mr. STANTON. Thank you, Mr. Chairman. I am delighted to appear
before your subcommittee. I would like to present to the subcommittee
my administrative assistant, Sanford Watzman, who is not only my
administrative assistant, but author of a book entitled "Conflicts of
Interest" and who has spent many years studying not only from a
public service standpoint, but also from a newspaper standpoint, the
problems of campaign reform.
Mr. DENT. I am sure the committee is very pleased to have such a
distinguished person with us this morning. You are very welcome.
Mr. STANTON. Mr. Chairman, I appreciate the opportunity to ap-
pear before you today on behalf of H.R. 10258, a bill aimed at creat-
ing a new institutional framework in Government for the regulation
of political campaign financing-and also for dealing comprehen-
(151)
PAGENO="0156"
152
sively. with conflicts of interest and other ethical problems in all three
branches of Government. I regard the bill as more far-reaching ahd,
in many respects, more stringent than the other proposals you have
under consideration, including S. 372, which the Senate has approved,
and ELR. 7612, the so-called Anderson-TJdall bill.
Title I of my legislation sets up a Federal Board of Elections and
Ethics (hereinafter called the Board). Title II establishes a Federal
Elections Campaign Bank (hereinafter called the Bank), functioning
as an arm of the Board. Title III assigns to the Board duties which
clearly confer on it an institutional status as being the focal point in
Government for dealing with all sorts of ethical problems in the three
branches. These are problems going beyond the immediate concern
with Watergate and campaign financing. But they are problems, such
as conflicts of interest, which are nonetheless familiar because they
generated serious political scandals earlier in our Nation's history-in
fact, even recently-and, unless they are dealt with now, are likely to
recur, causing more disillusionment and further undermining the con-
fidence of Americans in their Government.
I offer IE[.R. 10218, then, as a bill addressing itself to three goals.
The first is to give the people, through the Bank, a governmental
mechanism aimed at drawing campaign contributions out of subter-
ranean channels-to enforce the flow of political cash and credit to
the surface, where the press and public can watch the currents and see
who is riding with them. The second goal is to establish for the Bank
(through the instrumentality of the Board) some self-starting, self-
propelled, free-wheeling enforcement machinery. Those being policed
would have no place in the driver's seat, with one exception that will
be explained fully below.
*The third goal is, over the long run, to localize in the Government,
as it were, the primary responsibility for dealing with ethical problems
that willy-nilly affect, and sometimes preoccupy, Federal officials in
all three branches. The bill seeks to grant them relief from these con-
cerns and to free them to conduct the much more important substan-
tive business of government.
Of the three titles in H.R. 10218, I regard title I-the one establish-
ing the Board and its enforcement powers-as the most important. But
in the interest of a clearer exposition of what I seek to accomplish, I
shall proceed, Mr. Chairman, by elaborating first on the duties and
powers of the Bank, as contained in title II.
You have the statement I have before me. I will summarize the
provisions of this rather lengthy statement because it is 10 pages long.
Mr. DENT. It will be made a part of the record at this point in its
entirety.
[The complete statement follows:]
PREPARED STATEMENT OF CONGRESSMAN JAMES V. STANTON, ON BEHALF OF
CAMPAIGN FINANCING REFORM LEGISLATION
Mr. Chairman and members of this distinguished panel, I appreciate this
opportunity to appear before you on behalf of HR. 10218, a bill aimed at creating
a new institutional framework in government for the regulation of political cam-
paign financing-and also for dealing comprehensively with conflicts of interest
and other ethical problems in all three branches of government. I regard the bill
as more far-reaching and, in many respects, more stringent than the other pro-
posals you have under consideration, including 5. 372, which the Senate has
approved, and H.R. 7612, the so-called Anderson-Udall bill.
PAGENO="0157"
153
Title I of my legislation sets up a Federal Board of Elections and Ethics (here-
inafter called the Board). Title II establishes a Federal Elections Campaign
Bank (hereinafter called the Bank), functioning as an arm of the Board. Title
III assigns to the Board duties which clearly confer on it an institutional status
as being the focal point in government for dealing with all sorts of ethical prob-
lems in the three branches. These are problems going beyond the immediate con-
cern with Watergate and campaign financing. But they are problems, such as
conflicts of interest, which are nonetheless familiar because they generated
serious political scandals earlier in our nation's history-in fact, even recently-
and, unless they are dealt with now, are likely to recur causing more disillusion-
ment and further undermining the confidence of Americans in their government.
I offer H.R. 10218, then, as a bill addressing itself to three goals. The first is
to give the people, through the Bank, a governmental mechanism aimed at draw-
ing campaign contributions out of subterranean channels-to force the flow of
political cash and credit to the surface, where the press and public can watch the
currents and see who is riding with them. The second goal is to establish for the
Bank (through the instrumentality of the Board) some self-starting, self-pro-
pelled, free-wheeling enforcement machinery. Those being policed would have
no place in the driver's seat, with one exception that will be explained fully
below. The third goal is, over the long run, to localize in the government, as it
were, the primary responsibility for dealing with ethical problems that willy-
nilly affect, and sometimes preoccupy, federal officials in all three branches. The
bill seeks to grant them relief from these concerns and to free them to conduct
the much more important substantive business of government.
Of the three titles in H.R. 10218, I regard Title I-~the one establishing the
Board and its enforcement powers-as the most important. But in the interest
of a clearer exposition of what I seek to accomplish, I shall proceed, Mr. Chair-
man, by elaborating first on the duties and powers of the Bank, as contained in
Title II.
THE FEDERAL ELECTION CAMPAIGN BANK
A. General Authority of the Bank
The Bank would be an agency of the government, functioning as the sole and
exclusive depository of all funds that finance campaigns for the Presidency,
Vice-Presidency, the House of Representatives and the Senate. Also, it would be
charged with certain other duties. The plan, in essence, would work this way:
All candidates for federal office in primary and general elections would be
required to open accounts at the Bank. On receiving a campaign contribution,
whether in the form of cash or a loan, the candidate without exception would
have to deposit these receipts in his account at the Bank. There, a record of the
contribution perforce would be made immediately, and it would be maintained
thereafter for public scrutiny. This record would disclose the source of each
contribution. In addition, the financial value of commercial services rendered
to the candidate would have to be reported by him as contributions.
Moreover, it would be illegal to spend any campaign funds except by check
drawn on these accounts. The Bank would be formally notified as to who is
authorized to draw and sign these checks-the candidate and/or his agents.
(There is a similar provision for checks and checking accounts in Section 311 of
5. 372, a bill which, in lieu of a single Bank, authorizes a national network of
campaign depositories, utilizing existing commercial banks).
Campaign expenditures too, then, perforce would become a matter of record,
these transactions being reported as they occur. Armed with this information,
the voters wouldn't have to wait until the election was over to learn where the
candidate got his money and how he spent it. Under this system, it would be
against the law for anyone running for federal office, or for his agents, to receive
or spend any campaign contributions without having the exchange of money
recorded and cleared through the Bank. (A separate provision is made in HR.
10218, as a practical matter, for petty cash transactions).
In addition, organizations and groups supporting a candidate, or a group or
slate of candidates, would have to open accounts of their own at the Bank, sub-
ject to the same rules and obligations that would be imposed on the candidates
themselves. How these groups apportion their funds among the candidates, then,
also would become a matter of public record. Such organizations would include,
but would not be limited to, units and appendages of the national political parties
and special-interest groups such as the AFL-CIO or the American Medical
Association. They would be required to establish accounts at the Bank for that
PAGENO="0158"
154
portion of their budgets that they earmark for electioneering purposes. Through
checks drawn on the Bank, it would be revealed to the public that these groups
bad directed the Bank, say, to pay out `jx" amount to, or on behalf of, Candidate-
A, and "y" amount to, or on behalf of, Candidate B.
The Bank would have no authority to interfere in campaigns by vetoing con-
tributions or expenditures. It would impose no ceilings on giving, receiving or
spending-except that H.R. 10218 retains the limitations on broadcast expendi-
tures and certain other restrictions that are part of the Federal Election Cam-
paign Act of 1971 (Public Law 92-225). In my opinion, a persifasive case against
general limitations on contributions and expenditures was made by witnesses
appearing earlier this year in the Senate hearings. I myself believe that general
limitations are not desirable. In most races they give an edge to the incumbent.
However, should we decide later that limitations are in fact practical, and in the
nublic interest, we would be armed through data developed by the Bank with
the facts we must have if we are to establish ceilings at levels that are realistic.
Right now, the public doesn't know how much a campaign costs-how much
money is routed underground, sometimes surfacing, sometimes not. The Bank
would bring this all out into the open. It would trace the flow for us. Similarly,
although I am not myself an advocate of public financing of political campaigns,
we ought to establish an agency like the Bank before we ever embark on such
a program as a matter of public policy. For the Bank could give us a true ac-
counting of the ratio of public funds to private funds in the candidate's campaign
coffers, enabling us to see exactly how far we would like to go with public financ-
ing. If we were to adopt such a program, the public funds would be paid into the
candidate's account at the Bank in the same way that private funds are received.
As I have indicated, Mr. Chairman, the Bank would maintain a record not only
of contributions and expenditures, but also of debts incurred by the candidate
or an electioneering organization. Both the amount and nature of the debts would
be of interest. H.R. 10218 requires "continuous reporting of such debts after the
election at such intervals as the (Bank) may require until such debts are repaid
or otherwise extinguished, together with a statement as to the consideration
for which any such debt is extingushed or a statement as to the circumstances
and conditions under which any such debt is canceled." Obviously, the Bank itself
would not be liable for any debts. If the candidate's checking account becomes
overdrawn, he would be responsible for it in the same way, and under the same
laws, as patrons of commercial banks are held liable.
B. Affirm.atIve Action. by the Bank
At this point, Mr. Chairman, I would like to call attention to a key provision
of H.R. 10218 which, to my knowledge, does not occur in any of the proposals
that Congress is considering. I refer to a section of my bill to assure that the
disclosures of the Bank are meaningful and comprehensible to the public. This
is a matter of over-riding importance because anyone who is familiar with opera-
tions under the 1971 campaign reform legislation knows that, in many respects,
it is a sham in terms of providing the public with relevant information, in di-
gestible form. Tons of paper are filed with the Clerk of House, the Secretary of
the Senate and the Comptroller General (the latter with respect to the Presi-
dential races). No effort is made by these officials-in fact, the law does not
require them to make any effort-to cull from these forms facts that the public
probably ought to know. No reports are routinely made to the public that relate
one fact to another. The result is that, despite the voluminous disclosures man-
dated by the law, the public is no better informed than it used to be under the
old Corrupt Practices Act.
The remedy is clear, Mr. Chairman. In relieving the aforementioned officials of
the responsibility for receiving and disseminating this information, H.R. 10218
reassigns the duty, of course, to the Bank. But the bill carries this still one step
further-an important step. It imposes on the Bank itself the affirmative obliga.
tion "to gather, analyze, and disseminate to the public at reasonable intervals"
data determined by the Bank to be significant. Such information would include
reports on "the uses of (campaign) contributions and the purposes of (calm
paign) expenditures." In other words, the Bank would violate its mandate if it
were to merely dump into the public's lap several carloads of raw statistics and
puzzling lists of names. Detailed information would continue to be available.
But, in addition, the data would be summarized and correlated and then im~
parted to the public in an understandable format-for example, in the form
a press release or a concise fact sheet. The Bank would take the initiative in
releasing this information.
PAGENO="0159"
155
Why is this so important? Because, Mr. Chairman, if we are to have public
disclosure, then the voters ought to be given the facts in a form enabling them to
make intelligent and timely use of the data. How is the public served if it is told
only that Mr. "A" contributed to a candidate's campaign, without also being
apprised of who Mr. "A" is, or of the additional facts that the candidates, besides
receiving the contribution from Mr. "A", was also the recipient of a contribution
from Mrs. "B," whose husband is a business associate of "A," and from Mr. "C"
and Mr. "IJ," who are identified with the same industry?
At present, the only time a voter is made aware of such facts is when an enter-
prising newspaperman with lots of time on his hands, and much acuity and an
abundance of patience, discovers these facts for the voter by closely perusing
available data. But the truth is that most newspapermen are not so endowed,
or so motivated. And, besides, most of the newspapers in the nation do not have
Washington correspondents. Consequently, information that the voters really
ought to have, and which actually is available to them, goes unrepo.rted. The dis-
closure statements in the offices of the Clerk, the Secretary and the Comptroller
General merely gather dust, costing the taxpayers money for storage.
H.R. 10218 says that anyone who violates its provisions would be fined not
more than $5,000 or imprisoned not more than five years, or both-penalties
drawn from the 1971 law. The bill, if approved by the Congress and signed by the
President, would become effective for the Presidential race in 1976. Obviously, it
is too late to implement such a plan in time for next year's Congressional pri-
manes and elections. With experience gained from concentrating their efforts on
the 1976 Presidential contest, the Bank officials then would be equipped to deal
with the multitudinous House and Senate races. Therefore, H.R. 10218 proposes
that campaigns for Congress not be covered until the 1978 elections.
THE BOARD OF ELECTIONS AND ETHICS
A. $tructure of the Board
Mr. Chairman, I said at the beginning of this presentation that I regard the
enforcement machinery which H.R. 10218 seeks to establish as the most impor-
tant feature of the bill. Obviously, a law that is not enforced-that really is un-
likely to be enforced because it is out of touch with political reality-is worth-
less, perhaps worse than having no law at all. This was the case with the Corrupt
Practices Act of the 1920's, and I'm afraid it's true, as well, of the 1971 law
which replaced it. The fact is that too much attention is being given right now to
what I consider secondary issues-such as slapping a limit on contributions and
having the campaigns financed in part out of the U.S. Treasury. It seems to me
that, if a case can be made for these additional reforms, including those proposed
in H.R. 10218, then we would have all the more reason to want to assure strict
enforcement. But, if Congress fails to be persuaded of the need for any of these
changes, we ought still to give consideration to amending the existing statute in
such a way as to enhance the prospect that politicians will at least comply with
the laws we already have, whatever they provide.
The problem, then, that confronts us immediately as we examine the proposi-
tion for a Bank is: Who will be in charge of it? I am assuming, of course, that
we no longer want a system under which the politicians police themselves-with
Members of the House and Senate "bowing" to their own employees, and with the
President calling the shots for himself and others by having his own Attorney
General sit in judgment on him.
Traditionally, when Congress wants to take politics out of an issue, it resorts
to the device of setting up a so-called independent, bipartisan, nonpolitical board
or commission. As a matter of fact, this has been proposed in the area of cam-
paign finance reform, and the Senate bought the idea when it approved 5. 372.
But the trouble with these new governmental entities is that they quickly become
non-entities so far as the public is concerned; they fade into the bureaucratic
jungle, settling into a status of obscurity on a level with that of dozens of other
boards and commissions. These agencies have low visibility to begin with, as
their members usually are appointees who lack name recognition and a popular
base in the electorate. Since the public doesn't know these people, it has no par-
ticular reason to have confidence in them. In time, as has been shown in Instance
after instance, these so-called independent agencies tend to. forget the public
interest, anyway, and to begin perceiving their true role as one of servicing the
groups they are supposed to be regulating. When this happens, the voters don't
know where to turn. If they blame the President or their Senator or Congress-
PAGENO="0160"
156
man, they are reminded by these officials that responsibility had been vested in
a presumably impartial panel that now is beyond their reach. So it is said.
Mr. Chairman, I appear to be posing a dilemma here. If we refuse to let the
politicians police themselves and if, in addition, we refuse to entrust this task
to the usual nondescript "independent" agency, then to whom do we turn? I
submit that the answer lies in a new concept-establishing an agency that com-
bines true independence with visibility and accountability, structuring the agency
in a way that ties it in-perceptibly-with the highest level of government. We
can accomplish this by putting the Bank under the control of a Board of Elections
and Ethics, with the President of the United States serving by statute as Chair-
man of the Board, and with its four other members, appointed by the President
and confirmed by the Senate, holding life tenure, as federal judges do.
H.R. 10218 spells out how the President, or a surrogate designated by him
as his alter ego on the Board, would interact with the other Board members,
under a system of checks and balances that would keep both in line-yet out
front where the people can see them.
I realize, of course, that in this era of Watergate it would seem to be insensi-
tive, and lacking wisdom, to repose such authority in the President-authority
not only to apparently be his own policeman, but also to police Members of
Congress. As I will show in a few moments, however, his authority really would
be limited. But first I would like to cite some reasons for putting the President,
nominally, in charge at the Bank.
The main reason for doing this iS that it provides a focal point for respon-
sibility and, in doing so, it follows and preserves the lines of authority set forth
in the Constitution. The President is, after all, the government's chief enforce-
ment officer and, in normal circumstances, he is expected to provide moral leader-
ship as well. With Watergate behind us, we might hope for a return to this
state of affairs. The fact that the Board's actions would be taken in the Presi-
dent's name would preclude diffusion of authority and responsibility, as seen from
the vantage point of the voters, and it would provide them with a proper-and
effective-point of reference. Also, the President's seat at the helm of the Board
would give this agency prestige and clout, keeping it in the public eye.
Besides having the President himself as chairman, the Board would be dis-
tinguishable from other so-called independent agencies in that its four regular
members would serve for life, subject to removal only by impeachment. Life-
time tenure would assure true independence for the Board members (who would
be inherited, as it were, by any new President on his inaugural). There would
be no reason for them to feel inhibited about prodding the President and seeing
to it that he does his job. They would not be as vulnerable as members of other
governmental boards, who are appointed to fixed terms and who could be con-
fronted with the need to make particularly sensitive decision on the brink of
the expiration of their terms. In such cases the member sometimes votes, or is
suspected of voting, in a way to best assure his reappointment by the President.
Having no concern about who is elected President, or who is elected or re-elected
to Congress, since the Board members' jobs would not depend on such decisions
by the electorate, the Board would have maximum and assured freedom from out-
side influence.
H.R. 10218 would further enhance the actual power of the Board vis-a-vis the
largely nominal authority of the President. The bill says that no more than two
of the appointed members may belong to the same political party. There is a
further requirement that at least four members constitute a quorum. This would
prevent what might at some time be a faction of the Board, acting with or with-
out Presidenial leadership, from making important decisions at a rump session.
Moreover, the bill asserts that the President may vote as a member of the
Board only under two sets of circumstances-first, to join in a unanimous deci-
sion of the Board or, second, to break a tie. Should it ever become necessary for
the President to east a tie-breaking vote, a great deal of public attention would
be focused on him and he would have to answer for his action. But in most cases,
as is evident, the President would have little actual control because he would
not be participating in Board actions as a voting member, even though the Board
would have the advantage of functioning in his name. It is at this level where
we should want the Board to operate, because nothing is so vital to the func-
tioning our democracy than assuring the integrity of its electoral processes.
B. Operations of the Board
HR. 10218 confers extraordinary powers on the Board, as does S. 372 on the
independent agency which that particular bill would establish. The Board would
PAGENO="0161"
157
have authority to issue subpoenas, conduct hearings, seek injunctions in civil
proceedings and to go to the grand jury and then to court to prosecute its own
cases in criminal proceedings. In other words, the Board would operate inde-
pendently of the President's Justice Department. As you know, Mr. Chairman,
there is precedent for this. In 1971 we vested similar powers in the Equal Em-
ployment Opportunities Commission, albeit for different reasons. As our col-
leagues in the Senate have discerned, no board set up to police the President and
Members of Congress could have true independence, or be effective, unless it
were able not only to investigate complaints, and to launch investigations on its
own initiative, but also to follow through without depending on the usual enforce-
ment agencies of government which might be under the influence of someone about
to be prosecuted. To this end, the Board would of course have its own staff, headed
by an executive director and general counsel, appointed by and serving at the
pleasure of the Board, plus a cadre of professional civil servants.
I would like to call attention, Mr. Chairman, to one additional power that
the Board would have under H.R. 10218-~a grant of authority that, so far as
I a'ñ~' concerned, wolild give it one of its key weapons. The bill mandates the
Board "to engage~in random sampling of election campaigns conducted by all
candidates for particular Federal offices in order to insure compliance with
Federal laws in such campaigns, and to disseminate information to the public,
before the elections to which such campaigns relate, regarding results of such.
sampling."
What this means, Mr. Chairman, is that the Board would not sit in Washing-
ton waiting for tips or complaints. Instead, ftwöüld send investigators -i-n±o-the----------------------
field. The potency of this weapon is assured by the phrase "random sampling of
election campaigns." In other words, the Board, would act unpredictably in its
monitoring operations, its investigators showing up, unexpectedly, in one or
two states around the country to look into races for the Senate, in a few Congres-
sional districts to examine campaigns for the House of Representatives and in
certain cities or counties and states to audit the Presidential contest in those
areas. The fact that it would not be known in advance where the investigators
might appear would create a powerful incentive for candidates and campaign com-
mittees everywhere to comply with the law.
The risk of adverse publicity in the midst of a campaign-of criticism from
impartial, wholly independent governmental investigators-would be too great
for most candidates to choose to ignore. Moreover, this system of operation-
in essence, what the Internal Revenue Service does when it spot-checks income
tax returns-would solve the overwhelming logistical problems that the Bank
and the Board would have if it were to attempt to do the impossible-that is,
to monitor every single race for the House and Senate, and the Presidential
race in every geographical jurisdiction in the country. The random sampling
tactic would of course supplement, and in no way diminish, the ordinary dis-
closure operations of the Bank and Board, in which data would be supplied to
the public on the flow of campaign funds in every election contest.
H.R. 10218 also provides that, in any area randomly selected by the Board for
a field investigation, Bank officials must audit the races of all the candidates
in that particular contest. This would protect the Board from accusations of
prejudice-charges that it had monitored, say, the Republican candidate while
neglecting to investigate the operations of his Democratic rival.
OTHER DUTIES OF THE BOARD
In addition to its authority with re~pect to federal elections, the Board would
have other responsibilities, as provided by H.R. 10218. One such area of con-
cern would be conflicts of interest. For all we know, as I pointed out earlier,
Mr. Chairman, the next major scandal in government-as have some earlier
ones-might revolve around a conflict-of-interest situation, rather than elec-
tion campaign financing. Therefore, the time to do something preemptive is now.
All of us know about the confusion and varying standards in this area. Sanford
Waltzman, my Administrative Assistant, summed it up admirably in a `book he
wrote in 1971 entitled "Conflicts of Interest: Politics and the Money Game," tt
volume from which many of the concepts in H.R. 10218 are drawn. Mr. Watzman
wrote:
In the judiciary, conflict-of-interest rules are promulgated by a Judicial
conference with dubious enforcement powers; some judges of the lower
courts reject its authority, `and the Conference itself acknowledges it has
no jurisdiction over the nine Justices of the Supreme Court. In Congress,
25-239 O-73----11
PAGENO="0162"
158
there is one code for the Senate and another for the House, each relying
heavily on the "honor" system for enforcement. In the Executive Branch,
the situation hasn't changed much since the New York Bar Association re-
viewed in 1900. Its report concluded: "Regardless of the administration in
office, the Presidency has not provided central leadership for the executive
branch as a whole . . . Administration of conflict-of-interest restraints can
be observed only on a fragmented basis-department by department, agency
by agency."
In fairness to public officials in all three branches, Mr. Chairman, isn't there
a single, clear standard that we can adopt to identify conflicts of interest when
they occur, and to enact a law that will prevent them from occuring? Several
solutions have been suggested, but each has failings as well. Some of these are
disclosure, divestiture, trusteeship, abstention from participation in certain gov-
ernment action when one's financial interest might appear to be at stake, and so
forth. I propose in H.R. 10218, Mr. Chairman, to have the Board study this
problem and then recommend to Congress appropriate legislation that would
establish a uniform government-wide test of what constitutes an illegal conflict
of interest, and a single set of rules for preventing and erasing such conflicts in
all three branches.
The Board would also make a study of how it might "monitor and review
fund-raising and other financial activities of persons holding public office." If
legislation resulted from such a study, it would put the Bank in business between
elections, as well as during elections. It is no secret, Mr. Chairman, that the
ordinary expenses of holding public office-I am thinking of Congress partic-
ularly-are not adequately covered by existing governmental expense allowances.
For example, many of us find it necessary to make many more trips home per year
than the government reimburses us for. To this end, some Members maintain a
special fund. I happen to think that the public ought to know where the money
for these funds comes from, and how it is spent-since we are speaking here,
after all, about what might properly be seen as official activities of the Congress-
man. Perhaps such a study would pave the way for our adopting more realistic ex-
pense allowances for ourselves and other governmental officials; perhaps it would
result in legislation calling merely for a public accounting of such funds.
The Board would also be that agency of the government that would, as HR.
10218 provides, function in a general advisory capacity for officials in all three
branches of the government with respect to ethical problems of whatever kind.
And it would also make a study of "the establishment and maintenance of
uniform accounting systems with respect to contributions and expenditures on
behalf of candidates for Federal office and political committees, with a view
toward insuring an effective monitoring of such contributions and expenditures."
This is a broad and ambitious proposal, Mr. Chairman. I hope it is a practical
and desirable one, and I would welcome any questions you might have, now or
at any subsequent time.
Mr. STANTON. The Bank would be an agency of the Government. It
would be the sole and exclusive depository of all funds of candidates
for the Presidency, Vice Presidency, the House of Representatives and
the Senate. Also it would have other specific duties that it would be
charged with. All candidates would be required to open up accounts
at the bank and, upon receiving a campaign contribution, whether in
the form of cash or a loan, the contributions would be recorded through
the bank, just as transactions are recorded in your own account at your
own local bank.
There would be a record of the contribution and it would be made
immediately and would be maintained thereafter for public scrutiny.
This record would disclose the source of all contributions. It would also
disclose the financial value of commercial services rendered to the
candidate, which have to be reported as contributions under the bill.
It would also make it illegal for anyone to make contributions out-
side of the bank mechanism. Candidates would have to give author-
ization to the bank as to who can sign checks on behalf of the
candidates.
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You must put `through the bank all cash contributions, loans, and
reports of financial services rendered.
All expenditures paid out of the candidate's account would be by
checks drawn on the account at the bank, so if one were to be paying
his campaign debts, he would have to pay them through the account
at the bank.
The bank would maintain a record showing how the debts were ex-
tinguished, the consideration for it, and whether there were any debts
still outstanding. There would be no ceiling or contributions on the ex-
penditures or the amount given in the campaign. I think that we
realize, as people in political life, that financial limits in a campaign
are extremely unrealistic for enforcement purposes.
Better than limitation is exposure, which the bank would give you.
I think it is important to point out that voters can make a judgment.
If $400,000 is given by ITT to a Presidential candidate, or $200,000
is given by an individual to a Presidential candidate, disclosure of
that fact before the election can have more weight and effect than any
limitation that we could impose in a legislative `act.
One of the primary factors is that the bank would have affirmative
duties. This would involve taking all of the paperwork we now have
under the 1971 act and making it meaningful and condensing it down
into a digestible form so that it reaches the public before the election,
relating what has been done, who has made contributions, and the rela-
tionship between the candidate and the people who have made the con-
tribution. It has `been a practice in the past to show `a contribution from
J. Stanton, who might give his address as 1500 Investment Plaza,
which happens to be my law office in Cleveland, Ohio. There might be
another contribution from James V. Stanton, 10041 Carinelita DriveS
Potomac, Md., which is my home address. These different types of ad-
dresses and contributions have to be brought together and disseminated
to the public if the voters are to make a judgment, because I think the
important fact is that the public wants to know who is contributing to
whose campaign and why.
This bill assigns disclosure duties to the `bank, and carries this one
step further.
It imposes upon the `bank an obligation to gather, analyze, and dis-
seminate information to the public not just after election, but at rea-
sonable intervals during the course of the campaign. Hopefully, this
would be an important fact in the voter making a judgment as to the
candidacy of an individual.
I think in terms of the Board itself, it is important not to have
a Board that is just another Federal agency which gets lost in the
bureaucratic shuffle. For that purpose, we put the President on the
Board with four citizens, hopefully distinguished Americans, who
would serve for life. The reason for that is they would serve unfettered
and without obligation.
The Chairman of the Board, the President, would have duties
that don't call for any affirmative action on his part unless the Board
becomes deadlocked.
I think, if Congress wants to take the step of taking the problems
of campaign financing out of the framework that we have today,
then we have to deal through an independent agency.
I do not believe that we have effectively governed ourselves; I do
not believe that the executive branch can govern us; and I believe that
PAGENO="0164"
160
the Board, as structured in the bill, would establish a policing opera-
tion in which the public could have confidence.
I think that is what all of us are seeking.
I think it is important to understand that the operation of this
Board would be like a national board of elections; that it would have
subpena power, that it could conduct hearings, that it could prosecute
its own cases in court, and that it could conduct field investigations
through a random sampling technique.
I think it is important that there be accountability in the elective
process.
To date, the only accountability that we have really had has been
through the newspapers, and it has been inadequate and spotty at
best. Most districts in the United States don't have newspaper corre-
spondents in Washington, and they don't get a clear and precise
picture of the Senate and House Members with respect to the par-
ticular contributions they receive, and the people that support the
incumbents.
I think it is clearly important that the Board have these functions.
This would be no different from functions we have already given to
other governmental boards in the past.
I would like to point out that we seek here in 1973 to put together
a bill that means something in terms of campaign reform. The 1971
act did not achieve any real, meaningful reform. It achieved putting
a lot of people under the gun.
I think that our bill, which we offer here today, is a realistic bill.
I do not believe you will get a realistic bill if you try and put an
arbitrary limit of dollars upon campaigns because I think certain
people will find subterranean ways of financing elections, as they
have in the past.
I would hope that this bill, as outlined to you this morning, would
receive your consideration, and while we take pride of authorship, we
would also hope that if you do not accept all the provisions of the
bill, that you might consider any of the provisions that might
strengthen campaign reform.
Thank you, Mr. Chairman.
Mr. DENT. Thank you very kindly, Jim.
At this time, the chairman of the full committee has to leave for
another appointment. Mr. Hays, do you have any questions or
remarks?
Mr. HAYS. Yes. Thank you, Mr. Chairman.
Mr. Stanton, I am glad you came before the committee. I think
you have thrown out some ideas that certainly are new. I know you
have had a long career of public service in Ohio and that you are
knowledgeable in the political arena.
I also know your administrative assistant's experience in this field,
but I can't help but wonder if you or he or whoever wrote this first
position on this Board, really worked through the implications of it.
Suppose this had been a law 2 years ago. You would have had
the President. You would probably have had Mr. Haldeman and
maybe Mr. Ehrlichman and John Connally, who was then a Democrat,
and Mills Godwin, who was then a Democrat. That is the possible
Board you would have had. Now, would you have trusted any of
those?
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Mr. STANTON. Well, Mr. Chairman, I would point out to you we
provide in the bill that the four members of the Board have to be
approved by the Senate.
Mr. HAYS. Yes, but, Mr. Stanton, you and I like political argu-
ments and you and I know this is on a friendly basis, but if you can
think back and clear out of your mind all that has transpired in the
last 2 years, those four men probably would have been confirmed
by the Senate at that time, or some four like them. Maybe not Halde-
man and Ehrlichman, maybe just one of the two.
Mr. STANTON. Mr. Chairman, I would have to operate from the
premise that any law can be subverted. We know in the course of our
history that laws have been subverted by many people.
I operate from the premise that public officials are going to act in
the interests of the public. I offer this bill in that light. I am not naive~
but at the same time I have to put my confidence somewhere and I
really believe that by limiting the function of the President vis-a-vis
the Board, we also get the advantage of his presence on the Board.
I also believe that the Senate, in the aftermath of Watergate would
want that Board to be composed of people of unquestionable char-
acter and integrity, to the point that it wouldn't smack of political
partisanship.
Mr. HAYS. I am sure that your motives are good, but I happen to try
to think of all the potential contingencies when we write something in
the law.
Take the four members of the Supreme Court Mr. Nixon has ap-
pointed. The Senate confirmed them, and I am not criticizing the
Senate; I probably would have voted to confirm those particular four
myself. But they have formed a bloc. I believe it was Time or News-
week had a profile on all of them this week and they vote as a bloc
75 percen.t of the time and they reflect the thinking of the man who
appointed them pretty much.
That is something built into the system.
Don't you think it would be better if you are going to have a board
to have one the President did not appoint totally? I mean have a
couple of them appointed by the President of the Senate, the Presi-
dent pro tem, one of each political party and a couple appointed per-
haps by the Speaker and perhaps a couple by the President, so that no
man has a chance to put people of a total philosophy exactly like his
own on this very important board.
Mr. STANTON. I would think that could be considered and obviously
that is a different approach; one that is obviously acceptable. I would
point out that the Senate had the wisdom to reject Haynsworth and
Uarswell and from that standpoint showed good judgment in my
viewpoint.
I also believe that the history of the Supreme Court is such that jus-
tices appointed by Presidents sometimes reflect the viewpoint and
philosophy of Presidents themselves and the four gentlemen who were
appointed, while they are not of my particular philosophy or belief,
are men of unquestionable integrity and character and to the extent
that they may vote in a pattern, I think their individual judgments
reflect the philosophy that Mr. Nixon has had all his life.
Mr. HAYS. I think that is true and I think we could go further if
we wanted to get into a philosophical debate about the Court, which I
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162
don't think we do; that they don't always follow the philosophy of
the man who appoints them. Take for example "Whizzer" White, who
voted with the Republicans 95 percent of the time. Yct he was ap-
pointed by probably one of the most liberal Presidents we ever had.
It doesn't always follow but in a thing of this kind it seems to me
if you had a Board totally appointed by the President before Water-
gate, who was running this thing, you never would have had Water-
gate exposed; they would have swept it under the rug. That is what
bothers me.
Mr. STANTON. That could well be, but we are dealing with the time
after Watergate.
Mr. HAYS. I understand that, but I don't want to vote for anything
that is going to permit one man to have total control of the Board.
That is the thing that bothers me.
Mr. STANTON. Mr. Chairman, I don't underestimate the task of this
subcommittee. It has a real tough task. It is a real job to put together
all the divergent opinions on how campaign reform should be enacted
and it is no easy task.
I believe that you have a major problem on your hands and the
House is depending largely on this subcommittee to handle it.
Mr. HAYS. Thank you.
Thank you, Mr. Chairman.
Mr. DENT. Thank you, Chairman Hays.
Mr. Frenzel.
Mr. FRENZEL. Mr. Stanton, thank you for contributing some new
thoughts to our discussions here. I think there are some interesting
concepts in your bill.
Like our chairman, I would perhaps like a little different alinement
of members of a board, whatever kind of board it is. But I think you
have given us a good start and some good ideas.
I notice on page 152 you explain the lack of spending limitations in
the bill with the statement, "I, myself, believe general limitations are
not desirable in most races and they give an edge to the incumbent."
That was your sole thinking for not laying on the limitations in this
bill?
Mr. STANTON. No, I think it is enforcement of limitations that both-
ers me more than anything else. It has been my experience in public
life that I have watched candidates who get labor contributions and
contributions, for example, through ad agencies, and they are not dis-
closed contributions. They are indirect contributions. I have watched
it so much that I am sort of cynical about effective limitations, financi-
ally, upon campaigns.
Mr. FRENZEL. I thank you. I think that is kind of an interesting
statement. We don't get a lot like that up here and I thank you for it.
I also notice on page 154 you indicated that you believe it is too late
now to pass a bill which will be effective in next year's congressional
elections.
My hope has been that we would have a bill that would be effective.
I wonder if you could tell me on what you base that statement. Do you
really believe we can't get a bill out?
Mr. STANTON. I think you can get a bill out, but I don't think you
could get this bill out with concepts that are new to be effective for
next year. That is why I tried to emphasize that it was this bill and
not any particular campaign bill.
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I think if you are just going to make amendments to the present
bill, you could make that effective, but this bill involves setting up a
whole new enforcement process. You would really have to gear up for
the Presidential campaign of 1976 and follow then with the congres-
sional campaign after you had had the experience.
Mr. FRENZEL. I see that. On the other hand, it is not much different
from the three supervisory agencies that are operating now. Say they
would be amalgamated and given some new powers. The concept isn't
all that radical.
Mr. STANTON. The Board would have depository power; it would
have enforcement powers; it would have have subpoena powers. All of
these are new powers conferred on it by my bill. The Board would have
to adjust to them. It would take a little time, frankly. I wouldn't want
to rush into it, like the 1971 bill which I think was rushed into.
Mr. FRENZEL. Thank you. I notice you don't dictate the style of
reports or the nature of them; you leave that to the Board.
Mr. STANTON. That is correct.
Mr. FRENZEL. Presumably you would make sweeping changes in the
reports that are required now?
Mr. STANTON. Obviously, because we give the Board the power to
digest, analyze and report out the reports or statements given to it.
Mr. FRENZEL. Right now candidates file with the Clerk and with the
Secretary of State in their home State. The newspapers apparently
have this material available to them, if not in Washington, at least
in the State capitals.
The situations with which I am familiar usually result in the press
reporting all the contributions over $500 or $1,000, and reporting all
the candidates in the area at the same time, and the public kind of -
yawn's.
What would your Board do that would be `better than what is being
done now?
Mr. STANTON. I think that is a good point. I think what the Board
would do, for example, it would show the relationship of contributions,
for example. If you and I and Chairman Dent were partners in a law
firm and each of us had contributed $1,500, then it would show not
only thait each of us contributed $1,500 to "A's" campaign, but we were
partners in a law firm. Or, if there were 15 of us, executives of a
corporation who contributed $1,500 each, it would also reflect that fact
which currently the law does not do, and newspapers-
Mr. FRENZEL. Some do.
Mr. STANTON. Very few do.
Mr. FRENZEL. Opposing candidates do.
Mr. STANTON. Very few opposing candidates have the sophistica-
tion that you have when you are down in Washington for a couple of
years and you have seen the processing and you know how the House.
of Representatives operates. Very few people have that insight.
What we all ought to do is, we ought to make it even for everybody.
We ought to give everybody an opportunity to get a clear view of who
supports candidate "A."
Mr. FRENZEL. I wish I had your optimism about the ability of the
press to report and the public to be enthused over this information.
However, I think you have given us some good ideas and I greatly
appreciate the testimony in the bill.
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164
Mr. STANTON. Thank you.
Mr. FRENZEL. Thank You, Mr. Chairman.
Mr. M~rnis. Mr. Jones?
Mr. Jo~s. rfhank YOU, Mr. Chairman.
I want to thank our good friend, Jim Stanton, for bringing new
concepts and ideas before the subcommittee this morning. I think
whatever I would say would reflect comments made by Mr. Hays of
Ohio and Mr. Frenzel.
Jim, I think you did a real good job and have given us some good,
new ideas.
That is all, Mr. Chairman.
Mr. MAThS. Mr. `Mollohan?
Mr. MOLLOHAN. The thing that concerns me here is we seem to be
attempting to legislate in such a fashion as `anticipating no violation
of any law we have passed currently.
Why do we have any reason to believe here that these sections placed
in here and these ideas you have come up with will be complied with
in the fuller sense of the word any more than those we passed and that
were a part of the campaign reform bill of 2 years ago?
Of course, right in the face of that, immediately, the first thing that
starts to develop are ways and means to evade the law. You will
remember the $200,000 Vesco contribution. They said they didn't
report it because it had been "substantially received" I be]ieve was the
language, prior to April 7, which was the effective date of the 1971
reporting law.
Why do we believe here if you appoint the President as the real
custodian of this law, that it will be more fully complied with than the
law of 2 years ago? Actually there wasn't anything necessarily wrong
with the law before except nobody complied with it.
Mr. STANTON. Let me say this: I think if the Board is truly an inde-
pendent Board, which I would hope it would be, the four members who
serve on that Board with the President would have enforcement
powers under the bill that would cause an investigation into things
such as the Vesco contribution or the ITT contribution. They would
take affirmative action to stop what occurred there. We have Pat Jen-
flings, the Clerk of the House, investigating us. Pat is a fine clerk and
he is a very decent guy and everything else, but it is unrealistic to think
that he is going to really investigate the House of Representatives in
terms of campaign reporting.
Mr. MOLLOHAN. This violation procedure, if it were carried on, what
we are talking about here, last year it was done by the people who
were truly in charge of the reelection campaign of the President and
here we have that person, the President, wanting to be the man who
really controls the operations of this law.
Mr. STANTON. If the Senate were to perform its duties in examina-
tion of the four individuals who would run the Board, setting up the
policy, then these. individuals likely would have the character to
appoint people on an investigative staff that would uncover such acts
as the Attorney General was involved in.
You know you are always going to have a situation where somebody
in the Government might try to violate the law, or might think he is
above the law.
Mr. MOLLOHAN. Is there not some other group you can visualize
being more in the position of neutrality and who would maybe be more
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165
objective in analyzing the various expenditures and programs and
solicitation programs of any committee, any political committee?
Such as the GAO?
Mr. STANTON. I have no quarrel with the appointment of GAO as
an independent agency. What we were really trying to do was to
highlight the visibility of the Board. You know, the person who runs
GAO is not a really visible public official. It is questionable whether
the public would really have any great confidence in his activities,
his actions.
When you go to the American people they don't know who the GAO
is and the reason for trying to build up the Board with the President
as a sort of honorary chairman of it, in having four distinguished
Americans on it, is so that the public would have confidence in that
Board.
Mr. MOLLOHAN. Well, Congressman, what do you think would be the
reaction today if we would pass this legislation, this bill, just as you
have it here, H.R. 10218, and turn over to the President of the United
States the responsibility for being a member and ex officio chairman
of this custodial committee and the authority to appoint the other four
members? And we do it here in the face of the fact that we have a
President of the United States today who just a few months ago
enjoyed a poll rating of 68 percent and is now down to 31 or 32 and
in the face of this and what has happened in the last 2 years, we give
to him sole authority for the policing and control of this important
piece of legislation. What do you think the national response would be
to that?
Mr. STANTON. I think that first of all the provisions of this title
shall apply for the election to the Offices of President and Vice Presi-
dent held after the close of December 31, 1975.
Mr. MOLLOFIAN. You want to remember we are doing this in the
face of a situation today that would suggest that, if we want to instill
credibility-and I think this is the objective of every one ~of us, to
restore, if that is the right word, and instill, if that is the right word,
credibility in the Government and confidence and faith of our people
in the Government.
Mr. STANTON. It would be the next President who would-
Mr. MOLLOHAN. I know that, but we are talking thout the President
of the United States, whether his name is Nixon, Jones, or Smith.
Mr. STANTON. I think we should take these steps to rehabilitate the
President, along with other public officials, by reposing confidence in
him.
I can't say that the Congress of the United States is going to con-
tinue not to give duties and obligations to the President. We do it
every day legislatively. We repose confidence in him.
Mr. MOLLOHAN. I think this is true, but this is a very sensitive area,
as I know you are very, very aware of. At the moment I can see no
more foolhardy act of ourselves than to, at this point in time, and in
this environment, to pass this legislation and give to the President of
the United States the authority to create the commission, appoint the
commission and serve as ex officio member of it.
Mr. STANTON. Well, he appoints it with the consent of the Senate.
Mr. M0LL0rrAN. I realize that, but you know it is in relatively few
circumstances and situations that the Senate fails to approve the ap-
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166
pointee of the President. It has to be something highly significant
which makes the appointment undesirable before that appointee is
turned down.
Mr. STANTON. We can discuss it back and forth as to the form
but-
Mr. MOLLOHAN. Thank you very much, Mr. Chairman.
Mr. DENT. Mr. Mathis?
Mr. MATHIS. First of all, let me commend you for very fine testimony.
If I recall correctly, you said the 1971 act put a lot of people under
the gun in your oral testimony before the committee. in what way
did the 1971 act put a lot of people under the gun?
Mr. STANTON. There was an attempt by many people in the admin-
istration to get campaign confributions prior to the date that the law
would go into effect. That date was related rather closely to the date-
within a period of months-that the legislative act was passed. I
think that created an incentive for them to try and skirt the law.
I think that had a very damaging effect. The list of major contributors
of $100,000 or more, prior to April 7, was a rather large and long
list and involved millions of dollars of contributions, for which much
illegal-many illegal acts were performed.
For example, in order to get that much cash, corporation executives
went out and took money out of the corporate till in a number of in-
stances that `have been cited in the newspapers.
Mr. MATHIS. If your legislation had been passed by the House at
the same time the 1971 act was passed, would it not also have put a
lot of people under the gun?
Mr. STANTON. That is the reason I asked that this bill, if it were
adopted in the form that it is, not take effect until the 1976 election,
because it would give time to gear up under the `act in order to imple-
ment the provisions of it, so that people could adjust to it and so that
the enforcement machinery could be set up and organized.
Mr. MATHIS. You don't envision then that a lot of people are still
under the gun as a result of the 1971 act? It was a one-time, one-shot
statement that you had reference to?
Mr. STANTON. Yes; that was a one-time, one-shot statement. I think
in the next campaign you will find a lot of people extremely reluctant
to give you anything because so many contributors have been burned.
Mr. MATHIS. Under the provisions of your bill, don't you think those
same people would also `be reluctant to make contributions knowing
that the Board had the authority to gather, analyze and disseminate?
Mr. STANTON. I think it might be healthy. One of the goals of this
bill, frankly, one of the goals is to try and limit the amount of con-
tributions. If a person knows he is going to be held publicly account-
able and his name will be on a list and he has to do it out in the open,
he might be reluctant to give you $10,000 or $5,000 or $2,000. He
might only give you $100.
I think the whole amount of campaign money would be brought
down so that we wouldn't be talking about $60 million for a Presiden-
tial campaign. Or if somebody tries to seek office in my home State of
Ohio, or in the chairman's home State of Pennsylvania, he has to spend
a million for the U.S. Senate.
Mr. DENT. How much?
Mr. STANTON. A million dollars.
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167
Mr. DENT. It won't get you out of three counties.
Mr. STANTON. The point is, we have got to bring the amount of
money flowing into these campaigns to a realistic figure. I don't think
limitations work but I think exposure of contributors and dealing out
in the open does work. I think that is a helpful, healthy sign.
Mr. MAThS. Why do you say that you think limitations do not
work?
Mr. STANTON. I think you develop a limitation of dollars to a cam-
paign, then people try to find a way through services or other areas
in which to contribute.
I think, frankly, it is unrealistic.
I have dealt in campaigns for a long time and I think it is more
realistic to make people contribute out in the open.
We have a law in Ohio, for example, that if you fail to file your
statement of expenditures, you are barred from the ballot for 5 years.
It is a very tough law, and the fact of the matter is, a former member
of this body has been barred from the ballot in Ohio for 5 years
because he failed to file.
I think that the enforcement provisions have got to be tough but
I think that a limitation on contributions is unrealistic.
Mr. MATrn5. Do you think that Ohio law that bars the name of the
candidate from a ballot is effective and would you support that kind of
law for Federal elections?
Mr. STANTON. Yes, I would, but I am realistic enough to know that
it would have very little chance. At least I think it would have very
little chance.
I think that failure to file expense accounts and statements in this
area ought to encounter tough sanctions and I think failure to report
campaign contributions ought to be governed by very tough sanctions.
Mr. MATHIS. Do you deal in your bill-and I apologize fornot hav-
ing read it previous to this meeting, but do you deal in your bill with
the question of the frank and mailing activities?
Mr. STANTON. No, we don't deal with that particular problem in
this bill.
Mr. MAThS. Do you think that is something that should be ad-
dressed prior to the time we report your bill if your bill should be
reported?
M~r. STANTON. I would think it might be realistic to `have a limitation
of 30 days, but I don't think that is a great problem. I have never seen,
for example, in the districts surrounding my congressional district,
any great abuse of franking privilege, 30 or 60 days before election.
I use the franking privilege as a vehicle to inform my people via a
newsletter. I do it regularly four times a year on an annual basis and
it has very popular reception in my district.
Mr. MATHIS. You would consider it a very valuable political tool
as well?
Mr. STANTON. Yes, I would. I think it is one of the great advantages
of an incumbent. I often wonder how I got here after I saw all the tools
my opponent had.
Mr. DENT. You will find you can get out, too, with all those tools.
Mr. MATHIS. You don't think that the kind of advantage an in-
cumbent might have, such as the frank, should be reported through
the Bank?
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168
Mr. STANTON. We make no provision for that. I don't think that is
necessary. I think we ought to confine this bill to the campaign
financing provisions.
Mr. MATins. Thank you very much, Mr. Chairman.
Mr. CLEVELAND. I have no ~questions but I have a brief comment.
I am not sure I approve of this proposal, but I approve of the obvious
time and effort that went into this. I notice several months ago you
said you were going to go to work on this problem and I was interested
when you came out then with this proposal. Whether or not the com-
mittee will approve it in whole or in part remains to be seen, but there
is unquestionably a great deal of research and work that went into
this. I think the gentleman from Ohio deserves commendation for his
efforts in this area.
Mr. STANTON. Most of the ideas frankly are those of my administra-
tive assistant, Mr. Watzman, and I am not telling you anything you
don't know.
Mr. DICKINSON. You are putting it on the record?
Mr. STANTON. He is author of a book called "Conflict of Interest"
and the Bank concept was originally his concept and is a part of
that book.
Mr. CLEVELAND. I would like to ask either you or your ammunition
handler if you have any comment to make on a proposal that has been
made, not too widely, but this would be to have all contributions
turned over to the Post Office or some Federal agency and then in
return there would be issued scrip and you would have to finance your
campaign entirely with scrip and, of course, in the process of turning
cash or checks over to the Post Office you have a recording feature.
Are you familiar with that?
Mr. STANTON. I am not familiar with it.
Mr. WATZMAN. I would like to say at the start while I appreciate the
credit Congressman Stanton gave me, the bill as it finally came out
is dosed up pretty heavily with political realism that wasn't a part of
my original proposal. Those portions of the bill are attributable to
him.
I have heard of that proposal, Congressman. Congressman Stanton
and I discussed this `and we think this is a better way of handling it
because you are dealing with real money. People are used to dealing
with real money and the scrip idea sounds like play money or a
"Monopoly" game.
Elections are serious business.
Mr. CLEVELAND. The `advantage of scrip is it would be handled
through `the post offices and you would avoid setting up another Fed-
eral agency.
Mr. STANTON. I think when one looks at the fact, you know, that
the Defense Department spends $50 million a year just to try to create
an image, that whatever we spend in this area. is minute in comparison,
in terms of the benefits to American society.
Mr. CLEVELAND. Thank you.
Mr. DICKINSON. No questions.
Mr. DENT. I have asked no questions but I would like to thank the
gentleman for putting in a great deal of time and effort to try to help
resolve a very touchy and critical situation in which we find ourselves.
I am worried and disturbed over a few things, where everyone seems
to have a central goal in mind, and that is to get the incumbent. Per-
PAGENO="0173"
169
haps the only way to resolve it would be to make it illegal for anybody
to run more than once for Congress.
Mr. CLEVELAND. Lifetime tenure, Mr. Chairman.
Mr. DENT. Run only once. Not only do they not have any confidence
in the Congress as such, or the individuals, but they don't have any
confidence in the people of the United States.
You know, there is one thing that in the end determines whether
a man is in or out of Congress, and that is the people out there voting.
If it wasn't for the people voting, you wouldn't have the changes in
Congress.
If every Member has the same advantage as an incumbent, why are
so many defeated throughout the years, with all of the attributes that
the other has-personality and whatever goes into politics?
I am very definitely opposed to the wide-open election moneywise,
because that will rule out the greater percentage of the citizens of this
country from ever obtaining office. You can't rule out advantages. You
can't rule out the advantage of a fellow like Johnny Heinz or a Joe
DiMaggio, who was a baseball player. He had built-in appeal that you
can't get away from.
Mr. STANTON. You are not suggesting you can take that away?
Mr. DENT. No; you can't take that away, but what you are suggest-
ing is that the things people have gone into politics for in the first place,
in the main is because they wanted to participate in the governmental
process.
I don't believe the 435 Members of Congress run because they .have
a chance to run in a campaign and pick up a lot of side money, as it
were. I disbelieve that. There are some that do, yes. A lot of them do,
yes, but we can't let one incident, bad as it is, distort our thinking in
this matter.
The Constitution makes the Congress the sole judge of its member-
ship, and it certainly ought to be the judge of how they gt in to be a
Member of Congress. Policing the elections. Policing as we have over
the years.
If you were chairman of this committee, you would know that over
the years, we have contests galore. There has never been any criticism
yet that I have ever read of how we settled the contest, because we are
realists, as every man must be. Because if we don't allow the little
fellow back home to run for office, because we allow the man that has
the most money-and that is what it has become; it has become a bid-
ding contest. Anybody in Congress can be defeated if somebody spends
enough money.
Mr. STANTON. Mr. Chairman, you wouldn't suggest that we have
ever had proper enforcement of the election laws, would you?
Mr. DENT. From the constable up to the Presidency, you have never
had it and you never will have it. There is no way that you can do it.
Vesco gave $200,000 and it was given in cash and who took it?
Mr. DICKINSON. He missed me.
Mr. DENT. Highly responsible, nonelected people.
How are you going to police the John Mitchells and the Stanses and
the rest of them and their counterparts here? You can't police them.
All you are doing is po]icing the Member.
Mr. STANTON. But having an independent agency such as the agency
proposed in this bill, which is not accountable to the Attorney General,
would be a way to get at the problem.
PAGENO="0174"
10
Mr. DENT. I am going to tell you something about independent
agencies. I wish you would take some day and pick up the catalog of
the Federal agencies. Then you just strike off every one that you find
independent, from their historical performances.
The Federal Reserve bank serves the bankers; it was supposed to
serve the people. The Utilities Commission serves the utilities; it was
supposed to serve the people.
There is no such thing as an unbiased person anywhere in the world.
If he is unbiased, he is at the bottom of his class. I am serious.
Mr. STANTON. We are seeking four individuals to he confirmed
by the Senate.
Mr. DENT. You say the Senate confirms. They confirmed Mitchell,
didn't they? They confirmed Stans? They confirmed Kleindienst. If
they had the chance, they would have confirmed Ehrlichman or any-
body else.
You must understand Congress has to be its own police, and is con-
demned for not being its own police. I am not going to be. responsible
for Vesco or somebody making my campaign.
Mr. STANTON. I am not a defender of the Republican administra-
tion.
Mr. DENT. I am. I want them there..
Mr. STANTON. I can think of illegal Democratic administrations in
the past.
Mr. DENT. What?
Mr. STANTON. I would suggest to you that there have been some
illegal acts performed by Democratic administrations in the past, but
they were not subject to the 1971 financing law. What I am indicating
to you is we have to deal realistically with the problem.
Mr. DENT. Did you look at the law before the 1971 bill passed?
Mr. STANTON. The most unenforceable law in the world, the Cor-
rupt Practices Act. It never was enforced.
Mr. DENT. But reporting was-
Mr. STANTON. It never was enforced. There wasn't ever a prosecu-
tion under it.
Mr. DENT. Jim, it isn't the fault of the law.
Mr. STANTON. Well, that is why you need an independent agency.
Mr. DENT. If you don't trust Congress, I think what you ought to
do is get an independent agency to pick 435 persons to represent the
people.
Mr. STANTON. No. It isn't a question of trusting Congress.
Mr. DENT. Isn't it?
Mr. STANTON. It is a question of policing action by an independent
agency.
Mr. DENT. Oh, we have the police action within our hands, and
then we go to the independent agency, the courts of the land. They are
supposed to be independent.
Now, there is a real independent agency. Named by the President
and the circuit court judges, and confirmed by the Senate.
Mr. STANTON. Somebody has to spread out the information and
prosecute the cases, and nobody has done it to date.
Mr. DENT. That doesn't mean-even the act today-very frankly-
I have looked at these acts `and rea.d them A to Z-there isn't a pro-
posal as good as what we have today. If you enforced the law you
have today there would be no problem.
PAGENO="0175"
171
Mr. STANTON. I hope you will read mine thoroughly because I think
it is much better.
Mr. DENT. I will read it, don't you worry. I have read it and I will
read it again. If I can find something good in it I am going to tell
you on the floor.
Mr. MOLLOHAN. Mr. Chairman, may I ask one question?
There are two questions here. One is compliance and the second is
enforcement. Your complaint just now about the corrupt practices
law is that it was never enforced?
Mr. STANTON. That is correct.
Mr. MOLLOHAN. The problem here is this is a responsibility of those
who are charged with giving the authority and responsibility to en-
force. They broke down and did not do their job according to what
you just said.
The thing that concerns me here is you seem to feel you have a
higher level of expectancy of compliance with this law than with the
1971 law. Upon what do you predicate that?
Mr. STANTON. I predicate it on the fact that all the transactions
have to be out in the open; that they have to be recorded through the
bank, which is not a factor now.
Mr. MOLLOHAN. Before it goes into that bank it has to surface.
Mr. `STANTON. That is right.
Mr. MOLLOHAN. A great amount of the money that we did not have
before us in this last election-I agree with what you said about both
parties, nobody is Simon-pure in this question, but much of the moneys
we are talking about are just surfacing now. It was received but never
reported under the law.
Now, how can we get this into the bank unless it is acknowledged
as having been received, and therefore your bank is not a vehicle
for actually helping to prove this law to be completely effective and
do the job that we want it to do, until the money goes into the bank.
Mr. STANTON. That is why we make provisions in the bill for ran-
dom field investigations and sampling of campaigns, hopefully to dis-
close that type of fact.
You have got to understand that April 6 was the date most of that
money was contributed and the law went into effect April 7. They
thought they were complying `with the law.
Mr. MOLLOHAN. Thank you, Mr. Chairman.
Mr. DENT. I just might observe it would be interesting to check with
the Chief Clerk of the House as a matter of his performing his duties.
I understand that he has already certified 5,000 violations. So evi-
dently the House can police itself through its elected officials and
through its House agencies. We can police ourselves, but when it
gets into the area of enforcement in the hands of the courts, where
I think it belongs, then it is a different problem.
Mr. `STANTON. That is why we would provide enforcement provi-
sions under this law within the Board structure itself.
Mr. DENT. I think that is why you are finding a great many men
who were in my opinion great public servants of great character-
I have never heard any scandal about `any I have in mind-yet this
year two outstanding Members of the Senate are walking away from
the jobs; and they are doing so because they cannot act in the freedom
of their own consciences because they always have seated before them
PAGENO="0176"
172
at least one representative of some of the 2,500 oversight committees
that have selected themselves to monitor Congress.
Therefore, they cannot act in good conscience.
Mr. STANTON. I am not a fan of John Gardner and I am not `asking
that he monitor the campaigns. I am `asking that this Board monitor
the campaign.
Mr. DENT. You know he was named to a Federal office and con-
firmed by the Senate. I have nothing against John `Gardner. I have
some admiration for him in some areas. I think he is one of the best
money raisers I have ever known. I don't hesitate to say it. I think
he has delivered. I think there is `where you ought to concentrate if
you want exposur&-expose those who spend money behind the cuitam
of nonprofit public service organizations.
Mr. STANTON. Common Cause would have to file under this bill.
Mr. DENT. Six times a year.
Mr. STANTON. Yes.
Mr. DENT. That is what you have us filing.
Mr. STANTON. Yes. Thank you very much, Mr. Chairman.
Mr. DENT. This committee delves a little deeply and sometimes
rubs a citizen the wrong way, but that is the way we can scratch and
get the blood where we have to feel it. People feel very strongly
about this subject.
Mr. STANTON. Thank you, Mr. Chairman.
Mr. DENT. At this moment we have Congressman Samuel Young
as the next witness. You are welcome to the subcommittee.
STATEMENT OP SAMUEL H. YOUNG, A REPRESENTATIVE IN CON-
GRESS PROM THE STATE `OP ILLINOIS
Mr. YOTJNG. Mr. Chairman and members of the subcommittee, I
am interested in making a contribution of thought and effort in
improving our electoral process. I have submitted H.R. 10463, which
is directed toward improving the Federal Election Campaign Act
of 1971 and providing for significant limitations on campaign contri-
butions and campaign expenditures.
My views are based on 25 years of active political experience, in-
cluding service as a precinct committeeman, township committeeman,
State president of the Young Republicans of Illinois, fund-raising for
the party as `a member of the board of governors of the United Repub-
lican Fund, assisting in raising funds for individual candidates, as a
contributor to the party and to candidates and, of course, as a candi-
date for public office in two primaries and one general election.
Let us k~p in mind that the essential reason for political campaigns
is to educate the voters about issues and candidates. The bulk of money
spent in campaigns is for the following: newspaper, radio and televi-
sion advertising; pamphlets, brochures and mailing material; tele-
phone, personnel and office expenses; loud speaker and recording
expenses; and precinct money for election workers on election day.
Presently, most funds are raised directly by the candidates. Party
financing provides less than 25 percent of the cost. of most congressional
campaigns.
Costs of campaigning in urban and suburban areas are generally
greater than the cost of campaigning in rural areas. The cost of cam-
PAGENO="0177"
173
paigning in a district almost equally divided between the two parties
is more expensive than campaigning in a district which is heavily
weighted in favor of one party or the other.
There are many persons in the United States who have benefited
a great deal from the political system and who respect it highly, and
who have ample means to contribute to political elections. There is
even a greater number of persons in the same position and with the
same financial capacity who do not donate to political elections. Limi-
tations on contributions must be reasonable, and should permit some-
what generous giving by those who are sufficiently interested. Dis-
clo:sure of the names, addresses and businesses of such donors provides
a certain measure of protection to the public. Campaign financing can
be an issue should the candidates wish to make it an issue.
While most people recognize that it would be desirable to cut down
on the time spent for election campaigns, this is a sensitive area to
limit. A candidate with little means but with much vigor and enthu-
siasm may, through a long campaign effort, overcome an opponent with
greater funds. We should not seek to prevent such enthusiasm and
effort.
H.R. 10463 provides for the establishment of a six-man commission
to be appointed by the President, with staggered terms of 2 years. It
might be more bi-partisan if the members were appointed two each
by the President, Speaker of the House, and President of the Senate.
The important thing is to have a commission to administer the Federal
elections law and with the power to enforce it. These powers are
provided.
The bill also provides for a central campaign committee whereby the
reports of various political committees can be centralized for ease of
review by the public. Anyone who has taken the opportunity to try
to review the records in the Clerk's office can testify as to the difficulty
in consolidating the information pertaining to a particular candidate.
A central campaign committee and a central campaign depository will
assist in providing complete and accurate information about total
campaign contributions and spending by a candidate.
I would continue the present requirement that contributions in "ex-
cess of $100" be reported. This will greatly simplify the already volu-
minous reporting requirements.
I think if you go $100 and below you are needlessly making the
reporting requirement voluminous. They are already voluminous. So
I would suggest that the committee continue that present provision
of the law.
While my bill does not so provide, I would recommend that an ex-
emption from the reporting requirements, not the registration require-
ments, be made for local, county and township organizations of the
major parties which spend less than $15,000 annually, provided that
such sum is spent generally in support of the majority of candidates
of such major party. At the present time, it is my information that
most of our Democratic and Republican county organizations are in
violation of the Federal Campaign Act for failure to make appropriate
reports. County organizations which spend more than $15,000 annually
can presumably have the office staff to make appropriate reports. There
is also a difficulty here, however, since many of the expenditures are
difficult to allocate between local candidates, State candidates, and
Federal candidates. Serious attention should be given to this problem.
25-239 O-73-----12
PAGENO="0178"
174
In my own area they do spend money for the entire ticket. They
are not filing these reports and they are technically in violation of
the law.
My suggestion of the $15,000 is arbitrary. You can increase it or de-
crease it. I picked the figure of $15,000 because I thought if they can
spend that much money, they would have a big enough staff to make
appropriate reports.
LIMITATIONS ON EXPENDITURES
My bill proposes a $50,000 limitation on primary spending for a
Congressman. This is a reasonable amount. In few cases will any such
amounts be spent.
Twenty-five cents per voter of voting age population is an adequate
limitation for primary expenses of `a Senator.
I provide for no limitations on spending for a Presidential candi-
date in `a primary. Competition and limitations on fund raising through
private sources should be an ample limiting factor.
For general elections, I propose a limitation on expenditures of
$175,000 for an incumbent Congressman and $190,000 for a challenger.
The additional spending for a challenger recognizes that there is some
advantage to being an incumbent.
Mr. DENT. Have you made any estimate of how many persons in the
United States could come up with that kind of money to be a candidate
for Congress? You are talking about $225,000 in a 2-year election.
Mr. YOUNG. Not very many, but there are some. If you look at the
reports that came in, you will find some candidates spent.over $300,000
for election.
Mr. DENT. You are not giving that much less.
Mr. YOUNG. For a general election, Mr. Chairman.
Mr. DENT. My honest opinion is that you would really strike out of
the political arena the vast majority of Americans. They would not
be able to come up with that money. There is always someone in the
district that can come up with $225,000.
Mr. MATHIS. $240,000 for a challenger.
Mr. DENT. Yes.
Mr. YOUNG. Where are you getting these figures?
Mr. DENT. These are your figures: $175,000 for an incumbent in a
general election, and $50,000 in a primary.
Mr. YOUNG. That is right.
Mr. DENT. If it is your opinion, that is all right.
Mr. YOUNG. In my own primary I spent around $35,000. In the gen-
eral election I spent `$200,000. My opponent spent $212,000. He was an
incumbent.
Mr. DENT. How many before you spent anywhere near that amount
in the same office?
Mr. YOUNG. The point I am making is that you provide a bill that
would provide for this type of election contest where you have a very
close election and you have the necessity of being able to pay for the
newspaper advertising. We got no free television or radio in a metro-
politan area, which is one of the things I know you are familiar with,
you cannot afford to buy television. You have to spend money on staff,
pamphlets, mailing costs.
PAGENO="0179"
175
In my opinion, I spent $200,000, and I am putting a figure of
$175,000 for the incumbent and $190,000 for the challenger, giving him
an extra $15,000 because of some of the advantages that the incumbent
has. You have to draw a line big enough to take care of the special
situations. You cannot draw a line in the middle because you will be
unfair to the expensive campaign areas I mentioned, particularly
where you have a very close differentiation between Republicans and
I)emocrats, for example in a 50-50 district.
You have a high cost area because in the suburban area of a metro
area, where you don't get free radio and television, you have to have
a fairly adequate figure.
Mr. FRENZEL. Mr. Chairman, as long as we have digressed at this
point, may I say that I think we ought to put the statute of Mr. Young
in the back of every church in the country. He beat an incumbent him-
self. He knows how much it cost. He is the first guy to put in bill form
a differential between incumbent and challenger and to recognize the
great differences that exist.
I understand that about 20 candidates spent more than $150,000 in
the last House general elections. There were several who spent more
than 50 in the primaries.
Mr. YOUNG. I think of the top 10 spenders, 8 were Democrats and 2
Republicans. They were all over $212,000 in spending.
Mr. FRENZEL. I would not want the gentleman to think he did not
have support on the subcommittee.
Mr. DENT. I would like to look at the returns to see where the money
came from.
Mr. YOUNG. It is in the record and I have looked them over.
Mr. CLEVELAND. I agree with Mr. Frenzel. I am very interested in
your proposal and some of us in the last session did make proposals-
Anderson-Udall is the code name for it-to recognize the advantages
of the incumbent. We have not gone back to that.
You said in the statement that presently of most of the funds that
are raised party funds comprise 5 percent. `What is your source?
Mr. YOUNG. My own campaign. I got $10,000. I spent $200,000 and
that is 5 percent. I looked at most of the rest. It is about the same. My
opponent got $15,000 from the Democratic Party and he spent $219,000.
He got a little more from the Democratic Party.
Mr. CLEVELAND. Has that statement you made been researched so it
can be stated factually?
Mr. YOUNG. Yes.
Based on my knowledge of what the Republican Party did for con-
gressional candidates, it ranged from nothing up to a maximum of
$10,000. I got the most they said that they gave out to any candidates.
Mr. CLEVELAND. Was that the congressional committee here or the
local Republican committee?
Mr. YOUNG. That is your congressional campaign committee that
allocates the fund.
Mr. CLEVELAND. I do not want to digress too much, Mr. Chairman,
but I have been told-and I would like to pursue this with you at a
later time, Congressman Young-that in some areas of the country the
party assumes almost the entire cost of the mechanism of election.
Mr. YOUNG. Not in the State of Illinois that I am familiar with,
and I doubt that is true in any other place.
PAGENO="0180"
176
Since they did not pay more than $10,000 for any candidate you
could not run a very significant campaign effort.
Mr. CLEVELAND. Excuse me, I am talking about the local Republican
or Democratic funds.
Mr. YOUNG. In my State you don't get any support from the local
organizations.
Mr. DENT. No financial support?
Mr. YOUNG. No direct financial support.
Mr. DENT. You say you beat an incumbent and he spent more money
than you?
Mr. YOUNG. That is right.
Mr. DENT. What was wrong with the incumbent?
Mr. YOUNG. He is a very able fellow. His views did not meet my
constituents'.
Mr. DENT. With all the advantages he has as an incumbent, how did
he beat him?
Mr. FRENZEL. He didn't live in the district.
Mr. DENT. He didn't have to spend the money.
Mr. YOUNG. He was an incumbent in a different district. He was
an incumbent but he didn't live in my district at the time he was an
incumbent.
Mr. FRENZEL. He had only part of the ordinary advantages of an
incumbent.
Mr. DENT. I still take it from what you all said that you start from
the same scratch: You want to allow the challenger more money than
the other fellow, but not unrealistic figures. I do not believe the people
of America as a general rule believe you would want to be a Con-
gressman and spend that kind of money unless you get a salary of
$85,000.
Mr. YOUNG. It is ridiculous, I grant, but on the other hand, you are
competing with another person who is spending that kind of
money-
Mr. DENT. If he cannot spend it either, aren't you even?
Mr. YOUNG. He got much more publicity than I did out of the gen-
eral news circulation and television because he was an incumbent.
Mr. DENT. Just being known doesn't elect you. In fact, too much
publicity hurts you. Very frankly, your record is what counts. If a
fellow has a bad record he should be beaten and will be beaten. If he
doesn't have a bad record, he should not be beaten. That is where you
get your Government. Either that or pass a law and say you have to
serve one 4-year or 10-year term.
We had that in the State of Pennsylvania for the Governor and the
people changed the constitution to give the Governor a chance to run
again.
Mr. YOUNG. The studies have shown that in most of the congres-
sional districts, still less than 50 percent of the voters know who their
Congressman is.
Mr. DENT. Then what is the advantage? Most of the Members of
Congress have been in public life, State legislators or county commis-
sioners, et cetera. The greater portion of Members of Congress have
past political experience.
Mr. FRENZEL. Mr. Chairman, you said if an incumbent had a bad
record he would be defeated. That means we must have wonderful
records.
PAGENO="0181"
177
Mr. DENT. You know it has been so since the beginning of our
democracy.
Mr. FRENZEL. Most of the people make a good choice the first time.
Mr. DENT. No; they don't make a good choice the first time, but they
do defeat incumbents when they are bad.
Would you name the ones in Congress who ought to be defeated?
Mr. FRENZEL. No.
Mr. DENT. You name the ones you think should be defeated. How do
you think you will be judged the next time-by what you spend or
what you do?
Mr. FRENZEL. I hope it is what I do.
Mr. DENT. That is the only record you can have. As long as you can
buy the election, you don't care how you vote. You can vote against
children, the minimum wage, or anything if you don't have to spend
the money.
Mr. YOUNG. It is my own opinion based on my own experience that
$175,000 is ample, though large, but is still almost $200,000 or at least
$150,000 less than has been spent by some candidates individually, as
shown by the record.
Mr. DENT. Twenty persons out of 435.
Mr. YOUNG. Ten.
Mr. DENT. Ten with $150,000 but some spent over $100,000.
Mr. MATHIS. Mr. Chairman, the record prepared by the Office of
the Clerk illustrates that 21 Members out of a total of 1,070 candidates
spent more than $175,000 in the last election.
Mr. DENT. How many of those got elected?
Mr. MATHIS. I guess 12 of the 21 lost. So nine won.
Mr. DENT. Very frankly, that had been party action, too.
Mr. MATHIS. The listing that was prepared by the Office of the Clerk
lists the top 25 spenders. Of these 25, only 7 were incumbents.
Mr. DENT. When you set these limits-I am very serious about this.
I have experience in this field for many years-one of the things that
creates the breeding ground for the `Watergate type of thing is the
candidates who do not need 1 cent in their district, because you have
this legitimacy to receive contributions up to many thousands of
dollars.
Many contributors know that candidates do not need 1 cent, who are
wealthy on their own part, or most of them.
You will see one of the wealthiest men in Congress got more con-
tributions than he spent, and he spent enough.
Seriously it gives these organizations an opportunity to come in
and hand you money, or me or anybody else, not because we need it
in our district, although maybe in some cases you do. In the main
what we are doing with that kind of unrealistic limitations is opening
the door to contributions for the simple purpose of controlling your
positioii in Congress on certain legislation. That is all there is to it.
Mr. YOUNG. Mr. Chairman, I think the point you are referring to
is a good one, but I think you control the point by the next limitation I
testify to which is limitation on contributions.
Mr. DENT. I am for that.
Mr. YOUNG. Section 614(c) (2) of my bill should be amended to re-
quire "knowledge and consent" by a candidate for expenditures made
on his behalf.
PAGENO="0182"
178
It is my opinion that $175,000 and $190,000 should provide sufficient
funds to contact the voters of a congressional district with a popula-
tion of approximately 470,000.
A limitation on general election expenditures of a Senator is 50
cents per voter of voting age population. This is ample and the amount
will expand and contract according to the size of the State.
I have not provided for any limitation on expenditures for candi-
dates seeking the office of President. Here again, limitations on ability
to raise funds will act as a practical limiting factor.
LIMITATION ON CONTRIBUTIONS
It seems to me that limitations on contributions are desirable and
that they should be of sufficient size to permit reasonably large contri-
butions, but not so large that they will be the conclusive factor in an
election.
Limitations of $3,000 on contributions for primary for congres-
sional candidates seem reasonable. Limitations of $6,000 on contribu-
tions for a general election for congressional candidates appear to be
approximately adequate.
For the office of President or Vice President, a limitation of $100,000
should be permitted. This $100,000 limitation applies to both the pri-
mary and the general election for Pi~esidential and Vice-Presidential
candidates.
CURRENCY CONTRIBUTIONS
I provide a limit of currency contributions of $50. Other contri-
butions must be by check, money order, cashier's check, or similar
instrument.
`~GOOD GOVERNMENT" FUNDS
Most of us are aware that many unions and many corporations
have set up funds with various names and often called "good govern-
ment" funds. Solicitations are made by employees of the corporations
or by the major unions to other employees of the same corporation or
union. The fund is usually administered by an employee of the same
corporation or the same union. Inherently, in these situations, there
is a certain amount of "coercion." The present law prohibits contribu-
tions by corporations and unions to Federal election campaigns. It
also prohibits coercion in the raising of political funds.
My proposal in section 617, page 22, is unique. It would prohibit
these types of "good government" funds when the solicitation of con-
tributions and the administration of the fund are all conducted by the
same corporation or the same union. This section does not prevent the
solicitation by an employee of a corporation or a union of other em-
ployees of the same corporation or union, provided that the contribu-
tions are made to a political fund which is administered by a third
party. If any employee or member of the corporation or union has any
connection with the administration of the political fund, then section
617 would come into play. Otherwise, it does not interfere with political
fundraising.
PUBLIC FINANCING
As stated earlier, I oppose direct public financing of congressional
political campaigns. I think this is an area that peculiarly should be
PAGENO="0183"
179
supported by the public. If financing of congressional political cam-
paigns is provided by the Government, the Government will also have
to provide limitations and controls on such financing to avoid abuses.
Further, financing of political campaigns of Congressmen, is suffi-
ciently unique to each district that broad categorical funding would be
highly undesirable. For some districts, for example, a proposed $90,000
funding amount would be more than adequate. In other districts, it
would be much less than adequate. In either event, taxpayers should
not have to pay for congressional campaign financing.
I do favor the providing of television time without charge to our
major party candidates for President. My bill provides for five one-
half hour programs for the candidate of each maj or party between
Labor Day and election day. Broadcasts are simultaneous on all net-
works. There are at least three alternative ways to pay for this time:
(1) Television stations would be required to furnish the time as a
public service without charge. (2) In my bill, television stations would
certify their bills for television time, to be provided as required by
law, to the U.S. Treasurer, and receive payment from the Federal
Government. (3) The networks would be given the right to solicit
corporate sponsors. Those sponsors would have their names appropri-
ately identified at the start and close of the programs for e.ach party.
Moneys received would be applied equally between both major parties.
H.R. 10463 also provides for free television time to Senators. These
would be simultaneous broadcasts of one-half hour duration three
times during the period from Labor Day to election day.
For Members of the. House of Representatives, I have provided for
free television time for two one-half hour programs during the same
time period. These broadcasts would not be simultaneous. Such time
could be divided by the television stations serving the same congres-
sional area. For example, in Chicago we have four major TV stations
with approximately 16 Congressmen who would be affected. These
four stations could divide the furnishing of the "free" time between
themselves.
The major importance of free television time would be to reduce the
cost of campaign spending and the need for raising large funds.
Nationwide simultaneous broadcasts should save our major parties
$12 to $15 million or more each. Such money not needed by the major
parties would be available to other Federal candidates and to State and
local candidates. This, in turn, will ease the pressures for fundraising
all the way down the line.
Likewise, the television exposure to Senators and Congressmen will
assist them in getting their viewpoints on issues to the public and
reduce their need for funds.
In short, I am emphasizing the affect on campaign financing that
these free television proposals provide.
TAX INCENTIVES
I also think that we should broaden the incentive to contribute to
political candidates. At present, there is a maximum deduction of $50
per person. I would increase this to an aggregate deduction of $500
with a limitation of not more than $100 to any one candidate.
This provision would encourage broader and greater public partici-
pation in the private financing of political campaigns.
PAGENO="0184"
180
Mr. YOUNG. Mr. Chairman, I appreciate this opportunity to be
here and if there are any questions about these matters, I would be
pleased to try to answer them.
Mr. DENT. I do appreciate your testimony. You are new in the field
here, and you come with an outlook of recent experience. I would sug-
gest that all of the sponsors of these bills be compelled to come to these
subcommittee meetings, so they would see there is a contradiction in
what anyone wants in legislation.
Basically, it is my humble opinion we are going further away from
what used to be considered representation by the people, because we
get into contributions paid by taxpayers which immediately takes
away from the independence of the candidate, regardless of how you
spell it out.
In the first place, I don't believe that citizens relish the idea of pay-
ing taxes and giving it to persons who want public office. Public office
is not supposed to be an honorary job, except in school boards. Why
anybody ever runs for the school board, I will never know. But these
jobs should pay sufficient that if you were in any other occupation you
would expect that kind of money for the responsibility you have. But
so long as you have a situation where Congress has to practically vote
itself a raise and only raises its pay in periods of 10, 15, or 16 years,
you put the person in public office in a straightjacket, as it were, if he
has to live on his income. The minute you cannot live on your income,
as a Member of Congress you have wiped out the vast majority of
Americans who may seek office. That is why I am up tight about the
kind of limitations we put on and the kind of allowances we permit for
spending.
As I have said many times, no matter what you do it would not affect
me, because I have reached the end of the road and not the beginning.
But I see down that road maybe a grandson of mine or just a neigh-
bor's boy who is just a machinist or truck driver. You bar him forever
from public office if you do not raise the pay of Congress. Cabinet of-
ficers had the same salary we had just 6 years, but now they are draw-
ing $60,000. If a man was in Congress and moves from there to a Cabi-
net office, it was considered uniquely the same as far as prestige is con-
cerned. But now in these United States it is the size of your paycheck
that puts you on a certain level of society. Income establishes your po-
sition in the social stratum. The further Congressmen are reduced in
comparison to the Chief Clerk of the House-nice job, $40,000, within
$2,500 of a rna.n who runs for office, and as you say no matter how much
donation it is still an expensive proposition in time and effort and
money-the more I believe this legislation has the caliber of a person
who has such divergent views that every phase of the election campaign
will be gone into rather thoroughly.
I refuse to be stampeded by eager beavers because we are at the point
because of the stampede last year.
Did you know that there was not 2 percent of the House who actu-
ally knew what was in the legislation? We studied it for 21/2 years in
this committee and we went to the floor and a complete substitute was
offered. Nobody knew- what w-as in it except the man who engineered
the whole deal from the top. Now he is screaming the loudest to get this
bill out fast, hoping to make another mistake.
I personally cannot-though the majority of the committee will
rule-allowing unrealistic figures. For instance, you talk about the
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181
urban, the big metro candidates needing more money than somebody
else in a rural area. He has a concentration of people.
Mr. YOUNG. Except his office rent, his telephone expenses.
Mr. DENT. This is our business. We should do that. Don't worry
about that. This House Administration Committee has not done its
duty in that area.
There you have to have more money. I can get a room for $4 a square
foot with air-conditioning and maid service and everything else. In
the city you pay $12 and $13. Many times you have to provide your
own janitorial cleanup service. I don't think you can write a fast dol-
lar on that. We have it now under consideration. When we go on the
floor, you cannot derive where the opposition comes from.
Mr. YOUNG. Many of my colleagues and your colleagues,. who come
from rural areas-when I say rural areas, I don't mean there are not
some cities there-they will get a large amount of television exposure
for free every day in their television stations. In Peoria, Champaign,
or Lincoln, Congressmen get frequent free exposure. In the metro area
we do not get any free television at all of any magnitude. Our prob-
lems of communicating with the voters are much greater even though
we may be in a smaller area.
Mr. DENT. I am in a metro area, yet one-third of my people are
farmers. I serve the county of Allegheny.
Mr. YOUNG. We have to rely on newspaper advertising to get our
message because television is prohibitively expensive for anybody to
buy in the Chicago area. You have to buy the whole market and you
only want a small segment.
The problems are different in these different areas and that is the
reason the figures I have selected are reasonable in view of that. They
are high, admittedly, but you have to have the high amounts to take
care of the exceptional districts that require a greater amount of
spending than the others.
Mr. MATHIS. If you are going to set the limitation that high, why
do you need limitations at all? You have only affected 21 people who
ran in the last election.
Mr. YOUNG. Just as the chairman stated, the public does have a lot
of skepticism of someone spending $200,000 or $300,000 for a $40,000
job.
It doesn't make sense. I think we ought to curb the competition at
some reasonable level and I think the campaign that I just experienced
is a reasonable level in the sense that I am putting figures that are
below those levels we spent.
Mr. MATHIS. With all due respect to your provision, I think to set
a limitation at $240,000, which in essence is what we are doing, would
do very little to relieve the skepticism of most members of the public.
Mr. YOUNG. It is a step in the right direction, as compared to
$350,000 or $400,000 which was spent by one of the candidates.
Mr. DENT. You cannot measure by money. I inherited a brand new
district. It is metro. I was not known in that district. My opponent
spent $180,000 without filing. He said he lost the papers or the forms.
I got the receipts. Yet I beat him in that brand new district pretty
near 2 to 1. But I went around and got acquainted. I went to every
place I could go. I even went to a church that I didn't belong to. I
think nothing takes the place of campaigning. That is true in my ex-
perience for 40 years.
PAGENO="0186"
182
Mr. YOTJNG. You heard of the fellow who visited all the churches in
his district and lost the election. He found he forgot the sinners.
Mr. DENT. So I am going to church too often. The elections roll on
many, many wheels.
For instance, you are talking about an incumbent. If you put it up
for grabs-suppose a district like my district where probably I am
not going to be a candidate-2 fellows or 4 fellows or 40 fellows would
run. If the salary being paid has no inducement because a fellow cannot
raise that kind of money and he has to live on it, you limit it down to
the campaign will be run in my district, and there won't be anybody
under a millionaire running. I can almost name two of them. You can't
run it in a district like mine and raise $200,000, I don't care who you
are, if you are a workingman. I don't think we ought to really wipe
out the working body of men and women in this country. That is
exactly what we are doing with these limitations. I don't think that
anybody who looks at it realistically can say we are doing anything
else, because that man has to live on his salary.
Mr. YOUNG. Mr. Chairman, I recognize what you are saying with
respect to many districts.
There are, of course, quite a few districts around the country where
you have the problems that I have mentioned and, as I say, in setting
limits you would have to set them at the upper limits because you
are circumscribing everybody's activities and in most congressional
districts `I think there would be few where the maximum possible
would be spent but I think there should be a ceiling. I said $175,000
and suggest $190,000 for the challenger, but I do believe I am going
to have an advantage over who would try to challenge me in the next
election because I will have my newsletters out. I will have exposure
on the local press, some news reporting and TV exposiure, and it is
difficult for the challenger to overcome some of this.
I think he should have an adequate amount of spending to be able
to try to do that. I picked these figures. I would be hard put to say
that $150,000 and $175,000 might not be the correct ones, but I don't
think it should be any less than about the areas we are talking about
because you have to take into consideration the problem areas and not
the general areas.
Mr. DENT. Would you say Florida, as a whole, would be pretty much
of a problem area for candidates with money? That you would have to
have a lot of money to run for U.S. Senator in Florida?
Mr. YOUNG. I am putting limitations on the amount any individual
could contribute.
Mr. DENT. Normally the way it is today a man would have to spend
$3 million in Florida very easily, would he not?
Wasn't it a strange thing that one Member of the U.S. Senate walked
his way through the State and spent so little money that no one be-
lieves it to this day and he won? You have to figure this.
Frankly it is not a miracle. I came within 11/2 percent of winning the
U.S. Senate and spent $67,000 for Congress and Senate and didn't
have 1 minute of radio or TV time. But I walked it. They didn't know
me in Shamoykin; you can bet your life they didn't. And the man
was in 12 years already that I came close to beating and he spent a
lot of money.
It depends on whether you want the job for the job itself; whether
you want the job for the job itself. Do you really want it?
PAGENO="0187"
183
Mr. YOUNG. Of course, the free television time in my bill and other
bills would be helpful in giving you exposure and overcoming the
problem-helping the system-
Mr. DENT. Would you have to have free television time if you
are allowed $175,000 or $150,000? That, I think, is kind of cheap.
Mr. YOUNG. Even with that kind of budget, I a~in talking about,
Mr. Chairman, in my area you still don't have any money
for television.
Mr. DENT. But you won without it?
Mr. YOUNG. True, but-
Mr. DENT. Did your opponent use television?
Mr. YOUNG. No; neither one of us could afford television.
Mr. DENT. There isn't any limit to set if you run in New York City.
The metropolitan candidates in New York City couldn't possibly fi-
nance television.
Mr. YOUNG. Not unless you can get free television time you can't
finance any television time for congressional candidates in the metro-
politan area.
Mr. MATInS. We have one of the witnesses I know you want to
hear from, but the provision that you have in your bill provides for
961 hours and 30 minutes free television time.
Mr. YOUNG. It is a problem.
Mr. MATInS. I assume too that you intended your testimony to mean
candidates for the House other than Senators and Representatives
the way you presented it to the committee. You did mean candidates?
Mr. YOUNG. Candidates for both offices.
Mr. DENT. How about independent candidates?
Mr. YOUNG. There is provision in my bill, but I don't think many
would qualify.
Mr. DENT. That is the point. Again, we shut out a number of people.
Mr. YOUNG. They have to make a certain showing to be able to show
they are entitled to it. There are certain people who run for public
office, I guess for the exercise, and they aren't really what most of us
would consider to be legitimate candidates.
Mr. DENT. When I first entered politics, I couldn't make up my
mind whether to be a Democrat or Republican. The community at that
time, the district, was entirely Republican at that moment. I decided
to run as an Independent. I probably would have never been in Con-
gress, much to the delight of many people, but I probably wouldn't
have been in Congress at all.
Mr. YOUNG. I wouldn't agree with that, Mr. Chairman. You showed
because of your merit and ability you were able to get elected. There
are no limitations on minimums.
Mr. DENT. They happened to find out about me after I got elected.
They didn't know about me at all.
Very seriously, I say I will never support any legislation that in any
way builds any kind of a barrier against the candidacy of any
American.
Mr. YOUNG. My bill does not build a barrier.
Mr. DENT. You do when you set up free time and allocate it on a
different basis because of the different party structure. That is what
happened to the Senate bill. It is so unrealistic that a person could
never qualify as a minor party candidate to get any of the free time.
PAGENO="0188"
184
Mr. YOUNG. Mr. Chairman, could I suggest this: I would recom-
mend very seriously that you give the Presidential candidate the free
time.
Mr. DENT. I don't think there is any question about that.
Mr. YOUNG. That will loosen up the whole finance structure.
Mr. FRENZEL. You don't have to do that by law.
Mr. DENT. You don't have to worry about that because all the Presi-
dent has to do is say, "Look, fellows, your license is up next year." Don't
worry about that. They will get free time.
Mr. YOUNG. They should give the free time to both major parties,
an equal amount, and that will take the pressure off those major
parties in raising the money that has to go to pay for those television
programs.
Mr. DENT. Don't you think Wallace is deserving of equal time, or
that he was last year? He was a major candidate in some areas.
Mr. YOUNG. As I recall he withdrew though. Wasn't he shot before
the-
Mr. MATHIS. He is speaking of the 1968 election.
Mr. DENT. That is correct. I meant the 1968 election.
Mr. MATHIS. He might very well have qualified.
Mr. DENT. He never would have.
Mr. FRENZEL. Your bill is 15 percent and he didn't draw 15 percent?
Mr. DENT. He drew 11 percent. Even in that big effort he made he
only drew 11 percent.
Mr. FRENZEL. Mr. `Chairman, could I comment on one other aspect?
First, I agree with the chairman that sometimes it is not how ex-
pensive it is to get to be a Congressman, it is how expensive it is to be
one and live on the salary with other expenses and I share the chair-
man's thoughts on public financing which are consistent with your
own.
I think the thing that is different about your bill is that you have
attempted to attack the pool contribution, which has bothered all of
us. We don't know how to deal with it and I think you have given us
another good thought. The other gentleman from Ohio, Mr. Brown,
and I have a similar kind of attack on this thing where we have tried
to say you could give through pools, but the individual must designate
personally to whom the money is going.
It is a thorny problem and I think you deserve great credit for
having taken it on. I am really pleased to see the new Members of
Congress, Mr. Chairman, contributing in this field so well and I thank
you for your testimony.
Mr. YOUNG. Thank you, gentlemen. I appreciate your courtesy.
STATEMENT OP THE HONORABLE RALPH S. REGULA, A REPRE-
SENTATIVE IN CONGRESS PROM THE STATE OP OHIO
Mr. REGULA. Thanks, Mr. Chairman. I will highlight my testimony
because you have it for the record.
Mr. DENT. It will be made a part of the record following your
remarks.
Mr. REGULA. To highlight the points contained in the bill I have
introduced it is designed to not only stimulate action at the Federal
level, but also to recognize the importance of some type of control
PAGENO="0189"
185
at the local level, and also some type of encouragement for contribu-
tions at the local level.
This flows from the fact that revenue sharing is the direction that
legislation is taking in the Congress and, as a result, the role of the
State and local governments will become increasingly important.
Because of this it is* important that as we move responsibility for
government to the local arena we also be concerned about stimulating
campaign contributions to worthy candidates at the State and local
levels as well as at the Federal level.
As a practical matter, local government offices have been and will
increasingly become incubators of potential candidates for Federal
office.
For example, in this Congress, 47 percent of the Senate and 44 per-
cent of the House at some time served in either State or local gov-
ernment offices.
The thrust of the bill-and some of the features-I won't get into all
of them because I am sure .they are covered in other bills, but in my par-
ticular proposal I have attempted to n~ake it more attractive for the
small contributor to contribute to Federal elections and unlike other
proposals also to State and local elections. By the same token, I have
limited the amounts that can be contributed to any one candidate and
have strengthened what I believe to be the intent of the 1971 Federal
Elections Campaign Act, that is accountability, by providing that
only one committee may be authorized to make expenditures on behalf
of and receive contributions for `any one candidate.
I won't discuss this, because it will be in the record, but I have pro-
vided a procedure whereby a candidate for State or local office may,
for the purpose of complying with the Internal Revenue Code, desig-
nate a single political committee which would then be bound by the
Campaign Act provisions.
I think Internal Revenue regulations are going to h'ave an increas-
ingly important impact on campaign contributions and there is lan-
guage in the bill that I proposed that would enable candidates for
local office, if they would designate a single committee, to thereby
comply with any regulations, but they at that point would become
bound by the Campaign Act provisions.
Also, to encourage many people to contribute to candidates of their
choice, the allowable tax credit would be increased from $12.50 to $250
and the tax deduction from $50 to $500. However, the aggregate contri-
butions by a taxpayer to any committee or candidate could not exceed
either $25 for tax credit treatment or $50 for deduction treatment in
any one year.
In other words, this emphasizes again the need to contribute not only
to Federal campaigns, but also to State and local campaigns.
This would mean that a person would have to contribute to more
than one candidate or committee-in fact, 10-to take full a'ditantage
of the tax credit or deduction. Obviously the objective of this proposal
would be to get a broad range of participation by the interested citizen
in not only Federal elections, but State and local elections by saying in
effect, you can get the tax credit but you have to spread it around over
many candidates rather than to any one candidate if you are to maxi-
mize the availability of the tax credit mechanism.
I asked the Department of the Treasury what effect this proposal
would have and I h.ave been told that at the time the Revenue Act of
PAGENO="0190"
186
1971 was under consideration, existing tax credit and deductions were
e~timated to cost the Treasury $100 million in a Presidential election
year; that total campaign contributions were estimated at $300 million
with 12 million taxpayers participating; that in a congressional cam-
paign year the estimates would be halved; and that in an off year they
would be only one-quarter as large.
The Treasury does not yet have reliable data on the actual utilization
of the existing tax credit and deduction provisions, but has stated that
a small sample of returns indicates substantially fewer taxpayers
claimed deductions or credits than anticipated. At 1972 levels of con-
tributions, the Treasury estimates that the revenue loss for my proposal
would be $140 million as compared to $100 million under the 1971 act,
an increase of only $40 million.
This would mean an increase of only $40 million if we were to up
the limits from the present level.
I think this offers a reasonable alternative to Federal financing of
campaigns and it has an added advantage of directly involving people
in the political process.
Thank you, Mr. Chairman, for the privilege of coming here.
Mr. DENT. Thank you. I think you have touched on important points.
Most of the other fellows have introduced this. I am amazed at the
number of the younger Members of Congress who are interested in this
subject.
Mr. REG1JIJA. This is probably because we have been through it and
probably because we were initiated into the impact of the 1971 act im-
mediately. Most of us have had the experience of running in State and
local elections where we had the State provisions for accounting, which
were substantially less stringent than the Federal.
Mr. DENT. I know Ohio has one of the toughest laws.
Up in Oregon you are not allowed to give anything of vidue away
no matter what, even a box of paper matches. It limits the amount of
space you can put into a newspaper. You have to have approval of the
type of ad you are offering `to the newspapers. They don't have to
raise large sums of money up there.
I sort `of agree with your view-I think I know your view-that there
has to be some limitation to the spending. I agree wholeheartedly with
you on the responsibility `being placed directly at the door of the candi-
date by having only one committee disburse money. I am not so sure
that you could have only one committee solicit money.
If you have a far-flung operation, miles and miles, 190 miles one way
and 200 another, with your larger cities at different corners of the area,
you `have to have some committees to help you out.
I still believe that then the person who is responsible for the money
has to be the candidate. No collection committee shall ever be per-
mitted to slough it off. I am very serious. That would be the No. 1
reform we ought to keep in mind. 1 am happy that you have recom-
mended it.
As you say, you recommend it from a State that has very stiff re-
porting laws too and limitations.
What would you think would be a reasonable limitation on total
spending a candidate could make in a calendar year?
Mr. REGULA. Mr. Chairman, I think this varies, depending on the
type of district that you are running in. For example, a rather compact
PAGENO="0191"
187
district that did not have television would not require nearly the
expenditure to do an effective job as would a large district-or a
compact district that did have local TV.
In my particular district we didn't have `a lot of TV available in the
sense that the maj'or stations `were not in the district, therefore I didn't
expend very much in that area, but :had I had TV it would `have un-
doubtedly increased the expenditures.
Mr. DENT. That is one of the reasons-and I have not closed the
door in my own mind, in any way-if we can contribute something to
this new law in a way of giving an opportunity to a candidate who
does have this expensive media within his district, where it is avail-
able to the one who does have one and it is not available to the one
who doesn't have one.
There should be some kind of free time. That is one area where we
could spend, if necessary public funds. But it wouldn't necessarily be
an exorbitant amount of time.
You have a television station in your area, Mr. Frenzel. I have six of
them. They are all on the outside of my district.
Mr. IREGTJLA. The more important thrust of my proposal is the
limitation on the individual contributions to a candidate and, second,
to get a lot of people to contribute. If a candidate can attract 10,000
to give him $25, this is great because that is public participation. The
thrust of the bill that I have introduced here is to get more people
involved in this process by saying, "We will give you a tax deduction
but only a limited amount for any one candidate," hoping that they
will be supporting a number of candidates, not only Federal but
State and local.
Mr. DENT. As a matter of public record, what did you spend in
your campaign?
Mr. Rnoui~. I spent approximately $10,000 in the primary and
$70,000 in the general. This was in Congressman Sow's district and
he had vacated it therefore it was an open race.
Mr. DENT. Your opponent spent with you or over you?
Mr. REGULA. I don't know what he spent because his `committee
didn't file in the general.
Mr. DENT. That is one of the disadvantages an incumbent has. He
has to file.
Mr. FRENZEL. Only the winners file.
I think you have made a great contribution here. It is a view com-
pletely opposite to the previous sponsor of legislation.
Somewhere in between we are going to find some answer, I hope.
That is the legislative practice.
Mr. FRENZEL. Mr. Chairman, I want to congratulate the witness
too. I think he has done a good job and he has pointed out the single
committee need. If there is anything `this subcommittee agrees with,
that is the first point that we agree on, that there has to be a single
accounting and a single dispensing and money-raising unit or some-
body who is accountable for it. They may have `branch offices, but
somebody has to accumulate it all.
The other thing is the increase in the tax credit, where you try to
channel some money `back to local candidates. That dawns as a new
idea on the committee and I don't know what we will do with it, but
we are grateful for having it.
PAGENO="0192"
188
Mr. REGULA. I don't think we can overlook the impact of what we
do in terms of State and local elections. With revenue sharing we
are saying in effect local and State government has a much greater
role.
Mr. FRENZEL. Our problem is we have to put up a "next window"
sign and send you over to Mr. TJllman.
Mr. DENT. Being burned once, I am afraid of every stove. I am
not about to give Mr. Uliman something that gives him some theo-
retical right.
Mr. MATETIS. I am interested in one of the things Mr. Stanton
pomted out to us and that was a provision that I understand you
have in Ohio law which says if a candidate does not file proper
reports he is barred from seeking-
Mr. RixiulA. The candidate must file within 40 days after election.
Mr. MATm5. He is barred from seeking public office for 5 years.
Mr. Ri~otrr~. We have one statewide candidate who has been
caught in that.
Mr. M~rnis. I wonder if you could furnish the committee copies
of that legislation?
Mr. Ri~xiui~&. Certainly.
Mr. `DENT. It is on file. The chairman has it upstairs. in fact he
patterned the Hays bill after the Ohio bill. He said it wasn't liberal
enough for the liberals.
[The complete prepared statement of Mr. Regula follows:]
STATEMENT OF THE HONORABLE RALPH S. REGTJLA, A REPRESENTATIVE IN CONGRESS
Fno~r THE STATE OF OHIO
I consider it a privilege to be here today to submit my testimony on a modest
proposal, an alternative to public financing of Federal elections.
A lot has been said about proposals that recognize a need for reform and
answer that need by injecting the Treasury of the Federal Government into
the breach.
I have no quarrel with laudable proposals that recognize that moderate
federal support for contributions from the private sector can provide an im-
portant and healthy avenue for citizens to participate in the electoral process.
Indeed, a candidate's right to funds ought to be measured by his ability to
obtain grass root support-and that includes support from small contributors-
not only at the Federal level but at the grass root election level as well.
Revenue sharing is the direction that legislation is taking the Congress. As a
result, the role of the State and local governments is becoming increasingly
important.
I think, therefore, that it is very important as we move responsibility for
government to the iocal arena, that we be concerned about stimulating cam-
paign contributions to worthy candidates at the State and local levels as well
as at the Federal level.
As a practical matter, local government offices have been and will increas-
ingly become incubators of potential candidates for Federal office. In this Con-
gress forty-seven percent of the Senate and forty-four percent of the House
at some `time served in either State or local government offices.
I recently polled the constituents of my district, and one of the ten questions
I asked was, "Should Federal tax dollars be used to finance election
campaigns ?"
The response I received was overwhelmingly in the negative. 71.4 percent
responded in the negative.
I therefore reject proposals to federally subsidize our time honored free
elections procedures. I believe we can achieve the necessary reform as well as
greater citizen participation by providing for a greater tax credit or deduc~
tion, at the election of the contributor, for his contribution to individual
candidates.
PAGENO="0193"
189
I have, therefore, drafted and introduced a bill in the House of Representa-
tives, HR. 9983, that I believe offers a reasonable alternative to both those
that say our present system of elections favors "those that have or can get it"
and those that advocate a Federal subsidy of potential politicians. Perhaps
more importantly, my bill provides incentive for increased local participation
in the election process.
My bill contains many of the recommendations of the President of the
United States and some of the best provisions of the various bills introduced
in this and the other body to date.
I would provide a permanent Commission on Elections that is wholly inde-
pendent, charged with implementing the Federal Elections Campaign Act of
1971, and studying and recommending such changes to that Act as may be
necessary.
I have attempted to make ~t more attractive for the small contributor to
contribute to Federal elections and, unlike other proposals, to State and local
elections.
By the same token, I have limited the amounts that can be contributed to
any one candidate, and have strengthened what I believe to be the intent of
the 1971 Federal Elections Campaign Act; that is, accountability, by providing
that only one Committee may be authorized to make expenditures on `behalf of
and receive contributions for any one candidate.
The Commission is given administrative and investigatory powers and is
charged to report its recommendations to the Congress and the President by
December 1, 1974.
The bill makes it unlawful for any person other than a candidate, an official
national party committee, or any official Congressional or State campaign com-
mittee, to make directly or indirectly contributions or expenditures on behalf
of any candidate, including the authorized committee of that candidate, in any
calendar year any amount in excess of $2,500 in case of a Presidential or Vice
Presidential election, and $1,000 in the case of congressional elections.
What I mean by the official national committee of a candidate or his au-
thorized committee is that committee that is certified by the Federal Elections
Commission under the 1971 Act, as amended, and I limit the number of such
committees to one and only one.
Every candidate for Federal office is required to appoint a single committee
to handle his campaign financing. I prohibit inter-committee transfers of
money.
In addition, I have provided procedures whereby a candidate for State and
local office, may, for the purposes of complying with the Internal Revenue code,
designate a single political committee which would then be bound `by the Cam-
paign Act provisions.
To encourage many people to contribute to the candidates of their choice, the
allowable tax credit would be increased from $12.50 to $250, and the tax deduc-
tion from $50 to $500. However, the aggregate contributions by a taxpayer to
any committee or candidate could not exceed either $25 for tax credit treat-
ment or $50 for deduction treatment in any one year.
This would mean that a person would have to contribute to more than one
candidate or committee, in fact ten, to take full advantage of the tax credit or
deduction.
The objective of this proposal would be to get a broad range of participation
by the interested citizen in not only Federal elections but State and local elec-
tions by saying in effect, you can get the tax credit, but you have to spread it
around over many candidates rather than to any one candidate if you are to
maximize the availability of the tax credit mechanism.
I asked the Department of the Treasury what effect my proposal would have.
I have been told that at the time the Revenue Act of 1071 was under consid-
eration, existing tax credit and deductions were estimated to cost the Treasury
$100 million in a Presidential election year; that total campaign contributions
were estimated at $300 million with 12 million taxpayers participating; that
in a Congressional campaign year the estimates would be halved; and that in
an off year, they would be only one quarter as large.
The Treasury does not yet have reliable data on the actual utilization of the
existing tax credit and deduction provisions, but has stated that a small sam-
ple of returns indicates substantially fewer taxpayers claimed deductions or
credits than anticipated. At 1972 levels of contributions, the Treasury estimates
that the revenue loss from my proposal would be $140 million as compared to
$100 million under the 1971 Act. An increase of only $40 million.
25-239 O-73-------13
PAGENO="0194"
190
I think this `offers a reasonable `alternative to Federal financing of cam-
paigns. It has the added advantage of directly involving people in the political
process.
I believe this bill would lessen the possibility of gross misuse of money in
election campaigns. It broadens the base of campaign financing while assuring
that no one has undue influence on a candidate as a result of a large contribu-
tion.
Thank you for the privilege of appearing here.
Mr. DENT. Thank you, gentlemen.
[Whereupon, at 12:20 p.m., the hearing was adjourned.]
PAGENO="0195"
FEDERAL ELECTION REFORM
TUESDAY, OCTOBER 16, 1973
HousE OF REPRESENTATIVES,
SUBCOMMITTEE ON ELECTIONS OF THE
COMMITTEE ON HOUSE ADMINISTRATION,
Washington, D.C.
The subcommittee met, pursuant to other business, in room 2253,
Rayburn House Office Building, Hon. John H. Dent (chairman of
the subcommittee) presiding.
Present: Representatives Hays (chairman of the full committee),
Dent (chairman of the subcommittee), Jones, Mollohan, Mathis, and
Frenzel.
Also present: John T. Walker, staff director; John G. Blair, assis-
tant to the staff director; Ralph Smith, minority counsel, Committee
on House Administration, Richard Oleszewski, clerk, and Miss Bar-
bara Lee Giaimo, assistant clerk, Subcommittee on Elections.
Mr. DENT. At this time we are privileged to have with us the dis-
tinguished gentleman from Illinois who will discuss the reform of the
election laws. You may cover any of the bills before the committee
at this time. I am sure as you cover the points of the major bill it will
be very important for us tO pay attention to the testimony of the
Honorable John B. Anderson.
Welcome to the committee, John.
STATEMENT `OP HON. JOHN B. ANDERSON, A REPRESENTATIVE IN
CONGRESS PROM THE STATE OP ILLINOIS
Mr. ANDERSON. Thank you very much, Mr. Chairman and members
of the distinguished subcommittee. I have a prepared statement I
would ask permission of the committee to insert in the record. I will
consult it but will try to save your time as much as I can.
Mr. DENT. Without objection, it will be made a part of the record
at this point.
[The statement referred to appears on page 219 of this hearing:]
Mr. ANDERSON. Mr. Chairman, it is a great pleasure for me to appear
again before your Subcommittee on Elections.
It seems to me that the events of the past week probably have given
more impetus to the importance and, I think, the timeliness and the ur-
gency of the work that is being performed by this committee. I want to
add my commendation to those that you have already received for
scheduling this very important series of hearings.
I think we have had so much emphasis on the President's low estate
as far as the public opinion polls are concerned, and now more re-
(191)
PAGENO="0196"
192
cently of course the downfall of the Vice President, that we sometimes
tend to forget that the very same polls that show those things indicate
an even lower level of confidence in the Congress itself. You have all
heard the ranking that politicians were just above used car salesmen
in public esteem.
It seems to me that if we really want to do our job of restoring pub-
lic confidence in our political process, if we want to avoid being swept
from the scene ourselves in a wave of public backlash against the
"in's," then the matter of campaign reform is a matter of immediate
importance to all of us.
I would hope that the opportunity to make some obvious and long
overdue changes will be recognized and acted upon by this committee.
Let me preface the three or four points I would like to make by say-
ing, as one who has been interested in this topic and has introduced a
bill cosponsored by my colleague, Mr. TJdall, Democrat of Arizona, a
bill now cosponsored by more than 140 of our colleagues on both sides
of the aisle, I think that bill addresses itself to the four basic policy
issues which I would like to discuss in this statement.
First of all is the need to develop a more independent and credible
means of monitoring and enforcing our existing disclosure law; second,
is the question of whether overall spending limits are desirable; third,
is the necessity to reduce as much as we can the influence of big money
in campaign for Federal office-whether from wealthy individuals or
interest groups, business or labor, or liberal or conservative organiza-
tions; and finally, we need to decide whether the time ~ias come to es-
tablish at least a partial form of public financing.
I have a rather lengthy section in my prepared statement on the
subject of an independent elections commission. I have the feeling you
have already heard so much about this that I am going to skip over
this and make this comment only: Our bill recognizes the argument
that some Members have made that this should not be a Presidential
appointed commission, that this puts too much power in the hands
of the President. So we would provide for two of the appointments to
the independent commission to be made by the Speaker of the House
of Representatives, two by the President Pro Tem of the Senate, and
two by the President. These would be for staggered terms, and this
would be a wholly bipartisan commission, three from each major
party.
The second aspect of campaign reform to which I would like to call
your attention briefly is the question of overall expenditure ceilings.
Nobody has to belabor the point that the 1972 campaign showed that
excessive spending was a problem. Candidates in the Presidential
race alone spent almost $100 million, I believe, and Common Cause
has indicated that congressional candidates spent almost an equal sum.
When you include the total expenditures for State and local races,
some experts, such as Herb Alexander, of the Citizens Research Foun-
dation, believe that total spending for all elections came close to $1.5
billion in 1972.
Now I recognize that a very considerable portion of these funds
were spent for purposes that probably did very little to illuminate the
issues or underscore the differing qualities and capabilities of the
competing candidates. Moreover, as the cost of elections continues to
mount, it most certainly has the effect of foreclosing public office to
PAGENO="0197"
193
those of modest means and of enlarging the role of the wealthy and
special interests in the election process. But before we jump to the
conclusion that rigid expenditure ceilings are the quick and ready
solution to that problem, I believe we need to very carefully consider
the likely impact of such limits.
With the assistance of the raw data on the last election compiled by
Common Cause, we have been able to develop some very dramatic
figures which I believe clearly illustrate the danger of excessively
low and inflexible overall expenditure limits. Stated simply, I thinl<
enactment of low expenditure limits would in most instances be tanta-
mount to a guaranteed incumbent reelection security system.
I have a table that appears on page 221 of my prepared statement
that indicates that expenditures by candidates for the House during
the last election varied enormously-from an average of $15,700 in the
case of challenging candidates in races against heavily entrenched in-
cumbent to $106,300 in the case of winning candidates in open dis-
tricts or contests in which no incumbent was on the ballot and where
both people were running for the first time.
Specifically, the top and bottom lines of the chart show that truly
competitive elections are costly for both candidates involved. Indeed,
I would point out that, although challengers succeeded in raising an
equal amount of funds relative to incumbents in the 54 races repre-
sented by the first line, less than a dozen were actually successful at
the polls. Those that were successful in beating incumbents spent an
average of $126,000, as opposed to the $82,000 figure given for all
challengers in this category.
So I am talking about those with a winning margin of 55.9 percent
or less. There the incumbents spent $84,000 on the average and the
challengers spent 98 percent of that amount.
You get down to the so-called safe districts-I guess supersafe dis-
tricts-where the incumbent won by more than 70 percent, and you
have a figure there of $33,997 representing the spending by incumbents
and only 46 percent of that amount was spent by challengers. They
only spent $15,702.
While those of us who enjoy continued tenure in public office do not
like to stress this aspect of campaign reform, I think it is, neverthe-
less, vitally important.
The fact that more than 90 percent of House Members who stand
for reelection are consistently successful suggests that our elections
are not really as competitive and open to genuine voter choice as they
should be. In almost half of all races in the last election, the incumbent
was reelected by a margin of 62 percent or more, and in 12 percent of
all House districts, an opposition candidate was not even slated.
Yet if we were to establish low overall expenditure limits, perhaps
in the range of $50,000 to $75,000 as many have suggested, would that
not further reinforce the pro-incumbent bias of the system. That is
already demonstrable in the present system.
Mr. HAYS. Why do you use the term "pro-incumbent bias"? Did
it ever occur to you that maybe the incumbent is doing a good job and
the people want him back for that reason alone?
Mr. ANDERSON. I don't suggest for a moment that there is anything
wrong with an incumbent seeking reelection or the fact he wins in
some instances, as we indicated on the chart, by 70 percent or more
PAGENO="0198"
194
of the vote. It is indicative of the fact that he is a good man and
should have been reelected and that things came out right in the
public interest.
Mr. HAYS. The whole thrust of what I understood you to say, and
I have been listening very carefully, has been that, somehow or
another, there ought not to be so many incumbents reelected and, some-
how or other, we have got to get rid of more incumbents. I understood
that was your thrust whether you intended it or not.
Mr. ANDERSON. I am grateful for your question because I don't want
to leave that impression. What I want to do is try to insure a more
competitive electoral process, one where the people can feel that we
have not, because of the kind of overall expenditure ceilings we have
imposed, stacked the deck so that the well-known incumbent, whose
name is a household word as I know yours is in your district and I
hope mine is in my district, will not, by virtue of that fact alone, be
so strong that the challenger is put at an initial disadvantage because
he cannot use the media and he caimot get the necessary exposure to
maybe make that a more even kind of contest that would be fair, I
think, under a competitive system.
I don't want to leave the impression that I am running down the
incumbent in the Congress or that I am not for giving them an equal
chance to stand on their record for reelection.
Mr. ~HAYS. Mr. Chairman, I hope you will pardon my interruption
but I want to make the point and I have to leave soon.
Mr. DENT. If the witness doesn't mind, I certainly don't.
Mr. ANDERSON. Certainly not.
Mr. HAYS. I have made a little study of this myself and 18 of the
top 25 spenders last year were not incumbents, which doesn't jibe with
all of the arguments you hear that the top spenders are always in-
cumbents because they can raise the money.
Thirteen of the 25 lost the election. Only seven of the 25 were in-
cumbents. Some of them lost the election.
So I suppose you can take any set of statistics you want to and,
depending on the way you break them down and the way you analyze
them and the way you interpret them, you can prove about anything
you want to.
But in the district where it is open-and you talked about open
districts-it seems to me that an overall limitation would be just as
fair for John Doe as for John Dokes, given the fact that neither has
run before.
Mr. ANDERSON. I agree. I think in that type of specialized situa-
tion that would probably be true. The problem is, of course, in draft-
ing legislation whether you would have constitutional problems, and
whether on the grounds of simple equity you would be able to draft
a statute that would provide one standard for the so-called open dis-
trict and another standard for the district held by an incumbent.
Mr. HAYS. I don't think the courts would let that stand for a
minute, nor do I think the courts would let stand this business of pro-
viding disparate sum of public money for candidates, nor do I think
they would let stand any limitation on candidates. So if you are going
to have public financing in the primary and you have 1,000 people file,
I think you are going to have to finance all 1,000 people equally. You
PAGENO="0199"
105
can bet if there is $50,000 of public financing, there will be 1,000 people
file in most districts.
As I said the other day, 990 of them will find out some way to rip
off most of that money for themselves.
Mr. ANDERSON. I couldn't be more in agreement, Mr. Chairman. I
am not in favor of total public financing or in favor of a system that
puts a flat sum out on the stump for a candidate to come out and run.
Mr. Udall and I do have some provisions in the bill we introduced that
sets up what is called the Federal Matching Entitlement Fund that
would say to the candidate, "If you can go out and demonstrate your
capacity and your ability to raise a minimum amount"-and the bill
would suggest $1,000 for House candidates, $5,000 for Senate candi-
dates and another figure for Presidential candidates. But that is just
for purposes of discussion, really. There would have to be a minimum,
obviously, they would have to raise. But only after they had demon-
strated that capacity to raise a fixed amount themselves in small con-
tributions of under $50 or $100, would they get any money, and then
only on a matching basis. So what we are proposing is a mixed system.
I don't want to do away with private gifts.
Mr. HAYS. You are saying, as I gather, the law we have now is in-
adequate?
Mr. ANDERSON. I have to say that; yes.
Mr. HAYS. You are aware that law is almost totally the Anderson-
TJdall substitute which was offered on the floor with the exception of
the commission, are you not?
Mr. ANDERSON. Sir, of course, I think that was a significant deletion,
hut I think that what you have said is true. The results of the last elec-
tion, the unhappy experience that the American people had. I think
as they go back and look at what happened in that 1972 campaign do
in my humble judgment dictate the need for strengthening amend-
ments.
Mr. HAYS. You are not proposing strengthening them in my judg-
ment. You are proposing we open the thing up further and have more
expenditures. If I can figure out anything at all, is there was too much
money spent. That is what everybody back home says-why don't you
clamp a ceiling on how much money they can throw around?
You talk about the repudiation. I think you read polls too much.
We had a dinner Saturday night in my county, and for the first time
for a fundraising dinner for the party and the first time in my life-
time people were scalping tickets.
Mr. ANDERSON. Unfortunately this was a Democratic dinner.
Mr. HAYS. That is right. We had a seating capacity for 550 people
and the dinner cost $10. It was worth about 75 cents. I should have
been catering it out of the cafeteria. But people were actually paying
~20 apiece for the tickets because they wanted to be there, apparently
wanted to be seen there. We don't have an election this fall of any sig-
nificance. I don't think people have turned their back on officeholders
and incumbents and political figures generally.
Mr. ANDERSON. I agree, Mr. Chairman. I don't think they have. I
think what they have turned their backs on is the spectacle of laundered
money in suitcases being flown around the country in vast sums.
Mr. HAYS. I agree with you on that.
PAGENO="0200"
196
Mr. ANDERSON. Of $50,000 and $100,000 and $1 million contributions.
I think this is almost obscene.
Mr. HAYS. I propose to put an amendment in the bill, if I have any-
thing to do with writing it, that no one can contribute more than $500.
Mr. ANDERSON. I totally agree with that, and one section of our bill
relates to limits on those contributions. I think this is a large part of the
problem. There has been too much big money, too many financial fat
cats.
I couldn't be happier with what you have just told me about scalping
$10 tickets for $20 at a dinner. This is the kind of grassroots participa-
tion we ought to have.
Mr. HAYS. We are having another dinner, a lOth-Districtwide dinner.
Mr. ANDERSON. I don't want to wish you too much success.
Mr. HAYS. We already have people angry because they want to get
tickets at $25. I don't think they are turning their backs on the political
officeholder at all.
Mr. ANDERSON. Not per Se.
Mr. HAYS. They are saying, especially Common Cause, that we now
have built-in security and we have no limits. Somewhere along the
line someone is at fault in this thinking. If no limits are going to give
security and high limits are going to give security, the thinking must
be sour at some point.
Mr. ANDERSON. Let me say, Mr. Chairman, I think if you have an
incumbent who is doing a credible job, a good job, in the public office
that he holds, there is always going to be some built-in advantage for
that incumbent. I don't propose to eliminate that. I think tJiat is the
kind of advantage lie ought to have. If you have a good record, you
are entitled to the advantage.
I merely suggest that if you have an overall ceiling which is rela-
tively low, that it will not differentiate between incumbents with good
records and others. Instead it is going to protect against a good stiff
competitive challenge of the incumbent who is just sitting there and
hanging on for dear life by virtue of the fact he has been in office for
10 or 20 or 30 years. So the ceiling makes no distinction as far as what
kind c~f incumbent, and that is what bothers me about the ceiling.
Mr. DENT. I can name you a set of circumstances in a dozen instances
in the campaigns I have participated in, with other Members, not my
own. I can name you an outstanding Member of Congress who was
here quite a while and made a great contribution, and he was beaten
only because a great sports figure ran against him.
Here is one thing you must understand in my book: I learned early
in my days a long time ago that the combination of low salaries for
legislative bodies and unlimited expenditures for campaign are the
means of controlling legislative bodies. That has been true in all 50 of
the States. I served 22 years in the State senate and 18 here in Con-
gress, and it is true in every legislative body in the entire country today
and it is true in Congress. It is not realistic, and the recommendation
was made the other day we set a limit of $225,000 for a congressional
campaign for the incumbent and $240,000 f~r a nonincumbent, and
that was even `attacked as being too low in this subcommittee. It is not
realistic.
In my mind, if I were an ordinary citizen, and I know a lot of them
very well, they can't believe that any man spending $200,000 or
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197
even $75,000 for a job that only pays $85,000 in 2 years is running as
an honest endeavor. They just can't believe it.
Mr. ANDERSON. I have talked to a few cabdrivers myself.
Mr. DENT. We had a limitation under the old law you can only
spend so much per vote. We had no difference in membership defeats,
incumbent defeats on a general average. If there is a turnover of
public opinion they clean house; the money doesn't mean anything.
I believe that any limitation-for a realistic approach to the salary
paid, if you have it raised, it would be a lot better than limiting the
amount you could spend, so an incumbent could spend about the
same and give the advantage to the other fellow. I don't care about
that.
Mr. HAYS. Mr. Chairman, I want to reinforce what you are saying.
Mr. Anderson, when I came here in the election of 1948 there were more
than 80 new Members elected that year. I displaced a four-term incum-
bent, and I spent less than $3,000. I would imagine that most of my
colleagues who came in that year didn't spend much more than that
because you couldn't find the money in 1948.
Mr. ANDERSON. Did you have much media?
Mr. HAYS. What counted was the record of the 80th Congress. I am
not going to say which party controlled it, but that is what happened.
And many of the people who came that year in my class didn't survive
the first election. I only survived it by about 1'/2 percent. I didn't
spend much money, less than $10,000. I didn't have it.
But if the record of the Congress or the record of the individual
is repugnant enough-I will use that word in its best sense-that his
constituency disagrees with him, he is not going to survive and it
doesn't make much differerce how much money he spends.
The gentleman I beat was a very decent fellow, and I wouldn't have
beaten him except for the record of that Congress. There is no question
about it. And he didn't spend an excessive amount of money to stay
in. I suspect maybe $15,000.
Mr. ANDERSON. What I was relying on, very frankly, as the basis
for my argument was the more recent experience where I indicated
in 1972 something better than 90 percent of the incumbents were
reelected. I agree there have been tidal waves that ha.ve wiped out
incumbents.
Mr. HAYS. In 1952 when Eisenhower swept the country I had a
very tough opponent and he had lots of money, a Republican and
Whip of the House. I was for Kefauver in that campaign and I
didn't like what went on at the convention. I took a vacation in the
month of August and left the territory. When I got back everybody
said, "You are in trouble. That fellow has been around the district
and spoken to every club in the district." I said, "Great. He will
have time to make a second round."
I have had opponents before now that, if it hadn't been illegal and
unethical, I would have financed a considerable television campaign
for. Sometimes they have the money to finance themselves, and
there is nothing as revealing as somebody getting on television, and
a lot of neophytes do it, for 30 minutes.
What do you think happened to Cary in Massachusetts? He spent
$281,000 and he got on television once too often carrying a Vietcong
PAGENO="0202"
198
flag, and that was the end of that, the ball game was over. I am
grateful it was.
Mr. ANDERSON. In a sense you are making the argument I support.
It isn't really the overall ceiling that we need as much as it is some
reasonable limitation as you support, I know, for the media. I cer-
tainly support the concept we have in the present law that we ought
to have limitations on the categories that are mentioned there.
Mr. HAYS. We don't have a limitation on what I consider to be
the most effective category-direct mail.
Mr. ANDERSON. I would support adding that, Mr. Chairman.
Mr. HAYS. I tried to do it in the conference, and Common Cause
didn't have anybody in the conference but they gave out a press re-
lease saying they did and blamed me for all the things that went
right in the conference. I was only one. We had a joint conference
at that time with the Committee on Interstate and Foreign Commerce.
It was the biggest conference you ever saw, and the same thing on the
Senate side.
Mr. ANDERSON. I support the idea of adding direct mail.
Mr. DENT. You made a statement a while ago which would rule out
a certain number of laboring men even to become a candidate. There
is nothing in the world will rule out individuals from the campaign
trail and from being candidates in an unlimited or high limited spend-
ing ceiling. There is no way on God's earth that a bricklayer with a
college education-and incidently there are many of them today.
Mr. ANDERSON. Ye,s.
Mr. DENT. Could you possibly run for office if you put any kind of
a limit beyond some reasonable association between the limit you can
spend and what you can earn. We will have to get over that hump
before we can even talk about limitations.
Mr. HAYS. You picked a bad illustration with bricklayers because
they make a substantial sum of money. You had better say a farmer
or something like that.
Mr. DENT. They make subetantial, but let me ask a question on sub-
stantial. You make about $14,000 a year if you work the full 50 weeks
out of 52 weeks with 2 weeks vacation, and the full 40 hours a week.
That is whatit is.
I propose a 10-cent population count for every election. That equal-
izes on everybody. If you want to spend it for television, you do so.
Maybe you can't use it better. You can't expect to do what I do in my
district where I don't use television, and you do what I do plus addi-
tional television. If the other fellow can't spend it, you are no worse
off than he is.
We have six television stations. My opponent spent $180,000. I re-
fused to make the first break going into television because I knew it
would put me over my head in the kind of district I come from. I am
not allowed to hold fundraisers in my district.
Mr. ANDERSON. Why is that?
Mr. DENT. Because the Democratic Party has that kind of setup. The
candidate is not allowed to hold fundraising dinners.
Very frankly I could take you to one of our colleagues who is an
attorney, but he made one of those kind of honest confessions that he
listened to the newspapers and didn't realize what the game would be.
He thought with $42,500 he would be able to keep his family here
PAGENO="0203"
199
with his small children going to school and still maintain his resi-
dence here and go back to his constituents and make speeches, and he
just couldn't do it. He publicly announced he would not earn a cent as
a lawyer, that he would not have any conflict of interest, and he reg-
istered all of his assets and he does it periodically once every year. The
fellow is strapped into a bind.
He said to me, "Any hope that I could spend 10 cents a vote is
absolutely ridiculous." He has a better chance of getting something
like $20,000 in the primary if he needs it or $47,000 for the general. It
isn't an unreasonable thing that a man spends $47,000 in a single 6-
month campaign. I think it is a pretty darn reasonable figure. It is a
little high for some anyway. I don't think we can go much higher
than that regardless because we are saying to the public that anybody
that can afford it can buy it. You and I know that, John. You are a
reasonable person. I don't think you spent $200,000 to beat your first
opponent; did you?
Mr. ANDERSON. No.
Mr. DENT. And he was an incumbent.
Mr. ANDERSON. No. As a matter of fact I had the good fortune to
run in an open district. The Congressman retired.
Mr. DENT. But you had an advantage over the other because your
name was a byword in the district too, you know. You were so well
known above him it was impossible. How would you give him all the
opportunity-put him on television 1 or 2 years to get acquainted?
Mr. ANDERSON. We do have a provision in the bill to provide for some
voter's television time.
Mr. DENT. We have had that argument. I don't think they can find
the time. The time is now limited. There is no time for public informa-
tion, and it is between sports and murder and mayhem and rapes, fires,
disasters, wars, and scandals. There is about 1 percent of television
time given to any public service whatsoever, and we would be public
service. You can't cut in on that. You can bet your life on that.
I do think if we give each man the same amount to spend and police
it-don't forget I have sat on this committee on contests where one
man spent almost over $400,000 and he was challenged by the man he
beat because he had spent too much money. We found out the other
man spent $280,000.
I don't disagree with what you are trying to do. In fact, I applaud
it. I do say all of us better get together and sit down, even informally,
and discuss what will be good for the future. That is the only thing
I am looking at because my future is beyond me.
Mr. ANDERSON. I would invite the distinguished chairman's atten-
tion to a table on page 222 presented in my testimony. After analyzing
the data for the so-called marginal races indicated on that first line,
I must still state my conviction that I have little doubt a limit of $50,-
000 would have deprived even the handful of candidates that did beat
incumbents last year of their hard-won victories at the polls.
I would also point out that since the reporting requirements went
into effect after many campaigns were well underway, that data we
have probably substantially understates the actual amount of funds
raised and spent in competitive races, in some cases by up to 25 per-
cent. In addition, these are average figures which obscure the fact that
PAGENO="0204"
200
in many races in the first category both candidates spent well over
$150,000 and in some instances up to $300,000.
Thus, we must search for other means of deahng with the problems
resulting from the rising costs of campaigns. In my view, a lunited
form of public finance could help to insure adequate funding for can-
didates who do not possess the personal wealth necessary to run a cam-
paign from their own resources.
Mr. DENT. How would we deal with it if we don't put a limit on
it?
Mr. ANDERSON. My suggestion is we deal with it with a limited
form of public financing of campaigns so that candidates who do not
possess the requisite personal wealth to run a campaign from their own
sources can at least, if they have the capacity to go out and command
enough grassroots support to raise small contributions of less than
$50 or $100, get some Federal financing, and that would be, according
to the figures we have in the prepared statement, about $25,000 worth
of help to the candidate for Congress in the last election if this proposal
had been in effect.
Mr. DENT. Individually?
Mr. ANDERSON. Yes.
Mr. DENT. Supposing I am a labor fellow and belong to a union of
5,000 or 500 workers-and that is not where most of the unlimited
spending is as anybody coming out of the labor ranks knows. Labor
is notoriously tight about giving money. They say, "I don't want to
spend my money to finance him so he can drive a Cadillac." I came
out of the ranks so I know.
But if I would use the shrewdness the Lord sort of blessed me with
when I started out and I was young, I would have had a simple means
of raising all the money I needed to get the full $25,000. I would have
them give me a check for my campaign for $100 or whatever limit
you put on here, and then I would turn right around and give them
a check to work for me on election like we are allowed in Pennsylvania
for the same amount they gave me, and also give them the advantage of
the $50 deduction. This is a way around it. He would get $25,000 and
would not be a serious candidate. He would find some way to take it
off the top somewhere as the gentleman said. You can't. You will get
into the greatest can of worms in my opinion. I won't be around to see
it, but it will be a terrible can of worms if you ever open up the
Treasury.
Mr. ANDERSON. Why do you suggest the man wouldn't be a serious
candidate if he was paying people to work for him at the polls on elec-
tion day? I believe by defintion then it would seem to me if he were
interested enough to hire poll workers he would be a serious candidate.
Mr. DENT. The poll workers aren't necessarily effective if they are
given $100 or whatever. There are many campaigns you could turn
money back because you didn't spend it. Some do. Most generally find
a way to get rid of it. That is what caused most of the trouble we are
in now, finding a way to get rid of excessive money, doing things not
done in normal campaigns.
Mr. ANDERSON. Certainly this is part of the problem. I don't argue
that point with the chairman for a minute. But I cannot see the con-
nection between his objection in that regard and the relatively modest
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201
sums of money that would be available to candidates on a matching
basis under the proposal we have made in this bill.
In the first place we are not talking about vast largess from the
Federal Government, we are not talking about putting just a fixed
amount of money out on a stump for a candidate to pick up at his will.
He has to submit vouchered proof he has raised money himself in the
small contributions and prove he is legitimate before he gets matching
help.
Mr. DENT. Who is in the best position to raise money, the incumbent
or the nonincumbent?
Mr. ANDERSON. The incumbent.
Mr. DENT. Isn't that again giving him a step on the man running
against him?
Mr. ANDERSON. I think I indicated, Mr. Chairman, I don't think
you are ever going to totally eliminate the fact that a good incumbent
has got a certain advantage and I don't want to. That is quite proper.
I am not trying to suggest that you ought to so demean an incumbent
and bring him down to this level while you are bringing up his chal-
lenger. I just don't want to give him an unfair competitive advantage
and stack the deck in favor of him completely. I just want to have a
competitive situation, and I think a good incumbent can come out
all right in that situation.
Mr. DENT. If an incumbent raises $25,000 and gets $25,000 from the
Treasury, being well known, being an incumbent, and a nonincumbent
candidate would not be able to raise that amount so he would get less
out of the Treasury.
Mr. ANDERSON. That doesn't limit him of course. He can raise money
in sums that would not be entitled to matching. This doesn't say the
challenger is limited by that amount, can only spend the amount of
money he raises and which is then matched. I am suggesting this bill
leaves him a lot of leeway to go out and raise other funds.
Mr. DENT. I notice the open district, incumbent, $106,293, but that is
not an incumbent because that is an open district.
Mr. ANDERSON. That is right.
Mr. DENT. Somehow or other the challenger in this particular case,
I guess, spent $98,000. Who is the challenger when you don't have an
inci;imbent?
Mr. ANDERSON. This just would be his opponent.
Mr. DENT. Will you tell us who won in that case in that particular
district?
Mr. FRENZEL. He passed that, Mr. Chairman. He said the winner in
the open district is listed in the incumbent column and the loser in
the challenger's.
Mr. ANDERSON. I have some other good statistics, which I think are
good anyway, on page 225.
Mr. DENT. In other words, by spending $98,000 more, according to
the theory being propounded today, the nonincumbent was able to beat
the other nonincumbent. One spent $98,000 which certainly ought to
be enough to finance a campaign, and the others spent $106,000 which
is $8,000 more and he won. That really becomes a contest of money.
Here the figures show he who can raise the most money gets the office.
I submit that 97 percent of the people could never raise $100,000
no matter how many years they were in the area or how popular they
were.
PAGENO="0206"
202
Mr. ANDERSON. We are not suggesting that $100,000 is any magic
figure that people ought to have to raise. I merely point out this is just
what did happen in 1972. I am just trying to give you the facts as to
what did happen and that the winners in those open districts spent
roughly the same amount as the challenger. There was only about
$8,000 difference as you point out.
Mr. DENT. What is the difference in the others-94 to 82, 64 to 31,
;37 to 21, 33 to 15. The 55.9 percent winners spent the same amount as
the incumbent did. So evidently money has something to do with it.
Mr. ANDERSON. The top and bottom lines of the chart show that truly
competitive elections are costly for both candidates involved whether
you are a challenger or whether you are the incumbent, the winner or
loser, it is going to be a costly proposition if you are going to have a
really competitive situation.
All I am trying to do here with the matching principle is to open
up the electoral process to the fellow who isn't rich and isn't born with
a silver spoon in his mouth, but who is innovative, enterprising, and
a good candidate. We are not talking about some deadbeat. After all he
isn't going to raise that much money. If he has all of these qualifica-
tions I mentioned, then at least he has a fighting chance to go out and
not only raise his money but get a little help from the Federal Govern-
ment through the Federal matching entitlement fund and make this
an equal race.
I think it is a better idea, I repeat, then trying to arbitrarily limit it
by an overall ceiling.
Having said that, if this committee, despite what I think are some
very cogent arguments, feels some kind of upper limit oii spending
is necessary, then I surely think it ought to consider something higher
than the $90,000 contained in the Senate bill.
I think that the data from the 1972 election would suggest that a
minimum acceptable ceiling would be in the range of $125,000 to
$150,000. I say that because anything lower could not help but rein-
force the substantial advantage with regard to fundraising that the
incumbent enjoys, not only with respect to fundraising but the other
attributes of incumbency.
Mr. DENT. We differ in our views because l)erhaps my experience
over the years has been different. I find the higher you make the limit
you could spend, the more the incumbent would be protected because
historically, unless a man is wealthy in his own right, a nonincum-
bent can never match the money of an incumbent. I doubt if the peo-
ple would consider this a reform in my district. I know this is true.
I go home every week and visit meetings every week, and have for
40-some years. I know the people will never have confidence in the
Congress of the United States as an honest body so long as you can
spend more than you earn. So people think $42,500 is a salary and this
kind of a thing is a fraud. And we haven't the guts to raise our salaries
so it can be realistic and spend money on campaigns.
Mr. ANDERSON. You put you finger on a problem. We need to edu-
cate the people.
Mr. DENT. We are hiding behind a fraud.
Mr. ANDERSON. V~Te need to educate the people that that isn't all free
and clear, that there are expenses. . .
Mr. DENT. There is one thing in the Vice Presidential situation I
agree with, and that is you can't treat the Vice Presidential job as a
PAGENO="0207"
203
second-rate janitor's job insofar as income is concerned when you are
talking about how he has to live and hold up appearances.
I think that is probably more of the crime and fault of the whole
Agnew deal than any other thing. In fact we are thinking seriously
of buying the Vice Presidential home he had to buy himself as a gov-
ernmental plot and make it a residence for the Vice President. It is
bad for the Vice President to come here and have to shop around for a
house at $190,000 to $200,000, unfurnished, so he can entertain some-
where in the area of his standing in Government in the United States,
and give him $60,000 a year salary. You make him dishonest on the
face of it. I am sorry but I feel very strongly about that.
Mr. ANDERSON. I come down to the third point I mentioned. I ap-
preciate the forbearance of the committee.
Mr. DENT. You have the time.
Mr. ANDERSON. In contrast to the difficulties associated with over-
all expenditure limits, I see no such problems with contribution limi-
tations. Indeed, such limitations are imperative if the cloud of sus-
picion now hanging over our election process as a result of the Water-
gate revelations is to be repelled. The only caveat I would issue is
that such tight contribution limitations require the enactment of at
least a limited system of public finance in order to replace funds that
could otherwise be raised privately in the absence of such ceilings.
The data we have developed on contributions and spending in House
races during the 1972 elections underscore in a quite precise manner the
reason why contribution limitations are necessary. The data show that,
on the whole, the role of large contributions and special interest money
may be somewhat exaggerated. In the average House contest these
sources account for only about 30 percent of total funds raised by can-
didates with the remainder derived from small contributors (under
$100) and broadly based party committees.
But lest anyone conclude this means that contributions limits are
unnecessary, let me point out another significant finding from our
analysis of the data. The role of interest groups and large contributors
increases directly with the expense of campaigns. Since we have
already seen that the truly competitive contests require huge amounts
of funds, this latter finding underscores why these groups have so
much leverage in our political system. Simply stated, where the out-
come is in doubt, special interest money and large contributors can
provide the margin of support needed to win an election.
The table on page 221 shows that in contests in which candidates
spent less than $30,000, almost three-fifths of funds were obtained
from contributors of less than $100 and from broadly based party com-
mittees. However, as the level of expenditures mounts, this ratio drops
substantially, and the portion of funds supplied by special interest
groups and large contributors rises.
I won't take the time of the committee for all of the figures that we
have here on page 222, but they show, for example, that when the
expenditure level for the campaign gets up to $120,000 or more then
the large contributors, the special interest groups, go up to 40 percent.
Those campaigns of less tham~$30,0Q0~-there~was~ Only 27.1 percent. I
think that demonstrates there is a correlation that as the campaign
becomes more expensive there is where the margin of difference could
be made by throwing in the biggest money at the last minute, the large
PAGENO="0208"
204
contributions or special interest groups. We need the contribution
limit.
Mr. DENT. I guess a lot of us forget one thing when we study this
whole problem. For many years limitations were automatic insofar
as spending as well as contributions because at one time you could
name on your hand the special interest groups who had a direct in-
terest in the election of individual Congressmen and members of leg-
islative bodies. Now you have the utilities, you have the NAM, and
labor groups, and you have the chambers of commerce in som~e in-
stances, but usually this was business versus labor in one form or an-
other. You never had more than a single hand of special interest
groups. Now that we have 2,500 cataloged special groups, these special
groups have proliferated. For instance we used to have agricultural
interests tied up in the Farm Bureau. Now you have the Farmer's
Union, the National Farmers Organization, and you have the milk
distributors, the beef distributors, the beef feeders, the beef handlers,
the butchers, the bakers, the candlestick makers. So each of those
are now in the situation. So that is why you have campaign spending
unheard of figures. They all want to buy in a piece and therefore they
give to both sides and to all candidates.
I have no illusions about the fact that somebody who gives me a
campaign contribution hasn't or is going to my opponent. These peo-
ple have so much money that they raise without any kind of expose.
We don't know who are on their board, we don't sit in at meetings
on decisions on who they are going to support.
Last week an incident occurred* that was carried in the public
press. The women's league up in Connecticut wanted to hold hearings,
and they wanted to hold hearings on a matter that is very controversial
today. They invited a professor to come and be the principal speaker,
and then have a panel. The contribution had been made to this group
by Common Cause. When they saw who the professor was they with-
drew their contribution because he had publicly stated he was opposed
to their point of view on a single subject. These women had to then
deny him the right to be the speaker, and lie was doing it f.ree of charge.
He has written books on it and is considered an expert. This is what
the problem is today. You can't have an unlimited campaign with 2~500
registered independent parties monitoring the Congress of the United
States. This is the point.
The only thing that can be done to clear this up is for the Members
of Congress to have the guts to do this in order to save the institution
itself, I don't know how anybody else feels about it, but you limit con-
tributions absolutely. No. 1, but at the same time we should monitor the
contributions through a single committee with the gentleman or lady
candidate being fully responsible and on him falls the action if there
is anything wrong, not on the committee or on anybody else.
Mr. ANDERSON. I completely concur in what the chairman has said.
The Clean Elections Act proposes limits of $1,000 for House and
Senate campaigns and $2,500 for Presidential campaigns. These lim-
itations would apply to both individual givers and to contributions by
all types of political committees. However, our bill does provide an
exemption for broadly based party committees as there is certainly
a strong public interest in enhancing and strengthening the role of the
political parties in the campaign fundraising process. In order to insure
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205
that party committees do not become simply indirect conduits for
large contributions to candidates, the bill places a tight limit on the
size of contributions that may be received by these committees in the
first instance. As currently written this limit is $2,500 but the commit-
tee may deem that a uniform $1,000 limit would be more appropriate.
That would be completely acceptable to me and, I am sure, to most of
the cosponsors of the Clean Elections Act.
As one who has authored a bill providing for public finance, I am
pleased and encouraged by the new climate in which we find ourselves.
According to the latest poois, a substantial majority of the public now
endorses the use of tax funds to finance candidates for public office.
Moreover, an increasing number of prominent national leaders from
all walks of life, a growing chorus of politicians from both parties,
and a vast legion of editorialists and other national opinionmakers
have also expressed support for the concept of public fimmce of
elections.
But I would be less than candid if I did not also suggest that this
sudden transformation of opinion may carry with it attendant dangers
that we would be well-advised not to ignore. For it is one thing to
arrive at the conclusion that our current system is in need of some
basic corrective surgery and that public finance must be an important
element of the remedy, but quite another to devise the specific machin-
ery and mechanisms needed to translate these general objectives into
reality.
Because the deficiencies and shortcomings of our current system
have been so long neglected and ignored, because there has been such
a dearth of serious thinking on the subject of campaign reform, and
because the data we have on the actual manner in which campaigns
are financed is so scanty, I think we would be well served to proceed
with utmost caution and restraint. We are now confronted with an
unprecedented opportunity to fashion a campaign financing system
that can serve this Nation well for decades to come. But if we proceed
with too much haste or without rigorous coinceptual and empirical
analysis of the likely impact of the public finance mechanisms we `fi-
nally choose, that tremendous opportunity might be tragically frit-
tered away. Indeed, unless we thoughtfully and carefully consider the
implications of the various public finance proposals now under dis-
cussion, we may end up adopting a proposal which is either unwork-
able or detrimental to the very objectives we are trying to achieve.
The most compelling reason for public finance is the fact that the
current system gives special interest groups and the wealthy a dis-
proportionate role in determining outcomes of elections, and in the
subsequent process of governmental decisionmaking. Clearly, making
the principle "one man one vote" an operative rather than merely a
rhetorical reality in the election process must be a major objective of
our reform efforts.
But I hardly need remind this committee that there are other im-
portant objectives as well. In a country as heterogenous and complex
as ours, and in one in which the governmental system was deliberately
designed to fragment and disperse political power, it is imperative
that there be strong institutions capable of fashioning consensus and
reconciling diverse interests and views. The alternative is perpetual
governmental stalemate and inertia. I believe that our political parties
25-239 O-73-7----14
PAGENO="0210"
206
perform that aggregating and consensus forming role, so it is vitally
imperative that the changes we adopt not discourage their ability to
thrive.
Similarly, the fact that Government has grown so large and all
pervasive, reaching into nearly every corner of our lives, makes it
essentml that our election system encourage a degree of active citizen
participation in the election process that goes beyond the mere act of
pulling the lever in the voting booth. Any further spread of the
alienation and withdrawal from the political process than we have
seen in recent years might well have catastrophic consequences. Yet,
some of the public funding proposals that have been put forward
might well interfere with or even discourage the revival of citizen
participation that is so essential.
Mr. Chairman, let me summarize my prepared statement quickly
by saying that the problems in designing a public finance mechanism,
as I see them, are these:
Should there be a total public financing or should it be a mixed
system?
Should it apply to general elections or to primaries as well?
Should third-party and minor party candidates be considered?
Should it be a fixed subsidy or a variable amount?
*What are the means of screening out the frivolous candidates that
might be attracted to the electoral process simply because of avail-
ability of the public financing?
The results of the analysis of the 1972 campaign we have made, the
House campaign, I think shed some important light on that question
or those questions.
And beginning then at the `bottom of page 15, let me pick up and
suggest that the most important finding of our analysis of this most
recent campaign is the small contributors and political party orga-
nizations, ranging from the national party committees to local town-
ship and county organizations, play a significant role in financing
House campaigns. Specifically, the average House candidate derived
nearly 50 percent of his funds from contributors of less than $100 and
from party committees; small givers accounted for about 33 percent
and party committees for an additional 16 percent.
This suggests two things to me: First, the popular stereotype
about the role of the special interests and "big money" may be some-
what overdrawn. Our source of funds data suggests that these groups
may not dominate the campaign funding process to the degree some-
times supposed. Indeed, contributors giving $1,000 or more accounted
for less than 11 percent of funds raised by the average House can-
didate with interest groups of all kinds providing an additional 18
percent.
Second, these results suggest that in light of the pivotal role played
by small contributions and party money in the financing of at least
House campaigns we certainly should not throw the baby out with
the bath water and scrap our current system completely in favor of
total public financing as some have suggested, not for a moment.
Instead, I believe it would make far more sense to channel public
funds into campaigns by building upon the current significant foun-
dation of small contributors and party organizations and their ability
to raise money for congressional campaigns. This is not the appro-
PAGENO="0211"
207
priate forum to discuss in exhaustive detail the reasons I take this
position. But let me just briefly suggest that both political parties and
the laborious process of mobilizing a vast network of small contribu-
tors provide an important institutionalized means for involving citi-
zens in the political process.
Now I stress this point because a number of the proposals before
this committee rely largely on direct fixed sum subsidies to candidates
from the Federal Treasury. To the extent that candidates can raise a
down payment in the form of a security deposit, probably not an
overly difficult task given the modest amounts involved, they would
be, as you suggested, off to the races with need for neither party sup-
port nor a strong grass roots organization.
By contrast, the bill that Congressman TJdall and I have intro-
duced would have just the opposite incentives. The subsidy would not
be a fixed sum but would vary directly with the amount of small con-
tributions raised by a candidate. Moreover, the party fundraising
committees would also be eligible for matching payments for small
contributions as well.
Since in many instances these organizations would be more sophisti-
cated about the techniques for successful grass roots fundraising drives
and operate on a year-round basis, they would likely account for a
significant share of matching payments from the Treasury. Thus,
rather than ignoring the established political parties, the candidates
would have to turn to them both for direct financial support and also
for assistance in conducting their own grassroots fundraising cam-
paigns. In short, instead of divorcing candidates from party organi-
zations, and I do not want to do this, obviously, from what I have said,
our system would encourage mutual cooperation between the candidate
and party of his choice and interdependence.
In addition to providing an important channel for citizen partici-
pation, the political parties play a second indispensable role in our
system. As I have already suggested, political parties are important
aggregating institutions which facilitate the task of governing and
fashioning a majority will out of the disparate plethora of interests
that comprise the body politic. To be sure, our parties do not function
as single mindedly as do parties in many parliamentary democracies.
But I have little doubt that were we to sever the ties between public
officials and the two great political parties completely, the inertia and
stalemate already built into our constitutional system of divided or
separated powers would only be compounded.
Thus, in designing a public finance program, we must take care to
see that political parties are encouraged and strengthened rather than
undermining them because of this important institutional influence
that they can have on the whole political process. I believe the match-
ing payment principle would accomplish this objective far more ef-
fectively than would any of the proposed direct candidate subsidy
approaches.
Mr. Chairman, the figures I presented earlier on variations on spend-
ing between competitive and uncompetitive races contain two impor-
tant implications for the type of public finance mechanism we adopt.
First, they suggest that a minium threshold of funds must be
raised before elections are truly competitive, but in the majority of
cases, the current system simply does not provide this kind of fund-
PAGENO="0212"
20&
ing. To the extent that provision of pu'blic funds would help candi-
dates achieve this threshold and close the gap between incumbents
and challengers, I think our political system would benefit immeas-
urably. A floor of public support would encourage the fluidity and
turnover that is essential to responsive government and voter con-
fidence that their ballots really do make a difference on election day.
These figures also suggest that we would be well-advised to think
of public funds in terms of a floor for financing campaigns to be
comingled with whatever amounts of funds candidates can raise
privately, subject, of course, to limitations on the size of the contri-
butions. The data suggest that in many parts of the country the ex-
penditure of $150,000 or more is not an excessive amount of funds to
insure rigorously competitive contests.
In my view, it would be entirely impractical, however, to provide a
fixed public subsidy of this magnitude to every candidate. In many
nonmetropolitan districts, in the numerous one-party districts around
the country, and in districts where the incumbent has broad public
support and approval, it would be simply foolish to set $150,000 on the
stump for anyone who can qualify for the ballot.
Such a rigid system would lead to an unnecessary dissipation of
taxpayer-would dissipate public funds and, as the chairman sug-
gested, would undermine public confidence. So, for this reason, I be-
lieve, that the mixed system and matching formula provided in our
bill is far superior to the fixed subsidy mechanism contained in many
of the alternative proposals. It would gear both the amount of tax
funds provided a candidate and the total amount of funds spent to
the conditions of the particular district and set of candidates involved.
By contrast, I think there is no way that a fixed subsidy system
that totally eliminates private financing can avoid the twin dangers of
providing to little total money, thereby causing further rigidities in
the current system or producing a level of support far in excess of
what is necessary or appropriate in many areas of the country and
individual election contests.
I want to stress this point because the disparity in spending by in-
cumbents and challengers, as shown in the tables I have referred to,
has sometimes been interpreted to mean that challengers are inher-
ently incapable of raising sufficient funds to mount a truly vigorous and
effective campaign.
I think the Chairman mentioned that in our colloquy. There can be
no doubt that this is true to some degree, and figures which I will
present in a moment suggest that incumbents have far greater access,
as you said, to special interest money and other sources of large con-
tributions than do challengers. But, in many instances, I want to point
out, that incumbents are challenged ineffectively, not due primarily to
an inherent inability of challengers to raise funds but for a whole
host of other reasons that are unique to the ,districts involved. These
include lack of voter dissatisfaction with the incumbent-people like
the fellow who is there, so why should they give to his opponent. He
may not be an attractive candidate as compared to the incumbent.
There may be disinterest by the local organizations in mounting an
effective challenge: what is the use, this fellow is in there, he is cinched
into the saddle so solidly we cannot dislodge him.
PAGENO="0213"
20.9
The fact that nearly 54 challengers were able to raise an average
of almost $100,000 in campaigns against incumbents suggests that,
even under the current system which we have now, funds can be raised
if conditions are right. Moreover, the fact that some challengers even
in lopsided contests were able to raise large amounts of funds even
more strongly suggests that an assumed inability to raise funds is not
the only reason for the relative lack of turnover from one election to
another.
The table below rather dramatically highlights the fact that even in
districts dominated by long-entrenched incumbents, and in which the
incumbent won by an overwhelming margin in 1972, there was a tre-
mendous variation in the amounts of funds raised by challengers.
The fact that such miniscule amounts of funds were raised in the
second category relative to the first suggests that the mere availability
of funds will not insure competitive elections in every district. Indeed,
provision of a flat $100,000 or $150,000 subsidy that would be entirely
appropriate in some districts would be largely ineffective in changing
election outcomes in these latter situations and would, therefore, be a
dissipation of tax funds and could well discredit the concept of public
finance.
Thus, again, flexibility is essential. Where local interest and capable
candidates are present, small and modest private contributions can
be raised and party funds will be provided. In these cases matching
public funds will build upon and equalize the opportunities for viable
challengers. Where such conditions are not present, a matching pay-
ment system would keep public expenditures to a minimum, which I
agree we should do. By making candidate viability and local initiative
the litmus test, it would avoid the potential dangers of pouring public
funds into situations where they could not be used effectively.
There is a chart on page 225 showing the variation in funds raised
by challengers in entrenched districts. We have referred to four States,
by district number, where challengers raised substantial money; one
in Tennessee, almost $100,000; one in New York, over $100,000; on the
other hand, a district in New York, the seventh district where the
challenger only raised $1,201; one in the State of Illinois where the
fourth district challenger raised only $2,285.
Mr. Chairman, let me say in conclusion that I have no strong com-
mitment to the precise formula for matching payments contained in
our bill. It was written as a vehicle to encourage consideration and
discussion of the concept it embodies.
I would like to suggest that our analysis of the election data sug-
gests that a $50 matching level might be somewhat low, and might not
really provide enough supplementary funds to achieve some of the
objectives I have discussed this morning. Therefore, I would propose
that you consider providing matching payment for each individual
contribution in an amount up to $100. I repeat what I told Mr. Hayes
when he was here, this would help provide $25,000 in Federal match-
ing payments.
If such a formula had been operative during the last campaign, it
would have provided the average House candidate with about $25,000
in Federal matching payments. In those districts involving large ex-
penditures and highly competitive contests, the amount of matching
payments would have ranged between $30,000 and $50,000.
PAGENO="0214"
210
While this figure is somewhat lower than the sums provided in some
of the other public financing bills before this committee, it should
be recalled that our bill would not eliminate the current substantial
base that I referred to that does consist of small contributions and
party support for candidates.
In conclusion, whatever the details of the formula, the main ob-
jective should be to provide a flexible mechanism for channeling public
funds into campaigns that will eliminate current dependence on
special interest and wealthy contributors, while at the same time build-
ing upon rather than destroying the significant base of party and
small contributor financial support that already exists.
Mr. Chairman, that concludes my statement and I thank you for
your courtesy in allowing me the time to elaborate on what I think
are the four essential matters that ought to be addressed in any truly
significant campaign reform legislation.
Mr. DENT. I want to thank you.
Of course, you realize that you are one of the principals in this
entire subject matter be.fore this committee, and I think that is why
we originally had as full a committee meeting as we had. I believe it
is very interesting that you did not hesitate to permit yourself to be
interrupted at any point along the way, which shows you are knowl-
edgeable of the subject and have made a sincere effort to try to get
some legislation.
I might say I agree with you, in its entirety, when you referred to
the so-called big doughnuts; there are not as many as some people
think there are. There might be in some districts, but in many districts
that is not the case. In most instances, outside of the personal contribu-
tions you get, when you get up over $500, there is some kind of an
interest attached to it, which is the democratic way. We may as well
realize if you stop that, you stop democratic government. If people
have no interest in what you are doing and do not care about what
you are doing, then you would have an incumbency situation that
would be phenomenal.
I appreciate you are a busy man. I know you are due to attend a
Rules Committee meeting shortly.
Mr. ANDERSON. The Rules Committee is meeting concurrently with
this committee.
Mr. DENT. Yes; I have to appear next, as I understand, as the leadoff
on the appropriation before the committee. If I happen to leave, Mr.
Mollohan, would you take the chair for any further session. Although
when I leave, I suppose you ought to leave.
Mr. MOLLOHAN. I have no questions at this time. I had several ques-
tions, but I think they have been fairly well covered. I am very pleased.
I personally look upon you as being one of the most objective Mem-
bers of this Congress and you make an important contribution. I ap-
preciate your being here.
Mr. ANDERSON. Thank you.
Mr. DENT. Thank you.
Mr. Frenzel?
Mr. FRENZEL. Thank you, Mr. Chairman.
John, I really cannot say enough good things about your work in
this field, particularly as one who has borne the brunt of some of the
PAGENO="0215"
211
criticism for last year's bill; I am glad to find the chairman accusing
you of having done it all.
Mr. ANDERSON. I did not. I want to publicly acknowledge your
share of the blame.
Mr. DENT. You only did 50 percent, TJdall did the rest.
Mr. FRENZEL. But I have to sit here every day. It is not quite so
easy. I have a couple of comments and then a couple of questions.
You and your partner' in crime, Congressman Tldall, have really
furnished some of the different and creative ideas. Last year I recall
you had a postal stipend which was calculated to reduce the differential
between incumbent and challenger, and this year you have moved on to
voter time. I presume that is simply because the other one failed, not
necessarily because you like this one any better.
My personal observation, which is based on testimony the com-
mittee has heard, is that if we have to subsidize, mail is a better com-
mon denominator than television, simply because of the different
nature of the television markets and districts within this country.
Mr. ANDERSON. Could you say a word on that?
Mr. FRENZEL. Sure.
Mr. ANDERSON. I understand Mr. Jenks, vice president of CBS,
appeared earlier before this committee and was very critical of the
voter time proposal. I want to make one point, very briefly. I will
not take the time of the committee now, although I would like to
perhaps have the option of submitting some material that I have for
the record.
Mr. DENT. Without objection.
Mr. ANDERSON. I want to indicate that if these broadcasts were made
simultaneously-he did not take into consideration that if these broad-
casts were made simultaneously that, even in a metropolitan media
market like New York City, you would only have one half-hour a
day, in this period part of the campaign would have to be devoted
to transmitting the message of each candidate for Congress in New
York City or running for office within that media market. So I think,
I just want to make that point, that if you have simultaneous broad-
casts and telecasts you can get around the argument that you are just
going to be boring people ad nauseam by too much of this, you know,
day after day or hour after hour on the same day.
Mr. FRENZEL. I am glad you commented. I hope you will have time
perhaps to even submit to the subcommittee some thoughts because
you did not get into that today.
Mr. ANDERSON. No. The chairman has given me permission and I
have a chart that I will include with my test1mony.
Mr. DENT. Yes.
Mr. FRENZEL. Still it seems to me that mail is more applicable to
every campaign than television is, based on the differential between
the markets. I was pleased that your bill did not include spending
limits, because I, too, am cognizant of the fact that 96.58 percent of
incumbents who ran last time in House elections were elected, and
that the figure was slightly higher in the previous election.
While I think that this Congress is going to impose some limit, I
think you have contributed mightly to the conversation by not put-
ting a limit in, so that when one is established it will be a reasonable
one rather than a restrictive one.
PAGENO="0216"
212
We have talked about, advantages and disadvantages of incumbents
ad nauseum in this committee. I do not want to lean on it any more. I
do notice that the contribution limit that you suggested was $1,000
and $2,500.
Mr. ANDERSON. Right.
Mr. FRENZEL. Later modified in your testimony to say maybe a
$1,000 across the board is good enough. I do not mind the modification.
I suspect what is good for one candidate should fit another one even
though the district is of a different size and number of constituents.
The Senate bill had $3,000 and $25,000. The point that bothers me
is the free speech aspect of this consideration. My problem is that
someone can work in my campaign and be a rather highly skilled per-
son, a lawyer, statistician, accountant, advertising executive, and in
terms of personal time contributed he can pour into my campaign
$5,000 or $10,000 worth of services. Now his counterpart, my next door
neighboor, who may be in a wheelchair, may be 65 years old, cannot
ring doorbells, does not know how to add figures, does not know an
ad budget if he saw one, under your bill he can only give $1,000.
Do you not think we have a constitutional problem there?
Mr. ANDERSON. I do not challenge Mr. Frenzel on the notion that it
would be raised and that that argument could be employed..
Mr. FRENZEL. I agree with you-
Mr. ANDERSON. But I feel so strongly that the court, in looking at
the situation, and particularly the horrors of the last campaign, would
simply resolve that constitutional problem in the end by saying that
weighing in the balance what has to be done to eliminate these evils,
that we have to accept this limitation. It is like with a lot of other
things, you know-
Mr. FRENZEb. Like shouting "fire."
Mr. ANDERSON. It seems to me they would have to come down on
the side that this is the only really effective way to deal with an evil
that has become so pernicious and so insidious and so destructive
potentially to the whole electoral process that they will say that they
will ratify this kind of limit.
Mr. FRENZEL. I would agree. I guess our disagreements are a matter
of degree; $2.1 million is pernicious, $200,000 contributed at the end
of an election by a person who gets appointed ambassador is certainly
highly suspect as being pernicious. $5,000 or $10,000 may not be so,
when you compare it with a personal services contribution of some-
body else.
Mr. ANDERSON. Yes.
Mr. FRENZEL. With respect to the matching grants part of your
testimony, it went to the fact that party groups would also participate
in the matching grant program. Now, is this an unlimited matching
grant?
In my State we raise just an awful lot of money door-to-door,
through the Republican Party. Is that all going to be matched be-
cause none of it is over $50,000?
Mr. ANDERSON. No, we have some limits.
Mr. FRENZEL. You limit it for a candidate to 10 cents a head?
Mr. ANDERSON. We do limit it. I have it here. To limit Treasury
liabilities, an upper ceiling of 10 cents per eligible voter is placed
in the bill on payments to House, Senate, and Presidential candidates
PAGENO="0217"
213
and $15 million per year on the sum of payments to the national,
Senate and congressional campaign committees of each party. So the
Democratic National Committee, for example, could never get more
than $15 million, no matter how much they raise in small contribu-
tions; likewise, the Republican National Committee or any of these
other official committees.
Mr. FRENZEL. My comment there is, it is a noble idea but you are
looking at the wrong level. I think where we want to stimulate the
contributions is at the local level, the local parties. My goodness, the
national parties are not out collecting $50 contributions. I guess
maybe they are, but I would like to see that thing extended elsewhere.
I do not know how to do it.
Mr. DENT. Would you yield?
Mr. FRENZEL. Yes.
Mr. DENT. You would certainly say that an individual who gives
$1 million is suspect-
Mr. FRENZEIJ. Yes, I stipulate.
Mr. DENT. This man is a personal friend. He gave the $1.333 imil-
lion in three checks and did not even slip one my way and we have
been friends for many years. It all went to the Presidential campaign.
I think that is a little bit out of line. I do not know how you fellows
feel about it. He does not want anything, very frankly. I knew the
gentleman all my life. He does not want anything `whatsoever from
either party.
Mr. ANDERSON. We had large contributions in my State and I am
not ascribing venal motives necessarily to all of these people.
Mr. DENT. Neither am I.
Mr. ANDERSON. But it is not a healthy thing.
Mr. DENT. It is not good public relations.
Mr. FRENZEL. There is some consensus on that.
With respect to matching grants, I am very much in opposition to
public financing. I do want to compliment you and your cosponsors
for having developed a possibility for public finance, which is the
most palatable of the suggestions that have been produced so far.
I do not know why you want to give the game back to the bureauc-
racy, but perhaps we can find that out in a future date.
Is it fair to state that you thiiik the creation of the Federal Elec-
tions Commission is the single most important, highest priority item
on the agenda for Congress now in election reform?
Mr. ANDERSON. You are speaking about that `part of the bill?
Mr. FRENZEL. Yes.
Mr. ANDERSON. Yes; I think, Mr. Frenzel, that that is a very high
priority item.
Mr. FRENZEL. Do you see a strong need for the Federal Elections
Commission to have the powers of prosecution now enjoyed exclusively
by the Justice Department?
Mr. ANDERSON. Yes, sir.
Mr. FRENZEL. I commend you on that thought and want to reiterate
that that is `at the top of my priority list as well.
You indicate that your bill, or that modern conditions in your
words, I believe, restrict those of modest means from entering politics.
Somehow under the current condition, the role of the wealthy is en-
larged. If your contribution limits were imposed, it seems to me that
PAGENO="0218"
214
your statement would no longer be true and then you do not need
public financing. Would you comment on that?
Mr. ANDERSON. I think to some extent; yes. You do level the differ-
ence or the distinction that might otherwise be drawn between the
challenger with either a lot of wealthy friends or access to wealth him-
self, and the challenger who is not so advantaged.
However, I think that contribution limits, per se, only go to part
of the problem. I think you have to have-you remember when I
testified a few minutes ago, I spoke of a threshold-you have to provide
this critical mass, this threshold before you can really launch `any kind
of a successful campaign. It is to that extent that I think the public
finance mechanism that we suggest would enable the candidate to
reach that threshold, whereas the contribution limits alone, while it
would smooth out some of the disparities that otherwise exist today,
would not help in that regard.
Mr. FRENZEL. Let me `progress a little bit.
Where `big money is spent is where the action is. It really does not
depend on how wealthy the candidate is, nor how wealthy his friends
are. There are always going to be about 40 races that are fairly closely
contended, they will be where there is no incumbent or where the in-
cumbent won `by a narrow margin or where a particular issue excites
the people. They are the ones that show the hight expenses.
Mr. ANDERSON. And where the most leverage is obtained `by `the big
contributor `and special interest group, that is true.
Mr. FRENZEL. Yes. `So with respect to candidates, I do not see that
wealth or wealth of friends `has all that much to do with it, with one
exception that bothers me greatly which is not included in any of
these bills, and that is the living expenses of the candidate while he
campaigns.
I had the opportunity to run against a fellow who is enjoying a very
high income and, because of the nature of his employment, he had
to resign from his job, carry himself for 7 months. Those are not
reportable expenses.
I was more fortunate, I was not stuck with no income for 7 months.
There was an enormous difference between us. All of that guy's
friends, relatives, neighbors, and supporters are never going to run
themselves because they know what he went through. If a guy is used
to $2,000 a month income, or even $1,000, that is a substanial amount
of dough that is not overcome in any of these bills.
I am wondering if you or the coauthors gave any thought to that.
Mr. ANDERSON. I suppose I think there are candidates, and I guess
this is legitimate, who pays themselves living expenses out of cam-
paign funds.
I remember one statewide race in my own State of Illinois in 1972,
where that was true. The man had no other means of support, he had
to quit his job to run for the statewide office. I think `he quite properly
gave himself money out of the campaign fund to make sure he was
housed, fed, and clothed during that time. I do not see anything tsr-
ri'bly reprehensible about that. He reported it.
Mr. FRENZEL. I guess that is one public su'bscription that I might
be interested in. I do not want to pay my constituents' tax dollars
to see your lousy 30-second spot on television or get your emery boards
or your balloons, but if I thought you were a legitimate candidate and
PAGENO="0219"
215
it was keeping you alive through the campaign, I might look with a
great deal more favor.
Mr. DENT. You are taking my campaign issue away from me, those
little balloons.
Mr. FRENZEL. In my State they are illegal.
Mr. DENT. I know. If you make them illegal all over, you would
save a lot of air, hot air.
Mr. FRENZEL. Mr. Chairman, this is a big bill, an important bill.
I want to give other members a chance to talk and give Mr. Ander-
son a chance to get back to Rules. We only have five guys over there,
four with him.
I want to say your thinking, your work, and that of your accom-
plice, Congressman TJdall, is really the best stuff that we have here.
I certainly appreciate your efforts.
Mr. ANDERSON. Thank you very much.
Mr. FRENZEL. Even though I do not support it fully.
Mr. DENT. Does Mr. Cleveland want a chance?
Mr. CLEVELAND. As a member of the House Administration Com-
mittee, but not of this subconunittee, I appreciate your courtesy in
letting me sit in on these hearings.
I would like to compliment John Anderson on his statement and
also on the bill that he and Mr. TJdall drafted, of which I happen to
be a cosponsor, although just as you have some reservations about the
bill, I have reservations about the bill too, but at least it is a serious
effort to get something moving and I have not seen too many signs
of motion, although we are having these hearings. I hope we can get
something done.
A quick question because I consider you something of an expert
in this field. Have you ever considered the proposal of h'aving~differing--
limits for the incumbent as opposed to the challenger?
Mr. ANDERSON. You are talking now of an overall spending ceiling?
Mr. CLEVELAND. Yes.
Mr. ANDERSON. Not contribution limits, but an overall spending
ceiling?
Mr. CLEVELAND. Yes.
Mr. ANDERSON. I cannot honestly say, Mr. Cleveland, that I have
given too much thought to that, because I guess just as a practical mat-
ter I do not think it would be `an acceptable idea in the minds of most
people that you have different amounts.
Mr. DENT. Mr. Clev~land, would you consider a man who had just
won `an election, served 2 years, as being the kind of entrenched in-
cumbent `who would necessarily be constricted to spend less than a
challenger?
Mr. CLEVELAND. I can answer that question from personal experience
because of my second term, which `occurred in 1964. I thought I was
entrenched, but I found out I was wrong.
Mr. DENT. That is right. So you will not give the other fellow much
more advantage than he had?
Mr. CLEVELAND. You still have to meet the problem of incumbency.
Mr. DENT. I do not believe that. I believe no one was born into Con-
gress. Each one of us was a challenger at some time or another. We
beat the incumbent. I do not believe that was intended by the Constitu-
tion.
PAGENO="0220"
216
Mr. CLEVELAND. Mr. Chairman, I feel, being in the House Admini~-
tration Committee, I am in a unique position to comment on the ad-
vantage of the incumbency because we are adding to them almost every
time we have a meeting.
Now, getting back to the questioning of Mr. Anderson, Mr. Frenzel
pointed out that last year you and Mr. Udall and those of us that in-
troduced legislation tried to meet this advantage of incumbency repre-
sented by the frank, by a postal allocation.
Mr. ANDERSON. Yes, sir.
Mr. CLEVELAND. This year you are doing it with the voters' time.
Mr. ANDERSON. Yes.
Mr. CLEVELAND. I agree with Mr. Frenzel that the postal scheme
would be much better; I think it would be fairer across the country
because there are some places where television does not reach `too
well.
But let me task you this question: Were there ever hearings on that
postal differential section of `the bill 2 years ago?
Mr. ANDERSON. Those hearings, I guess, would have been conducted,
I believe I am cor~ect, in the Post Office and Civil Service Committee,
and I am quite sure there were never any hearings on that precise
proposal.
Mr. FRENZEL. We discussed that in this committee.
Mr. ANDERSON. In the House Administration Committee?
Mr. FRENZEL. Exactly, because it was `a part of your bill.
You will recall there was an amendment on the floor when the bill
was offered-
Mr. ANDERSON. Not-
Mr. FRENZEL. Not to give the challenger anything but to restrict
the use of the frank within so many days of the election?
Mr. ANDERSON. Right.
Mr. FRENZEL. Which vote was repeated here recently this year. Both
of them failed by such a majority that I can understand your reluct-
ance to repeat it.
Mr. DENT. Consider one thing at this point: If I tried to reach the
potential number of voters that would be reached by television by di-
rect mail, I would probably spend twice as much money for that that
you would spend on television, because you necessarily are limited. You
are in a very expensive area today with postal and direct mailing.
Mr. FRENZEL. Will the gentleman yield?
When you buy television, you are getting barking dogs, children,
people out of your district. When you buy direct mail, you can direct
it to registered voters or Republicans or Democrats or labor unionists
or whatever.
Mr. DENT. Is it not true barking dogs make noise too, and somebody
outside of your district might say "I heard Bill Frenzel and he is a
good man," but the fellow did not live in the district.
Why do you think they advertise products that they do not even
sell in the market area?
Mr. FRENZEL. In some districts dogs may even vote, Mr. Chairman.
Mr. DENT. Even in your district, if they do not live there, you mean?
Mr. CLEVELAND. In any event, there were no committee hearings on
that particular section?
Mr. ANDERSON. To my knowledge, no.
PAGENO="0221"
217
Mr. CLEVELAND. Of course, that is one of the points, one of the prob-
lem points that campaign reform legislation has because it goes to this
committee, the Post Office and Civil Service Committee, and sometimes
Ways and Means, of course for the tax credit and Interstate and For-
eign Commerce perhaps if you are getting too much into radio. So
that is one of the problems, why motion is difficult in this area, even
though desirable.
I want to ask you just a couple of quick questions, not addressed to
your bill but to the general problem.
There is a good deal of talk, implicit in a good deal of our conver-
sation seems to be that too much money is bad and certainly this
was one of the lessons of Watergate, too much money unrestricted, they
had so much of it they did not know what to do with it. It was burning
a hole in their pockets, they made some serious mistakes because that
was no problem.
Conversely, is not the raising of money by a candidate, if not the
test, at least part of a series of tests that he should be exposed to?
Mr. ANDERSON. Yes, I quite agree; that is why I am totally op-
posed to public financing as the whole takeover.
Mr. CLEVELAND. If you take a candidate who literally cannot raise
any money because he is considered something of a joke in his com-
munity or is not taken seriously by his friends, we never want to get
into a consideration of where Uncle Sam finances him for a trip
around the hustings.
Mr. DENT. His bill safeguards against that.
Mr. CLEVELAND. I am not sure the entire safeguard is there. We do
have some perennial candidates.
Mr. ANDERSON. Yes, we have a fellow by the name of Lar Daly, who
dresses up in an Uncle Sam suit and goes down to the local pub and
announces his candidacy.
Mr. CLEVELAND. He is always up in New Hampshire for `the first
of the Nation's primaries, so we know him well.
Mr. FRENZEL. He can get everything but the filing fee.
Mr. CLEVELAND. A somewhat philosophical question here: You as
a great expert in election reform, and others who have joined the cause
of election reform, is it not implicit in your effort toward congressional
reform, not yours, but is it not implicit that they do not think much
of what they have? In other words, if they felt that the 435 Members
of Congress were fine people, either individually or as a group, do
you think there would be this call for campaign reform?
Mr. ANDERSON. Mr. Cleveland, you were not here earlier when, in
opening my prepared remarks, I stated that even though the empha-
sis more recently has been on the low public opinion rating of the
President and the downfall of the Vice President, that before we
crow very loudly, we had beitter take into consideration the fact that
you have just made reference to, that `the Congress itself, I think, to-
day is not held in as high esteem by the people generally as we would
like.
Mr. DENT. Collectively?
Mr. ANDERSON. Collectively, yes, as an institution.
Mr. CLEVELAND. The reason I ask you this question, and it is some-
what philosophical or somewhat by the way of background, because
I am preparing my own remarks for this committee which I will give
PAGENO="0222"
21~
at an appropriate time when given the time, and I will try to make
this point-I am working on it now: If this is true, that Congress is
in very low esteem and because of that fact, because people think there
ought to be election reform, so theoretically you get a better Congress,
which means they do not like the Congress, they want a better one,
this is why, when the chairman gets back to his repeated assertions of
what is wrong with the incumbency, I think he is thinking of some
of the really great men we have in this body, whereas the real issue
may be that we ~t.re not doing a very good job or not appearing to do
a very good job as a body, and therefore the priority, rather than elec-
tion reform, would be congressional reform so that we can take the
people we have and do a better job for the people, win more confidence.
Mr. ANDERSON. I think there is much to what you say, Mr. Cleve~
land. I for one do not think the reform should begin and end with this
effort to revise and reform the electoral process. I do think because of
the `Watergate hearings and the great focus of attention that has been
placed on the fund-raising aspects of the last campaign that it gives
an immediacy and an urgency to this effort that this committee is now
undertaking that puts it certainly very high in any order of priorities
that you would establish. But I do not want to sign off on the ques-
tion of congressional reform just at this point. I quite agree.
Mr. CLEVELAND. I have no further questions.
Mr. FRENZEL. Would the gentleman yield?
Mr. CLEVELAND. Yes.
Mr. FRENZEL. I would like to pick up that last statement about
high priorities.
In your opinion, do you think this committee should produce a bil]
before we adjourn this year?
Mr. ANDERSON. Mr. Frenzel, I will be intensely disappointed, and
I think the Nation will even be disillusioned, if this first session of
the 93d Congress does not produce an election reform bill.
Mr. FRENZEL. I agree with you wholeheartedly, and I hope the
whole committee does. I think they do. But I hope we can speedily
cover the material that we have to cover.
Mr. ANDERSON. In that regard, you have been more than generous
to me.
Mr. FRENZEL. I hope we can get one before we adjourn. I do not
know when we are going to conference.
Mr. DENT. The problem is, we have a limited time and we have an
almost unlimited request for appearance before the committee. These
requests just started to come in about 2 weeks ago. I have already
had five Members of Congress who have demanded time or requested it,
and a request to me by a Member of Congress is a demand. Five of them
did not show up after being given the time, one of them twice and one
of them the main sponsor of the legislation. So I have no way of ex-
pediting the legislation-
Mr. FRENZEL. Do not invite him back.
Mr. DENT [continuing]. Unless we have a limit date of some kind.
I will have as many hearings as time allows. I have been stuck with
some rather important legislation.
Mr. FRENZEL. Is it possible as we get a little closer to the ending that
we might be able to have more than a meeting a week?
PAGENO="0223"
219
Mr. DENT. Certainly we will have it. If we can get the witnesses,
which we tried to get and were only able to get one, who has done
as well as four or five in my humble opinion, giving us an insight
into his thinking, which is important.
I will relinquish the Chair to another member to take over for the
hearings. I do not have any pride of sitting here. I will still continue
the other duties that I have on education, minimum wage, black lung,
impact of imports, just a few little things. I think we can get away
with it.
Are you going back to the committee room?
Mr. ANDERSON. Yes, sir.
Mr. DENT. You do not mind if I go with you?
The hearing stands adjourned to the call of the Chair.
[Whereupon, at 11 :42 a.m., the subcommittee adjourned, subject to
call.]
[The following statement was subsequently submitted for the
record:]
STATEMENT OF CONGRESSMAN JOHN B. ANDERSON
Mr. Chairman: It is a great pleasure for me to appear again before your Sub-
committee on Elections. I would like to commend you for `scheduling this im-
portant series of hearings on the question of campaign reform, an exercise that
I am sure you would agree has taken on even greater timeliness and urgency
in light of last week's sad turn of events.
I will not take time this morning to cite to you chapter and verse the dis-
maying sequence of developments during the past ten months which compels
a fundamental reevaluation of our campaign practices. Suffice it to say that
the "everybody does it" explanation for the course of behavior that led to the
downfall of Vice President Agnew is a dramatic enough illustration of the
failure of our current system.
Though national attention has `been focused on `the President's rapid decline
in the public opinion polls during recent months, let us not forget that these
same polls show an even lower level of confidence in `Congress. Indeed, we have
reached a point where politicians are now outranked even by used-car salesmen
in the hierarchy of public esteem. Thus, if public confidence in our political
process is to be restored, and from a somewhat more parochial perspective, if
those of us now privileged to serve in public office desire to avoid being swept
from the scene in a wave of public backlash against the "in's," then the matter
of campaign reform can no longer be deferred.
It is my hope that the tremendous opportunity which confronts us' now to make
obvious and long-overdue changes will be recognized and acted upon by this
committee. If it can take the lead in fashioning legislation for consideration
during the present Congress, it will have helped to translate that opportunity
to an accomplished reality.
As one who has long been interested in the topic of campaign reform and
who has introduced legislation now co-sponsored by more than 140 of our col-
leagues in the House, it is my view that we are confronted with four basic policy
issues: First, the urgent need to develop a more independent, effective and
credible means of monitoring and enforcing the disclosure law; secondly,
whether overall spending limits are desirable; thirdly, the necessity to drasti-
cally reduce the influence of big money in campaigns for Federal office-whether
these contributions be from wealthy individuals or interest groups, `business or
labor, or liberal or conservative organizations; and finally, whether or not the
time has come to establish at least a partial form of public finance.
I
Perhaps first and foremost on the agenda of reform is the current unsatisfac-
tory arrangement regarding the supervision of the `disclosure law and enforce-
ment `of the Federal Elections Act. Without disparaging in any way the work
of the Clerk of the House and Secretary of the Senate, I think the experience of
the past year demonstrates pretty conclusively that a single independent agency,
PAGENO="0224"
220
supported by adequate staff and financial resources, and possessing full powers
of subpoena and prosecution is absolutely essential.
Now I recognize that there are those who fear the creation of an independent
elections commission, like that contained in the Clean Elections Act, will mean
just one more layer of bureaucracy and possibly one more temptation for the
President or others to manipulate the election process to their own benefit. I am
cognizant of these concerns and am confident that the provisions of the bill
introduced by Congressman Udall and me provide adequate safeguards. But let
me also stress that during this period of deep public disillusion and distrust of
politics I doubt that even the most cynical among us still believes the public
will continue to tolerate an arrangement in which the superivsory officers are
employees of one party and those with legal enforcement responsibility are
agents of the other.
Instead, our aim must be to transfer the entire administration of the campaign
laws to an agency that is removed from the influence of both political parties,
and to one which has an institutional interest in rigorously and swiftly enforcing
the laws rather than winking at abuses or passing the buck to someone else.
On that score, I think the careful division of appointment powers provided
in our bill gives such assurances. It would take twelve years for the any one
of three individuals given appointment powers to designate just one-third of the
Conmilssion's membership. Yet, in the past twelve years we have had three
different Presidents, three Speakers of the House, and at least as ~many Presi-
dents Pro Tem of the Senate. Moreover, no more than one-half of the member-
ship of the Commission could be from the same political party. Thus, even during
a period when one party dominates both branches of government, there would be
built-in protections against partisan manipulation.
In this regard, I might suggest that the Comptroller General also be included
as a member of the Commission. Since he is appointed for a 15-year term, his
addition to the Commission could help to further guarantee it would be free
of partisan influences. Since GAO has had substantial experience in attempting
to carry out the supervisory functions of the 1971 Elections Act, the inclusion
of the Comptroller General would also provide an important measure of experi-
ence and expertise that would be invaluable during the initial period of
operation.
I must say that I have little patience with the second argument often advanced
against an independent Elections Commission-the establishment of another un-
necessary bureaucracy. The problem is quite the contrary. There are right now
literally tons of reports on file with the respective supervisory officers of the
House and Senate ~hich are next to useless because these officers do not have
the manpower and computer capability to process and analyze them. Yet what
could be more relevant at a time when we are attempting to further reform our
campaign system than to have a solid base of information about the sources,
flows and uses of funds in the current system?
Unfortunately, anyone turning to the data on file in the Clerk's office would
gain little insight into this question because all of the reports are still in raw
form, neither consolidated nor broken out into any meaningful analytical cate-
gories. Again, my purpose is not to ascribe blame but to suggest that the cur-
rent supervisory officers possess neither the resources nor the professional exper-
tise to perform their functions effectively. Their primary responsibilities are of
a far more routine and clerical nature than the demanding task of monitoring
thousands of candidates for Federal office and processing this information into a
form that will be useful to the public and the press. Therefore, rather than con-
tinue to impose a largely extraneous function on these officers, I hope that this
committee would see fit to establish an independent Elections Commission whose
sole responsibility would lie in this area.
Finally, I would mention the current untenable division between monitoring
responsibilities on the one hand, and enforcement or prosecution powers on the
other. If our election laws are to have any effect, especially if we move to tight
expenditure and contribution ceilings, then violations must be detected and ex-
posed during the campaign, not many months or years later. Yet it is my under-
standing that hundreds of potential violations were transmitted to the Justice
Department last year and that most of these are still pending fully one year after
election day.
Clearly, this situation makes a mockery of our election laws and disclosure
requirements. Unless we are willing to give adequate investigative staff, subpoena
powers, and direct recourse to the courts to the administrators of these laws, they
PAGENO="0225"
221
are likely to remain toothless and ineffective. In the course of your deliberations
I hope you will devote special attention to the need for implementing changes in
this area.
II
A second major aspect of campaign reform concerns the question of overall
expenditure ceilings. Certainly, the data available from the 1972 campaign sug-
gest that excessive spending is a problem. Candidates in the Presidential race
alone spent almost $100 million, and, according to Common Cause, Congressional
candidates spent almost an equal sum. When you include total expenditures for
state and local races, some experts, such as Herb Alexander of the Citizens Re-
search Foundation, believe that total spending for all elections came close to
one-half billion in 1972.
Now I recognize that a very considerable portion of these funds were spent
for purposes that probably did very little to illuminate the issues or underscore
the differing qualities and capabilities of the competing candidates. Moreover,
as the cost of elections continues to mount it most certainly has the effect of fore-
closing public office to those of modest means and of enlarging the role of the
wealthy and special interests in the election process. But before we jump to the
conclusion that rigid expenditure ceilings are the quick and ready solution to that
problem, I believe we need to very carefully consider the likely impact of such
limits.
With the assistance of the raw data compiled by Common `Cause, we have been
able to develop some very dramatic figures which I believe clearly illustrate the
danger of excessively low and inflexible overall expenditure limits. Stated simply,
enactment of low expenditure limits would in most instances be tantamount to a
guaranteed Incumbent Reelection Security System.
As is shown in the following table, expenditures by candidates for the House
during the last election varied enormously-from an average of $15,700 in the
case of challenging candidates in races against heavily entrenched incumbents
to $106,300 in the case of winning candidates in open districts or contests in which
no incumbent was on the ballot.
Specifically, the top and bottom lines `of the chart show that truly competitive
elections are costly for both candidates involved. Indeed, I would point out that
although challengers succeeded in raising an equal amount of funds relative to
incumbents in the 54 races represented by the first line, less than a dozen were
actually successful at the polls. Those that were successful in heating incumbents
spent an average of $126,000, as opposed to the $82,000 figure given for all chal-
lengers in this category.
VARIATION IN SPENDING BY TYPE OF RACE AND INCUMBENT VS. CHALLENGER (HOUSE OF REPRESENTATIVES,
1972)
Challengers!
incumbents
Incumbents
Challengers
(percent)
Winning margin:
55.9 or less
56 to 62.5
62.6 to 70
70.1 or more
Open districts 1
$84, 128
62,891
37, 164
33,997
106,293
$82, 197
41,972
21, 512
15,702
98,689
98
67
57
46
98
I As there were no incumbents involved in open districts, figures represe
nt winners and
losers respectively.
While those of us who enjoy continued tenure in public office do not often like
to stress this aspect of campaign reform, it is nevertheless vitally important.
The -fact that more than 90 percent of House Members who stand for reelection
are consistently successful suggests that our elections are not really as com-
petitive and open to genuine voter choice as they should be. In almost half of all
races in the last election the incumbent was reelected by a margin of 62 percent
or more, and in 12 percent of `all House districts an opposition candidate was not
even slated.
Yet if we were to establish low overall expenditure limits, perhaps in the range
of $50,000 to $75,000 as many have suggested, would that not further reinforce
the pro-incumbent bias of the system? After analyzing the data for the marginal
25-239 0-73----15
PAGENO="0226"
222
races indicated on the first line, I have little doubt that a limit of $50,000 would
have deprived even the handful of candidates which did beat incumbents last
year of their hard-won victories at the polls.
I would also point out that since the reporting requirements went into effect
after many campaigns were well underway, the data we have probably substan-
tially understates the actual amount of funds raised and spent in competitive
races, in some cases by up to 25 percent. In addition, these are average figures
which obscure the fact that in many races in the first category both candidates
spent well over $150,000 and in some instances up to $300,000.
Thus, we must search for other means of dealing with the problems resulting
from the rising costs of campaigns. In my view, a limited form of public finance
could help to insure adequate funding for candidates who do not possess
the personal wealth necessary to run a campaign from their own sources. The
enactment of tight contribution ceilings could substantially reduce the role of
special interest groups and the wealthy in financing these expensive campaigns.
If it is nevertheless felt by this committee that some kind of upper limit on
spending is necessary, then I would urge that you consider something substantial-
ly higher than the $90,000 figure contained in the Senate bill. I believe that
data from the 1972 election suggests that a minimum acceptable ceiling would
be in the range of $125,000 to $150,000 per election. Anything lower than this
cannot help but reinforce the substantial advantages already enjoyed by incum-
bents.
III
In contrast to the difficulties associated with overall expenditure limits, I see
no such problems with contribution limitations. Indeed, such limitations are im-
perative if the cloud of suspicion now hanging over our election process as a
result of the Watergate revelations is to be repelled. The only caveat I would
issue is that such tight contribution limitations require the enactment of at least
a limited system of public finance in order to replace funds that could otherwise
be raised privately in the absence of such ceilings.
The data we have developed on contributions and spending in House races dur-
ing the 1972 elections underscore in a quite precise manner the reason why con-'
tribution limitations are necessary. The data show that, on the whole, the role
of large contributions and special interest money may be somewhat exaggerated.
In the average House contest these sources account for only about 30 percent
of total funds raised by candidates with the remainder derived from small con-
tributors (under $100) and broadly based party committees.
But lest anyone conclude this means that contributions limits are unnecessary,
let me point out another significant finding from our analysis of the data. The
role of interest groups and large contributors increases `directly with the expense
of campaigns. Since we have already seen that the truly competitive contests
require huge amounts of funds, this latter finding underscores why these groups1
have so much leverage in our political system. Simply stated, where the out-
come is in doubt, special interest money and large contributors can provide the
margin of support needed to win an election
The following table shows that in contests in which candidates spent less than
$30,000, almost three-fifths of funds were obtained from contributors of less
than $100 and from broadly based party committees. However, as the level of ex-
penditures mounts, this ratio drops substantially, and the portion of funds
supplied by special interest groups and iiirge contributors rises.
FUNDING SOURCES BY EXPENSE OF CONTEST
Share of funds derived from (percent)-
Small contributors Large contributors
and party and interest
committees groups
Expenditure level:
0 to $30,000
$30,000 to 70,000
$70,000to 120,000
$120,000andabove
57.9
50.6
46.7
39.1
27. 1
34. 6
36.5
40.4
1 Large contributors defined to include all contributors of more than $1,000. Figures include all funds provided by special
interest committees.
PAGENO="0227"
223
Iv
There are other problems in designing a new election finance system of equal
importance. The question of how a candidate shall qualify for taxpayer support
and in what amount is enormously difficult to resolve, perhaps best attested to
by the wide variety of approaches that h ave already been suggested.
Whether public financing should be extended to primaries and minor party
candidates is also a matter relatively easy to answer in principle, but terribly
difficult to implement. Should a uniform mechanism be adopted for all Federal
elections, or are Presidential, Senate and House contests, rural and urban, or
small state and large' state situations so dissimilar that what might be appro-
priate for one may not be at all appropriate for the others?
The question as to whether tax-money should cover the entire cost of a cam-
paign or only part of it, and whether privately raised supplements to public
funds, if allowed, should be strictly limited or remain totally unregulated is
equally troublesome. That decisive answers to these questions have not been
forthcoming reflects in no small measure that fact that we have done so little
earnest thinking on this subject and that so little concrete, empirical informa-
tion and data is available on how campaigns are currently financed. Yet, if we
have learned anything from the sad failure of so many Federal programs over
the past decade, it is that we ought to look before we leap to embrace every
shining panacea that comes our way. Thus, I hope that this committee expedil-
tiously reports a public financing bill, for the principle is difficult to take issue
with. But at the same time, I would urge that you not do so until you have
seriously grappled with some of the questions I have briefly referred to, `and
have designed a mechanism that will best balance the numerous, sometimes
conflicting objectives, that we all want to achieve. In the few minutes I have
this morning, I would like to share with you some of the tentative conclusions
that I have reached regarding these issues.
Perhaps the most important finding is that small contributors and political
party organizations, ranging from the national party committees to local town-
ship and county organizations, play a significant role in financing House cam-
paigns. Specifically, the average House candidate derived nearly 50 percent of
his funds from contributors of less than $100 and from party committees; small
givers accounted for about 33 percent and party committees for an additional 16
percent.
This suggests two things to me: First, the popular stereotype about the role
of the special interests and "big money" may be somewhat overdrawn. Our
source of funds data suggests that these groups may not dominate the campaign
funding process to the degree sometimes supposed. Indeed, contributors giving
$1,000 or more accounted for less than 11 percent of funds raised by the average
House candidate with interest groups of all kinds providing an additional 18
percent. Secondly, these results suggest that in light of the pivotal role played
by small contributions and party money in the financing of at least House cam-
paigns, we would not be well-advised to scrap the current system completely in
favor of total public financing as some have suggested.
Instead, I believe it would make far more sense to channel public funds into
campaigns by building upon the current significant foundation of small contribu-
tors and party organizations. This is not the appropriate forum to discuss in
exhaustive detail the reasons for this position. But let me just briefly suggest
that both political parties and the laborious process of mobilizing a vast network
of small contributors provide an important institutionalized means for involving
citizens in the political process.
While some may harbor the romantic notion that our democracy is akin to a
Greek city state in which citizens spontaneously join in the political process, the
truth is rather the opposite. Modern life is filled with so many distractions,
our society is so large and the institutions of government often so impersonal
and remote, that active citizen participation must be encouraged, facilitated and
nourished by organizations designed specifically for that purpose. This is one of
the functions of strong political parties and of the grass roots mobilization of
voters and small contributors. Yet, if we were to summarily eliminate candidates'
dependence on political parties and hand them a fixed sum Federal subsidy to
run their campaigns, those important institutionalized channels for participation
would be seriously weakened. The result would likely be a political system in
which candidates divorced from all ties to party and grass roots organizations
would compete for public office by means of the slick media oriented campaigns
that have already done so much to degrade the level of political discourse in this
country, and to replace meaningful citizen participation with voter manipulation.
PAGENO="0228"
224
Now I stress this point because a number of the proposals before this committee
rely largely on direct fixed sum subsidies to candidates from the Federal Treasury.
To the extent that candidates can raise a downpayment in the form of a security
deposit, probably not an overly difficult task given the modest amounts involved,
they would be off to the races with need for neither party support nor a strong
grass roots organization.
Since in many instances these organizations would be more sophisticated about
the techniques of successful grass roots fund raising drives and operate on a year
round basis, they would likely account for a significant share of matching pay-
ments from the treasury. Thus, rather than ignoring parties, the candidates
would have to turn to them both for direct financial support and also for assist-
ance in conducting their own grass roots fund raising campaigns. Instead of
divorcing candidates from party organizations, our system would encourage
mutual cooperation and interdependence.
In addition to providing an important channel for citizen participation, the
political parties play a second indispensable role in our system. As I have already
suggested, political parties are important aggregating institutions which facili-
tate the task of governing and fashioning a majority will out of the disparate
plethora of interests that comprise the body politic. To be sure, our parties do
not function as single-mindedly as do parties in many parliamentary democracies.
But I have little doubt that were we to sever the ties between public officials
and the two great political parties completely, the inertia and stalemate already
built into our constitutional system of divided powers would only be compounded.
Thus, in designing a public finance program we must take care to see that politi-
cal parties are encouraged and strengthened rather than inadvertently under-
mined. I believe the matching payment principle would accomplish this objective
far more effectively than would any of the proposed direct candidate subsidy
approaches.
Such a rigid system would lead to an unnecessary dissipation of taxpayer
funds and could well undermine public confidence in the concept of public finance
itself. For this reason I believe that the mixed system and matching formula
provided in our bill is far superior to the fixed subsidy mechanism contained in
many of the alternative proposals. It would gear both the amount of tax funds
provided a candidate and the total amount of funds spent to the conditions of
the particular district and set of candidates involved.
By contrast, I think there is no way that a fixed subsidy system that totally
eliminates private financing can avoid the twin dangers of providing too little
total money, thereby further rigidifying the system, or a level of support far iii
excess of what is necessary or appropriate in many areas of the country and
individual election contests.
I want to stress this point because the disparity in spending by incumbents
and challengers as shown above has sometimes been interpreted to mean that
challengers are inherently incapable of raising sufficient funds to mount a truly
vigorous and effective campaign. There can be no doubt that this is true to some
degree and figures which I will present in a moment suggest that incumbents
have far greater access to special interest money and other sources of large con-
tributions than do challengers. But in many instances, incumbents are challenged
ineffectively not due primarily to an inherent inability of challengers to raise
funds but for a whole host of other reasons that are unique to the districts
involved. These include lack of voter dissatisfaction with the incumbent, absence
of an attractive alternative candidate or disinterest by local organizations hi
mounting such a challenge.
The fact that nearly 54 challengers were able to raise an average of almost
$100,000 in campaigns against incumbents suggests that even under the current
system funds can be raised if conditions are right. Moreover, the fact that some
challengers even in lopsided contests were able to raise large amounts of funds
even more strongly suggests that an assumed inability to raise funds is not the
only reason for the relative lack of turnover from one election to another.
The fact that such miniscule amounts of funds were raised in the second cate-
gory relative to the first suggests that the mere availability of funds will not
insure competitive elections in every district. Indeed, provision of a fiat $100,-
000 or $150,000 subsidy that would be entirely appropriate in some districts
would be largely ineffective in changing election outcomes in these latter situa-
tions and would therefore amount to an enormous dissipation of tax funds and
could well discredit the concept of public finance.
PAGENO="0229"
225
Thus, again, flexibility is essential. Where local interest and capable candidates
are present, small and modest private contributions can be raised and party funds
will be provided. In these cases matching public funds will build upon and equal-
ize the opportunities for viable challengers. Where such conditions are not pre-
sent, a matching payment system would keep public expenditures to a minimum.
By making candidate viability and local initiative the litmus test, it would
avoid the potential dangers of pouring public funds into situations where they
could not be used effectively.
VARIATION IN FUNDS RAISED BY CHALLENGERS IN ENTRENCHED DISTRICTS'
State
District
Funds raised
Challengers raising substantial funds:
Tennessee
Maryland
Oregon
New York
Challengers raising minimal funds:
New York
Ohio
Pennsylvania
Illinois
6
3
18
7
10
10
4
$99,493
59,065
57,874
107,811
$1,201
4,130
4,049
2,285
I Districts in which incumbent won by more than 62.5 percent.
Mr. Chairman, let me say in conclusion that I have no strong commitment to
the precise formula for matching payments contained in our bill. It was written
as a vehicle to encourage consideration and discussion of the concept it embodies.
I would like to suggest that our analysis of the election data suggests that a
$50 matching level might be somewhat low, and might not really provide enough
supplementary funds to achieve some of the objectives I have discussed this
morning. Therefore, I would propose that you consider providing matching pay-
ment for each individual contribution in an amount up to $100. If such a formula
had been operative during the last campaign it would have provided the average
House candidate with about $25,000 in Federal matching payments. In those
districts involving large expenditures and highly competitive contests, the
amount of matching payments would have ranged between $30,000 and $50,000.
While this figure is somewhat lower than the sums provided in some of the
other public financing bills before this committee, it should be recalled that
our bill would not eliminate the current substantial base of small contributors
and party support as would these proposals. Moreover, if the incentive effect of
matching payments were present, candidates would surely raise substantially
more matchable contributions than they did under the system which prevailed
in the last election.
Nevertheless, you might well determine that a higher level of support is
necessary and appropriate. In my view, the most effective way to accomplish that
would be to provide what some have termed "multiple" matching for at least
part of the matchable funds raised by a candidate. Thus, the first $15,000 might
be matched on a two Federal dollar for one private dollar basis with the
remainder matched in the manner we have proposed.
But whatever the details of the formula, the main objective should be to
provide a flexible mechanism for channeling public funds into campaigns that
will eliminate current dependence on special interest and wealthy contributors,
while at the same time building upon rather than destroying the significant
base of party and small contributor financial support that already exists.
PAGENO="0230"
PAGENO="0231"
FEDERAL ELECTION REFORM
THURSDAY, OCTOBER 25, 1973
HOUSE OF REPRESENTATIVES,
SUBCOMMIT'rEE ON ELECTIONS OF THE
COMMITTEE ON HOUSE ADMINISTRATION,
Washington, D.C.
The subcommittee met, pursuant to notice, in room 2253, Rayburn
House Office Building, Hon. John H. Dent (chairman of the sub-
committee) presiding.
Present: Representatives Hays (chairman of the full committee),
Dent (chairman of the subcommittee), Jones; Mollohan; Mathis, and
Frenzel.
Also present: John T. Walker, staff director; John G. Blair, as-
sistant to the staff director; Ralph Smith, minority counsel, Commit-
tee on House Administration; and Richard Oleszewski, clerk, Subcom-
mittee on Elections.
Mr. DENT. We are honored this morning to have as a witness a man
who has devoted a great deal of time and effort and' I am sure a great
deal of thinking toward this very serious problem which confronts
the American people.
In earlier days, elections were very, very haphazardly run. Somehow
or other, because of lack of communication, people really didn't know
about it. But today, we are `forced into a position where we must do
something to clean up the many wrongs that are in the electoral
system.
Mr. Udall has been a fighter in that effort. I am very happy to have
you with us, Mo. The floor is yours.
STATEMENT OP HON. MORRIS K. UDALL, A REPRESENTATIVE IN
CONGRESS PROM THE STATE OP ARIZONA
Mr. TJDALL. Thank you, Mr. Chairman, for those kind words. I have
a prepared statement, but I would like permission to simply put it in
the record and then take about 10 minutes to summarize my thinking.
Mr. DENT. Without objection, it will be made a part of the record
at this point.
[The statement follows:]
PREPARED STATEMENT OF REPRESENTATIVE MORRIS K. UDALL
Mr. Chairman, before their golden era, the Brooklyn Dodgers protected third
base with an all-hit, no-field ballplayer named Lonnie Frey who made more than
fifty errors in one season. Defending his decision to play Frey, a beleaguered
Dodger manager oi~ce told newsmen: "He has only one weakness. Batted balls."
I wonder if a parallel statement can be made about the American political
system: its one weakness is election campaigns.
(227)
PAGENO="0232"
228
America is nothing if not resilient. We have survived civil war, Hitler, de-
pressions, assassinations, and urban riots. We have lived through periods of
national sacrifice and national gluttony, through eras of laissez-faire and umon-
ization, segregation and integration. During the last few eventful decades, Ameri-
cans have perhaps witnessed more social and technological change than in the
entire preceding century, and we have weathered it for the most part intact.
Part of the reason for the American success has been the stability of its politi-
cal institutions, their ability to adjust to necessary change, and th~ willingness of
the governed to support their elected leaders once those changes were made. The
11th Commandment in America is "Support the President," and with remarkable
unanimity we always have.
But there are black clouds on the horizon this year, and they carry with them
perhaps the most violent storm this democracy has yet experienced. Public polls
are now measuring the headwinds. For example:
Last year about 45% of all eligible adults failed to turn up at the polls, the
lowest turnout in almost 25 years. In many cases, our backward laws prevented
them from voting. But most simply didn't care enough or didn't believe their
vote would make any difference.
A 1965 Gallup poll found that almost two-thirds of the American people gave
those of us who serve in Congress generally high marks for integrity. But by
1973, a survey ranked politicians last behind used-car salesmen and morticians on
a list of 20 occupations rated for trustworthiness.
A Gallup poll published only last week revealed that only one out of every
three Americans approve of the job being done by the incumbent president, a man
who will presumably be leading this nation for the next three years.
Some will see this disapproval as a temporary phenomenon. I don't.
One of our nagging problems as a democracy has been both the unwillingness
and the inability of millions to participate in elections. These "no-shows" have
come largely from that segment of our society which is least wealthy, least edu-
cated. They have been correctly characterized by political scientists as alienated
voters: disinterested, unaware, or impaired by an onerous registration process.
The Watergate affair has been the catalyst for yet another challenge to the
system. That challenge is represented by the explosive growth of the ranks of
actively cynical voters. Far from being disinterested, these voters are opinion
leaders; they are educated and middle class; they not only participate in elections
but determine who wins them. If this group balls out of the political process, or
alternatively, refuses to align with either of the existing political parties, this
democracy is in deep trouble. For on the one hand, our democracy cannot long
exist if the great mass of educated people refuse to participate, nor on the other
can this two party system effectively govern in the face of growing non-alignment
of the populace or its alignment with splinter parties. And that will surely
happen-and sooner than we think-if the two major parties fail to take im-
mediate steps to rebuild confidence in the traditional processes by which we select
our leaders.
I said the one great weakness of American politics is election campaigns. This
is so even though the Congress approved in 1971 a largely unheralded but historic
campaign reform act-an act that is directly responsible for virtually every
indictment so far returned in the Watergate case, except those for burglary. The
1971 law replaced the non-law known as the Corrupt Practices Act under which
every politician's fund was a "secret fund."
The hard fact is that if the White House had riot dragged its heels on the re-
form issue two years ago, we may not today have a presidency under siege, a
former Attorney General and Commerce Secretary under indictment, and the
entire political process under a cloud of suspicion. If that law had been in effect
on January 1 instead of April 7 of the last presidential election year, as well it
should have been, there may have been no satchels filled with cash. Mexican
bank accounts, and fearful executives doling out corporate money to insistent
Nixon fund-raisers.
But that mistake is behind us now, and we would do well to take our theme
from the old saw which preaches: "When left with a lemon, make lemonade."
The public is demanding new reforms, and I think our response has to be on
three fronts: tightening the 1971 act, enacting modest public financing, and chang-
ing broadcast policies so that accessibility is not solely dependent upon money.
AMENDING THE 1971 LAW
A review of the performance of the 1971 act reveals that certain amendments
to that measure are essential. All of these recommended revisions are included
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in some form in S. 372 and H.R. 7612, the two major bills before this
Subcommittee.
The first essential revision is the establishment of a centralized administra-
tive body to insure proper implementation and enforcement of campaign laws.
Such a group could take many forms and indeed many have been proposed. For
example, both measures before this Subcommittee would establish independent
commissions, but I would note that the makeup of these vital commissions would
be substantially different under the two proposals. The Senate proposal would
have the President appoint all members, while H.R. 7612 recommends that two
be appointed by the Speaker, two by the President Pro Tern of the Senate, and
two by the President. An alternative to this proposal would be the formulation
of an elections board in the General Accounting Office, composed of members
selected by and balanced between the executive and legislative branches. Regard-
less of its precise foremat, this body must be empowered to investigate suspected
violations of the law, authorized to subpoena evidence pertinent to such investiga-
tions, and able to follow through with prosecution if need be. Politicians have to
get out of the business of policing themselves. History has shown us that it
doesn't work, and the public will no longer buy it.
Another important update of the 1971 act is the centralization of reporting
committees. The Senate bill takes positive action along this line. Under the Senate
proposal all candidates would designate one central campaign committee which is
responsible for reporting all contributions and expenditures in excess of $100, as
well as total campaign contributions and expenditures. Reports would be filed
on the 10th of April, July and October; 10 days preceding the elections, and on
January 31st following in an election year; on the 20th of April2 July and October
in non-election years.
For the purposes of fulfilling existing state requirements, the federal report
ought to be sufficient. The candidate and his committee ought not to be chained
to the task of constantly completing different forms to satisfy the requirements
of local, state and federal jurisdictions.
The most obviously desirable reform of the existing law is the enactment of
strict limits on individual campaign contributions. Ambassadorships should not
be up for sale. No one, regardless of his motives, should have the kind of clout
that a $1 million contribution buys. H.R. 7612 limits annual gifts to $1,000 for
House and Senate candidates and $2,500 for presidential candidates and national
party committees. The Senate bill limits contributions in all federal contests to
$3,000.
The Anderson-Udall bill makes only two exceptions to the contribution
limitations: 1) national political parties, and 2) congressional campaign com-
mittees. I might note, however, that the argument has been made that the
exemptions ought to include other broad national committees which have legit-
imate ideological interests, and in all fairness, I think their position deserves
serious consideration by the committee.
Finally, it is clear we must add the cost of direct mailing of campaign lit-
erature to the existing spending limitations. Expenditure reports of the 1972
campaign show that the use of direct mail has grown fantastically, and probably
is a direct result of our failure to include it under the media limits of the
1971 act. To ignore this item in setting limitations is like giving your wife a
credit card and saying, "You can spend no more than $200 except for what
you spend on diamond bracelets and minks."
PUBLIC FINANCING
The next real step in reform is the long overdue institution of a modest
plan of public financing. Recent weeks have brought a remarkable reversal
of American attitudes on this once unpopular proposal. Public financing has
won the support of newspapers and editorial columnists ranging from the New
York Times to James J. Kilpatrick, and from public officials like Vice President
Agnew. Most impressively, last week's Gallup poll revealed that two out of
every three Americans now favor the idea.
But public financing is like the electoral college, the abolishment of which
is as universally favored as its substitutes are scorned.
Ever since President Theodore Roosevelt first suggested public finance in
1907, three nagging and persistent doubts have plagued the concept, and until
now no one has been able to answer them. They are:
1. How would third or minor parties be handled?
2. Would it cost exorbitant sums to finance primaries and multi-candidate
races-the real struggle in many cases?
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230
3. Should hopeless general election candidacies in "one-party" districts be
financed and, if not, who determines which ones are serious?
H.R. 7612 answers those questions for the first time by changing the rules
of the game. It succeeds in doing so through a kind of free enterprise approach
which allows a candidate to demonstrate the serious nature of his campaign by
raising substantial but reasonable sums in small contributions. Thus, this kind of
public financing does not discriminate against minor parties nor those carrying
the independent fianner, but only against frivolous candidates. And by dis-
couraging frivolous candidacies, it reduces the overall cost of traditional public
finance schemes.
Briefly described, the Anderson-Udall Clean Elections Act would establish
a system of federal grants matched to contributions of $50 or less with in-
creased `tax credits to stimulate such contributions. Candidates for the H'ouse,
Senate, President and Vice President would be eligible. Both primaries and
general elections would be covered.
A candidate would qualify for a matching entitlement by raising a set amount
in donations of $50 or less. We recommend a $1,000 mininmm for House races,
$5,000 for Senate, and $15,000 for President or national party committee, which
also could participate.
In order to receive additional federal grants, the candidate must continue to
solicit small donations, up to a ceiling of ten cents times the number of eligible
voters; in the case of national parties a fiat figure of $15 million would be the
ceiling. None of the contributions by an individual beyond $50 in a single year
could be matched by the entitlement fund.
To repeat, our proposed system would cover all federal election candidates
who wished to take part; would cover primary, general and run-off elections;
would provide a funding base for both the individual candidates `and the national
parties; would make considerable allowance for third and minor party candi-
dates; and would do all of these things at a maximum cost of a little more than
$1 per every registered voter in America.
Such a system is feasible. Consider that in 1004, Senator Barry Goldwater
set new fundraising records by appealing to small donors and just last year
Senator George McGovern raised over 80% of his campaign costs in donations
of $30 or less. A check of party fundraising last June revealed that approxi-
mately 75% of `all donations to the Democratic Party had come in sums of
$100 or less while the Republicans claim that almost 00% of the funds they
receive are from donations of $100 or less.
We think our approach to public finance answers every major and some
minor objections raised by those who favor the concept but `who haven't liked
other specific proposals.
BROADCASTING AND MISCELLANEOUS
Ph matching grant system would be complemented by other elements of our
bill. One feature of the proposal, called Voters Time, would make substantial
progress toward capturing the genius of the media and putting it to work
productivity `to shore up our political process. We do not `ask `broadcasters to
put candidates on the screen free of charge. Rather, we propose that a reasonable
amount `of `television time be subsidized by the federal government and that
blocks of time be made available during general election campaigns for Presi-
dent, Vice President, Senate and House candidates. Depending on the office `being
sought, the plan, based on an intensive foundation study, recommends from two
30-minute local blocks for House candidates to five 30-minute national blocks for
presidential candidates. Congressman Anderson `will go into this proposal in more
detail, `but let me point out that it is indeed possible to construct a schedule
of political programs which are interesting and productive and do not saturate
the airwaves with a morning-to-night dose of drab political commentary.
Another potential change which bears consideration by the Subcommittee, but
is currently in neither bill, is the proposal `to allow election winners to utilize
campaign surpluses to assist in the payments for newsletters, radio and tele-
vision reports, and other semi-official duties they encounter as Members.
Campaign reform is in many ways a painful task for incumbents. I remember
saying before enactment of the 1971 law, which this Committee played an im-
portant role in developing, that American elections are a jungle, but it is our
jungle, *and one in which incumbents have learned to survive, to hack their
way through. I sympathize with the statement of the Chairman who recently
said, "No incumbent is born into Congress." It was not easy to get to the
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Congress, and I don't want to make it any easier than is absolutely necessary
for my next opponent to usher me into early retirement.
But as I said earlier, one of the great enduring strengths of this country
has been the willingI~ess of the American people to support necessary change and
to support leaders who promote it. I think the country would greet campaign
reform with gratitude and a feeling of renewal.
Adlai Stevenson said it better than anyone else: "The hardest challenge in
politics is to win without proving that you are unworthy of winning." Today
his personal goal is a national imperative.
Mr. UDALL. I imagine the chairman has heard about all he wants to
of oratory on the desperate need for campaign reform, that people
are turned off, that we face a crisis because of Watergate, and so on.
I have the first three pages of that kind of oratory. I hope it's as good
as some of the other the chairman has already heard.
I do want to take the time I have on details. Unless we move shortly,
unless this committee can put together a package of amendments to
existing law and some changes that I will suggest, we are going to lose
the best opportunity in a generation to really take some steps forward
that will purify, elevate, and improve our political process.
The kinds of things I am going to suggest, Mr. Chairman, I think
can be done without a great deal of controversy. I think they can be
done fairly quickly. They fall into three categories.
First, I think we ought to simplify and make less burdensome the
reporting requirements and similar requirements of the 1971 existing
law.
I recommend that we preempt State jurisdiction with regard to the
reports. I am sure the committee has hnd advice on that. It seems
to me that a complete copy of my Federal report filed with the ap-
propriate officials in Arizona should be enough to satisfy that law.
To the extent that Members and candidates for Federal office are
required to follow very burdensome duplicative procedures with
duplicate forms, I think we could change that very quickly.
Secondly, I think we have been around the track now once with
this 1971 law, and all of us can agree that there are too many reports
required, particularly in off years. We can simplify and reduce the
number of reports. The thrust of the 1971 law is disclosure. The idea
was that if the public and if one's opponent knows ahead of the elec-
tions where you are getting your money and how much you are
spending and where you are spending it, the public will take care of
most abuses in that field. We ought to bear in mind that the purpose
of disclosure is to inform the electorate before the election and not
to burden candidates and committees with dozens of unnecessary re-
ports before and after the election, particularly in off years.
Mr. DENT. At that point, would you mind answering something
for me?
Mr. UDALL. Yes.
Mr. DENT. I have already put down some notes. I am opposed to
the preemption and the off-year thing. I agree with you, it's burden-
some, and not only burdensome but uncalled for. We are acting as if
everybody is under suspect in this political campaign. I don't think we
all are.
However, what would you think if a candidate, an incumbent
especially, of course, who is running for reelection, makes a report
upon announcement of his candidacy for reelection of all that has
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transpired since the last election in the matter of finances? I think
that would give the people all they know. They don't know anything
now, because nobody looks at the off-season reports.
Mr. TJDALL. I wouldn't view this with a great deal of objection. As
I say, you have to bear in mind the overall goal is that before people
vote for me or my opponent in those last couple of weeks before the
election, they ought to know where I got my money and how I am
spending it. To the extent we can simplify and focus on that overall
goal of disclosure, I am all for it. The suggestion the chairman makes
doesn't bother me particularly.
There are a couple of matters that affect incumbents and Members
generally and would make this package more attractive to Members.
I would like to simply mention this in passing. My staff and I have
worked up some language on this which we would be glad to submit.
One is this problem of leftover campaign funds. If you put on a
campaign and you are elected to the House or Senate and you find
yourself with a few thousand dollars on hand, traditionally this money
has been put into newsletters or travel for the Member to go home or
into constituent service projects of different kinds. A ruling in the
House now says you cannot do this. I think that is clearly wrong. A
ruling in the Senate, strangely enough, under the same law, says
it's permissible. I think we ought to clear that up. I think the Members
would appreciate that suggestion.
Finally, in this area of simplifying and taking off unnecessary
burdens, there is now a decision by IRS that concerns me, which says
that campaign committees or newsletter funds operated by an in-
cumbent in some cases must file income tax returns. This is preposter-
ous except with regard to earned income. If you have a campaign fund
awaiting next year and you buy some bonds with it or put it in the
savings account, sure, that is income. But simply treating ordinary
campaign contributions as income, as IRS suggests you must in some
cases, and to put that added burden on, seems to me highly irregular
and unnecessary. That is the first category of things I wanted to talk
about, to simplify and make less burdensome the rej)ortmg require-
ments, particularly in off years.
Secondly, I think we can clean up and tighten up the 1971 act. There
are some obvious loopholes on which I think there is general agree-
ment. Let me list them.
The first and most obvious one is contributor limits. I recall the
battle 2 years ago when there seemed to be a feeling in the House at
large that we ought to have a contributing limit. There ought to be
some point at which no American has any more additional clout in an
election campaign.
I remember the White House opposed this bitterly. We said how
about $5,000? They said no contributor limits. We said how about
$10,000? They said no contributor limits. We said how about $50,000?
No contributor limits came the word back. The bill was going to be
vetoed.
I remember a suggestion of $100,000 to the emissaries of the admin-
istration. There were no contributor limits. It was either to give up
on that or not to get a bill, and we chose to get a bill. I think we have
got to face that fact. Clement Stone can give $2 million to Nixon or
Stewart Mott can give half a million to George McGovern-I am sure
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you have heard all of this. There ought to be some limit on the amount
of influence that any one American has, regardless of his wealth.
In our bill, Congressman Anderson and I suggest $1,000 for the
House and Senate, $2,500 for Presidential candidates, and $7,500
aggregate.
Mr. CLEVELAND. Your limit doesn't go to a committee that would
pay, like a Republican or Democratic committee ~
Mr. UDALL. No. I was going to come to that in a moment. We would
make an exception in terms of contributor limits to these national
committees and to the major campaign committees of the parties in an
attempt to strengthen political parties. But that, Mr. Chairman, is the
first change in the 1971 law. I think we have to have a contributor list.
Second, I think we need some kind of centralized administrative
body to enforce the law. You can get in great arguments about whether
it ought to be the GAO or an independent commission of some kind. To
satisfy a lot of the complaints that many Members have expressed to
me, as the most workable kind of thing, I would probably favor put-
ting it in the GAO, which already handles the Presidential campaign
fund administration, but perhaps with some kind of a supervisory
board coming from the Congress or appointed by the House and Senate
and some appointed by the President.
There is a great fear among many incumbents that a group of do-
gooders are going to be harassing honest Members who come in 5 min-
utes late or don't submit enough copies of their reports. I think we can
resolve this by getting some kind of a centralized administrator, per-
haps in the GAO, with an overseeing board of some kind that would
satisfy those kinds of complaints.
I don't believe the public any longer is going to accept, nor should
we insist on, having the administration of these campaign laws in the
hands of Members of Congress, any more than I can insist that the
Watergate matter is going to be firmly and finally investigated or the
administration is going to be investigated by someone appointed by
the administration.
We are going to have to give on this. We can do it in a way that will
assure honest, sincere Members that they are not going to be harassed
for mere technical violations. That is the second change.
The third change I think we ought to make is to bring direct mail
in under that umbrella that we put in the 1971 law. Let me remind
the Members of a little history on that.
There was a big argument whether we could have spending limits,
whether we should have spending limits. We finally agreed that the
philosophy of the 1971 law was this-there are some things you can
control and check on very easily. There are a lot of other things you
cannot control and check on. Let's pick out the ones to identify, that are
easy to monitor, about which there can be no argument, and let's put
a limit on those.
In House races, when the bill left the House, we had this $50,000
limitation covering five items: (1) Radio and television; (2) printed
material, newspapers and magazines; (3) billboards; (4) direct mail;
and (5) telephones.
Each one of those you can check. You can see the billboards. You can
go `around and count them. You can go to the radio and television
stations and add up what your opponents bought. You can't hide that
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234
newspaper ad. You can check the regulated utilities, the telephone.
Direct mail requires postage and you can check this.
We had a 10-cent-a-voter ceiling on those five big items, the "big
ticket" items in any campaign. Then we had the subceiling of 60 per-
cent of that for the media, the feeling being that with a television
blitz, you should spcnd no more than 60 percent of that for the elec-
tronic media.
When the bill came back from conference, through an act of God or
through some logic I have never understood, the direct mail was
dropped out. This had a very vital impact oii the 1972 campaign for
President. The Nixon campaign people, as well as the McGovern
people, under that 1971 law were limited to $14 million for those
items. But when you drop direct mail out, they simply went to a com-
puter mailing operation and I am told speiit as much as $20 million
more on that alone. There was no reason that was taken out, and I have
never understood why.
Clearly we ought to put back under the 10 cent umbrella the direct
mail operations. Television and radio blitzes have lost the appeal
they had. Direct mail is really the coming thing. It's kind of a joke
to say we are going to limit the big ticket items to 10 cents and then
take out the one that is most important. It's like giving your wife a
credit card and telling her she is strictly limited to $500 a month except
for mink coats and diamonds. The one big ticket item we have left
out is direct mail.
Next, with regard to cleaning up the 1971 law, we ought to take
care of centralized reporting. This business of having 435 different
committees reporting on a Presidential or other candidacy is wrong. A
number of proposals have been made. Different members have differ-
ent ideas how you can centralize this. Clearly, you ought to do some-
thing, perhaps along the lines of the Senate bill, so that the candidate
designates one committee regardless of how many there are, and this
lead committee must compile the reports from all the other committees
in order to make a single candidate report.
For those who came in late, I have talked about three areas that
I think we could get agreement on. One is simplifying and making
less burdensome the reporting compliance procedures and limiting the
impact on incumbents of some of these rulings that have come out of
the 1971 law.
Second, cleaning up three or four gaps in the 1971 law which I
have discussed.
Finally, Mr. Chairman, I think we could get agreement on some-
thing experimental, a beginning at least on public financing of
elections.
Public financing of elections has always been one. of these things
like the electoral college. Everybody is for it in theory. Almost every
civics class instructor will tell you how great it is. Everyone can agree
that the electoral college ought to be abolished, but no one can agree
on what will take its place. Everybody agrees in theory, except Bill
Frenzel and a few other scholars, that we ought to have some measure
of public financing. But you can never agree on how you are going
to do it.
The proposal that Congressman Anderson and I have made I
think answers most of the serious objections that have ever been
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raised about the mechanics of public financing. Public financing
has always failed because you couldn't answer three questions.
One, what are you going to do about primaries? If you are not
going to cover them, you have eliminated in many cases the major
races. If you are going to cover them, how are you going to handle
those like the 1971 Texas elections that you have heard about ad
nawseum where there are 71 candidates for Senator. Somebody is going
to say, four candidates are serious and we are going to subsidize them
or we will subsidize all 71, in which case the taxpayers are going to
go broke. You could never answer the question about the primaries.
No. 2, what are you going to do about general elections in one-party
districts? I know districts where-let's take Mrs. Abzug in New
York-the only way you are ever going to beat her is in the primary.
The general election in that district is a joke. I know Republican
districts in Kansas and some places where you are never going to win
in a general election. So are you going to give somebody an ego trip,
and give him the same amount of money you would give in a hotly
contested incumbent situation? If you are not, somebody has to say
this candidate is serious and this one isn't. That is an awful lot of
power to give a political party or an administrative body to decide
which challenges are serious and which ones are not.
The third problem you have never been able to solve is the new
party independents, like Henry Howell in Virginia or Harry Byrd or
Joe Moakley, who won a House seat in Boston. What are you going
to do about these people? We solve them all on a matching funds basis.
We say no one decides who is a serious candidate except the candidate
himself. The way he proves he is a serious candidate is by getting a
broad base of small contributions. Barry Goldwater did it in 1964 and
George McGovern did it in 1972. This would take care of Harry Byrd
and Moakley and anybody who is running on an independent party or
new party ticket.
It would not base your support on all these fantastic formulas that
they have for determining how much new parties get or how much third
parties get. They are usually based on what you did 4 years ago.
If I could have gotten the American Independent Party nomi-
nation for President in 1972 based on what George Wallace had done
in 1968, I would have had $6, $8, or $10 million to kick around to
maybe have a little convention somewhere. The same in 1952, after
Strom Thurmond put on a major States Rights Party campaign.
In the following election somebody under any of these formulas I
have seen would have had a whole bundle of money to spend.
This matching proposal says that we will match the strength you
have this year from small contributors. So it resolves your problem
in Texas with 71 candidates, where three or four of them are serious
and are going to be able to get donations in large amounts and will
get matching funds, and the other candidates are not serious and are
not going to get a dime because they cannot qualify.
It solves the problem in the one-party district in general elections.
If the man is really making a serious challenge against Wayne Hays
in Ohio-I cannot imagine that happening-he can get money and if
it's just a frivolous candidacy, he is not going to get any of the match-
ing funds.
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I would like to see, at least on a beginning basis, at least on an
experimental basis, this committee try public financing. Try it for the
1974 election or try it for the first Presidential election. If you don't
like 10 cents a voter limit on matching funds as in our bill, try it
for 5 cents one go-around. But let's seize this opportunity to see if
public financing works.
I have never believed that you are going to go from total private
financing today to total public financing tomorrow. I think that is
visionary. I think it's unrealistic. But I think you can go first to a
mix and see how it works, have a mix of small contributions with
tough contributor limits and some public financing, which may give
you the best of both worlds, and try it out.
Mr. Chairman, these are my basic suggestions. I think this com-
mittee can put together a bill that can fly, that will meet the legitimate
objections that may have been made. It will clean up the obvious
defects in the 1971 law. I think we can do it this year.
I thank you for letting me have this opportunity to be here.
Mr. DENT. Thank you, Mo. Of course, you have touched on the
subjects that are pertinent in this whole study that we are making
today because they have been revealed as being the sore points that
we have to deal with.
I certainly am sure the committee will give very serious considera-
tion to all that you have said, as well as your prepared statement
whi~h was made part of the record. I know that Mr. Hays has quite
a few important engagements this morning. We are always happy
to have him with us. As you well know, Wayne has been in the fore-
front of this election reform battle for many years. He still is in the
forefront. He never misses a meeting.
Mr. Hays, do you have anything this morning you would want to
add?
Mr. IJDALL. He has never blindly followed my lead in these
matters. I don't anticipate he will in this case.
Mr. HAYS. I have no intention of doing it this time. You speak
with a great deal of assurance, Mr. TJdall, about how this is going to
work, as you spoke with a great deal of assurance about the bill in
which you now say we have got to clean up the defects, because it was
your substitute that was finally adopted 2 years ago.
Mr. TJDALL. It had the chairman's name on it when it finally went
off.
Mr. HAYS. That was unfortunate because all that was left of the
original bill was my name. There weren't any limits or a.ny of the
things we should have had.
You talk very deliberately, I must say, about this public financing
and all they have to do is raise a certain amount of money and then
the Government will match it. Who is going to audit how they raise
that money?
Mr. TJDALL. I think the auditing would come in the first instance
from one's opponent. I think it would come in the second instance from
whatever agency we set upto police this thing.
I don't think there will be any problem exposing fraud. A lot of
members expressed to me the fear that there would be fraud, that all
you would have to do is say to the boys down at the taverns, "Boys,
here is some money. Give it to me and we are going to get some
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Federal matching funds. Back me and I will share it with you."
I would like an opponent to try that on me!
Mr. HAYS. You may have more stupid people in your State than
there are in `Ohio, but I can promise you there would be a thousand
people in my district who would find a way to get the maximum from
the Federal Government and rip off 95 percent of it for themselves,
unless you had about 250 auditors out there every d:ay certifying the
checks as they came in.
What about a cash donation of $50? Suppose a fellow says he can
get $1,000 or $100. Let's take that cash donation to $50 and he puts
$5,000 in the bank. How are you going to prove where be got it or
when he got it or who `he got it from or anything else? He can give
you a list of names.
Mr. TJDALL. Most good laws work because you have a lot of eyes
and ears watching them. Most good election laws are self-enforcing
because your opponent is monitoring your performance.
In the case of our law, you are going to have to go down Wayne
Hays' voucher and request for matching funds and you are going
to list 50 people who gave you $25 or $30 or $40 to get this money.
Mr. DENT. A $1,000?
Mr. T5DALL. If I wanted to fix you and I was your opponent, I would
send someone down there with some marked cash with a couple of
witnesses and that kind of thing. These lists are going to `be a public
record which your opponent can get.
Mr. HAYS. You send somebody down with marked cash and I accept
it and report it. So what?
Mr. TJDALL. That is fine. But I thought your fear was-
Mr. HAYS. If you send somebody to me with marked cash, v~e will
take the money. Don't think we won't! We will get the man to identify
himself and we will list him.
Mr. TJDALL. Wayne, I thought your fear was `that I would make up
all kinds of phony names and submit a voucher.
Mr. HAYS. I am not saying you would, but I am saying there are
plenty of people who could.
Mr. IJOALL. And then get some matching money. I would start
checking these people out and if they are graveyard names, I can
get the man who filed your report, he is going to jail on a Federal
offense. I don't think candidates are going to do that.
Mr. HAYS. What you are saying is you are going to have little
Watergate break-ins going on all over the place. You are going to hire
somebody to investigate your opponent and your opponent is going to
hire somebody to investigate you and I am going to lure somebody to
investigate my opponent, and so on?
Mr. TJDALL. I think it's going to be very clean because you are deal-
ing with small amounts of money and people aren't going to risk
going to jail for a $25 matching donation. I think it will work. I
think we can try it. That is why I suggest, because of all the fears,
maybe an experimental 2-year test. You are not going to be forced th
use these matching funds if you don't want to.
Mr. HAYS. How do you feel about a top limit on campaigns?
Mr. UDALL. I have mixed feelings about it, but I would accept it.
Before you came in, I said the philosophy of the 1971 law was that
there are things we can control. Billboards you can count. You can
25-239 O-73----16
PAGENO="0242"
23~
go to the television station and find out exactly wl1at your opponent is
spending. But there are a lot of things which are very fuzzy.
You and I are both going to Cleveland for a rally because the
candidates come and I ride in your car. Do I report that? Somebody
says use the hail in the back of the hotel for your meeting night. Do
I report that? What about the man who gives me a week of his time
and he is a $500-a-week man? Do I report that? You get into all of
these arguments about all kinds of fuzzy things.
The philosophy of the 1971 law was let's pick out the things we
can really control and let's have a meaningful limit on those big ticket
items that really influence elections and let's not try the others. If
this committee feels you ought to have that kind of limit and on
top of it another limit, I will go with you. I will see how it works.
Mr. HAYS. What about a limit on contributions?
Mr. TJDALL. I am for it. I testified earlier that I want a $1,000 limit
for House and Senate and a $2,500 limit for Presidential elections.
Mr. DENT. At that point, excuse me, you are talking about a $1,000
limit. You are talking about a $1,000 limit when you mention $25 as
a donation with matching funds. `What if 50 people give me $1,000
to print my newsletter and afterwards I give him a contract to print
my newsletter and give that firm $1,000 back so I got the $1,000 out
of the treasury?
Mr. TJDALTJ. We match the first $50.
Mr. DENT. We are presuming everybody is dishonest in an election
I suppose, so therefore we are going to have to consider everybody
is dishonest.
Mr. TJDALL. No. The beauty of our matching proposal is if the local
bartender likes you he can give you $50 and we match that. If Stewart
Mott gives you $1,000, we match his first $50 and the other $950 we
do not match. There is no limit.
Mr. HAYS. Would there be a limit on expenditures? What do you
consider a reasonable limit on expenditdres? Or don't you want
any? You said you covered the things in the other bill that you could
control. We didn't cover direct mail.
Mr. TJDALL. I made a strong pitch for putting that back under the
10-cent umbrella. I think we should. I would go a $90,000 limit or
a 20-cent, which would be $100,000 roughly.
Mr. HAYS. How do you explain to the people- maybe your people
don't ask that question but mine do-"Why do you want to spend
$90,000 for a job that only pays $85,000?"
Mr. TJDALL. I think that is a preposterous, oversimplified argument.
Mr. HAYS. It may be, but that is the argument they make.
Mr. DENT. That is the poor districts.
Mr. HAYS. I spent last year, my staff tells me, $20,134. That is about
average for my district.
Mr. DENT. That is mine, too.
Mr. TJDALL. I don't object, Wayne, to an overall limit. I think you
are going to get into a lot of arguments about what is and what is
not a contribution to the campaign, value of services and that sort of
thing. As long as you have this subceiling, this 10-cents-a-voter
aspect that you helped develop in 1971 and it covers the three big
ticket items, I think that will do the most good.
PAGENO="0243"
239
If the committee wants to put an overall ceiling above that one,
I will go along with it. I see some problems with it, but I will go along
with it.
Incidentally, I don't buy the `Common `Cause argument that the most
important thing is to beat incumbents and, therefore, you don't need
a ceiling at all and you ought to leave a man free to raise $500,000
`and try to knock an incumbent off. I think there are some values in
incumbency. We ought not to undertake a program that simply is
designed to beat as many incumbents as possible.
Mr. HAYS. Right at that point I hadn't thought of this question,
but you made me think of it, that we ought to put in this bill some
kind of provision to allow common cause and other organizations~-
all hthbying organizations-to reveal the sources of their income. Do
you think we ought to go further than to allow them to say they
shall?
Mr. TJDALL. I hadn't thought about it. I don't think Common Cause
would object to it.
Mr. HAYS. They don't reveal the sources of their income. I have
checked their reports and they reveal exactly what the lobbying is.
They say everybody ought to make a revelation of everything, but
they don't. They only reveal the ones over $500 that the lobbying law
requires they reveal. The rest of it is a blank.
Mr. IJDALL. I think one of the most cleansing principles in all of
public life is disclosure and the people who have tax exemptions
ought to disclose where their money is coming from `and what they
are doing with it.
Mr. HAYS. I am sure if we put that in, there will be a substitute
bill that won't have it.
That is all I have, Mr. Chairman.
Mr. DENT. Mr. Frenzel?
Mr. FRENZEL. I yield to the gentleman from New Hampshire.
Mr. CLEVELAND. Thank you. The question I wanted to ask has al-
ready been covered. In the dialog between Mr. Hays and Mr. Udall
you are talking about campaign limits. You finally covered the point
I wanted to cover, which was that campaign limits could be construed
as giving the incumbent an unfair advantage. You covered the point,
thank you.
Mr. [JDALL. I have had an argument with some of the Common Cause
people. They can't have it both ways. On the one hand, they say the
most important value is to be able to defeat incumbents. I think there
are some values to continuity in public service. I think they have to
weigh the evils. I think you ought to have a fair shot at an incumbent.
I don't think we enshrine you for life. On the other hand, there are
some great evils in letting people raise $1 million or $2 million to run
for the Senate or the House. I come down to the side of having some
kind of sensible, reasonable limitation.
`Mr. CLEVELAND. Why did you retreat from having the public financ-
ing by a mailing grant. instead of TV grants?
Mr. UDALL. On practical grounds. I got my head torn off in the
House dining room. There are two or three Members who, every time
I walk in there, say this is the s.o.b. who wants to give our opponents
the frank, the right to send out free mailing. That is a form of public
PAGENO="0244"
240
financing. I think it's a good idea, but we are clearly not going to get
it through this committee or through the House.
Mr. DENT. Completely, no. I disagree entirely. It's not a form of
public financing. It's the only way that a person who does not get any
publicity whatsoever because of private ownership of all of the media
and being disliked because of the way he votes or walks or talks or
stands. He gets absolutely nothing. There is a newspaper in a district
I have been representing for 43 years and only twice did it mention
my name in 43 years. Once was when it heard I got killed in an auto
wreck and the next time they `thought I had a heart attack. That is
true. `I have to have mailing to get to `my people.
Mr. UDALL. They write an editorial hoping it was nothing trivial.
I am for the frank. I defend the franking privilege. I think the frank
is good, but I think you can distinguish that from public financing of
mailings. In many States now there are propositions on the ballot
that will allow each side at State expense to print and mail out argu-
ments pro and con. I apply that same principle to candidates. But
there is so much objection to this I have given up trying to get that in
any kind of a bill out of this House.
Mr. DENT. Mr. Frenzel?
Mr. FRENZEL. I would like to thank the gentleman for his testimony
and for the good ideas that are encompassed in his bill.
Mr. DENT. It's a very fine committee.
Mr. UDALL. My cup runneth over when you compliment me.
Mr. FRENZEL. It does have some excellent ideas in it. Of all of the
forms of public finance, I think the one you suggest is the least ob-
noxious, I guess I told your coauthor. It may be ultimately the way
we `go. As you have correctly described me, I have not been friendly
toward public finance schemes. Like the gentleman from New Hamp-
shire, I am sorry you had to come off the mailing scheme because I
thought that was a far greater common denominator in campaigns
than the television time which you suggest this year.
I suspect, however, television will go the way of the frank, and for
practical purposes it's not something that we should spend a lot of
time discussing.
Mr. HAYS. Would the gentleman yield?
Mr. FRENZEL. I do yield.
Mr. HAYS. I want to make my position clear. I merely asked the
question about mailing because that doesn't indicate that I am for
putting a ceiling on, it. I agreed to that provision in the conference,
as you may well remember. That may be the way to balance the in-
cumbent with a nonincumbent. I happen to think that in 90 percent of
the districts, direct mail is the most formidable and the best method
of reaching the voters.
Certainly if you have a limit, as we do now, which does not include
direct mail, it allows a fellow like Mr. McCloskey to spend $321,000,
Mr. Lowenstein to spend $282,000, and Mr. Carey $281,000, et cetera.
Mr. FRENZEL. I agree with you. I think the gentleman from Ari-
zona's testimony was to the same effect.
Mr. DENT. That is right.
Mr. FRENZEL. The most currently powerful single device, at least
in congressional campaigns, is direct mail.
Mr. LTDALL. Right.
PAGENO="0245"
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Mr. FRENZEL. To proceed, I notice that perhaps either it can offer
a compromise or retrenchment from the Federal Elections Commis-
sion's position to that of the GAO saying we have to take it out of the
hands of Congress. Maybe that is a good compromise for those who
cannot stomach a Federal Elections Commission. As the gentleman
knows, I am very strongly in support of a Federal Elections
Commission.
I would ask, is not the GAO subject to some of the same criticism
that the Clerk of the House might be, in that it is a congressional
creature and subject to congressional oversight, appropriations, et
cetera?
Mr. IJDALL. In theory, yes; in practice, no. We have got to be practi-
cal. Sam Hughes, who administered the Presidential aspects of this
1971 law, is about as decent and honorable a public servant as you will
find. Nobody is going to play games with Sam Hughes. I would think
that kind of a man is going to administer it down at GAO. My bill
is for an independent commission. If I had my druthers I would go
that route. But I recognize the realities of life.
Mr. DENT. Where do you get an independent commission? Is he
handed down from God?
Mr. UDALL. No.
Mr. DEN'r. There are no independent people in the world, really.
Mr. TJDALL. I agree with my friend that we have seen less and
less with the White House trying to run the FCC and trying to run
the ICC and sending up orders and instructions.
Mr. HAYS. Would you change that from "trying to run" to
"running"?
Mr. TJDALL. In most cases I think the chairman is right. If you
had an independent commission which was appointed partly by the
Congress-the House and the Senate-and partly by the President so
you wouldn't have a majority of Presidential appointees and if you
gave them long terms, maybe we can develop a spirit in this country
of fair play where people really left that independent commission
alone. I don't have ultimate faith that they would do it.
Mr. DENT. Like the Supreme Court?
Mr. TJDALL. Yes.
Mr. DENT. Roosevelt got in trouble over that.
Mr. FRENZEL. Mr. Chairman, if I may proceed, the question of
outside groups disclosure under the election campaign law was raised,
I do have such a provision in th~ bill which I have introduced. I did
take the trouble to discuss it with Mr. Gardner. He indicated he had
no objection to it and would in fact think it's a pretty good idea. If
it comes up. I don't think there will be a serious objection from any-
where on that.
I have also included those groups who rate Congressmen for one
reason or another, because they are part of the process. If you are
declared one of the "dirty" half-dozen, somebody is after you.
Mr. TJDALL. Absolutely!
Mr. FRENZEL. They are a part of the deal. That would be included.
I think it could be included without objection from almost anywhere.
I would say this about the gentleman's testimony. You have come
before us and suggested a number of compromises, which I think is
great, which are not included in your bill. You have talked about
PAGENO="0246"
242
coming back from the FEC. You have talked about expense limitations
which are not a part of your bill. Obviously, this committtee is going to
write something that isn't Anderson-TJdall, that isn't the Senate ver-
sion, that may include all of these and Hays' and everybody's ideas.
Ihope it does.
Mr. HAYS. At that point, would you yield again?
Mr. FRENZEL. Sure.
Mr. HAYS. When we get that happy day, presuming we do-and
I hope we do-would you think then we ought to clear the whole
thing with Mr. Gardner? You seem to suggest that.
Mr. FRENZEL. I don't know as if lie is going to have a vote. However,
he is very interesting.
Mr. HAYS. You said when you cleared your proposal with him,
that would indicate there would be no opposition from anywhere. I
thought maybe we ought to try to write a bill and clear it with
him and sail it through the House like a frisbee.
Mr. FRENZEL. The chairman's point is well taken. I shouldn't have
said there wouldn't be objection.
Mr. TJDALL. I think we are all'closer than it appears.
Mr. FRENZRL. I should have said I don't think Common Cause
would object to that particular feature.
I think what the gentleman from Arizona is saying is that we must
move on something and that we have many similarities here and the
quicker we move the better. The ultimate judge is going to be the
House. We have 435 experts and they are going to do what they want.
The quicker we get something served up to them so they can do what
they want I think the better we are all going to be.
Mr. TJDALL. I agree. The whole thrust of my appearance today is that
I think we are a lot closer to agreement than might be apparent. I have
pulled back on several points. You have tried to indicate areas of
agreement. I think this committee can write a bill that will meet most of
the objections that have been raised.
Mr. FRENZEL. I agree with the gentleman. I think we have all come
a little ways. I hope we keep going. I thank the gentleman for his
testimony.
Mr. DENT. Mr. Jones?
Mr. JONES. Thank you, Mr. Chairman. I have no questions. I just
want to thank our good friend, Mo TJdall, for coming down and
giving us some real good ideas.
Mr. UDALL. Thank you.
Mr. JONES. Maybe we are closer than we think.
Thank you, Mr. Chairman.
Mr. DENT. Mr. Mollohan?
Mr. MOLLOHAN. Thank you, Mr. Chairman.
Mr. TJdall, I have had a great deal of difficulty in accepting this
idea of public financing, with the taxpayers coming up with money
to finance an individual's ambitions to hold a public office. I won't
say I made up my mind that I won't support it at some point in time,
but I have had great difficulty in arriving at that point where I could
accept it completely.
Mr. TJDALL. Many conscientious members are in the same frame of
mind, I am sure.
PAGENO="0247"
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Mr. MOLLOJIAN. Tjndoubtedly there are some very obvious reasons
to some, they may be different, one person to another, why he would be
persuaded public financing was necessary.
In your view, what are the one, two or three primary reasons justi-
fying this sort of a thrust of interest?
Mr. TJDALL. I got a nasty letter the other day saying, "You lousy so-
and so, we not oniy pay you fat salaries and office expenses and travel,
but now you s.o.b.'s want us to pay for your campaign." I wrote
back and said, "You already pay. You don't know it, but you are
already paying." The milk producers go to the White House and the
White House had been unable to find any reason why milk support
prices should be increased. The Secretary of Agriculture made a care-
ful study and two or three times had turned them down. They go into
the Oval Office and consult and at that gathering it was indicated
that maybe a couple of million dollars would be forthcoming for the
Nixon Presidential campaign. That has cost the consumers of
America $750,000 already just in increased prices for milk, which I
don't think were justified.
Many of the decisions that are made down the line are made by
people who have entre because they help pay for a Presidential
campaign or other campaigns.
I think you would get big money out of politics. You would get a
much more objective decisionmaking process in the Congress and in
the White House. That is my main argument for public financing.
Mr. MOLLOHAN. If we do these things which you are suggesting in
this bill and which have been suggested by many others, that we put
a very realistic ceiling, $1,000 on congressional raises for Senators
and Congressmen and $2,500 for Presidential, you already satisfied
that. Basically, I understand that your principal interest in turning
to public financing is the fact that excessive contributions result
in undue influence.
Mr. tTDALL. That is right.
Mr. MOLLOHAN. If you satisfy that item by these other provisions
of your bill-and I heartily am in sympathy with the ceiling-then
this would have removed entirely your principal interest in going to
public financing. Is this true or not?
Mr. UDALL. No, not entirely. Even if you put a $1,000 limitation,
there are elements in our society which are going to have no difficulty
raising many individual $1,000 contributions. The medical profession
is already given as an example. When we get into the battle on national
health insurance I don't think there will be any trouble for the
AMA to extract from almost every doctor $500 or $1,000 to put down
on the line in a crucial election campaign where this was an issue.
It's not as easy to get the ordinary working person in West Virginia,
who has a real stake in whether or not we have national health
insurance, to come up with that kind of money. I still think you
would have the undue influence of people with big money even with
a very strict contributor limit of the kind I proposed.
Mr. MOLLOHAN. But you would not have it to the extent and on the
level that you have it currently.
Mr. UDALL. You are talking degrees.
Mr. MOLLOHAN. You suggested a moment ago we try this public
financing on possibly a modified basis. Why wouldn't it be more
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244
realistic and more practical in our American way of satisfying our
own ambitions by our own efforts to try to remedy the defects in the
existing legislation by creating a very positive and enforceable ceiling
on those aspects of an election campaign where we can enforce com-
pliance with those ceilings and try that rather than to plunge into this
entirely new concept, into this new theater of understanding as to what
would be proper in election campaigns?
Mr. TJDALL. That would be a fallback position. I would hope the
committee would go beyond that. Public financing works in other
countries. We have it in Puerto Rico. It works well there, I am told.
I don't know what we would lose by trying a mix. I am not saying
let's go to total public financing. I am saying let's try a little mix
here.
Mr. MOLLOHAN. I understand this, but I am trying to be responsive
to your primary concern here. That is undue influence and excessive
contributions. If we can eliminate those and then do it on a 2-year
basis, or a 4-year trial basis, then we can come back and amend.
It's very, very hard, Congressman, as you know, to retract, to go
back to where you were before after you have done a bit of innovating.
This is innovation. It's awfully hard to go back and repeal that
provision and start the other way.
But we can continue here to make our legislation better by amend-
ment of those areas which obviously need amendment and then see
if that will not work, rather than to make this new concept venture.
Mr. TJDALL. I see your point. I just wish we would try it out. It has
been striking to me that whenever recent Presidents finally left office
and had been through this miserable business of raising Presidential
campaign funds-Eisenhower, Lyndon Johnson, John Kennedy, all
down the line-they come out and say let's go to public financing,
Why can't we just try it?
Mr. MOLLOHAN. We are in complete agreement on part of what you
said. My thinking at the moment is that if we put on these very real-
istic ceilings in the five areas of enforcement probability which you
have enumerated, then we would have gone a long way to satisfy this
need of people who are insisting that we go to public financing.
Mr. TJDALL. We would be far better off with those changes and
reforms. I would still like to see a test run of public financing. Write
a bill that says it's only for the 1974 election. You don't have a
Presidential election up. See how the House and Senate work out.
See if Wayne Hays' fears of fraud and abuse pan out. Maybe he is
right.
Mr. MOLLOHAN. I think this is a radical departure from standard
procedures and we have such obvious false problems with existing
legislation which, if corrected, would go a long way toward satisfy-
ing this need for public financing that you very eloquently elaborated
on this morning. Thank you very much.
Mr. HAYS. Would the gentleman yield? One of the problems that
bothers me is cash. I don't know whether it's possible to write a law
that is going to describe cash contributions. I would like to have some
people before this committee who have been involved in that field.
I think the only way we are going to get them is to subpena them.
I think I am going to ask the House for subpena power. I would
like to have some of these people who have been passing out $50,000,
PAGENO="0249"
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$100,000 and $150,000 or $2 million or whatever in cash sitting down
here so we could ask them some questions. Frankly, at the moment
I am at a loss to know how to write a bill that is going to be able to be
enforced on that field in that area.
Mr. UDALL. Could I make a suggestion?
Mr. HAYS. Especially about laundering this money.
Mr. UDALL. Stewart Alsop, who writes about the best column around
in the back of Newsweek, was saying last week that the problem has
always been with public officials who can take money perfectly legiti-
mately for campaign contributions. They can take cash and cash has
always been the source of a lot of our evils in electoral politics. He says
lie would like to see a law which makes it a crime for any public official
in Federal Government, appointed or elected, to receive any money in
cash.
Mr. DENT. How about a candidate who is not an elected official?
Mr. UDALL. I'd go that far, too. Then you don't have this dodge.
Mr. HAYS. You would have to go that far, wouldn't you? In a cam-
paign you couldn't make it a crime for an elected official to receive
cash and his opponent make it not a crime for his opponent to receive
cash?
Mr. UDALL. I agree. He would eliminate this distinction, so it would
be a crime for me, Mo IJdall, under any circumstances to receive any-
thing in cash. If it's legitimate I would be glad to have a check. It's
there. You have evidence and it would destroy the temptations that are
inherent in all this business of cash changing hands.
Mr. FRENZEL. Would the gentleman yield? We have provisions in
most of the bills that have been introduced that say you can't accept
cash over $100. Is that what you are talking about? I think if you are
on a direct mail campaign you are going to get cash. You are going
to get 5 cents and 10 cents.
Mr. UDALL. Any substantial amounts of payment of any kind ought
to be in a check. But I think you ought to be able to pass a hat for
$10 or $20.
Mr. HAYS. Another danger comes up. I am not going to defend
Spiro Agnew, but let's take a hypothetical case where some fellow
gets caught.
Mr. UDALL. In the Executive Office Building?
Mr. HAYS. He gets caught anyplace in a crime where he is indictable
and the evidence is pretty cold on him. It looks like he is going to go
to jail and you get an ambitious prosecutor saying, "Name some big
politician and we can make a deal." Let's prevent this crime of some-
one saying, "I gave Wayne Hays or Mo TJdall or I gave John Dent
$5,000 in cash", and it's his bare word against yours and you are
blighted in public life.
Mr. TJDALL. This suggestion we are talking about does an end-run
around that whole controversy because no longer is there any cause.
Nor is there a legitimate reason to give cash to a public official. Under
that new proposal there would be no legitimate reason to ever give cash
to Spiro Agnew or anybody. It would be a violation of law if it were a
Christmas gift to give him cash. If you love him, give him a check.
Mr. HAYS. I can see that, except I don't see how you do an end-run
about somebody on a plea-bargaining basis just manufacturing a lie
and saying, "I did it."
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Mr. TJDALL. That is the whole problem of the immunity laws.
Mr. HAYS. That is outside the jurisdiction of this committee, unfor-
tunately. But it's a factor in any kind of bill we write.
Mr. 1IJDALL. That is right. I see that.
Mr. DENT. Mr. Mathis?
Mr. MATHIS. Thank you, Mr. Chairman. I did have a couple of
questions of Mo that I wanted to ask. I missed John Anderson's testi-
mony and he dealt more on TV time. Could you address yourself to
that for a couple of minutes?
Mr. TJDALL. Yes. This is an idea we have had and others have had.
Everybody talks about the Lincoln-Douglass debates and how elevat-
ing this was for the country and here we have the magic of television
where you can bring debates and discussions right into the home.
We have never used this in the political process to educate and elevate.
We have used it for jingles and this kind of thing.
On free television time, 2 years ago we had a provision in our bill
which would have required the stations at their expense to give a
certain amount of free prime time to Federal candidates. Of course,
we got the national broadcasters down on our backs. That lobby des-
cended upon us and that provision quickly went down the tube. We
tell them give us the time, but the public will pay for it.
Mr. MATHIS. Could I interject something right there? In that con-
ference, although I got blamed for everything that came out of the
bill, there were two committees involved. The other committee had
total jurisdiction over the TV elements. This committee didn't.
Mr. UDALL. I understand that.
Mr. MATHIS. When you say it went down the tube, let's understand
how it went down the tube.
Mr. UDALL. I understand that. The theory was that this is a form
of public financing. We really have three kinds of public financing
in our bill-the direct mail of two free mailings for candidates the
month before the election, the free television time, and the matching
funds. There are three different kinds of public financing.
We now suggest that we have this modest kind of public financing
and that we give each House candidate two half-hours prime time,
for example, but the television station will bill the Treasury and the
Treasury will pay for it. It's a kind of public financing.
Mr. MAThS. Have you considered the problem that is going to cause
in metropolitan areas such as New York?
Mr. TJDALL. Yes.
Mr. MATHIS. How do you handle it there?
Mr. UDALL. It sounds crazy, but I know how it works. We can dia-
gram how it works. That is the worst case. In 60 percent of the dis-
tricts, there is no problem. In my district there are three stations that
cover the whole district.
Mr. MAThS. There are none in my district either.
Mr. UDALL. New York is the worst case. I can show you how, on a
voter's time basis for the last 30 days or so before the. campaign, you
can give each one of the 40 Congressmen in that large metropolitan
N~w York area two half-hour segments and some chance that they
can reach the people through them. In every other place it's not that
bad.
Mr. FRENZEL. Will the gentleman yield?
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Mr. MATJIIS. In just a minute. Who would pick the stations? Are the
candidates allowed to pick the stations they want?
Mr. UDALL. No. This would be under the supervision of the inde-
pendent commission or whoever is running it. They would meet with
the television stations and make assignments, and each station would
have to carry its proportionate share of the load.
Mr. MATHIS. If I were challenging you up there, they might give
me one of the stations that had absolutely no coverage and you might
be given CBS.
Mr. TJDALL. You can think of unfair uses, but presumably the candi-
dates would be shouting their heads off and the independent commis-
sions in the final analysis would make the judgments. We would as-
sume they would give you equal exposure.
Mr. MATHIS. Do you think there might be a problem of overexposure
when talking about 60 to 80 hours of television time 30 days prior to
the campaign? Would anybody be watching after the first week?
Mr. TJDALL. No. I think what is not understood is that you would
have voters' time every weeknight from 7 to 7 :30. So on every single
station for 30 minutes people would know that they are going to have
voters' time. If you are in Befla Abzug's district and you see she's
on channel 12, you tune in there. If Ed Jones is in som~body else's dis-
trict, they tune in there. If there are 12 TV stations in that area and
you divide 80 hours among 12 TV stations, it isn't much. It's 4 or
5 hours, I think. I have the figures somewhere for each station over
a 30-day period.
Mr. MATHIS. Everybody learns that between 7 and 7:30 is the time to
go grocery shopping or whatever. I yield to the gentleman from
Minnesota.
Mr. UDALL. Sure.
Mr. FRENZEL. The real problem, I think, is not the size of the dis-
trict. It's the size of the station and the impact of television within
the congressional district. In the first place, in my district if you
wouldn't get the one station that literally blankets the area but you
got one of the other three stations, you are dead as a mackeral. So
you would have a complete fight for the one station that exists. Any-
thing else would be unfair.
The other serious criticism is that in most congressional campaigns,
television is not a factor and, indeed, it is not used. The trouble with
this bill is that it would inspire its use in all those areas where it is
not used because it would become a free tool.
In some campaigns, you would help people immeasurably, and you
would reduce the amount of money that they would have to spend
under other limitations. In other districts, you would not do anything.
It seems to me it's highly discriminatory because of the tremendously
different kinds of districts that exist in this country.
Mr. UDALL. We don't require you to use it. It's optional. Again I
would think in t:he Minneapolis-St. Paul `area, blanketed by those
stations, in a period of 30 days you could find a couple of half hours
for you and your opponent on the same station and roughly the same
slot.
Mr. FRENZEL. I think you could. But I just think it falls uneven.
Mr. UDALL. You would promote it. You would get out your direct
mail and your workers and say on Thursday night so-and-so, Frenzel is
PAGENO="0252"
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on. Tune in. And if the people are interested in looking at you, they
will tune in.
Mr. MATHIS. One other comment, Mr. Chairman, if I might. If in
fact we go back now and pull direct mail under the provisions of the
1971 act, as I happen to think we should do, will we not then open up
some other avenues, something that is not now a big ticket as you have
described it, and make it become one, like a door-to-door delivery of
campaign materials?
Mr. TJDALL. The history of politics has been that fashions change
and new ways of influencing voters are discovered. My answer is
sure, somewhere down the road we are going to find something else
effective and then let's talk about putting that under the umbrella
at that point.
Mr. MAThS. It wouldn't be simply to go ahead and place an overall
expenditure ceiling and let the candidate have some discretion as to
where he is going to use those funds?
Mr. TJDALL. I prefer the big ticket separate ceiling. I think that
is the most effective way to control the items that we now know really
influence elections. I would accept an overall ceiling above that one,
but you are going to get in all kinds of arguments about paid workers
and transportation and handbills and bumper stickers, et cetera. If
somebody loans you a truck on election day to take around your election
day materials, what is the value of that truck and how much gas did it
use and what would Hertz charge you for the same rental? You can't
answer a lot of these questions.
Mr. MATms. I agree. Mr. Frenzel raised a question earlier. If you
bring in someone like Paul Newman and get him to campaign, how do
you put a dollar value on that? You said you accepted in the neighbor-
hood of $90,000. I presume that would be for the primary and then
$~0,000 more for the general election. Then you have spent $270~000,
if you have a runoff. That does not restore public confidence. I think
a dollar figure has to be much lower, with all due respect to the
gentleman's opinion.
Mr. IJDALL. I understand the gentleman's view on it. I think you
have to strike a balance between those who want no limitations and
those who want a strong limitation and find a limitation that is
sensible, reasonable and gives a challenger a fair shot at an incum-
bent, but doesn't let anybody buy offices the way they have been doing
in the past.
Mr. MATHIS. I thank the gentleman from Arizona for his very
fine testimony.
Mr. DENT. Moe, we talk about different ideas of winning elections.
We had a district attorney candidate and he is now State senator in
my old seat. His big campaign gimmick was fresh red roses. Every
time there were tw-o people gathered anywhere, even on a jury, he
would give red roses. You would see all the women sitting up there on
the jury with red roses every day they went to court. I don't know how
many million roses he gave away, but that is his idea. Evidently it's
all right. He~ is a senator now-. Nobody ever heard of him until he came
out with the roses.
Mr. TJDAr~r~. Under these limitations you would have to put down
roses. What is the value of a handpicked red rose?
Mr. DENT. That is, right, long stems, too.
PAGENO="0253"
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Mr. TJDALL. Right.
Mr. DENT. We will do all we can. If anybody wants to be a thief
in an election, he is going to be one. If anybody wants to run it on
the basis of trying to win an office because it's an office, not only is
that an honor but it is a livelihood.
We always seem to forget that there are many Members of Congress
who actually live on their salaries. The office has to be treated as such.
The oldest gimmick in controlling legislative bodies, and that means
the Congress of the United States, is to keep the cost for running
elections high, spending high, and salaries low. That is how you
keep a controlled Congress. You pay a livable income to a person
who has to live in Washington, live at home, run back and forth
maybe sometimes twice a week but every week, for instance, in my
own case, and give to every Red Cross drive not only from your home
town and from all of the precincts, including the Salvation Army,
all of these things. I spend between $5,000 and $7,000 a year on nothing
but handouts for drives. I get letters from hospitals, I believe in
every State of the Union. You do, too.
Mr. UDALL. I have fought some of these. I still have some teeth
imbedded in certain areas.
Mr. DENT. It's an impossible thing for everybody. I know a Con-
gressman who has four children and has absolutely not one red cent
of income other than his salary.
`What we have to do is be realistic in this. I think your amendment
should have prevailed. It should certainly prevail because if you
award cost-of-living index increases to the whole Government panel
except Members of Congress, you are being silly. We had to put a
resolution in because Fishbait Miller was making $2,000 more than
Congressmen and I never saw him do anything but bow and welcome
Congressmen.
Mr. MATHIS. One other statement at this point before you leave,
Mo. You mentioned the scenario involving the dairymen at the
White House, which was a thing that concerned us all. I think that
there is one other aspect of that that might be considered. Certain
Members of Congress felt that that increase in the milk price was
justified. In fact, legislation was introduced of which I was a co-
sponsor that said the same thing. `What frightens me more than the
scenario you brought in was that people in Government might have
believed that it was justified but refused to grant the increase until
such time as the campaign contributions were coughed up. That is
even more frightening, indeed.
Mr. UDALL. That is right.
Mr. MATHIS. Thank you.
Mr. UDALL. A good point.
Mr. DENT. Of course, everybody knows the episodes. For goodness
sakes, Johnson named five or six airlines with new franchise exten-
sions right before he got out of office. They were knocked off within
24 hours after the new President took his seat. About 3 weeks later
there was a big fundraising dinner. That night they raised $7 million.
Within a month and a half or 2 months all the franchises were given
back. I am not giving anything out that is not public. The Washington
Merry-go-Round published the figures, $25,000 from TWA or
PAGENO="0254"
250
some figures like that. They are in public print. You can get them
any time.
Mr. TJDALL. That is my point. You already have public financing.
Only the public pays when they go to the airline ticket counter or to
the grocery store or whatever.
Mr. DENT. I may be out of my head. Maybe I am a practical,
`hardheaded person, but I found that I never got anything for nothing
that was worthwhile-except my wife. She doesn't cost me a cent.
Mr. CLEVELAND. Mr. Chairman, I have a written statement and I
will summarize it very briefly. I would like to have the statement in
the record and I would appreciate 11 if the members of the committee
would read my statement.
One of the issues before us is the issue of public trust. In view of the
firestorm of public frustration ranging about us, for us to fail to act
would be a serious breach of trust. In my statement I address myself
to the problems of the advantages of the incumbency. I note some
figures there, some statistics that pretty well prove, in spite of the
chairman's contention, that the incumbents do have some advantages.
I might say that the advantages include the fact that many of them
are very able men.
I also point out that the taxpayers invest in the office of Congress-
men aproximately $600,000 for the 2-year period. I point out that
the Anderson-IJdall bill, the general purposes of which and principles
of which I support as a cosponsor, is trying to encourage small con-
tributions. `To me that is the guts of election reform.
I point out the dangers of total subsidy. Here I think I share Mr.
Mollohan's fears, which I think are well founded. I think if we
went to total subsidy of financing elections we would get ourselves
into an incredibly disastrous situation, with the spectacle of politicians
becoming a breed apart, `people who *have figured out the
combination in using taxpayers' funds to lock themselves into posi-
tions of affluence and influence. I might say that during the dialog,
Mr. Mollohan particularly was concerned about this. We already have
a certain amount of taxpayer support of elections via the contribution-
tax credit route.
We allow up to $25 a campaign for a tax credit. If there is a middle
ground here, Mr. Mollohan, the middle ground might he to increas~
that and put off into the future the direct cash contribution.
My statement also addresses the matter of cash. This was discussed
quite extensively in the dialog with Mr. TJdall. I am absolutely con-
vinced we have got to curb the use of cash in elections. I suggest a
$25 limit. I hope this committee will have some strict meaningful
limit on the use of cash.
`I remind this committee that Mr. Stanton of Ohio `has a solution to
this which is worth the committee's consideration and Mrs. Dwyer,
our former colleague from New Jersey, had an interesting suggestion
in this area.
I don't suppose it is possible to have an incumbency differential,
but I think we should at least consider it. We started on that in
the New Hampshire State Senate. We couldn't get it through. I think
the `advantages `of incumbency have ~ot to be taken into consideration.
I discussed the act that has been discussed `here by several witnesses
PAGENO="0255"
251
and there is no need to go into that further. 1 conclude by pointing
out there is a real demand for reform in this area. I wish to stress
that.
I being in an interesting colloquy that occurred in another com-
mittee, where Senator Fulbright pointed out the problems that Mr.
Hays referred to, the problems of a campaign contribution being
construed as a bribe.
In conclusion, I point out that no matter how hard we try to clean
up our elections, I think one problem will remain. Knowing `as many
Members of Congress individualy as I do, and having as much respect
for them as I do I also know that the public seems to feel that, as a
body at least, we are not doing a very good job. I wonder if perhaps
the culprit is not so much the individual Congressman, but the pro-
cedures under which we operate as a body. For this reason I remind
us all that congressional reform is also very important, so when you
get people elected and they come here they can act in a way that will
give the public more confidence in what we are doing.
Thank you very much, Mr. Chairman. I appreciate your kind
attention and I have enjoyed sitting here for the last hour awaitii1g
my turn.
Mr. DENT. Thank you very kindly. I am sorry these matters tako
a great deal of time normally with the witnesses, simply because there
are 435 Members of Congress `and each one is `an expert in this field.
It is hard to get that many experts to agree on anything.
I believe we all agree something is needed. Election reform is
required, but we must never reform to the point where we deliberately
close the door on thousands, hundreds of thousands of potential
candidates who, because of the financial situation itself, as one item,
bars them from running when you have such things as suggestions.
that we spend $270,000 in a single year for an election. It just closes
the door on about 90 percent of the potential candidates and citizens
of this country. I think a limitation is the first reform that must
come. Not only in spending, but also in contributions. I think these
two are very, very important. Personally I believe reporting is essen-
tial to an honest election.
We must put more emphasis upon penalties. Not alone upon the
incumbent who is running for reelection, but on the candidate.
They have ignored the election laws. The greatest violations last
year weren't by Members of Congress running for reelection. The
violations were on the part of candidates who didn't take it seriously.
One candidate who ran against me said he lost the form so he never
made a filing.
It is important and I think we can come out with something. I don't
believe we can write between now and a reasonable time before the
primaries, the earliest primary, an overall law that would take into
consideration all of the problems, butT think we can go after it with
a stopgap piece of legislation. Since you are on the House Administra-
tion Committee with us, you might think about it. We could put in
a stopgap piece of legislation dealing only with the primary and see
how it works, see what its faults are before we put into the general
election. I think that would not be. too much of an effort.
We can get something through in short order on that. Do you think
that would be helpful?
PAGENO="0256"
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Mr. CLEVELAND. I hope we get something out, Mr. Chairman.
Mr. DENT. In the primaries you can check what you have done as to
its fairness or unfairness, to the candidate trying to unseat the incum-
bent. It gives you an insight into the various districts in both parties.
The general election in many cases is only a matter of form.
In the primary, if there is a candidate against you, it is not a matter
of form.
Mr. Jones.
Mr. JONES. I have no questions. I want to thank our good friend, Jim
Cleveland, for briefing the statement he has presented to us and I shall
look forward to looking at it.
Mr. DENT. Are there further questions?
Mr. FRENZEL. I wanted to thank Mr. Cleveland because I think the
depth of his statement indicates the kind of interest he has had. You
will recall he was one of the leaders in the Reorganization Act of 1970
and I think this follows:
I notice you are suggesting $25 in the way of cash, where other bills
say $100 and Mr. TJdall said none. I think that is not a bad idea.
Mr. DENT. I don't think you will ever stop cash. If an ordinary
workman wants to give $10 or $20 to a candidate, many of them don't
even have checking accounts. I don't think the figure $25 isn't
unreasonable.
I don't think that could be reflected in a price increase on milk. As
far as I am concerned, your testimony will be read, I am sure.
STATEMENT OP HON. CHARLES E. BENNETT, A REPRESENTATIVE
IN CONGRESS PROM THE STATE OP FLORIDA
Mr. BENNErr. I will put my statement in the record, Mr. Chairman.
I would like to thank you for this opportunity to testify before your
subcommittee today.
I am very pleased that the committee is now considering amend-
ments to the Federal Election Campaign Act. I believe that the Con-
gress can be very proud of the Federal Election Campaign Act which
was enacted in 1971. I believe now that experience has shown us that
amendments are needed to improve and perfect this legislation.
I have legislation pending, H.R. 106, which would require that all
contributions received by a candidate be reported just as contributions
of over $100 to Federal campaigns are now reported. At the present
time if an organization wished to give, for example, $5,000 to a candi-
date running for Congress. it could encourage its members to give $100
apiece from 50 members. The candidate would still `have received the
$5,000 but the public would not know, either during the campaign or
after, where the money came from. The public has the right to know.
The Florida campaign law, which is considered one of the best in
the `country, has a' provision which requires the disclosure of all con-
tributions and expenditures. This is referred to by many as the "who
gave it-who got it" provision of the Florida government in the
"sunshine law."
I have reviewed S. 372, to provide further limitation on expenditures
in Federal elections and to relieve broadcasters of the equal time re~
quirement for Presidential `and Vice-Presidential candidates, which is
PAGENO="0257"
253
the specific legislation the committee is holding hearings on at the
present time.
I believe that this is worthwhile legislation and I am glad that the
Senate has taken that action in passing this measure on July 30 of this
year by a vote of 82 to 8. I believe this legislation will go a long way
toward improving public disclosure of campaign activities in Federal
elections.
I hope that, when the committee considers this bill, it will give seri-
ous consideration to my bill which I believe would make an even
further improvement in the Federal Campaign Disclosure Act.
I am also a sponsor of other legislation before this committee which
would create a 1-day Presidential preference primary which I feel
would improve the chances for a sincere and honest debate of the is-
sues before a national audience, all at the same time. I have also in-
troduced legislation prohibiting the broadcasting of paid political
advertisements for Presidential candidates, in lieu thereof requiring
broadcast stations to provide free broadcast time for such candidates.
The consolidation of the primary campaign and free broadcast time
in segments long enough to allow matters of substance to be discussed
will do much to raise the level of campaigning which we have seen in
the past.
There is another provision of the Florida campaign law which I
would commend to the committee for study in conjunction with any
amendment to the Federal Election Campaign Act. This is a pro-
vision that requires that when a candidate declares himself for office,
he must establish and report to the appropriate State officials a
designated depository of all campaign funds. I was pleased to note that
Mr. Eugene C. Adams, the current president of the American Bankers
Association, has offered the assistance of his association in working
out the mechanics of such at the Federal level. The American Bankers
Association, according to Mr. Adams, has suggested this provision to
"take some of the stigma away from political contributions we now
have in this country."
I very much appreciate having this opportunity to testify today and
I hope the committee will take prompt action on this legislation.
In addition to making a limit on the gifts of $100 apiece, I like the
idea testified to here this morning about limiting cash and to try it
out we might see if $25 in cash is a practical thing.
Another thing I think is beneficial and has something to do with
what the chairman mentioned a while ago about roses is that there is
a strong law in the State of Florida which absolutely prohibits a gift
of anything of value; for instance, even paper matches, with an
advertisement on them about your campaign are not allowed in
Florida. A ruler is not allowed. Roses wouldn't be allowed. Anything
of value, if it is not purely educational, purely propaganda for your
campaign, it is abided by and it is not the advantage of the candidate
to hand out anything of questionable value so he doesn't do it.
In other words, he has a moral compunction upon him in addition
to the law.
Mr. DENT. I think that is a good law. I think they have the same
thing in Oregon.
Mr. BENNETr. It works.
25-239 O-73-----17
PAGENO="0258"
254
Mr. DENT. We tried to get it in Pennsylvania but any time anyone
proposes it, they say, well, it is an advantage to the incumbent. Every-
thing is based on trying to defeat every man in Congress. They seem
to forget that no one is born into Congress. Somewhere along the line
he was not an incumbent and after once he is an incumbent, in my
opinion, the people then are the judges as to whether or not he should
be a candidate. I am against these expenditures that are mentioned as
top limits. I think they are out of line and they should come closer to
an equation of what you earn in the job, as in any other ]ob. It is
silly to do this.
Mr. BENNETT. Another thing has come up in the discussion here
which I have some feeling about: I feel if we are going into subsidized
campaigns, it might well be that we might try out the Presidential
campaign first and see how it works. It may not work. We wouldn't
want to spend a lot of Federal money if it wasn't really going to the
proper source. What we do today is not what we may want to do 10
years from now as has already been well brough out. Things do change.
I would think it might be the better piece of wisdom if we are going
to federally finance campaigns to try the one, first, which is more
likely to be controlled, to wit, the Presidential campaign.
That is all I have to say. I appreciate your being here.
Mr. DENT. Thank you. I have no questions.
I know of your sincerity and I have discussed this matter with you
on numerous occasions. There is the one thing of barring things of
value.
Mr. BENNETT. It works in Florida. Nobody would be caught dead
with a match thing which says "Vote for Charlie Bennett."
Mr. DENT. And the cost of it helps.
Mr. BENNETT. It does.
Mr. DENT. I go into homes now and they hand me matches I gave
out in 1i~72.
Mr. BENNETT. I gave them out years ago and felt they were effective.
However, when they put that law in I realized the value of that law.
Mr. DENT. I would give a committeeman a whole carton, you know;
50,000 matches. Well, he is just fixed for life.
Mr. FRENZEL. I want to thank Mr. Bennett for his testimony. I recall
vividly you were one of the first Members of Congress who appeared
before this committee 2 years ago when we were looking into this and
your thoughts are particularly interesting.
I note you request publication of all the contributions. As you know,
those are a matter of record for audit, but it is required only now that
we list on our tables those of more than $100. As it is some people feel
we have taken the thrust out of the disclosure laws by disclosing so
much nobody understands what we are talking about.
For instance, in my area the newpapers cover a dozen and a half
House candidates and maybe a half a dozen Senate candidates in a
given election and they can't publish that information. So the more
information you throw out to the people, the less helpful it is because
it tends to bewilder them and, as a result, people only look at the big
numbers.
I guess I question the wisdom of publication of all of those small
amounts. I tend to believe that the $100 is not a bad `break points
although I wouldn't mind moving it up or down some. I would hate to
PAGENO="0259"
255
get into listing all of them. I think it would defeat the disclosure pro-
vision, just like a lot of public time on TV would defeat an exposure.
Mr. BENNETT. As a practical matter, it is the law of Florida and
to inc it is a very beneficial law. In the first place, I usually set a $100
limit on my campaign donations, so there are a few hundred dollar
people, but there are 2,000 or 3,000 people who give $5.
Mr. FRENZEL. Under the Federal law you would not report anything.
Mr. BENNETT. Well, I am suggesting we `do.
Mr. FRENZEIJ. Under the curent one, you wouldn't if you set a $100
limit.
Mr. BENNErT. I am testifying to what I think the law ought to be.
As a matter of fact, I welcome a restriction in amount because it shows
that at least I am still a man of the people. In other words, my
campaigns don't come from big concerns.
Mr. FRENZEL. It is a great endorsement list if you can get any
newspaper to publish it.
Mr. BENNETT. They have already published mine.
Mr. MAThS. Charlie, I too appreciate your coming over here. I am
probably a little unique. My district is much like yours peoplewise.
One of the ways we raise money, I have spent about $16,000 five
times to get my name on the ballot. We have fish fries and so forth
and pass the hat. We get $10 and $15. How do you keep up with all
these people and report that sort of thing?
I don't think this is what you are trying to get at. It is a real
problem for those of us who do that.
Mr. BENNETT. The value of the food I don't think you would have
to report it.
Mr. MAThS. Somebody donates the food.
Mr. BENNETT. Then I think it is a contribution. Under those cir-
cumstances you could have a yellow pad there and have everybody
write down what they contributed. Also, it is pretty good politics
because those people have already announced they are somewhat
for you and that is not bad.
Mr. MATm5. It is not bad if you can keep them coming, but it pretty
well destroys the effectiveness of that kind of campaign, I think.
Mr. BENNETT. Of course, any law you have is going to have dif-
ficulties about it. This is not a difficulty in my district, but it may be
a difficulty in yours, but I think if you made it a law that everybody
who contributed money to a campaign, over and above the cost of
whatever they got, would have to be listed, that would be good. It is
the law in Florida and it is subscribed to. Every contribution has to
be noted.
Mr. MATrns. No matter what size?
Mr. BENNETT. Yes; I even reported not too long a~o when som~bodv
gave me a wall plaque. I thought: Well, it is a wall plaque because I
am Charlie Bennett and they would like to see me reelected. That
is what it was. That was a month ago and I reported that.
I don't think the law is that strict, but I leaned over backwards to
do that. I don't mean a wall plaque from the chamber of commerce
or something like that, but one oriented on my reelection did that.
It has value so I reported the value.
I think that is stretching it, but I did comply with it.
PAGENO="0260"
256
Mr. MATHIS. In my campaigns I have had people `that I did not
know, that I had not seen before, and never saw again. They walk
up to me on the street and say, "Here's $5."
I would have to say "Wait a minute. Give me your name and
address."
Mr. BENNETT. I have had that `happen. I say, "I deeply appreciate
your doing this. I sure appreciate this. Let me get your name and ad-
dress and I will drop you a note later to thank you for it."
I have `had not a dollar or two; I have had in total thousands of
dollars offered to me like this. I would be riding with somebody
who is taking me to the football game or something like that and,
they say, "We know you need something for your campaign" and
they will hand me a large sum of money.
I say, "Well, I have to report this, you know," and they say they
want to report it or they don't want to report it. If not it can't be
accepted.
Mr. MATHIS. When I told that guy I needed his name and address
he would tell me, "I met you three times before. The last time was at
your brother-in-law's house."
Mr. BENNETT. Of course, there are ways of doing this and as you
get older you find ways of doing it. I am not suggesting you ask them
how to spell their name. but there are ways of fumbling through this.
There are techniques of finding out people's names.
Mr. MAThS. I want to talk to the gentleman.
Mr. DENT. They can take a collection at a clambake or a weenie
roast or a potato fry. You just put down "potato fry." You wouldn't
know his precinct but you can put down "potato fry."
In the big cities we don't personally take those donations at all.
For instance, tonight I have to get home to a fundraising for our
November election. We are not allowed in our district, we do not
permit any candidate to hold any affair to raise money for himself.
He can lend his name to an affair to raise money. but the money must
go to the party. `The party takes up the burden of the general election.
Once you are nominated in the primary, you become their candidate
and they raise the money with dinners, ciambakes~ and the things
you talk `aiout and then they pay the workers that `have to be paid.
Mr. BENNETT. That is a way you could evade all these details.
Mr. DENT. That is why I can get back in a campaign sometimes with
$3,000 or $4,000.
Mr. BENNETT. In those cases perhaps you don't have to estimate how
much of this is fish and how much is paying off somebody who helped a
little bit.
Mr. DENT. You don't embarrass anybody who works for you and
give them pay.
Workers up in the rural areas where you have to haul voters, maybe
90 percent of the voters have to be hauled to the polls. The precinct
migh't cover 25 square miles. That is why it is hard to write a law, other
than a limitation law. In my opinion, a limitation on all these things
we know to be wrong that have been violated is the real reform that
we need.
There is no reason why a man in New York ha.s to spend a cent more
than I do. In fact, he should spend less. If he gets a high enough
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257
building, he could talk to his whole district in 1 day. Out where I
come from you can give a hoot and a holler and no one would hear
you but hogs and horses.
Thank you, Mr. Bennett. I think you have opened up another source
of thinking and that is a limitation on gifts.
I would like to comment on the question of gifts, matches, pens,
and flags, for example.
STATEMENT OP HON. SAMUEL S. STRATTON, A REPRESENTATIVE
IN CONGRESS PROM THE STATE OP NEW YORK
Mr. STRATTON. I haven't given that much thought, Mr. Chairman.
I was just trying to address myself to the broadcast feature of the
proposal. I have given out matches myself in the past. I have never
gotten into anything more substantial than matches, however, and I
don't really think they are too effective.
I think a card with my name and picture on it and the holidays for
the coming year has been extremely effective. I would hate to have to
list one-third of a cent for all of the thousands of those I have passed
out in front of office buildings and plants.
Mr. DENT. This is a pen from the last campaign that I put out-
75,000 of them. You can't start with one. Everybody who sees it wants
one for their brother. Some of them don't even have brothers. I use
this all year round though. I don't buy these only for election. I have
them in my various offices and give them out.
Mr. STRATTON. I have never actually felt that sort of thing was too
effective, to tell you the truth.
Mr. DENT. It is a reasonable thing. By buying a large number, I
paid 8 cents apiece.
Proceed, Sam, with your testimony.
Mr. STRATTON. I have a little statement here. I think probably the
best thing to do would be to read it as I go along.
I appear here today in connection with your consideration of the
general subject of election reform. Specifically, I want to talk about
radio and television campaign broadcasting.
Before I came into Congress, I was in the television field and was at
one time a television cowboy, so I have a little bit of background in
that field. I hoped to have available this morning a bill of my own on
the subject, but the pressure of other business, impeaching a President
and electing a Vice President, you know, and some of those things,
prevented my having this bill in final form before you this morning.
Accordingly, I wculd like to present my views in the form of com-
ments on }I.R. 7612, the Anderson-TJdall bill, specifically title V, em-
bracing pages 26 through 34.
If, Mr. Chairman, as I anticipate, I have completed my bill before
the hearing record of this subcommittee is sent to the printers, I
would like to ask permission that my bill be included as a part of these
prepared remarks.
Mr. DENT. Without objection.
Mr. STRATTON. With respect to the major subject of the Anderson-
Udall bill, public financing of Federal elections. I have some serious
reservations, and am not taking a position on that issue in my remarks
this morning. I recognize the advantages of public financing and also
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258
~ee some of its disadvantages. In addition, inspite of what the Gallup
poii has recently indicated in terms of public support for such an
idea, my own experience has been that there is still a good deal of
public opposition to it. People usually feel they are doing enough to
vote for candidates of their choice, let alone be taxed to pay not only
for those campaigns, but the opposition campaigns as well.
I find it difficult to believe that the Gallup poll indicates what is
involved.
Even if public financing is not approved, however, it has always
seemed to me that the one. area where millionaire candidates with un-
limited campaign war chests can often gain a big margin over less
affluent opponents, lies in the field of broadcasting, especially televi-
sion. This is the subject to which title V of H.R. 7612 addresses itself.
As drafted it would provide certain limited segments of time to be
made available to all candidates in Federal elections, with somewhat
larger portions available to the candidates of the major parties and les-
ser portions to those of the minor parties. Title V would also restrict
such television time to 35 days preceding the general election.
I might add here I did not have the opportunity to listen to all
of the presentation of the gentleman from Arizona on this subject,
but, I read Mr. Anderson's remarks that were presented to you last
week. He had nothing whatsoever on this subject in his own remarks,
however, so it is hard to get the rationale behind this particular
title V, but I would like to make just a few comments and some pro-
posed changes on the basis of what is contained in title V.
1. RADIO AND CABLE TELEVISION
`While I recognize that television is the medium with the greatest
impact on election results, as well as the costliest to use, there are a
number of districts around the country-and I once had the privilege
of representing one-where no television stations are located and
where television is therefore definitely limited as a campaign device.
This, of course. is true in rural areas, and often also in huge metropoli-
tan areas like New York where television is not only prohibitive in cost
for individual congressional candidates, but much of the coverage
is wasted on individuals outside the particular congressional district
concerned.
I think New York City candidates for individual districts almost
never use television. In these areas, radio or cable TV become a very
necessary substitute. Both should be covered in any legislation we
enact.
2. FREE BROADCAST TIME
The Anderson-ljdail bill specifies the time which television stations
must give to candidates but makes no change in the financing of these
broadcasts. I heard Mr. TJdall indicate this would be taken care of
by Federal contributions. That is not in the legislation at least as I
understood it. My feeling is that since the airwaves are in the public
domain, Congress has a right to require broadcasters to provide cam-
paign time as a public service. By requiring free time, moreover, we
eliminate one of the most expensive campaign items, especially in
national campaigns. Thus we would go even further than the Ander-
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259
son-Udall bill goes in eliminating the corruptive influence of big
campaign money.
3. PRIMARIES
H.R.. 7612 deals only with general elections. I believe primaries
should also be included, certainly statewide primaries. Often the
decisive factor in such primaries is TV coverage, as was demonstrated
in the 1970 Democratic Senate primary in New York State, won by
former Congressman Ottinger, who reportedly spent well over a
million dollars on television in that one primary.
4. TIME BLOCKS
The Anderson-Udall bill provides only five one-half hour blocks of
airtime for Presidents and Vice Presidents, three one-half hour blocks
of time for Senate candidates, and two one-half hour blocks for Mem-
bers of Congress. First I believe these totals are unrealistically small
and should be increased. Secondly, the legislation should permit these
totals to be subdivided into smaller segments of not less than 1 minute,
as desired. One-half hour of solid time on television is just unrealistic
for anyone except perhaps a Presidential candidate.
5. NO OTHER TIME ALLOWED
The Anderson-Udall bill seems to be ambiguous on whether these
allotted time segments are minimums or maximums. I believe we should
set a maximum figure not a minimum figure, and specifically provide
that-except for news or panel programs originated by the station
themselves or the networks-no other political broadcast time should
be allowed.
6. PRIME TIME
I do not believe it is realistic to require that all these blocks of time
be aired during prime time. Time other than prime time can also be
helpful, such as morning news shows. I would suggest a requirement
that not less than 75 percent of the time segments be provided in prime
time.
7. POLITICAL COMMERCIALS
There should also be a specific provision to ban political "commer-
cials." I mean the kind of thing where a hard-selling announcer comes
on and tells you to vote for Joe Zilch, but you never hear from Joe
Zilch himself.
This is the basic intention of the language contained in subsection
H on page 33 of the Anderson-Udall bill, but I believe it should be
spelled out more clearly.
8. THIRD PARTIES AND MINOR PARTIES
The basic feature of sections 4302 and 603 of H.R. 7612 which provide
a lesser amount of time for candidates of third or minor parties could
in certain cases provide an unwarranted bonanza, at least in my State
of New York, and could work a serious hardship in other cases. In
New York, which has two principal "third" parties regularly on
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260
the ballot, the Liberals and the Conservatives, candidates frequently
run on two or more party lines. Obviously it would be unfair to give
one person additional coverage simply because of that fact. At the
same time, H.R. 7612 is unduly harsh on independent-minded candi-
dates who might, for example, possess substantial public support and
yet for one reason or another choose not to run on a major party line.
The case of Senator Harry Byrd in Virginia comes to mind. I believe
there ought to be a provision that at least in the case of an incumbent
running for reelection, he would be entitled to as much air time as
that extended to candidates of the major parties.
Thank you, Mr. Chairman.
Mr. DENT. Would you allow time on the air or the equivalent in
money to a man without a television station?
Mr. STRATTON. I once had a district that had no television station
in it and I spent my money on radio because those people listened to
radio. I might buy a little television in the fringes hut I would recog-
nize that I was wasting my money because only about 15 percent of
the people who listened to the station could actually vote for me.
Mr. DENT. If they would give me the money for radio that it costs to
go out on television where I live, I could buy the station.
Mr. STRATTON. Cable television seems to be moving into many of
these areas. That was certainly true in my old rural, upstate district.
Their prices don't match broadcast television but they are beginning to
build up.
Mr. DENT. I think your suggestions are in line with those who pro-
pose that feature regarding television and radio time. The only pos-
sibility is, the committee will have to come up with something every-
one will agree to.
Mr. STRATTON. I am not sure the broadcasters will be happy about
this, but I made this statement first before the broadcasters conven-
tion in July. They didn't throw me out of the convention at any rate.
I think actually, the way we operate now, the television in the last
3 or 4 days of a campaign is really useless. You get one candidate right
after the other, some in New York, some in Vermont, Massachusetts,
and the people decide to go out to the movies. They don't want to sit
around and see that kind of thing.
Mr. DENT. You have to make sure that you didn't take a housewife's
soap operas off. I would hate to compete with "John's Other `Wife."
Frankly, I think the limit is still the answer. Put a reasonable limit
on the expenditures for each and every one. `We all have the same num-
ber of people in our district. Each of us knows which way and the
best way to meet the problems of campaigning in a particular district.
Mr. STRATTON. I would certainly agree with that, Mr. Chairman.
Mr. DENT. I think that is the answer to it. You don't need free time.
You don't need anything.
Every person running for office can get all the exposure you want.
All you have to do is to look at the papers. Many public affairs that are
on, every day. I don't think that this country is ready to spend mil-
lions of dollars. It is a modest sum perhaps, but it doesn't stay modest.
long. Once you start giving anything away out of the Treasury, that
would be just so many hands to join with the 168 million hands that
are in there every day now.
PAGENO="0265"
261
You would have to do a lot of selling, Sam, to get me to support
public financing.
Mr. STRATTON. My reservations are very much like yours on public
financing.
Mr. DENT. I don't care what Gallup says or what he didn't say. He
always makes sure there is enough of a group who couldn't make up
their minds to swing it one way or the other.
Mr. FRENZEL. It is good to have some information from somebody
who has been in the business before. We have one member of our own
subcommittee who has had a similar experience. You heard my ex-
change on the subject of airtime. Television, I still maintain, is some-
thing that does not apply equally across the districts and if we make it
a matter of public disbursement we will simply be giving some candi-
dates lots of money, others very little, equivalent amount of money,
and will be encouraging expenses that are not incurred now that we
don't have to incur.
Mr. STRATTON. I am not urging that Federal money be spent on this.
I am saying I think the broadcasters should give this time free.
Mr. FRENZEL. I understood that. I was just coming to my congratu-
latory statement to you because I believe we have that ability too, to
support the granting of free time. All stations now provide a certain
amount of public service time. My complaint has been that in my area
they serve up that time when the Vikings are in town and everybody is
at the game or watching it and all the other stations who have nobody
watching them will parade half a dozen candidates before the world
and it is an absolute shame. There is no public service involved. I agree
with you if we should do that, we should certainly not pay for it.
Mr. STRATTON. These things come on at 8 o'clock on Sunday morn-
ing and things like that.
Mr. FRENZEL. The other item was the last one you mentioned. Un-
der the Anderson-TJdall formula for third parties, Governor `Wallace,
who was in my judgment a bona fide candidate, would not have quali-
fied as a third party because he didn't get 15 percent of the vote in
1968. I don't think the Solomon has yet. been invented who could de-
velop a formula to take your formula into account. In some States
there are ways to get on the ballot by petition or signature which peo-
ple are used to. If you put that in this kind of a bill, in some States it
would work well. In other words, where people aren't used to signing
petitions, it wouldn't work at afl.
I just see an awful lot more problems in the thing than I see values,
but I think your contributions are great and I am delighted that you
suggest it should come out of the hides of the broadcasters rather than
out of the Public Treasury.
Mr. STRATTON. I think you are quite right that this does present a
real problem. This is one of the reasons why I still haven't come up
with my own bill, because I think the problem is more complicated
than the treatment in the ilidall bill suggests.
Mr. FRENZEL. I had the same feeling you did and I was drafting a
bill, and working with another Member of Congress and working on
the formulas and after 2 months of strugglin2 with it I decided there
was no way I could construct a formula so I cut voter time out of my
bill.
PAGENO="0266"
262
Mr. STRATTON. I regard myself as a fairly independent guy and I
wondered if the time might come where I would~want to cut myself off
from my party and run independently as Senator Byrd did, or John
Lindsay did in New York City. Should I be penalized under this
formula for doing so? The trouble with this kind of thing is that it
kind of locks you into the party and if you want to thumb your nose
at the party, you are in real trouble.
Mr. FRENZEL. I think the public would not accept that with good
grace at a time when the independent feelings of the voter throughout
the land is ominous.
Mr. MATHIS. In your testimony you suggest that perhaps three 1-
hour blocks for Senate candidates and two one-half-hour blocks for the
Members of the House is small. What are you thinking of in terms
of the total amount of time?
Mr. STRATTON. Well, I really haven't gone into that completely.
That is why I hesitated to come up with a specific figure. It seemed to
me that 1 hour of television time, which is what is represented there
for a Member of Congress, seems to be unrealistically low. You might
want to have a couple of 15-minute programs on a couple of stations
let's say, and you might want to have some 5-minute spots perhaps
and a few 1-minute. It seems to me you ought to have at least more
than an hour total for the 35 days before the campaign, but I don't
think it needs to be much greater than that. Maybe, say, 2 hours or
an hour and a half. I do think it is very important, however, that
you don't say that the only program you can put on is a half-hour
program. You put a half hour program on and everybody is going
to switch to some other sta:tion.
I think this is an attempt possibly to eliminate the commercials by
saying that they can't have anything less. But 1 minute is a long
time on television and you can get across a point in 1 minute. 11t is
these 20 second, subliminal spots which are the ones I think are
dangerous, with all of the high-priced fancy kind of thing that is
usually done in New York State and eslewhere.
Mr. FRENzEI. If the gentleman will yield, some of us could tell
everything we know in 1 minute.
Mr. MATHIS. Even 10 seconds, probably. Not speaking of this side
of the committee though.
I am a little concerned about how much time it should he.
There were over 1,000 candidates in 1972. Multiply that by the
figures in Anderson-IJdall and you see the vast number of hours you
are going to be calling upon broadcasters to make available.
You said in the last few days of the campaign television is not a
factor because people start going to the movies. I can see them going
to the movies more if we `hit them with this free time.
Do you use television in your campaign now?
Mr. STRATTON. I now have a district which is not a rural district.
I did have the most rural district in New York State. We had more
cows than people. I now have a very compact one which is covered
by two television stations which cover the entire district, plus Vermont
and Massachusetts. I do use it. I don't think I probably use up a full
hour. Mine would be mostly 1-minute spots.
Mr. MATHI5. What do you use in your 1-minute spots?
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263
Mr. STRArrON. Just myself talking. I have never used any of this-
being familiar with the media, I don't want some hard-selling an-
nouncer in there telling them what a great guy I am. I just tell them
myself.
Mr. MATHIS. I believe you could do that unusually well. Some of
us perhaps are not as gifted. We are not the kind of orator that Sam
Stratton is, and maybe we need somebody else to tell them. I know
several Members of Congress who are able, but are not attractive on
television and their speechmaking ability is not that great, but I would
hate to see them defeated because they got on television and made the
wrong impression.
Mr. STRATTON. 1 wouldn't suggest that we ought to eliminate some
other voice entirely, but it does seem to me that-and I think that is
about the way they spell it out here-"A substantial live appearance
by the candidate."
I would think that "substantial" would mean that more than half
of the time is used with the candidate himself, and even people who
may not project too well, I would think would come across at least
with sincerity, with the fellow just telling how he, himself, feels.
Without mentioning any names, it does seem to me that what some-
times happens in these television blitzes-and I have seen it happen
in New York-is that you get these fancy commercials with pictures
of the candidate walking around here, the announcer telling you what
a great guy he is, what a tremendous leader and so on; and then later
it turns out that the people run into the candidate personally and
they find he just doesn't measure up to the television presentation.
They may win a primary in that way and lose the election. If you
have too big a gap between the television presentation and the candi~
date himself, the thing can backfire.
Mr. MAThS. You raise some very interesting points, many of which
I agree with.
The commercials and the increasing time I would ask about. We
cannot draw the line and say to the newspapers in this country, "You
must give this much space." We can't say to the billboard people,
"You must give so many billboards." We are penalizing broadcasting
as such.
Mr. STRATrON. I am thinking in terms of Senate candidates. I think
it is unrealistic to suggest that whenever a Senate candidate is on
television he has got to be on across the entire State. We have some
networks in New York State but there are also a lot of independent
television stations in particular areas. So if the candidate gets 15 min-
utes in the metropolitan area, shouldn't he be entitled to get another
15 minutes up in Buffalo? And to restrict him to one-half hour seg-
ments for a Senate candidate in a State like New York, `I think would
be tremendously unrealistic.
Mr. MATHIS. It sounds like you `are talking about running for the
Senate.
Mr. STRATTON. I have thought about it in times `past but I am not
a candidate.
Mr. MOLLOHAN. Mr. Stratton, you are suggesting here that two
30-minute programs are not sufficient. Now, are we talking about
two 30-minute `programs in the :area or one single station, a maximum
of 10 minutes?
PAGENO="0268"
264
Mr. STRATrON. It isn't quite clear from the TJdall bill, but I assume
that means that is all they are going to get.
Mr. MOLLOHAN. Do you mean over a single station?
Mr. STRATrON. No, in the entire campaign.
Mr. MOLLOHAN. You may use it over any station, but if you are not
getting two 30-minute programs.
I have many radio stations and television stations. When I go into a
program I do it in a blanket sense. I am not able to finance 10 days of
programing over all of those stations, but rather than financing 10
days of programing over the stations I can, I cut myself down to 4
or 5 `days or maybe two or three spots a day instead of the five or six
I would like to have.
I start out my programing 2 weeks before with only one spot a day.
As I go into the campaign, I step that up until when I get to the 2 days
`before the campaign I am doing four or five or six a day.
`On election day I usually buy the whole radio package, 15 stations,
with 30-second spots only urging people to go out and vote. But it is
a blanket thing, near election day.
Mr. STRAr2ON. That is pretty much what I do. My recollection was
I had 1-minute spots and I think in the last campaign I started them
6 d'ays before the election `and I think I only got in about 10 or 1'2
spots on two different stations and I believe the bill was $9,000.
Mr. MOLLOHAN. I agree with you on another point. I, upon occasions,
have been offered 15-minute or 30-minute spots and I turn them down.
I don't think you can get a listening audience. I have never used any-
thing more than a `5-minute program `and usually only the 1-minute.
I zero in on one particular subject.
Mr. STRATrON. A panel show can be interesting for as long as a half
an hour.
Mr. MOLLOHAN. We have one or two of those occasionally, but we
haven't them as `a regular format.
Mr. MATHIS. You suggest that we need to set a maximum amount of
time that can `be used legislatively.
Mr. STRATrON. That is what I was trying to say, yes. In other words,
my idea is, at the same time we require the station to provide this free
time, we, in effect, `assure them that they are not going to be fully
absorbed with nothing `but television campaign stuff by putting a max-
imum limit on it, that is all the time you can get on television, or this
is all the time you can get on radio.
Mr. MATHIS. Couldn't we serve the purpose just as well by adopting
an overall, firm limitation on expenditures for a campaign and then
allow the candidate to spend it in any cottonpicking place he wants to?
It might be some candidates can do well on television and others might
prefer to use newspapers.
Mr. STRATTON. That is true. I thought what we were trying to do
was to get away from having to go around and solicit all of these con-
tributions because `obviously the more you read about the criticisms
that are made, it makes it extremely difficult to go to anybody for a
contribution that you have ever known or done anything for in the
past and if we are going to try to reduce the cost without going to the
nublic financing, it seems to me that these most expensive media could
be made free. At least in the case of television. I don't see how you can
do it in the case of newspapers.
PAGENO="0269"
265
Mr. MATrn5. I agree, if that is the decision we want to make, the
direction we want to go, that you have made a very good suggestion,
but I think if you are going to reduce the number and size of con-
tributions, we can do it simply by setting a ceiling above which you
may not go.
Mr. STRATTON. I do not quarrel with that. I think we do need a
ceiling.
Mr. JONES (presiding)., Sam, I want to thank you for being here.
You can see you have generated a lot of interest by the questions asked
in your testimony. We appreciate very much having had you with us.
Mr. STRATTON. Thank you very much, Mr. Chairman.
Mr. JONES. We will adjourn the meeting to the call of the Chair.
[Whereupon, at 11:45 a.m., the hearing was adjourned, to recon-
vene at the call of the chairman.]
PAGENO="0270"
PAGENO="0271"
FEDERAL ELECTION REFORM
WEDNESDAY, NOVEMBER 14, 1973
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON ELECTIONS OF THE
COMMITTEE ON HOUSE ADMINISTRATION,
Washington, D.C.
The subcommittee met, pursuant to notice, in room 2253, Rayburn
House Office Building, Hon. John H. Dent (chairman of the sub-
committee) presiding.
Present: Representatives Dent (subcommittee chairman), Jones,
Mollohan, Mathis, and Frenzel.
Also present: John T. Walker, staff director; John G. Blair, assist-
ant to the staff director: Ralph Smith, minority counsel, Committee
on House Administration, and Richard Oleszewski, clerk, Subcom-
mittee on Elections.
Mr. DENT. Good morning ladies and gentlemen,
The Subcommittee on Elections will now come to order. We are~
delighted this morning that we have with us Members of the Congress.
This will be the last panel of Members from the Congress, simply
because our requests for appearances go faster than the days come
`before us, so we either have to put a clamp-down sooner or later, or
we will continue to be accused of dragging our feet. When you have
36 new applicants coming in asking for time before the committee
we have to do something, so we intend to cut off the appearances before
the committee and will accept whatever testimony individuals want to
give. We will have one more day of hearings, since we have already
listed five other witnesses. This morning I am pleased to have as the
first witness Hon. Barber B. Conable, Jr., Congressman from New
York. We are glad to have you with us this morning. We may proceed
in any fashion that suits you.
STATEMENT OP HON. BARBER B. CONABLE, JR., A REPRESENTA-
TIVE IN CONGRESS PROM THE 35TH DISTRICT, STATE OP NEW
YORK
Mr. CONABLE. Thank you.
I would like to submit a statement in full.
Mr. DENT. Without objection.
Mr. CONABLE. I have no great pride of authorship of the bill that
I have `been sponsoring in almost ever Congress since I have been
here. We revised it from time to time. We are aware of the difficulties
this subcommittee has in drafting something that will be both realistic
(267)
PAGENO="0272"
268
and effective. I think it is terribly necessary to do something in this
field, and I hope the subcommittee will be able to come out with a bill
that will not only be acceptable to the Congress, but will satisfy the
public that we are concerned about this central issue in our democracy.
I have been to the dentist this morning, Mr. Chairman. I very much
appreciate your taking me at this time. I have had a toothache for a
couple of weeks and I found out what the problem is. I think the pub-
lic has a toothache about elections and are not quite sure how to deal
with it. The tooth problem is much more easily dealt with I think.
Mr. DENT. You could use a little novocain.
Mr. `CONABLE. I don't think novocain is what we want. We want to
have a fully sensitized public.
Mr. DENT. I think that is right, and I think the committee agrees
exactly with the principles and aims that you are advancing here. We
want a good bill that takes into recognition the possibilities of all
persons who wish to run for office to have an opportunity to do so,
without artificial barriers being built against them.
Mr. CONABLE. Mr. Chairman, members of the subcommittee:
It is my privilege to appear before you this morning and I appreciate
your willingness to work out a mutually agreeable time for my appear-
ance. I am the sponsor of H.R. 4708, an election campaign financing
reform bill, which I hope your subcommittee will consider carefully
as I am convinced the approaches delineated in this bill would provide
an equitable basis for future campaign financing.
A genuine attempt at campaign financing reform is an important
step at this time of suspicion of political campaigning. Thus, it is in-
cumbent on Congress through this subcommittee, to help change those
elements of current law which permit activities having the appearance
of impropriety. The efforts made in 1971 toward disclosure and limita-
tion of expenditures have been effective, but more reforms are needed
today.
As I say, I have no great pride of authorship, and even after having
sponsored this, as I continue to think about this I have thought of ways
in which I believe it can be improved. I have great confidence that this
committee will be pragmatic about the issues before it.
Removal of the enforcement of our campaign laws from the political
supervision of those whom they regulate is a minimal requirement of
legislation in this area. Regulation by an agent of the Coiurress does
not provide the insulation this task requires. H.R. 4708 would provide
the necessary insulation by creating an independent Federal elections
commission of five members appointed by the President with the
advice and consent of the Senate. No more than three of the Members
could be from the same political party. Senate confirmation would in
my opinion help insure the calibre of these appointments. We know it
is not an absolute guarantee, but I think it should be required.
Total and timely disclosure of campaign contributions and expendi-
tures would be another safeguard for the public. Most disclosure comes
too late now to do any good before the election but it is still the most
effective informational tool available.
I make it a practice to disclose all contributions and expenditures-
no matter how small-and the public acceptance of this personal
PAGENO="0273"
269
practice has convinced me that it should be done by all on a routine
basis. H.R. 4708 requires such disclosure except for expenditures under
$25. However, I would like to suggest that the subcommittee review
carefully the reporting procedures in present law in an effort to stream-
line them. My campaign manager wanted to quit last year because he
considered the schedule of reporting so harassing during a campaign.
I know this is a problem for all Members simply to keep up with the
law. It requires almost a full-time campaign assistant to look after
such requirements, particularly with the types of campaigns that some
of our colleagues have to conduct.
Reasonable limitations on campaign contributions is another im-
portant feature of my bill. It would put a ceiling on individual con-
tributions of $5,000 to a Senate or House candidate in 1 year, $10,000
to presidential and vice presidential candidates, and $50,000 as a total
annual individual contribution. The bill's definition of contributions
is broader than current law in that it also includes gifts, loans, services
and other things of value. I do not accept personally contributions of
over $50 from any individual for campaign purposes; this broadens
the base of my political support considerably and I personally find the
efforts made toward soliciting these small contributions extremely
worthwhile.
Everyone seems to get a vested interest in my campaign, if they
have even the smallest contribution to it. I think it is good politics as
well as good, sound public ethics.
A broad base of citizen participation is one of the keys to our system
and this is one fundamental method of achieving it.
I would also set definite limits on the amount of money which can be
spent in an election. H.R. 4708 would limit campaign spending to 25
cents per person represented, with one notable exception. A candidate
for the Office of President in a State primary election would have the
option of using the limitation of 25 cents per person in the State or a
limitation of one and a quarter cents times the total U.S. population.
This option is provided in order that candidates might have enough
money in early, important, Presidential primaries that frequently take
place in some of our more sparsely populated States. In other words, he
can concentrate in those if he wishes, but he has to take it out of his
total expenditure allowance.
In setting these limits, Mr. Chairman, my one reservation is that
we make sure that sufficient funds are permitted to enable challengers
to participate in the process. Incumbents have a great advantage, and
too low a limit woul4 enhance that advantage.
I have heard a Congressman say, "I'll vote for any election reform
bill; it's bound to hurt my opponent more than me." Mr. Chairman,
we should not enact this kind of law. We should protect the challenger
by setting an expenditure limit sufficiently high to permit presentation
of his case adequately to the electorate as well as put some limitations
on incumbents-such as the ban on the use of the frank for postal
patron mailings after qualification of the incumbent as candidate for
reelection.
Mr. Chairman, our present system of volunteerism in politics is a
significant strength of the system and I believe the reforms I have
advocated would strengthen it further by encouraging broader par-
ticipation. By limiting the big contributions, greater emphasis is
25-239 O-73----18
PAGENO="0274"
270
placed on many more smaller ones, enhancing the role of the individual
in the process. By requiring total disclosure and establishing an in-
dependent election commission, we reduce the aura of suspicion and
encourage wider participation. As long as the individual can choose
whom he wishes to work for and contribute to, I have no worries about
the stability of our system.
In closing, I would like to express some reservations about public
financing of elections. Rather than "clean up the system" as supporters
advocate, I feel public financing could "muddy the waters" by increas-
ing opportunities for political manipulation. It seems to me many
questions need to be asked. What do you do with minor party candi-
dates who have a right to run outside the two-party system? Should
there be encouragement to fringe candidates whose greatest incentive
might be to take advantage of the public funds? How do you keep a
hopeless candidate from using tax money to pay his brother to mali-
age his campaign? There are many others. I realize that some will
feel these questions are answered by the proposal to limit Federal
matching to $50 per contribution, but I wonder if the taxpayers will
be grateful for the opportunity to support in this way candidates of
whom they do not approve.
Our representative system of government is in trouble today, polls
have shown that there is a general lack of public confidence in all
branches of government. The manner in which we finance our elections
certainly contributes to this lack of confidence. It is an area we can
and should do something about. But we must do more than just appear
to correct the problem. Merely to change the nature of the problem
would damage the credibility of the legislative branch and govern-
ment in general even further. And that, Mr. Chairman, is something
we can ill afford. Conditions call for strong, responsible and effective
action and I believe my bill provides a basis for this kind of reform.
Mr. Chairman, thank you very much.
Mr. DENT. Thank you very kindly. As you know, most of the pro-
posals that come before us are oriented towards the limitation of ex-
penditures, the limitation of contributions, reporting, and trying to
create some kind of advantage for a challenger in every instance.
However, the range of thinking in the matter of the amount of money
to be allowed certainly shows there is little or no common ground for
this committee to work on. Since all of them are so different in their
proposals. For instance, you propose $190,000 for a campaign for
Congressman.
Mr. CONABLE. I think if you assume 500,000 people, sir, in the dis-
trict, it would come to $125,000, 25 cents per person in the district.
Mr. DENT. You don't say that it is for the entire election, the pri-
mary and the general. We have a proposal here for $240,000 for the
challenger and $225,000 for the Member. The people, as I see it and
read them, and I have been at this election business for quite a few
years insofar as handling this in committee, I find that the people have
a distrust, ability in distrust, of any kind of an act or law that allows
the kind of expenditure in this particular job in relationship to the
salary paid.
I believe my figures will show, within a very short time, we are
taking all the figures of all the candidates last year, primary and gen-
eral election, and the few who spent over $50,000 will astonish the
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271
Members of Congress, absolutely astonish them. I can't go back and
tell my people that I need $110,000 to $125,000 to get elected and that
they ought to give it to me out of the Treasury or they ought to pro-
vide it in some way or another. I don't think anybody else should.
I think it is an awful amount of money.
Mr. CONABLE. I think there would be quite a political reaction gen-
erally to public financing of campaigns once the public understands
what is involved.
Mr. DENT. You lose the democracy, let's not kid ourselves. The
minute the people find out they can get largees from the public treas-
ury you have already started decay and demise of the democracy, and
when candidates can get it out, my God, you just hasten that `day.
I don't think you can go to the Treasury of the United States and say,
"Give me money to run for office." I don't care what anybody says.
Of course that is only my view. The committee will probably have their
own views.
Mr. CONABLE. As I said in my statement I don't think the taxpayers
are going to react with `gratitude for the opportunity to support some
candidate they don't approve of.
Mr. DENT. That is what you do if you say ~ou can have $25,000 or
$225,000. The most lucrative job you could get in the world is to be a
candidate.
Mr. CONABLE. I realize the problem of setting realistic limits on ex-
penditure. I spend myself normally less than $25,000 per campaign,
but I have to acknowledge that I have been fortunate as an incum-
bent in not having major campaigns launched against me.
Mr. DENT. You weren't born into Congress, were you?
Mr. CONABLE. No, I was not, sir.
Mr. DENT. You had to run, didn't you?
Mr. CONABLE. You bet I did.
Mr. DENT. What did you spend the first time?
Mr. CONABLE. I make a greater effort at personal campaigning. The
first time I must say I undeiestimated the problems in my district and
I started with a campaign of roughly $15,000. I had `been a State legis-
lator there and felt I was well known and was not aware of the im-
pact of national elections on congressional campaigns and that it is
ciuite different than it is on the State lecrisiative level. The result was
that I underestimated my possible problems at that time, but I put a
great emphasis on personal campaigning. I do very little TV
campaigning.
I must acknowledge that many of our colleagues have considerably
greater election expenses realistically and without overspending in
the process of political survivorship. and so I don't have any ar-
rogance in trying to set a campaign limit that is realistic. I think I
am perhaps fortunate or have been fortunate in this respect.
Mr. DENT. The greater number of your colleagues are fortunate
in the same respect. A great number have spent somewhere in the
ranoe that you spend.
Mr. CONABLE. I know we focus on the newsworthy in this business,
and the newsworthy issue involves excessive bidding.
Mr. DENT. We can't allow this to get into a bidding contest, can
we?
Mr. CONABLE. No.
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272
Mr. DENT. Thank you very much. Mr. Jones.
Mr. JONES. Thank you. Mr. Chairman.
I think you have `asked sufficient questions and I have none. I thank
my colleague.
Mr. DENT. Mr. Mollohan.
Mr. MOLLOHAN. I have no questions.
Mr. DENT. I am sorry the Republicans are down at the White
House. They will probably learn more there about campaign reforms
than they will here.
Mr. MOLLOHAN. Mr. Chairman, may I ask one question.
Mr. Conable, you say on the first page of your statement that, "The
efforts made in 1971 towards disclosure and limitation of expenditures
have been effective."
Mr. CONABLE. I think its effectiveness has been established, yes.
I wouldn't be back in here advocating further reform if I felt we
had achieved the millennium in it. By "effective" I mean I think we
have had further disclosures as a result of the Campaign Reform Act
that we passed previously. I think also that it has helped focus
attention on the problems of campaign financing, perhaps not as much
as some of the events that took place in the Presidential election last
year, but I think the public is atuned to the problems of campaign
reform to a greater degree than they were as recently as 4 years
ago. I lay that partly to legislative efforts that have been made here.
Mr. MOLLOHAN. We had one of our colleagues before the committee
several days ago. He testified to the effect that the corrupt practices
law, which of course regulated our campaign expenditures and con-
duct for campaigns prior to 1971. was ineffective because it had not
been complied with. and the 1971 law was ineffective because it had
not been enforced. Therefore we should have another law and a tighter
law. He suggested many reforms, not the leaSt of which was Govern-
ment financing. I gather that you have an opposite view. You feel
that the 1971 law did serve a purpose over and beyond that of the
corrupt practices law?
Mr. CONABLE. I think it helps.
Mr. MOLLOHAN. And you think probably its greatest service was
in the area of public awareness.
Mr. CONABLE. I would like to say a~rain that I am not sure that
public financing would eliminate all problems of enforcement. I think
we would still have, very severe problems of enforcement, and public
financing would simply provide a base of public moneys for cam-
paigns. I don't think you would find any law prohibiting any further
fund raising activity, or if it did I think it would be very difficult to
enforce. Public financing, in other words, would simply add a whole
other area of public irritation about campaigns and would not elimi-
nate the enforcement problems.
Mr. MOLLOHAN. Fundamentally any law, regardless of' what it
may be and whatever revisions we may decide to be appropriate and
Congress put in here in 1971, actually it is of no moment unless it is
complied with, and then if it isn't complied with, if it isn't enforced.
Mr. CONABLE. I may say. Mr. Mollohan, I don't think you are
ever going to have complete success in enforcing campaign laws. I
think the most we can hope to do is to try to improve the situation
constantly. People who expect all election fraud, all election extrav-
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273
agance, all election nondisclosure to be eliminated by some sort of
a magic legislative effort here are expecting too much. I think we had
better be realistic about this, and opt for progress rather than the
millennium.
Mr. MOLLOHAN. I agree completely with this. In fact, I am for a
very, very simple law, one that can be enforced and can be complied
with, without the maze of misinterpretations that come about if you
create a very complex law structure here.
Mr. CONABLE. Simplicity is certainly to be desired. I don't think
simplicity automatically means enforcement.
Mr. MOLLOHAN. No, but it makes it much more simple of interpre-
tation and application. I know in the last campaign, all of us were
shocked with the $200,000 contribution which they said had been con-
structively received before the application of the law on April 7.
Well, of course, "constructively received" is a weird interpretation to
me, but it must have been reasonable and acceptable to those who
voiced it. Again, I am for a very simple law here which spells out
precisely and exactly what we mean. I am certainly in accord with
your idea of limitations. I thought the thing ought to be very specific.
Mr. CONABLE. Disclosure is a real problem, and I understand that
it is never going to be perfect either. One of the reasons is that lots
of people wait until the day before elections, to make their contri-
butions. They will make perhaps unofficial pledges before that time,
but they will wait until the day before the election to make their con-
tributions, and the public will not be aware of those contributions
when they go to vote. They ~vill find out about it later, and at that
point it is going to be very difficult to do much about it if it appears
there is some element of impropriety in the contribution. I think,
however, we should have a tough disclosure law, and the fact that it
is going to be difficult to achieve the total goal of airing an election
before the election doesn't mean that we shouldn't insist on complete
disclosure, and make it as iron tight as we can, even though some of it
is obviously going to be after the fact as far as public awareness is
concerned.
Mr. M0LL0HAN. I think all of our experience in this area of date
of receipt of campaign contributions has been pretty much the same.
In the last week or 10 days of the campaign, the contributions begin
to flow in much more readily than they have in periods prior to
that.
Mr. CONAELE. It is my impression, too, sir, that the candidates get
desperate as they think the hot breath of their opponent is on the
back of their necks, and they are likely to press for and accept larger
contributions just at the end of the campaign if they are in trouble.
Those are the contributions that reduce the independence of the legis-
lative judgment.
Mr. M0LLOHAN. What do you look upon as a reasonable number and
period within which reporting should be required?
Mr. CONABLE. I suspect that you are not going to be able to require
the filing of disclosure sheets within the last week before an election.
I think there should be a filing period for all `contributions up to that
point fairly close to that time. Again, I don't have any fixed idea
about this being appropriate and that not being, but I think you should
try to have a filing date as close to the election as is realistically
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274
possible in terms of what goes on in campaigns during that period
of time.
Mr. MOLLOHAN. We have in West Virginia a two-period reporting
requirement. The first report, the report prior to the election, is between
the 7th and 15th day prior to the election. The other is within 30 days
following the election; that is the final report. Of course, if I want
to, I can make my report 15 days before the election, and then there
would be no reporting of any funds that were received between the
last day and the 15th day until within the 30-day period following
the election. Does this sound unreasonable to you?
Mr. CONABLE. That doesn't sound unreasonable, I think, generally.
Mr. Chairman, I did not mention in my statement, but I would
like to urge, that this subcommittee consider several other elements
in an ele'ction reform bill. First of all, I think there should try to be
some way to cut down and prohibit, to the extent possible, large cash
contributions. I think such a thing has been demonstrated to be
a serious abuse in the past.
We ought to try to discourage practices that will result in the
laundering of money; that is, the nondisclosure of its real source
through subterfuge or by passing it through a series of people.
It seems to me that we ought to try to work toward having single
campaign committees. One of the abuses that emerges is use of multi-
pie campaign committee, which permits some multiplication of the
spending limits, the contribution limits otherwise. It seems to me
we ought in our Federal elections to try to find some way to preempt
State laws. Granted State laws in some cases are more stringent
than our Federal laws, I think the complication of having a whole set
of laws you have to comply with don't necessarily mean that there is
greater information for the nublic. It certainly causes serious prob-
lems in compliance.
Mr. DENT. The committee feels that the particular points you are
talking about we have been discussing off and on, with many of the
witnesses, are probably the essential changes that have to be made
in the law. There is no question about it. Mr. Mathis.
Mr. MAThs. No questions, Mr. Chairman. I would like to thank
my friend for coming here with this testimony. I think you will find
most of the members of the subcommittee are in agreement with you.
Mr. CONABLE. Thank you, Mr. Mathis. Thank you, Mr. Chairman.
Mr. DENT. The next witness is the Honorable Robert N. Giaimo,
Congressman from Connecticut.
STATEMENT OP HON. ROBERT N. GIAIMO, A REPRESENTATIVE
IN CONGRESS PRON THE THIRD DISTRICT, STATE OP
CONNECTICUT
Mr. GIAIM0. Thank you, Mr. Chairman and members of the
committee.
It is a pleasure to be here with you this morning.
Mr. DENT. Welcome to the committee.
Mr. GIAIMO. Let me say that I commend you for the work you are
trying to do. I would like to give you my advice as one who has been
involved in campaign financing on 10 different occasions, that I know
a little bit about the subject as do most of us who run for office.
PAGENO="0279"
~75
There are no easy answers and I would hope that the committee will
come forth with legislation which will be meaningful, but at the
same time will not be panicked, because there is a great tendency in
this country, every time we have a crisis or scandal of some sort to
think all we have to do is pass a bill and put a "campaign reform"
title on it and that solves all the problems. As you well know, it doesn't.
I think, for example, in the area of public financing of campaigns,
for years I have gone around and said to myself, and usually at times
of election when the difficulties of raising money is uppermost in our
minds, I have gone around and said it would be a good idea if we
had public financing of campaigns and totally eliminated all private
contributions. That has come very much to the fore as you know in the
present day and caused us to think about it a great deal more. The
more I think about public financing of campaigns the more concerned
I get.
It would be much easier for me~ it would be much easier for you
gentlemen running for reelection. if the Federal Government financed
our campaigns, particularly as incumbents, but I wonder what it might
do to the structure of our Government and to the two-party system.
I can think right off the top of my head, in my own district, of 10
people who really have no base for running for Congress, and by base
I mean no local partial or fractionalized base of support. Therefore
they are usually hamstrung because they can't raise money on a private
basis, but if you finance them publicly, and make no mistake about it,
if we have public financing the U.S. courts are ultimately going to
determine that it is going to be almost everyone's constitutional right
to run on the ABC or the XYZ ticket or whatever party you want to
call it, and he will get his petitions and signatures, the Government
is going to finance him.
What is this going to do to the basic two-party structure, which in
spite of all of the things that have been said against the Republican
and Democratic parties has served this country well? If we want to
see the comparison all we have to do is go to our multiparty situations
which we find in our parliamentary systems in European countries,
where we have multiparties, and then we will be having government
by coalition rather than by a basic two-party structure.
This public financing can be a weird tool which can result in unfore-
seen results, albeit~ it comes in under the guise of reform. I would
caution you very seriously about it.
It just concerns me. As I say, as an incumbent it would make our job
much easier, but I think anyone who runs for Congress has to have
some sort of recognition, awareness or support in his district. Other-
wise in the practical area of politics, under which t.he American
Government operates and operates well, he doesn't get that support.
If he does, he will begin to get support. His first couple of elections
let me tell you are going to be tough to finance as all of us who recall
our first elections remember. In fact he is going to have to do as many
of us did, borrow, put mortgages on our homes and everything else.
It is too easy an answer, public financing, and it is one that should be
looked at very carefully.
I would suggest limitations on the amounts of contributions,
although quite frankly I don't think in the average case at least, as
far as Congressmen and Senators are concerned, that we get huge
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276
contributions. There may be some that do. I never have. When you are
talking of the $5,000, $10,000, $20,000, or $100,000 contributions,
et cetera, normally speaking it occurs in very few congressional elec-
tions. I suppose it does happen more frequently on the Senate side and
of course we all know it does happen in the Presidential area. I do
think limitations on amounts would be healthy.
There is one reform I would urge. It was just briefly mentioned
but it is primarily the reason I am here today. That is this question of
preemption of State laws. We have a devil of a time in some States
because of the disparity between Federal laws and local laws. In other
States I gather there is no difficulty because some States probably still
don't even have any campaign reporting requirements. Take a look at
my own State of Connecticut, which because of some recent difficulties
of the last 10 years, which you may recall, has passed stringent cam-
paign reporting Tequirements. For example, the Federal law says if
we have a surplus left over we can hold that surplus and keep it for
our next campaign. The Connecticut law says we cannot have a surplus,
but must turn it over to either the Democratic State Central Commit-
tee or `town committees.
You know very honestly a lot of the money that I have received in
my campaigns has come from Republicans and they don't want me to
turn any surplus over to the Democratic State Central Committee. It
just `doesn't make any sense.
It seems to me that if the Federal law allows us to do something of
that type, the State law should not be in conflict with it. When are we
candidates, and when do we run for election, and when do we make
proper campaign expenditures? I was involved in campaign activities
of a local nature in Connecticut the past 3 weekends, where local can-
didates were running. I spent `a great, deal of money. I think those
were expenditures that quite candidly were made by me `because 1
expect to be a candidate for reelection next year or I wouldn't be
spen'ding quite as much money gratuitously in local elections.
There is a question whether under State laws you can do that sort Of
thing before t'he time when you are an `announced candidate or before
the time that you are nominated either in a primary or in a general
election. This ought to be cleared up.
If you will recall,, when we set up and discussed this matter, in the
establishment of our Ethics Committee in the House some years ago, it
was made very clear on the floor of the House that Congressmen are
candidates for reelection starting the `day after election, although they
may not be announced candidates. I think this area is nebulous and
should be cleared up.
Also there is the problem of holding off on your official announce-
mont as a candidate because you then begin to violate or may be in
violation of the Federal Communications Commi.ssion requirements,
where your views and expressions as a Congressman will not be put on
the air because of the equal time provisions so that as a result you have
people `delaying the official announcement of when they become can-
didates. This is an area that should be cleared up.
Take the area of newsletters. Under the Connecticut law it is my
opinion t'hat it is illegal for us in any way to raise any money for
newsletters. As you know, and it is quite clear, the Clerk of the House
and the Campaign Elections Committee have made it very clear, that
PAGENO="0281"
277
you cannot use campaign funds to send out a newsletter, because you
are sending it out on the frank. It is an official act by you as a Con-
gressman and not a campaign act by you as a candidate for reelection.
Therefore it is forbidden to use campaign funds for that purpose,
and rightfully so, but in Connecticut, although I know it is done in
other States, you cannot raise funds any longer for any purposes other
than campaign purposes, or at least it is seriously questioned that you
can and everyone has skirted away from it because they are afraid to
test that provision.
In some States they raise what they call nonpolitical newsletter
account moneys, funds, which they use for newsletters. We don't do
this in Connecticut. We are concerned about it and we don't dare to do
it, because we think it might well be in violation of our State law,
which says you can't raise moneys and you can only raise moneys for
campaign purposes. Therefore the result is that we cannot send out
many newsletters if any, unless we want to make expenditures out of
our own pockets, which would mean $1,500 a newsletter in my case,
and that puts a burden on Congressmen and candidates who are not
wealthy.
These kinds of conflicts between the State and Federal laws should
be resolved, so that candidates and incumbents particularly know
where they stand and what they can properly and rightfully do. I say
particularly incumbents because it has been my experience from the
last election that the penalties of the existing law apply much more
stringently to incumbents than they do to nonincumbents.
I believe as a practical matter that nonincumbents may not be as
concerned about strict compliance with the Federal law or even the
State law, as we are. They are not always as strict in conformity as
incumbents are, perhaps because incumbents recognize the harshness
and the penalties which exist if they violate them.
In conclusion I am asking this committee to proceed carefully in this
area, and to look at the practical problems which many of us who run
our campaigns, and who carefully watch our campaign finances to
make certain that we don't come afoul of either the State or the Fed-
eral laws, to make certain that we clarify them, that we remove the
uncertainties, and that we can properly proceed with our elections.
This is not always the case when we legislate in a moment of crisis
or in a situation where we give the impression to the public that by
passing hasty legislation we are going to cure the problems.
I don't know how it worked in all of the other districts, but my own
impression of the present Campaign Reporting Disclosure Act that
we passed, the Federal one, worked fairly well this past year. Let's
face it. The real problem that you are trying to get at, and the real
problem that we are always going to have difficulty getting at, is not
proper campaign laws or disclosures or reporting. It is criminal viola-
tions of the law, of any law. It is not easy to legislate against that.
That also brings in, as Mr. Conable and the Chairman says, a very
serious question, because this is where the violations occur, the very
serious question of cash that has flowed as you know in the past cam-
paigns. These are the areas where corruption exists, and where I think
steps have to be taken to try to have greater conformity with the law.
Mr. DENT. Isn't it true that while certain violations that have come
to light have been surrounded by spectacular disclosures and so forth,
PAGENO="0282"
27~S
that they have put into the background some of the more serious viola-
tions of the law which are just now beginning to emerge, when the
heads of large corporations deliberately violate the law.
There is no reason on God's earth that they wouldn't know it was a
violation to use that money in the method and manner they used it,
large oil companies, airlines and corporate entities of all kinds. God
knows I don't think anybody will ever know, even to a small degree,
the kinds of violations that took place in the multi-national corpora-
tions when we had peddlers going all over the world picking up money
for campaigns. Talk about washed money. That has been through a
scrubber. There is no way to identify it in any way, shape or form, and
so we are talking about individuals. We are talking about respect for
law.
Mr. GIADro. That is right.
Mr. DENT. You and I know that the challenger is never policed by
so many of the I think well meaning public organizations that monitor
Congress and monitor elections. You never hear any complaints about
your challengers.
I think my challenger last year spent more money in the primary
than I spent in 10 terms, but you couldn't get any word to anybody.
They were notified, but no one made any attempt to check into it. He
handled it very conveniently. The night before the primary he sent a
telegram to the Chief Clerk. He just told him that he had lost the form.
By that time he figured he had lost the election so why expose any-
thing. No one went after that. This is what it is. It is individuals, isn't
it?
Mr. GIAIM0. I think so.
Mr. DENT. Whatever law you write.
Mr. GIAmro. I think so.
Mr. DENT. Do you believe the present reporting system may be a
little too cumbersome or do you think it is all right the way it is?
Mr. GIAIM0. I think it is a little cumbersome. I think it could be
streamlined now in its mechanical reporting features. As you recall,
and I am sure you worked with it in the last election as we all did, it is
a pretty unwieldy format that the Federal Government uses. I don't
see why, with some experience now from the last election, it couldn't
be made a bit more streamlined, particularly those two last reports. I
think there was the 5 day and the 15 day preceding an election.
Let me say this. We have treasurers who run our accounts but any
congressman who has any sense, in my opinion, is going to pay very
careful attention to what is happening with his campaign finances and
what his treasurer is putting down on paper, because the Congressman
ultimately is the person who is going to be charged with anything
wrong, not the treasurer, at least in those elections below the Presi-
dential level.
Mr. DENT. Your contribution has been very worthwhile.
Mr. GIAmro. When you get to the Presidential level you may be far
removed from the actual finances of the campaign, but in congressional
and senatorial campaiirns you are much closer to the actual reporting
problems and preparations, particularly those last two ones. I wonder
how much that 5 day prior to the campaign report actually serves?
Mr. DENT. But that would be subject to public information and at-
tention right after the election on the report, would it not?
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279
Mr. GIAmI0. It would be right after the election.
Mr. DENT. And if it were that bad he would certainly get a few calls
before the general election. You put your finger on it when you said
we must not legislate in a spirit of panic. or in an area of panic, because
this is what has happened in Maryland and in other States. I think
one State has a law where a candidate has to have a full disclosure of
his transactions, his holdings if he has any. In a marketplace such as
what we call an independent, marketplace, free enterprise economy,
where the participation of citizens in the ownership of their corporate
entities or their business entities is made possible and-I note today
there is a large drive being put on now by Wall Street to try to get
the public back in the market because it is a leveling influence to have
individuals participate in the marketplace.
If you play the market, and I imagine Members of Congress have
a pretty keen sense of what used to be the opportunities in the market-
place to add to their income, changing stockholdings is part of the
game. There is no way out of it. There is hardly any industry in the
United States that somewhere along the line doesn't have something
to do with the Federal Government.
Mr. GIAIMO. Mr. Chairman, you have put your finger on a very seri-
ous problem. I am convinced that before long we are all going to have
to publicly disclose all of our assets and all that we own, and I will
comply when everyone else does and when it is the law. In fact I have
complied voluntarily with some newspaper people who asked me re-
cently, but in principle it disturbs me because what are Congressmen
and Senators?
Mr. DENT. Second-class citizens.
Mr. GIAnro. That may be, but I mean w~here do they come from? We
come from all aspects of American society. Some of us are farmers
and therefore we have great interests and holdings in farming, in
agriculture, and in the affairs of agriculture. Some of us are business-
men. Some of us are lawyers. Some are bankers, and we therefore re-
flect these holdings and assets. That in itself should not be considered
negatively, nor should it be a black mark against someone because he
has in fact accumulated some assets, purchased some stocks in the stock
market or in any other venture, real estate or what have you.
After all, the theory of representative government is that you pick
citizen representatives. You don't pick professional legislators who
have no other interests in life other than being legislators. They' come
from their communities and they reflect the attitudes and the interests
of their communities, and they may even have some of those interests.
I do believe, however, that the time is going to come where we will
have full public disclosure of assets by public officials.
Mr. DENT. You know some don't want to disclose because they own
too much but there are a few who own too little.
Mr. GIAmro. That is a problem which some of us have.
Mr. DENT. I know if some persons disclosed what they are worth
people would say, "My God, if a man like that hasn't been able to make
enough to get any more than that in a lifetime we certhinly don't want
him down in Washington." You have problems on both sides, the poor
guy and the rich guy and the fellow in between and I don't think we
ought to be treated any different than any other citizen, because I still
believe that whatever a man is when he comes to Congress, whatever
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280
his background is, it comes with him. As you said, he may `be a farmer,
a laborer, a mechanic, or a banker, and maybe it is because of this es-
sence of democracy that we have been able to survive and go further
in less than 200 years, at least up to the last couple, than any other
nation in the history of the world, because we are not all one breed.
In other words. we are not all one cat.
Mr. GIAIM0. The interesting thing about public disclosure as far as
Congressmen and Senators are concerned is it seems to apply only to
the nonwealthy. No one seems to get too upset about the massive hold-
ings that the wealthy own and hold. It is only the average Congress-
man who is suspect if he owns and accumulates assets.
Mr. DENT. I would like to see a report on a couple I know. They
would have to have a Sears and Roebuck catalog.
Mr. GIAIM0. In conclusion, Mr. Chairman, again I would just like
to stress this business of preemption. I think this is deadly serious.
Mr. DENT. We are very much interested in that.
Mr. GIAIM0. Because there are many conflicts between our State and
our Federal laws, and I think that if we are going to really get into
this, then let's make it so that we know what we are doing, and we will
not be in conflict with either the State or Federal law.
Mr. DENT. Thank you, Mr. Giaimo. Mr. Jones.
Mr. JONES. Thank you. Mr. Chairman.
I have no questions. I do want to thank Bob for being here and
for making these very worthwhile contributions, Mr. Chairman. I
think what he has had to say should really call our attention to some
needs in rewriting legislation, especially the preemption phase. Thank
you, Bob.
Mr. DENT. Mr. Mollohan.
Mr. MOLLOHAN. Just a question for clarification in my own mind.
By preemption, Congressman, you are suggesting that we set up
the Federal law to apply to Federal employees without any restric-
tions whatsoever or any compliance requirements.
Mr. GIAIMO. Federal employees?
Mr. MOLLOHAN. No; Federal candidates. I meant to say Federal
candidates. They are subject only to the Federal law.
Mr. GIAmIO. `No. I think the way the preemption would work is
that the States, as preemption works in other legal areas, States can
set up their laws, but they should not be in conflict with the Federal
law.
Mr. MOLLOHAN. Should or must?
Mr. GIATM0. Must not.
Mr. MOLLOHAN. Essentially what you are saying is that our require-
ments would be those prescribed by Federal law.
Mr. GIAIMO. Yes.
Mr. MOLLOHAN. And the State may have companion requirements.
Mr. GIATMO. They may have companion requirements to fit our own.
Part of the problem, Mr. Moflohan, and I know about Connecticut
particularly, is that when the State legislatures write campaign re-
form acts, they are thinking more of their problems than they are of
the Congressman's or federally elected officials' problems. For example,
our Connecticut State law is so restrictive that it is highly question-
able whether I can go out and rent a typewriter or a mimeograph ma-
chine in my campaign headquarters. You know that is just ridiculous.
PAGENO="0285"
281
They limit the categories of expenditures so narrowly that you can
practically go out and hire a hall and buy food. They don't say you
can buy liquor but they say you can buy food. You can pay poli
watchers and poii workers on election day. They are thinking of
local elections when they do that. They are not thinking of the kind
of an operation that a congressional candidate for the House or the
Senate has to run, where he has to pay TV and radio media, where
he has massive reproduction of materials, and the like.
We have tried to stress this on our State legislators but it is a diffi-
cult job many times to persuade them to understand our problems.
Mr. MOLLOHAN. Thank you, Mr. Chairman.
Mr. DENT. Thank you, Mr. Mollohan. Mr. Mathis.
Mr. MATHIS. Thank you, Mr. Chairman. Just one or two questions,
Bob, in the area of public financing, which you seem to be pretty firmly
opposed to.
Mr. GIATM0. I am not firmly opposed to it. I am just deeply con-
cerned about it. If you do get into this area, and I suspect you will,
whether you get into it this year or later, but let's just be careful how
we go about it.
Mr. MATHIS. I would certainly think and I think I can assure you
that this subcommittee will proceed with caution on anything, par-
ticularly after the 1971 act, but would you be willing to accept public
financing for the present interim election, as sort of a test or pilot
project, to see in fact how it might work, since it appears that this is
where the most apparent abuses have occurred?
Mr. GIAIM0. Yes; I would. I would not be onnosed to having it at
the Presidential level. First of all, at that level I don't think you are
going to have the problem of multiplicity of candidates. You might
have a third party, but you probably wouldn't have the situation that
you would have in the case of Congressmen and Senators.
You know, there are many people who will run for a congressional
seat knowing full well that they are not going to get more than 3 or 4
percent of the vote, but they will say "It is good for me to do." I am
thinking right now of someone in my own profession, which is the legal
profession, so I think I can take some liberties with my colleagues in
the legal profession and say that I have heard many young lawyers
say, "You know, it helps me to get known in my community, and it
will be good for me, so I will make the run."
He is splitting off the vote. He can hurt one or other of the candi-
dates, and he really knows he isn't going to win.
Now, if you finance this publicly, I think you are going to encourage
this type of activity. I feel, as I said in my opening statement, very
strongly about the two-party system. I think it does give good govern-
ment to this country and I am concerned when you get into coalition
parties, because history has shown in other countries that when you
deal by coalitions rather than by majorities, you have to negotiate and
make deals. This is the great fear that takes place, as you know, if an
election were to be thrown into the House of Representatives. You
would have a third party and that third party could in effect throw
its weight either way and as a result the minority would establish the
majority.
Mr. DENT. Like a veto.
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282
Mr. GIAIMo. I am not sure we want to see that happen in the United
States.
Mr. MAThS. But I think you might support financing the Presiden-
tial election.
Mr. GIAIMO. I think the problems would be less at the Presidential
election. I do not foresee having more than three or maybe four candi-
dates for President. Now you ~`now we always have one or two Joe
Smiths, I think they used to bu called, who ran for President in cer-
tain States.
Mr. MOLLOHAN. Prohibition party.
Mr. GIATM0. Yes. There used to be a fellow in New Jersey who ran
historically. I think the country could survive that kind of problem.
You would not have more than three or four really viable nationwide
candidates.
Mr. MOLLOHAN. Mr. Giaimo, another distinction you have drawn
here between the desirability, possible desirability, of having public
financing for Presidential campaigns as opposed to the lesser desira-
bility of having senatorial or congressional, concerns me, because
frankly, I think there is a greater threat to our two-party system in
this country, which we all accept as being one of the strongest and
most basic features of our democratic system here; it seems to me the
threat would be greater there than anyplace else.
Mr. GIAIMO. You may be right.
Mr. MOLL0HAN. Actually, we had a President in the 1960's who was
elected by 42 percent.
Mr. GIAIM0. Yes.
Mr. MOLLOHAN. And I think that if this Government of OUTS is to
continue as strong as it has been in the past, and we are all ~onfident
it will do so, that we want to prevent some real threats to this system;
I am talking about popular vote. I think there would be a stronger
argument `against public financing which would tend to create multiple
parties, a greater number of candidates in the Presidential campaign
which are national in scope rather than in the congressional nnd sena-
torial which are relatively limited.
Mr. GIAIM0. There could be, but you have to offset that with the
problem that the reality is that in congressional races you are talk-
ing about relatively small amounts of moneys.
Mr. MOLLOHAN. Yes, but that amount of money is as significant
to those people there as a~ greater amount is to the people in higher
echelons or higher levels.
Mr. GIAIM0. True.
Mr. MOLLOHAN. I think it depends where you are in the scheme of
things as to how significant it is.
Mr. GIAnro. But when you get into a Presidential campaign fund-
raising venture, it is quite obviously-well, we just do not know how
many millions of dollars are raised. We hear figures ranging from $40
to $50 million; we hear of campaign contributions ranging as high as
$1 million.
You know, I think there is a great difference and distinction be-
tween the man who gives a candidate $100 or even $500 and the man
who gives you $1 million. You know nobody hands out $1 million
merely because they want to participate in Politics & Co. Lob me put
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it differently: Very few people participate in the political process and
therefore give you $1 million.
Mr. DENT. Wait. One of my friends did. He gave $1 million just
last year, and he wants you to know and clearly understand there were
no strings attached.
Mr. GIAIM0. Well, fine. But there is a suspicion of it. I think the
fundraising of these many millions of dollars in Presidential elec-
tions has to be cleared up. So you have to throw that into the balance
when you determine whether or not to have public financing.
Mr. MOLLOHAN. I am completely sympathetic to this, but I do not
think it is necessarily the amounts that were involved. Just within the
last week, a very careful analysis of my campaign expenditures and
receipts for 1972 was made the subject of extensive argument in West
Virginia, one of my larger groups, not in my district. In the course
of that discourse, they suggested that the fact that I had voted for the
$250 million Lockheed loan guarantee was attributable to the fact that
somebody in Lockheed whom I never heard of, some employee con-
tributed $100. I do not think you can escape the influence suggestion.
Mr. GIAnro. No, but by your very telling of the story, you know,
someone who contributes $100 really is not in that same category as
someone, say, from Lockheed who would give $500,000. This is the
distinction.
Mr. MOLLOHAN. What I am suggesting is that you cannot escape
these suggestions regardless; it depends upon `the attitude of the in-
dividual doing the assumptions.
Mr. `GIAmro. True. But those suggestions you `and I can live with,
because, as Harry Truman said, if you cannot stand the heat in this
business, you get out of the kitchen. But it is the other problem that i~
of concern.
In further answer to your question, Mr. Mathis asked me this ques-
tion and I have not really thought about it that much, but I think there
would be a lesser risk in having it start, say, in the Presidential cam-
paign rather than in the congressional. But that is just an off-the-top-
of-my-head opinion. I have not really sat and thought about it that
long.
Mr. MOLLOHAN. It seems to me that, again this is off the top of my
head, too, first blush reaction would be there would be a greater pos-
sibility of multiple party identifications, that is, several parties that
are identifiable, appearing on the Presidential ballot in Presidential
elections rather than in the congressional or senatorial.
Mr. GIAIM0. If that were so, then I would have the same Objections
to it at the Presidential level that I think at the other, because if we
start having multiplicity of candidates and parties at the Presidential
level, I think we are going to destroy our system of government as
we know it. And our system of government has served this Nation
well.
Mr. DENT. Bob, is it not true, one point I remember in an elec-
tion I was in, we had the Communist on the national ballot, Socialist
on the national `ballot, the Royal Oak Party on the national ballot,
and there was another one, I am not sure of the name, but I know we
had six candidates for President and Vice President.
Now, maybe you can write a law that would sift out the so-called
lesser parties. But then would that not. somewhere along the line could
not a person make a contest out of it on its constitutional rights?
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284
Mr. GIAIM0. That is what I am afraid of.
Mr. DENT. Are we not in the same position on the congressional
level?
Mr. GIAIM0. Yes.
Mr. DENT. If we preempt, we must preempt all the way in every
phase of the election law that we write for the simple reason, if in my
State you only need 200 names and $35, and that under the law quali-
fies you as a candidate, who is to assume the knowledge in his own
mind that he can determine which one of these qualified candidates is
not going to win?
Mr. GIAIM0. I agree.
Mr. DENT. Now, you know with the last Presidential selection-it
was not an election-selection of delegates to the National Committee,
in my State-
Mr. GIAn~ro. You are talking about the Democratic Party.
Mr. DENT. Yes. In our State, it ended up being a lottery. If you
happened to. get the first four or five places out of 56 candidates, it is
a lottery. That could happen very easily. There is no way on the earth,
if the State has its own qualifying law for candidacy, I doubt we
could write any prescription that would bar that person from the
largesse of the Treasury.
Mr. GIAIM0. I do not think you can.
Mr. DENT. If you qualify under State law.
Mr. GIAIM0. When I was talking of preemption, I am not 1;alking of
it in terms of public financing, but in reporting and disclosure.
Mr. DENT. I know. But over the head of all of this is great drives
by certain organizations who do not have to stand the responsibility.
This committee has taken the brunt for the bad election law that some
people say we have now, and we had nothing to do with it, Our bill
went to the floor with reasonable limitations in it, that had been
studied, worked on. This committee worked diligently for 2 years.
What happened, it got to the floor and was completely discarded by
a substitute. But the people do not even know what the word means.
They only know that the Elections Committee of the House Admin-
istration Committee passed a bill to set a date of 7 days before election
you could gather all the money in that you wanted and not; have to
report it. We did not do such a thing. That is what is going to happen
now.
We know there are certain persons and influences behi nd them
have already written a law, no matter what we come up with. We are
not going to be able to~hold our bill on the floor. That is my opinion.
Certain people want reform that do not understand it. Almost in
every instance, every time you pass a reform bill in any area of legis-
lation, you have to pass another one to reform the reform bill pretty
soon.
Mr. GIAmro. All I can say to you is that days of crisis call for heroic
measures on the part of men who are willing to stand up and say what
they think is right.
Mr. DENT. You know this committee can stand up.
Mr. GJAfl~ro. I know this committee will stand up for what it thinks
is right and I will be willing to heTp, that is why I looked forward to
discussing these matters with this able committee.
Mr. DENT. Thank you very kindly.
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285
Our next witness is a distinguished Member of Congress who I know
has given a great deal of thought to these matters that deal with the
welfare of the country insofar as its ability to continue as a free enter-
prise and a free Nation.
Neal Smith of Iowa, we welcome you to the committee this morning.
STATEMENT OP HON. NEAL SMITH, A REPRESENTATIVE IN
CONGRESS PROM THE STATE OP IOWA
Mr. SrnTI-I. Thank you very much for those kind words.
Mr. Chairman and members of the subcommittee, I appreciate the
opportunity to appear before you on behalf of my bill H.R. 8401, and
some other bills designed to alleviate the serious problems connected
with financing Presidential campaigns. The Watergate affair has
dramatized a problem which has been with us for many years but
the problem itself is really not a new one.
We are kidding ourselves I think if we think we save money when
Presidential campaigns are financed by large contributions by private
interests. In my opinion it is both cheaper and better to do it with pub-
lic funds. I do not imply by this that Government officials are for sale,
but it just stands to reason that large contributors inevitably have a
better opportunity to be heard by key Government officials prior to
making a decision. Having a better opportunity to present the argu-
ments may be all that is necessary to produce the wrong result. Just
pointing to Watergate and the problems it has highlighted is not
enough. We should do something to avoid the possibility of such prac-
tices in future campaigns. I see no way to avoid such problems unless
we involve public flu ancing.
My bill permits Presidential candidates to elect whether to accept
public funds or to continue private financing. If a Presidential can-
didate elects to accept the public financing available, he is prohibited
from accepting private financine~ and, in the event he elects not to
accept public funds, the candidate must fully comply with `all the
campaign reporting laws and he is also prohibited from receiving
contributions from any one individual in excess of $250.
This leaves the discretion necessary to avoid constitutional problems
but provides the necessary incentive to assure that Federal financing
will be used and that special interests and big contributors will not
finance campaigns.
The `bill would establish a trust fund with an initial $100 million
appropriation to be administered by a seven-member commission.
Members of the commission would be as follows: Two members ap-
pointed by the President; one by the Speaker of the House of Rep-
resentatives; one by the minority leader of the House; one by the
majority leader of the Senate; one by the minority leader of the Senate,
and those six by a majority vote would appoint a seventh mem;b~r.
This involves elected officials who must answer to a constituency and
would be least apt to act in `an irresponsible or unfair manner.
Upon electing to receive the money from the fund, the candidate
or his representatives would establish a single campaign bank account
for all transactions and account for all expenditures made from the
fund. The candidate of a political party which received more than 25
percent of the votes in the last Presidential election would be eligible
25-239 O-73----19
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286
to receive 15 cents multiplied by the number of citizens in the United
States as determined in the last decennial census (approximately $30
million each for the major parties). A candidate whose party received
more than 5 percent but less than 25 percent of the votes in the last
Presidential election would be eligible to receive a pro'portiDna.l amount
(an amount which bears the same ratio that his party's popular vote
bears to the popular vote of the major party which received the lowest
number of votes).
My bill does not provide public financing for senatorial and con-
gressional campaigns. While I am not opposed to some public funds
for such campaigns, I have been unable to resolve some of the problems
connected with such financing. In some districts the primary election
is the only contested election and it would be difficult to find an
equitable and constitutional manner to prevent abuses. Perhaps the
committee can determine some way to overcome such problems but,
meanwhile, it seemed to me that we can overcome all the problems
connected with public financing of Presidential general elections and
that this would be one big step forward. By solving this financial prob-
lem, it would also reduce competition for small contributio:ris and leave
State and congressional election campaign committees a better oppor-
tunity to secure larger numbers of smaller cOntributions.
I have attached an explanation sheet setting forth the details of my
bill section by section and will not take the committee's time to re-
peat them at this time. I am sure the committee can improve upon this
bill and may want to write a clean bill of its own. I did not know at
the time last spring that `a lot of others were doing the same thing, or
I would have waited. But I am at least hopeful that it will provide the
basis for a good bill if the subcommittee decides to take this approach.
In summary, I would like to repeat that I very strongly believe that
general elections for the `Office of President of the United States are
public business and should receive public financing instead of being
financed by special interests who either expect or at least hope to re-
ceive dividends for their investment.
I think the private financing approach has received a fair trial.
Recent polls indicate 65 percent favor public financing, which I think
indicates a belief that the private financing approach has failed. The
majority `believe that under private financing advantages accrue to
the special interests and the wealthy, that fund-raising pre~sures create
undue strains on the candidate and the electoral system, `and that an
endless litany of sins can be expected to flow from such a system. It
is time `for Con ress to catch up `with the people on this issue and to
provide public financing for general elections for the `Office of Presi-
dent of the United States. I strongly urge your favorable considera-
tion of H.R. 8401.
Thank you.
[The attachment referred to in Hon. Neal Smith's statements
follows:]
EXPLANATION OF THE PRESIDENTIAL ELECTION FINANCIAL AsSIsTANC1~ ACT OF 1973
Section 1. The act shall be cited as the Presidential Election Financial As-
sistance Act of 1973.
Section 2. Definitions.
Section 3. A fund with an initial $100 million is established. Mc'ney collected
from the $1 income tax credits is also transferred to the fund.
PAGENO="0291"
287
Section 4. A Commission is established to administer the fund. The Com-
mission shall consist of seven members-two appointed by the President; one
each by the Speaker of the House, the minority leader of the House; the majority
leader of the Senate and the minority teader of the Senate; and those six shall
by majority vote appoint a seventh member. They are level III paid positions. The
Members serve for 4 years and elect their own chairtean and Vice chairman.
Section 5. Details, duties and powers of the Commission including prescribing
forms to be used and repoi~ts to be made and empowers theni to conduct exami-
nations, audits and investigations to assure compliance with the law.
Section 6. If a candidate for President in the General Election elects to receive
money from the fund, he shall agree to accept no other contributions whatever.
Section 7. Candidates qualified to receive money from the fund, shall be pro-
vided 10 percent of their total eligible assistance for a revolving fund and a
surety bond shall be filed for that amount guaranteeing that that sum will either
be spent for proper campaign expenditures or returned. Additional amounts will
be transferred to the candidates campaign account as he presents evidences of
expenditures. By December 31st of the election year, the accounting shall be
completed.
Section 8. Candidates shall establish a single caaipaign bank account for all
transactions and designate who shall be authorized to withdraw funds and act
on his behalf. Such persons share responsibility with the candidate for compli-
ance with the law. All withdrawals shall be documented and covered by invoices
signed by the persons furnishing the goods or services.
Section 9. Candidate of a political party which received more than 25 percent
of the vote in the last Presidential election shall be eligible to receive 15 cents
multiplied by the number of citizens of the U.S. as determined in the last decen-
nial census. (Approximately $30 million each.) Candidate whose party received
more than 5 percent but less than 25 percent of the votes in the last Presidential
election shall be eligible to receive a proportionate amount. (An amount which
bears the same ratio as his party's popular votes bears to the popular vote of the
mttjor party which received the lowest nuthber of votes).
Section 10. If a candidate is to decline the use of funds provided by this Act,
such candidate shall fully comply with the Federal Election Campaign Reform
Act of 1971 relating to the reporting of contribution and expenditure.
`Section 11. No candidate for President, including those who do not elect to
receive funds under this Act, shall accept contributions from any one person in
either a primary or General Election in excess of $250 for each election or con-
tribute more than that amount from his own resources. This does not inelud~
personal or family resources used for normal travel, lodging or living expenses of
the candidate and his family.
Section 12. No candidate who receives transfers from the fund shall make ex-
penditures exceeding the amount transferred to his account but this limitation
does not include activity undertaken by others completely unilaterally and not
at the request or suggestion of the candidate, his agents, or political committee
nor in cooperation with them.
Section 13. The Commission is empowered to take action, including court
action, to prevent violation of the Act. Complaints brought by Presidential candi-
dates who are on the ballot in at least ten states and those filed by the Commission
shall be heard promptly by the Commission and an order entered. The section
provides procedures to assure due process.
Section 14. Candidates who feel aggrieved by decisions of the Commission
relating to eligibility to receive funds or the amounts or handling of transfers
shall be given a prompt hearing by the Commission and have a right to appeal
that decision to a court.
Section 15. The U.S. Circuit Court of Appeals for the District of Columbia
shall have original jurisdiction of actions brought by candidate for President.
The Court of original jurisdiction for other complainants shall either be the
U.S. District Court for the District of Columbi.a or the U.S. District Court where
the unlawful action is alleged to have been committed.
Section 16. Violations shall be punishable by a fine of up to $10,000 or im-
prisonment for one year or both.
Section 17. State laws which are inconsistent (such as those permitting larger
contributions) shall not apply.
Mr. DENT. I am happy that your bill does not attempt at this time
any way to include the congressional raises in any attempt to get
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288
Federal financing. I can see, I guess the rest of the members can see
that probably there will be some effort made. The Senate seems very
much sold on the idea of Federal financing of Presidential elections.
With our difficulties, for instance in my area and in other areas
where they have a great number of industrial workers, Governor
Wallace was not a minority candidate. He was very seriously a ma-
jority candidate in western Pennsylvania, and in effect hc influenced
the rest of the members of the legislature who would be hammered to
take a particular position.
It is all these pressures that incumbents get that seem to be over-
looked. People say the incumbent ought to be overlooked and given a
secondary position. Apparently there is one aim of certain groups,
to get rid of incumbents. Well, after they get rid of them they will have
more incumbents.
You know, Governor Wallace received not half as much as you put
down as being the breaking point for the so-called major parties.
Mr. SMITH. I think he would have qualified.
Mr. DENT. How would he? He only got 11 percent of the vote.
Mr. SMITH. Five percent is all he had to get.
Mr. DENT. But he qualified only for what portion of the money?
Mr. SMITH. You mean half as much ~s one of the other parties?
Mr. DENT. That is what I am talking about, on the formula basis. If
he qualifies under the law to be an independent candidate, you almost
have to figure a law was written that a qualification meant that he was
a candidate, serious candidate for office.
This is one of the things that bugs some Members of Congress. If
you were to determine that the political party would receive the
money, not the Presidential candidate himself, we would have to have
legalized parties. Then establish how you create a party, which we do
in Pennsylvania. You have to have so much of a percentage of the
previous vote or something like that. It is a very intricate formula.
But there is always the fear that you might be cutting out a man who
may capture the enthusiasm of the people.
Mr. SMITH. That is one of the reasons for the provision that he can
choose between the public financing or take the private route. If he
has that much support, he can just waive the public finaacing and
secure private contributions.
Mr. DENT. Do you put a limit on total expenditure?
Mr. SMITH. I did not change the 1971 law.
Mr. DENT. Well, there is no limit there, at least wehave not found
one.
Mr. SMITH. No, on Presidential campaigns, that is right.
Mr. DENT. We have not found one.
Mr. SMITH. I did not change that. If he has more support than that
and he does not feel public financing is enough, he can go the private
route and fully report.
Mr. DENT. Take a look at it practically. If you were sitting here in
any of these seats and having to do the groundbreaking as it were, do
the writing of it, how would you logically explain a situatfon where
one particular party feels it needs $68 million? How much of that
would you subscribe to on the part of the public financing? Where
would you set the limit?
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289
Mr. SMITH. I have set 15 cents times the population for each major
candidate. That is approximately $30 million. If they take one penny
of that, they cannot raise money privately.
Mr. DENT. Then of course you say that if a Rockefeller, who might
be ambitious enough-there are rumors some of them do get ambi-
tious-decided to run and stay away from the Federal contribution
because he would be running maybe independently or as a candidate in
a party, he could then spend unlimited amounts, could he not?
Mr. SMITH. Under my bill, he would be limited to a $250 maximum
contribution from any individual. That is the way you overcome that
kind of problem-put limits on individual and family contributions.
Mr. DENT. A family can only give $250?
Mr. SMITH. No. The family could give $250 apiece, but that in effect
is a family limit.
Mr. DENT. How about the person's own wealth?
Mr. SMITH. He would be limited by the campaign, your 1971 law,
that limits how much he can contribute of his own money, $25,000.
Mr. DENT. We know what happens; every member of the family
can give it.
Mr. SMITH. I do not say there are not problems with all of these,
but I think there is a more serious problem when one party raises $68
million and it is 10 times as much as the other party raises. That alter-
native has to be taken into consideration. That is destroying our
system.
Mr. DENT. I failed to get it in trying to go through all these bills, I
fail to get where you limited the party itself; for instance, the county
Republican Party or the municipal Republican or Democratic Party,
or spending their money. How do we total that up in the total picture
and where is it restricted?
Mr. SMITH. It is impossible to control all of the resources that are
involved in any campaign, because individuals can voluntarily work
without knowledge of the candidate. But at least we can put some kind
of a limit on the national committee and the national support that the
candidate receives, or help to finance it. The individual candidate or
the five people whom he delegates to take care of this for him are the
only ones who can authorize expenditures from the fund.
Mr. DENT. Now we have a campaign Committee for the Re-Election
of tue President, or campaign committee for the election of Joe
Doakes. He has a limitation, but they can take money and send it into
your district.
Mr. SMITH. That would not be-
Mr. DENT. Have you been reading deep down into some of the re-
ports that are coming out of the hearings and so forth, where money
was transferred from the Re-Election Committee to this particular
candidate, and then this candidate turned around and gave it to a
political party which in turn-
Mr. SMITH. Well, they could not do that under my bill, because under
my bill they receive 10 percent of the money as a revolving fund. Each
week they account for their expenditures and they file them. It is a
public record of what they spent their money for.
Mr. DENT. Only for the public moneys, though.
Mr. SMITH. They cannot have private money if they get public
money. They choose one or the other.
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Mr. DENT. As you know, a President, for instance, or any candidate
of a major party would hesitate to take $30 million if that is the limit
that you have, if he anticipates his party figures they are going to need
$60 million and he can easily raise it.
Mr. SMITH. No. I really think they would both end up taking the
public money, for this reason: To start with, if you take the last elec-
tion as an example, one of the parties did not come even (~lo5e to $30
million. If that party takes $30 million, the public wants to know why
the other one is being financed privately. They are going to look at
their expenditures.
Mr. DENT. You know that is a freak election that does not come up
very often.
Mr. SMITH. It is not all that freakish. Republicans usually receive
three or four times as much in contributions for the Presidential
campaign.
Mr. DENT. This was a little different situation. The individual, I
have known him and served with him and personally have a regard for
him, but not insofar as his candidacy was concerned, because he could
not attract any support, financially, for instance, or politically. We
were up against a situation.
Mr. SMITH. I think that such an overwhelming percentage of the
public want public financing for the President that they are not going
to stand for somebody going the private route if public financing is
available.
Mr. DENT. That may be true, but do you think it would have made
any difference if your bill was in effect at that time and two candidates
in 1972 had a chance to get $30 million, do you think it would have
changed the result a bit in the end or would it be just a waste of the
$30 million given to one candidate?
Mr. SMITH. I think the Republicans would have taken the $30 mil-
lion and then we would not have all this scandal we are seeing now.
Mr. DENT. But the Democrats would have taken $30 mfLllion.
Mr. SMITH. Sure they would have.
Mr. DENT. It would not make any difference.
Mr. SMITH. Then we would not have Vesco and all those undesirable
episodes we are hearing about.
Mr. DENT. You would have that. I do not think Vesco read the law.
From what I have been reading about it, I do not read any law.
Mr. SMITH. Under my bill they could not receive it and the candi-
dates or their delegates will have to make sure they do not receive
such money as Vesco gave.
Mr. DENT. These are very serious problems and I am sure your input
is going to help us, because we have 435 Members of the Congress, as
you well know, and I think you know we have 435 thoughts on this
matter.
Mr. SMITH. I know you do.
Mr. DENT. It is pretty hard for us to get it all. We want your view
as well as everybody else's. I do think in the area you are talking about,
in the Presidential financing, the drive is on the public to get behind
it, whether they know what is in it or not, and we usually follow public
demand.
Mr. SMITH. If you narrow it to a particular area, get some agree-
ment, try it out, I think that is a good place to start.
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29.1
Mr. DENT. I think so, too.
Mr. Mollohan?
Mr. MOLLOHAN. You say here recent polls indicate 65 percent favor
public financing.
Mr. SMITH. I meant of Presidential campaigns when I said that.
Mr. MOLLOHAN. That being so, what do you consider the factors that
cause this attitude?
Mr. SMITH. Abuses they have seen, especially in the last election.
But they were present in other elections.
Mr. MOLLOHAN. What type?
Mr. SMITH. Huge contributions by individuals, and they know they
must have expected something in return. They just say to themselves,
"Look, I had better be the one who through my taxes pays some of that
cost, instead of having him get some advantage on me in the
Government."
Mr. MOLLOHAN. I think practically all Members are in favor of plac-
ing a very positive limitation on the amount that can be received or
made, through either individual or collective contributions, a maxi-
mum that an individual can give in a campaign.
It seems to me we are moving from an established practice and pat-
tern in campaign financing to something radical and innovative and
new in large part. Would we not be better off in attempting to correct
the faults of the existing patterns, such as limiting the campaign con-
tribution, rather than go into this radical departure from established
patterns?
Mr. SMITH. I do not think so. I will tell you why.
I think here we are a Congress that deals with passing laws under
which we spend $300 billion a year, $268 billion this year, and we hand
that over to an administration that spends the $268 billion and the
power to spend that much money in and of itself is an awesome power
unheard of in the history of the world before.
The people that are in that position, especially on the Presidential
level of having the power to spend that money, ought not to be subject
in any way to pressures that come as a result of favors to people who
helped to get them elected.
Mr. MOLLOHAN. But if you do correct this fault, and we do limit
contributions and out of all of the things that we have been experienc-
ing here in the last 8 to 10 months comes a very real concern on the
part of the American people and a demand for the enforcement of
campaign laws, would you not feel that we had moved and corrected
the faults of the private financing system in large part?
Mr. SMITH. I think it would be very, very difficult.
Mr. MOLLOHAN. And satisfy the demands of the American people?
Mr. SMITH. After serving as chairman of that special elections com-
mittee, I have concluded it is almost impossible. We do the best we can,
but it is almost impossible to completely enforce the present election
laws. If they get $30 million in public funds and they cannot get any
money any other way, that can be enforced, that is much easier. We
say, you cannot get any money anywhere else and here is the $30
million, you account for it down the line, penny `by penny. That can be
enforced.
Whenever we go the other route of limiting and reporting private
contributions, it is very, very difficult. We had over 5,000 violations
last year.
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Mr. MOLLOHAN. You heard the discussion between Congressman
Giaimo and myself with regard to the creation of multiple party
possibilities?
Mr. SMITH. Yes.
Mr. MOLLOHAN. Do you look on this as any threat or as a possible
outgrowth?
Mr. SMITH. I think there is a threat the other way, that is, if we do
not do something about this, we will end up with one party. One
party will get in power, they have the power to spend $268 billion or
$300 billion and they can perpetuate themselves in office. They get all
the financing, the other party does not receive enough.
I think you have dangers both ways, the way I see it.
Mr. JoNEs. Mr. Frenzel?
Mr. FRENZEL. Thank you, Mr. Jones.
Thank you, Neal, for your testimony. I have been reviewing some of
your stuff here. I am certainly impressed with the amount of work that
you put in on your bill. Most of us here snatch bits and pieces of other
ideas and glue them together.
Mr. SMITH. I would say I did not realize others were going to draft
bills, or I would not have put this much work in. This was last April.
Mr. FRENZEL. It is an excellent piece of work.
As I understand it, your elections commission does not compare with
some of the others that have been suggested, it is simply to implement
and administer the public financing.
Mr. SMITH. Yes. And it involves elected public officials that are re-
sponsible to a constituency. I think there is something good about that,
because they are not so apt to do something that is just a response
to some political instinct or something that is irresponsible. When you
get the minority leaders of the House and Senate, they are going to
act fairly responsible, I think.
Mr. FRENZEL. I like the composition of your commission. I think the
idea of the six appointments and the election of the seventh by the
other six is pretty good and would serve for any kind of an elections
commission, at least as one good idea.
I do not happen to like public financing. On the other hand, I always
like those plans better which are the most modest and yours is experi-
mental and certainly does not embrace all the Federal offices. I think
it is surely worthy of consideration by the committee.
Again, I am impressed by your work and appreciate having the
advantage of it.
Mr. SMITH. Thank you very much.
Mr. FRENZEL. If I might comment on Congressman Giaimo's
presentation, I was not here but I would like to state for the record
that the idea of preemption, ~~hich was one of the essential points of
his presentation, is enormously important. We really did not contem-
plate what we did in the act of 1972; what we did was to say the States
have not done enough and we are going to set standards and we
obligated members and challengers, candidates of all kinds, to double
standards. The problem in Connecticut, and I think Michigan was the
other one where we had just a terrible amount of problems, would
mean that any bill we would put out have to have some kind of pre-
emption. So I am indebted to him too for confirming that idea which
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293
occurs, I think, in many of the bills and I hope it will be part of ours.
Thank you.
Mr. SMITH. While I am here, I will not take but a minute, but I
want to say my experience with the Special Elections Committee con-
vinced me that there are at least six or eight amendments that are very,
very badly needed to that 1971 law. I do not say you have to rewrite the
whole law, but there are some provisions in that law that simply
do no serve the principal purpose for whi~h the law was passed. It
makes it too complicated; it needs to be simplified.
There are a couple of ambiguous provisions. We did issue a report
and I have sent copies of the report to the committee and I hope you
will seriously consider those.
Mr. FRENZEL. Mr. Chairman, I would ask unanimous consent that
that submission be a part of the record if it is not already.
Mr. JoNEs. Without objection.
Mr. FRENZEL. Are you referring to the multiple preelection reports
and that sort of thing?
Mr. Si~rITH. Yes, sir. In other words, the voter is entitled to know
the day he goes to vote who is financing his opponent's campaign. It
serves no purpose for him to know every 3 months in the off-election
year. Then we had 5,000 violations. Any law that has 10 violations
for every candidate elected has to have something wrong with it. Also
the reporting procedures and requirements are too detailed. It really
takes an accountant to make the reports and they cannot agree on it.
Mr. FRENZEL. The purpose is to tell the people but the reporting is
so complicated that no newspaper can print it, they cannot figure it
out when it is presented to them.
Mr. SMITH. In addition, double entries are required in case of loans,
so it is even misleading. First a candidate must record the loan as if
it were a contribution, then when his committee receives the contribu-
tion to pay for the loan, that is added on. So it is really misleading.
Mr. FRENZEL. That is right.
Mr. SMITH. There are a number of other provisions that ought to be
looked at.
Mr. FRENZEL. We appreciate your thoughts.
Mr. JoNEs. Thank you. Thank you for being with us, Mr. Smith. I
think you have made a real contribution to the testimony provided
here.
Mr. FRENZEL. Our next witness is Congressman David Obey from
Wisconsin.
Dave, we are delighted that you could take the time to give us some
views aiid ideas on what you are proposing.
STATEMENT OP HON. DAVID R. OBEY, A REPRESENTATIVE IN
CONGRESS PROM THE STATE OP WISCONSIN
Mr. OBEY. Thank you, Mr. Chairman. .
When Mr. Dent remarked about the possibility, if we ever attain
full disclosure of people looking at a political candidate and saying,
"His net worth is not enough~ we do not want him representing us," it
reminded me of something which happened in my first year in elected
politics in 1960, just before I ran for the legislature.
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294
Old Ben Riehie, who represented rural Marathon County, was upset
because his opponent was running pictures of his farm, which was
run down, and asking people if they wanted that kind of a farmer
representing them in the legislature. Keep in mind that this was 1960.
Ben came to a Democratic Party meeting and he was fuming and wav-
ing his cane and he said "Well, I don't know why you would run pic-
tures of my farm. Sure it is a little bit run down, needs a touch of
paint here and there. But after all, it is just 8 years of Republican
hard times."
So I think there are answers to everything.
Let me just summarize, if I could, my statement. Before I do that, I
would like to say that I will leave the clerk a very short description of
three minor drafting errors in the bill which ought to be corrected.
Let me just make a short summary of my statement.
[Prepared statement follows:]
PREPARED STATEMENT OF HON. DAVID R. OBEY, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF WISCONSIN
Mr. Chairman, H.R. 11244 covers four areas:
Campaign financing; administration of campaign law; reporting and disclosure
of campaign finance; and voter registration.
The bill is based on several basic assumptions about campaign finance reform.
(A) The opinion apparently held by some that the effectiveness of the election
process can only be measured by the number of incumbents who are defeated in
each election is just plain baloney.
A much more important indicator of the effectiveness of the election system is
how many incumbents have active, meaningful races.
Right now that is a mighty small percentage and as a result, a very few con-
gressional districts around the country have to bear the burden of the two party
process.
The current system of unlimited expenditures encourages the concentration of
the lion's share of campaign money in a few districts.
Some candidates spent $200,000 to $300,000 in the general election alone last
year.
It is sometimes argued that those people have to spend that much to get to
Congress.
My response to that is the cost isn't worth it. There were 22 districts in the last
election where the major candidates each spent more than $100,000, but in most
districts there was some poor guy trying to run a campaign against an entrenched
incumbent on $5,000 or $10,000.
This bill tries to change that by spreading the competition around and I think
the result will be a more responsive Congress because 300 plus members from
"safe districts" are going to have to go back to those districts and find out what
people are thinking.
(B) Tough spending limits are a necessary part of any campaign finance re-
form proposal that includes public financing.
To get a bill that can generate public support outside the Congress on one
hand and enough support within the Congress on the other, requires that it be
delicately balanced.
That balance can be achieved by providing on one hand tight spending limits
and on the other hand providing an assist from the public treasury for non in-
cumbents who would otherwise be in no position to raise significant amounts of
money.
I believe the spending limits of other proposals before your committee are
needlessly weak.
The $90,000 limit for House races in 5. 372 is a limit twice as high as the Sen-
ate was willing to impose on themselves.
I think they should be the same because I don't think it costs any more to con-
vince a man to vote for you if you are running for the House than it does when
you're running for the Senate.
It isn't just important to guarantee that non incumbents have sufficient money
to run a respectable campaign.
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295
It is every bit as important that the guy who gets the nomination doesn't get it
because he is able to bankroll the campaign with his own money or the money
of a few well connected friends.
(C) We should not be in the business of encouraging minority parties. The
two-party system has been the basic strength of American democracy.
We must be very careful to insure that campaign spending reform does not
Europeanize the American political system by encouraging umpteen minor
parties.
This bill provides for the participation of minority parties in public financing
in a constitutionally accepted way without unduly encouraging formation of third
parties.
Very briefly, this is what the bill does:
Spending Limits: (A) Applies the same 10~ primary and 15~ general election
limits to House races as the Senate bill applies to Senate races: $32,000 for a
primary and $48,000 for a general in the average House district.
(Rather than the absurd $90,000 limit gratuitously tossed into the Senate
bill for House races.)
(B) Restricts House candidates from spending more than $10,000 per election
from personal and family funds. Senate and Presidential candidates would be
limited to $15,000.
Public Funding: 1/3_1/3_1/3 financing for general elections only. (A) Grants:
Each nominee of a major political party willing to submit to an audit would be
provided with a grant of 1/3 of the allowable spending limit in his district. For
the typical House candidate that would be $16,000.
(B) Matching Funds: The remaining 2/3 would have to be raised from private
contributions except that all contributions of $50 or less would be matched by pub-
lic funds. If half of the remaining % were raised by contributions of $50 or less
the other half would be paid from the matching fund.
(That means in effect that a candidate with substantial public support could
receive a 1/3 basic grant of $16,000 and another 1/3 in matching funds-another
$16,000-assuming that he had been ~ible to raise $16,000 in private contributions
of $50 or less).
(C) Minor Parties: Candidates of minor parties would in most situations not be
eligible for grants. In the few situations where minor party candidates might be-
come eligible, they would receive only a fraction of the amount given major party
candidates.
To qualify for full funding as a candidate of a major party, the party must have
received 20% of the vote as an average in the last elections for President, U.S.
Senator, U.S. Representative and Governor in the district in which the election
is to be held.
If the American Independent party had received only 10% as an average in
those four races in a particular congressional district, the candidate for Congress
in that district would be eligible for only a portion of the amount given to the
major parties. (If the Democratic and Republican parties had together received
an average vote of 45% in the four races, AlP would get 1045 of the amount given
to each of the major parties).
In an averaged size district, that would be $16,000 so the AlP candidate would
receive $3,350.
If the AlP had received less than 10% (which was the case in every congres-
sional district in the country in 1972), they would get nothing. Only candidates
eligible for grants would be eligible for matching funds.
This formula for distributing basic grants is quite similar to the one used to
distribute funds to presidential candidates under the income tax checkoff pro-
visions in Public Law 92-178, and the Kennedy Scott proposal for financing con-
gressional races.
The problem with either of those formulas when applied to House races is that
there are 96 congressional districts on the basis of the 1972 returns in which only
one candidate would qualify for major party funding.
By using an average of 4 races instead of only one, and by lowering the mini-
mum percentage for qualification as a major party from 25% to 20%, we are able
to provide financing for both parties in more than 80 of those 96 congressional
districts.
Contribution Limits: (A) Limits all contributions to a campaign to $1,000; (B)
Limits contr.ibutions in cash to $50; (C) Limits total amount an individual can
contribute to all campaigns to $25,000.
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296
Administration: (A) Administrative powers are transferred to GAO with all
rules and regulation~s subject to approval by a 6-member congressional review
board appointed by the leadership.
(B) GAO powers of investigation are extended to include subpoena power, but
all prosecution would be conducted by Justice. Those suspected of violations
would have the option of demanding a hearing before information was transferred
to Justice by the GAO.
Reporting Disclosure and 1~impliflcation: (A) Number of reports reduced from
8 to 5 for House and Senate candidates. Presidential candidates may report
monthly.
(B) Candidates exempted from complying with dual requirements under State
law.
(C) Recording of occupation of contributor eliminated for contributions of less
than $100.
(D) Candidates are required to designate central campaign committee for the
purpose of making all reports.
(E) Candidates are required to designate campaign depositories into which all
contributions will be placed and from which all expenditures will be made.
Voter Registration: This combines the McGee bill for postcard registration
with the Kennedy amendment to S. 372 which provides grants to local elections
officials to improve registration and election procedures.
It places both activities under a special registration commission: Two members
appointed by the President; two by the Speaker; and two by the pro tem,
rather than under the Bureau of Census as provided by the McGee proposal.
It requires multiple language postcards in areas with more than 5% of the
population speaking a language other than English.
FEDERAL ELECTION CAMPAIGN ACT OF 1971
Reporting and Disclosure
No central campaign committee required.
Requires at least 8 reports.
Requires listing of name, address, and occupation for all contributions of
Limits on Contributions
No limits on individual contributions.
No limits on contributions by political committees.
No limits on cash.
Limits on Ecopenditures
No over-all limit.
Media: 100 per voting age pop. for all media, 6ç~ of this for TV & radio;
applies separately to each election.
Candidate and family can spend $50,000 for Presidential, $35 for Senate,
and $25,000 for House for each election.
Public Financing
For general elections only. Provides Presidential funding thru income tax
checkoff.
No funds for congressional candidates.
Broadcasting
Equal time remains in force.
Voter Registration
No voter registration grants.
No postcard registration.
Monitoring and Enforcement
Three separate offices receive and review reports from Presidential, Senate
and House races.
Justice Department enforces.
5ENATE PA55ED 5. 372
Reporting and Disclosure
Central campaign committee. Each candidate must designate one central
committee from which all reports are filed.
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297
Requires at least 6 reports.
Requires listing of name *and address for contributions of $1O-$100; name,
address and occupation for contributions of $100+.
Limits on Contributions
Individual may not give over $3,000 to a Congressional or Presidential candi-
date; applies separately to primary runoff, special and general elections; no more
than aggregate of $25,000 for all candidates and all committees in one year.
Political conimittees-same as individuals except no aggregate limit. Exempt:
candidate's central campaign committee, Democratic and Republican National
Committees and Congressional campaign committees.
No cash over $50.
Limits on Ea~penditures
Senate-Primary: 100 per voting age population-not less than $125,000. Gen-
eral: 150 per voting age population-not less than $175,000.
House-$90,000 for primary and general.
Presidential-Same as Senate.
Media-limits repealed.
Candidate and family-$100,000 for President, $70,000 for Senate and $50,000
for House per year.
Public Financing
For general elections only-Provides Presidential funding thru Incwne tax
checkoff.
No funds for Congressional candidates.
Broadcasting
Equal time eliminated.
Voter Registration
Grants to localities to improve election and registration procedures.
No post card registration.
Monitoring and Enforcement
Creates Federal Elections Commission to receive reports and enforce law;
stiffer penalties; power to issue subpoenas, bring civil and criminal action
(7 members: 2-2-2-and Comptroller General).
UDALL-ANDERSON ILR. 7612
Reporting and Disclosure
Central campaign committee. Each candidate must designate one central com-
mittee from which all reports are filed.
Requires at least 6 reports.
Requires listing of name and address for contributions of $10-$100; name,
address and occupation for contributions of $100+.
Limits on Contributions
Limit of $1,000 to candidates for Congress and $2,500 to Presidential candi-
dates. No aggregate limit on contributions.
Exempts candidates central committee, Democratic and Republican National
Committees, Congressional campaign committees.
No limits on cash contributions.
Limits on Ea,penditures
No over-all limit.
Media: Same as 1971 except direct mail is included as media.
Candidate and family can spend $50,000 for Presidential, $35,000 for Senate,
$25,000 for House for each election. (Same as 1971).
Public Financing
For general elections only. Provides Presidential funding thru Income tax
checkoff.
For primaries `and general elections: Provides matching funds for all contri-
butions of less than $50 to any candidate for federal office in either primary or
general election, once candidate for House raises $1,000, Senate $5,000 and
President $15,000 from contributions less than $50. 100 per voter maximum or
$32,000 in average Congressional District to be matched.
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298
Broadcasting
Equal time eliminated.
Voter Registration
No voter registration grants.
No post card registration.
Monitoring and Enforcement
Creates federal elections commission to receive reports and enforce laws;
same penalties as old law; power to issue subpoenas, bring civil action and
criminal action (6 members appointed: 2-2-2).
New penalties for false disclosure.
OBEY PROPOSAL H.R. 11244
Reporting and Disclosure
Central campaign committee. Each candidate must designate one central com-
mittee from which all reports are filed.
Requires at least 5 reports.
Requires listing of name and address for contributions of $10-$100; name,
address and occupation for contributions of $100+.
Limits on Contributions
Individual may not give over $1,000 to a Congressional or Presidential
candidate; applies separately to primary runoff, special and general elections; no
more than aggregate of $25,000 for all candidates and all committees in one year.
Political committees limited to $1,000 for individual candidates. No aggregate.
Exempts candidates central committee but no one else.
No cash over $50.
Limits on Expenditures
Senate-Primary: 100 per voting age pop.-not less than $125,000. General:
150 per voting age pop-not less than $175,000.
House-Primary: 100 per voting age pop.-not less than $30,000. General; 150
per voting age pop.-not less than $45,000.
Presidential-Same as Senate.
Media-Limits repealed.
Candidate and family can spend $15,000 per nomination and election for Presi-
dent, $15,000 per election for Senate and $10,000 per election for House.
Public Financing
For general elections only.
Provides Presidential funding thru Income tax checkoff.
Provides 1/~ of expenditure limit or 50 per voting age constituent as a direct
grant to the nominee of major parties for House and Senate.
Provides matching funds for contributions of less than $50 so that an addi-
tional 1/3 of the expenditure limit can be met with public funds if other 1/3 is
raised from small contributions.
Broadcasting
Equal time remains in force.
Voter Registration
Grants to localities to improve election and registration procedures.
Post card registration.
Monitoring and Enforcement
Places administration of disclosure for all federal elections under GAO.
Gives GAO subpoena power to investigate violations.
Requires hearing by GAO before evidence is turned over to Justice.
Prosecution is performed by Justice.
Requires all rules promulgated by GAO to be subject to approval of bipartisan
Congressional review board.
Mr. OBEY. The bill, H.R. 11244, is based on several basic assumptions
about camnaign reform.
First of all, it is my judg~ment that the opinion anparently held by
some people and mentioned by the Chairman that the effectiveness of
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the election process can only be measured by the number of incumbents
defeated in each election is just plain baloney. I think a much more
important indicator of how effective the election system is is how
many incumbents actually have real and meaningful races.
Right now, very frankly, that is a very small percentage. As a conse-
quence, just a very few districts around the country have to bear the
entire burden of the two-party system in terms of Congressional races.
Unlimited expenditures encourage the concentration of the large share
of campaign resources in a few districts. Some candidates spent $200,-
000 to $300,000 last year to get elected to a seat in the House. Some
people would argue-I had a conversation with the gentleman from
Minnesota the other day about the wisdom of tight spending limits-
Some people would argue that, after all, without the ability to spend
great sums of money some people could not make it to Congress.
It is my own frank assessment that if it takes $200,000 or $300,000
to get elected to Congress, then it is not worth it in the terms of the
damage that kind of spending does to the political system. I think it
is very dangerous when the public gets the idea that people have to
spend $100,000, $200,000, $300,000 to get elected, because a good many
people in the public feel if it takes that much to get elected, there
must be a great deal more at stake besides the $42,500 salary which
each of us gets.
This bill tries to change that by spreading the competition around, so
that you disperse the amount of money which is spent in congressional
campaigns and so that you provide real challenges to almost all in-
cumbents in the Congress.
Secondly, I think tough spending limits are a necessary part of any
campaign finance reform proposa1 which includes public financing, as
mine does. I think you have to have a decent balance between what you
provide in the way of an advantage to a nonincumbent, and very real-
istically, you have to provide some balancing advantage for incum-
bents. I think that is reflected in the tough spending limit.
I think the spending limits of many other proposals are needlessly
weak. The $90,000 limit for House races which the Senate gratuitously
put into its bill, is twice as high as the limit they were willing to im-
pose on themselves. I think it is too high. I think it is important to
guarantee not just that nonincumbents have sufficient money to run a
reasonable campaign, I think it is also every bit as important to guar-
antee that the guy who gets the nomination for the party out of power
in any congressional district, does not get the nomination because he
is going to be able to bankroll his own election either out of his own
pocket or with the assistance of a few well-connected friends.
The third assumption I base this bill on is that we should not be
in the business of encouraging minority parties. I agree very much
with Bob Giaimo that the two-party system has been the basic strength
of American democracy. I think we must be very careful to avoid
the Europeanization of our political system. This bill provides for the
participation of minority parties in public financing in what I believe
is a constitutionally acceptable way-though I am not a lawyer-with-
out unduly encouraging the promotion of third parties.
Now, very briefly, the bill does this: In terms of spending limits,
it would app~v tJie same 10 cents primary and 15 cents per voting age
population figures for the general election limits to the House races,
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300
that the Senate bill applied to the Senate races. It would be an average
of $32,000 for primary and $48,000 for general elections. I am not
stuck on those precise figures, but I think you ought to start low.
Secondly, it would restrict House candidates from spending more
than $10,000 per election from personal or family funds, and we
greatly expand what we mean by family funds. Senate and Presiden-
tial candidates would be limited to $15,000. Public financing: I think
that public financing is essential to recapture public confidence in the
election process, but I do not believe we ought to include primaries.
I think that would be dangerous for all of the reasons listed by
Bob Giaimo and many others.
I think if we are going to experiment with public financing, it should
not be at the Presidential level alone, in part because of the reason
mentioned by Mr. Mollohan. I think the danger of third parties is
much greater at the national level than at the local level. I think the
number of candidacies of third parties at the local level bears that out;
there are very few. Their impact nationally has been slight in com-
parison to third-party candidates for the Presidency.
I believe we ought to start on a limited basis. I would limit that only
to general elections, not primaries. Briefly, this is sort of a cross
breed between the Udall-Anderson and what others suggested. We
would basically have a one-third, one-third, one-third arrangement.
Every nominee of the major political party willing to submit to an
audit would be provided with what amounts to 5 cents per eligible
voter in his district, or about $16,000. Then he could match in public
funds every contribution of $50 or less up to another $16,000.
That means in effect if you can get about 320 people in your district
to contribute $50 apiece, you can run your campaign without a dime in
contributions of over that amount. I think that would be good. The
way we handle minor parties is this-incidentally, present law, as I
understand it, on the campaign checkoff for the Presidency, provides
for a different treatment for minority parties than majority parties-
this picks up the same method in which that is handled in present law
as far as the checkoff is concerned.
What we say is that to qualify for full funding as a candidate of
a major party, the party must have received 20 percent of the vote as
an average on the last election for President, TJ.S. Senator, U.S. Rep-
resentative, and Governor.
The formula is quite similar to the one used to distribute funds for
Presidential candidates under the checkoff provision and the Kennedy-
Scott proposal for financing congressional campaigns. The problem
with those formulas, however, both the Kennedy-Scott proposal and
the one in present law, is that when they are applied to House races,
that means in effect there are 96 congressional districts, on the basis
of 1972 returns, in which only one party would receive public financ-
ing. But using the average of the four races which I just enumer-
ated, and by reducing the minimum percentage for qualification as a
major party from 25 percent to 20, we are able to reach in this bill more
than 80 of the 96 congressional districts which would otherwise receive
funding for only one major party's candidate.
We would limit all contributions to a campaign to $L000. That in-
cludes COPE, that includes national committees, that includes con-
PAGENO="0305"
301
gressional campaign committees. I think you have to do that or you
cannot get around the problem of laundering.
We limit cash contributions to $50. We limit total amount an in-
dividual can contribute to all campaigns to $25,000. As far as adminis-
tration is concerned, we provide for administration by the GAO, but
with one critical difference than has been suggested by some people.
We provide that all rules and regulations which are promulgated
by GAO are subject to approval by a six-member congressional re-
view board appointed by the leadership. That is to guarantee that
whatever rules and regulations are promoted are practical, that they
are seen through the eyes of real life politicians rather than somebody
who has not participated in a campaign, does not understand what the
reporting requirements can be, or IRS requirements, in order to qual-
ify, for instance, for tax exemptions through contributions and all
the rest.
As far as disclosure is concerned, we reduce the number of reports
necessary from eight in the present law to five. I think we do that with~
out damaging the policy of disclosure which I believe in very much.
We exempt candidates from complying with dual requirements under
State law.
I agree with Bob Giaimo that you have a terrible problem if you are
trying to reconcile different statutes on the Federal and State levels.
We add in, arid I do not want to get into it, because this subcommittee
has already gone into it, we do add in a somewhat different version of
the McGee voter registration bill. 1,~\Te combine that post card registra~
tion plan with the Kennedy amendments to 5. 372, which would pro-
vide grants to local election officials to improve registration of elec-
tion procedures and we would place the activities under a special regis-
tration commission as opposed to the Census Bureau, which in my
experience has been fairly political.
It also would require multiple language post cards in areas where
more than 5 percent of the population speaks a language other than
English.
Let me just make a couple of points.
I very much understand the chairman's fear that this committee,
if it brings a bill to the floor, will see that bill hopelessly amended;
that you will have a number of operating coalitions working on the
floor; that we will wind up with something that is patch work at best,
and will make no sense legislatively or in any other way.
I would hope that this committee would be able to bring a compro-
mise to the floor which could avoid that. I frankly believe that you
cannot avoid a hopeless thicket on the floor, unless you have some kind
of public financing.
If you have some kind of public financing-and I do not like the
financing contained in the TJdall-Anderson bill, because it rewards those
who have (if you have trouble raising money, you have trouble getting
public financing~-if you can raise a bundle in private financing, you
can raise a bundle in public financing. I think that is not necessarily in
the public interest.
The reason that I provide in the public financing section of this bill
for party-nominees only but exclude primaries is because I think, if I
can go back to my original point, it is critically necessary that we
start spreading the competition around this country, so that we do
25-239 O-73-----20
PAGENO="0306"
302
not have the two parties just competing, in real terms, in about 60
or 70 or 80 districts in the country. If you spread that action around,
I think you would have a much more responsive Congress.
I would love to run without an opponent, but I think it is frankly
unhealthy for any ~nan to sit in this Congress for two, three, four, five
terms with no opponent. I think it makes you less responsive to public
needs and pressures, less aware of what the public concerns are, both
back home and nationally. You tend to get sloppy in trying to attune
yourself to what the public needs are.
I think this would help correct that by providing that even in the
safest Democratic or Republican district, with the eleven exceptions
that we cannot get to under this bill, even in the safest district you
would have a candidate of the out party who can at least present a
basic minimal case against an incumbent. I think that would make for
a healthier system. That is much more important than trying to figure
out how many incumbents get beat each time. I would be happy if no
incumbents got beat provided that every incumbent had a decent race
which challenged his poltical ideas and philosophy back home. That
is the much more critical question that faces the election system.
That is about all I have to say, Mr. Chairman.
Mr. DENT. Glad to have you with us. I am sorry I did not get to
hear all of your testimony, but it was very interesting to hear your
last conclusive remarks on the basis of this.
You would not like to see a district keep repeating and returning an
incumbent to office, and lie was declared, or was in the race without
opposition.
You know, I just wonder if that does not ~o into a little deeper prop-
osition than what appears on the surface. If a majority of the people
in a district believe in a certain philosophy of government and either
party or maybe an independent party represents their philosophy,
would you then somehow, artificially, change that situation so that
some of these people had to move away from their views? Let me give
you a for instance.
The city of York and the county of York, Pa., which is Pennsyl-
vania Dutch primarily, and I believe-I know in our State it was the
only entity of government that had Socialist mayors, Socialist county
commissioners, Socialists for years and years and years. It was just
useless for anybody to run for the State legislature. Now, how could we
go in and tell the Pennsylvania Dutch, and if you have ever tried to
tell the Pennsylvania. Dutch anything-good gosh~ you would have
an awfully tough time, trying to tell the majority-how would you go
in there and make it so that he had to have an opponent? We are
getting away from something here, you see. We. must never imnose
our own ideas of what the Constitution means at the point of thinking
that we, in order to give somebody that has an ide.a that there is some-
thing wrong with incumbency, and cont.inued incumbency, some of
changing the; views or the philosophies of the people in that district.
Now you know many years the South was known as the Solid
South. But it was not because they were De.mocrats as such. You know
that. You are on the. floor. But it is just because the people in those
communities liked what they had. The. greatest deterrent to reelection
is a ba.d record. There is nothing a challenger has that can compare
with the damage of a bad voting record on the floor. Yet if the people
PAGENO="0307"
303
want him, the majority of the people must want him or he would not
be in there.
Mr. OBEY. I would suggest that nothing in this proposal imposes
anything on anybody. I do not think anybody is so good that he
should not have an opponent. I do not care if h~ is the son of. God
Almighty.
Mr. DENT. There is nothing to stop an opponent.
Mr. OBEY. I think right now if you look at the practical reality in
this country, we only have contested elections in about a quarter of the
races in this House. That means each of us brings some very different
impressions of what the public concerns are to this House.
All I am suggest.ing is that if a fellow is as good as you imply, as
some incumbents are-and I agree there are a lot of good incumbents
around. But if a fellow is that good no amount of money spent against
him is going to put him in serious trouble. But what this will do is
allow his philosophy at least to be tested, at least minimally, which is
a lot more than happens now in a good many districts. I think it would
save on the tendency of the national parties to build up the cost tre-
inendously in the few districts which they define as being marginal
under the present system.
I would much prefer each candidate in a safe district spending
$30,000 and $40,000 apiece instead of some poor guy running against
an incumbent with only $4,000, $5,000, $6,000, $7,000 to spend while a
few well-financed challengers are spending $200,000 or $300,000.
I have a list of candidates here, in Arizona you have had $473,000
spent by two candidates; in Massachusetts by three candidates you had
$514,000 spent. The candidate who got 11/2 percent of the vote spent
$63,000.
Mr. DENT. Which proves what?
Mr. OBEY. I think what it highlights is the kind of big money in
political campaigns which people think is dangerous.
Mr. DENT~. Did you look at how many of them spent more than an
incumbent and lost?
Mr. OBEY. Quite a few.
Mr. DENT. Very frankly, it is a very difficult problem to resolve, but
if a person represents a district and continues to represent that dis-
trict, he evidently must be representing what the district wants and
philosophies that they subscribe to. No amount of artificial means is
going to change that.
Now I am no exception, I am just an ordinary Member of Congress
for a few years. But I am in my 43d year as an elected legislator. I
have had opposition every time I ran in those 43 years except one, and
in the one I did not have opposition is in the bad election where I won
a general election by only 700 votes. You tell me how you are going to
change that with any kind of formula you are going to write.
Mr. OBEY. I am suggesting even in the safest district it is very im-
portant for candidates if they are nominees of a major political party
to at least present a minimal case for his philosophy, his position on
the issues.
Mr. DENT. Who would you pick as that candidate, since no one ever
ran before, there is no minority party; how many would you allow to
run against him and who would you finance?
PAGENO="0308"
304
Mr. OBEY. All this bill does is provide for the nominee of the major
parties a small nut of money through public financing. It does not pro-
vide a dime in primaries. All it provides is that if you are the nominee
of the party, you get that money.
Mr. FRENZEI~. I would like to pick up Mr. Dent's question about pro-
viding artificial competition where no contest occurs. In those races
that you are trying to get at, those races where there are no contests,
the contests 99 percent of the time is going to occur in the primary and
you are not doing a dumb thing for the primary. You are creating an
artificial contest between two parties that don't even exist in that dis-
trict. Why are you spending our money for somebody who has no pop-
ular base?
Mr. OBEY. I don't know how you can tell if anybody has a popular
base. I come from Mel Laird's district, for instance. I represent the
district he used to represent, and there was no way, there was no
chance that Mel Laird would have had a primary opponent in that
district. No way at all was he going to have a primary opponent. The
Republicans liked him and half the Democrats liked him.
Mr. FRENZEL. But you are not talking about that but the 90 percent
who are opposed.
Mr. OBEY. Let me make a couple of points and I will get to that. The
Democrats couldn't have raised $10,000 to run against Mel Laird and
in fact didn't in any campaign that I ever saw against Mel, simply be-
cause he was so popular that nobody with any dollars was willing to
contribute them to anybody else. I don't happen to think that is
healthy. I don't get into the primary situation because, No. 1, you
aren't going to pass anything in this House which provides public
financing.
Mr. FRENZEL. May I suggest one other thing. That is the only place
Democrats ever get beat is in primaries.
Mr. OBEY. I don't know if that is true or not. I don't think that
is true.
Mr. MOLLOJIAN. Mr. Chairman, on the other side of the page I think
what the Congressman is doing here is making one of the most signifi-
cant arguments I have ever heard for public financing and I have
never been persuaded that it is right at all. You are suggesting the cre-
ation of a forum in which the issues can be brought to the people and
debated.
Mr. OBEY. That is right.
Mr. MOLLOHAN. This is one of the most logical reasons I have ever
heard here for public financing.
Mr. DENT. Who picks the contestants?
Mr. OBEY. I think you would generate much more interest in in-
cumbents if everybody knew their ideas and philosophies had been
tested. I don't want to get into primaries for public financing imme-
diately right out of the box for two reasons. First because you can't
pass it this time around and second because I think you should test
public financing in the general election first, see what bugs develop.
You can get the bugs out there and can then move on to the question
of how you do handle primaries. Very frankly, I am not smart enough
to figure out how you do handle primaries with public financing be-
cause you do run the risk of getting a dozen guys who want to adver-
tise their law business and so they run for public office. I don't know
how you sell that.
PAGENO="0309"
305
Mr. MOLLOHAN. I could say $16,000 initial participation of public
funds would assure a candidate for general election in my district
because my expenditures have been running around $23,000 to $25,000
so this would constitute a very high percentage of the funds that are
necessary to assure that a candidate would be in there.
Mr. OBEY. I think it would and I think it would be a spur for your
second party-the major party which is out of power in any congres-
sional district. I think it would be a spur to them to provide qualified,
responsible candidates where right now what they do in a good many
districts is look around for some poor sucker who is going to be a
sacrifice candidate, and I just don't think that is healthy.
Mr. DENT. It might not be healthy, but it certainly borders on the
Congress attempting to do something that the people in the district
themselves have not seen fit to do or that the political parties are not
strong enough. You can't equalize-
Mr. OBEY. Of course you can't.
Mr. DENT [continuing]. The political strength in party lines. If
you don't do that, then as you say, there is a lack of contest and then
there is a lack of discussion, but I don't know about that. Have you
ever run in a district where you had about 33 newspapers daily and
weekly?
Mr. OBEY. I have more than that.
Mr. DENT. And everyone of them opposed to you? They get a lot
of dialogue out there.
Mr. OBEY. When I ran for election in 1969 I had one weekly news-
paper with a circulation of 600 endorse me. That was it, so I under-
stand what you are talking about.
Mr. MOLLOHAN. Mr. Chairman, we have had arguments here for
public financing based on the fact of huge contributions, failure to
report, handling of cash and on and on. In my judgment all of these
can be handled by remedial legislation.
Mr. DENT. That is right.
Mr. MOLLOHAN. This is the only argument that I have heard pre-
sented to me which I couldn't challenge. I know that this would create
a forum in which an incumbent would have to go to the people justify-
ing his position on various and sundry issue,s, and there he would be
challenged by a candidate who had adequate financing and funding
to carry on a legitimate campaign and present himself to the people.
I am not persuaded that public financing is the answer. This is a good
argument for it, I will tell you that, Mr. Obey, and I appreciate your
bringing it up.
Mr. DENT. Of course I respect your judgment, Bob, and of course
Mr. Obey's, but I still see some interference on the part of Govern-
ment as to the free wishes of the people of a district. For instance, the
idea by the injection of money into a campaign and giving someone
out of the treasury money, you create a debate, as it were, on the
issues. When we are through with the statistics that this committee is
developing, out of the factual reportings that we have, we are going
to show you, I believe, from my first blush, in looking into the figures,
wherein more than instances than you figure-the outstanding points
where they say two men spent some $500,000-I am going to show you
more persons who spent less than what you are talking about as a gift
out of the treasury.
PAGENO="0310"
306
Mr. OBEY. I know that.
Mr. DENT. And so it isn't really money in some instances. It isn't
that at all. I could name you people without going too far from where
I am sitting who have spent as low as $3,000. You mean an individual
couldn't raise $3,000 to run for an office? What kind of a discussion
could he bring into the problem if he was lacking that much of a
standing in the community? He wouldn't understand the problems, in
my opinion. It is a peculiar situation, but I have long, long ago deter-
mined in my own mind that money isn't the answer, and I believe it
sincerely. I don't believe that. You had one adviser here this morning
advising a minimum of. $125,000 for a campaign. In your district
you might be able to raise it. Maybe I could if I went out and extended
myself.
Mr. OBEY. No, I have never spent more than $60,000 in any race
I have run, and that was last time I ran in a reapportioned district
against the dean of the delegation, and we both spent considerably
more money than we either had before in our lives.
Mr. DENT. Did you lose?
Mr. OBEY. No. I'm here.
Mr. DENT. Frankly what would have been the difference if you
were limited to $20,000 and he was limited to $20,000?
Mr. OBEY. Not much.
Mr. DENT. That is exactly right.
Mr. OBEY. That is not the best reason, but it is another reason you
can make for lower spending limits. The reason I provide for spending
limits which are so low in the eyes of many people in this bill is because
if you have public financing I think that you have to balance it off
with some kind of reasonable limit so that you aren't pumping huge
amounts of money into the election process.
Mr. MoLr~oIIAN. There is another reason for lower spending limits
too. It imposes upon the candidates a far greater need for individual
contact and reaching out for people personally, which I consider to be
essential in a matter of congressional representation. I spend a tre-
mendous amount of time in getting back to people personally. I think
by withdrawing massive sums for media advertising and media ap-
proach, television, radio, newspaper advertising, you put the burden
of the campaign back upon the individual Member of Congress,
which in my judgment is a wholesome situation.
Mr. OBEY. I would agree with that. I have great misgivings, for in-
stance, about the suggestion made, if I understand him right, by Moe
Udall and some others, who say maybe the first step you ought to
take is to just add direct mailing to the list of items for which we
have a limit right now. All you do, if you do that, is just push the
money someplace else.
Mr. DENT. That is right.
Mr. OBEY. So you will be hiring out hundreds of door-to-door
workers to go door to door and peddle your literature and your cam-
paign processes will become even more remote than they are today.
Mr. DENT. There is a lot of logic in that.
Mr. Frenzel.
Mr. FRENZEL. Mr. Chairman, might I question the witness. I guess
this is more of a speech, Dave, than a question.
PAGENO="0311"
307
John and I have pretty much taken opposite sides of this limitation
debate since it has been raging here. You want to submit a limitation
of $48,000 per average congressional district for general elections. If
you were to send one first-class mailing to every household in the dis-
trict, with a nice letter, a brochure and so on, it will by the time of the
election cost you a dime for the stamp and another dime to put some-
thing in the envelope, and buy the envelope, and that will cost you
$28,000.
If your committee wanted to put out something else, some junk
mailer telling you what a neat guy you were, and mail it to every house-
hold in your district, under the reduced mailing, the bulk mailing, you
would save a nickel and you would spend $21,000. If you did both of
those, you would be $1,000 over your limit. In the meantime, you and
I have been sending newsletters to our people at home once, twice, 10
times a year. I don't know how often anybody does it. Anyway we all
do it. It is a legitimate communications device, but it doubles as a
political brochure and recognition device, even if we don't intend it
that way, so in setting your $48,000 limit you have really put the chal-
lenger up against a miserable situation.
He can't buy those 10 billboards, which if he has them for 3 months
will cost him $20,000. He can't buy those 20 spots on television, which
in my market if you want to get on the one decent station is going to
cost you $10,000. He can run around like a chicken with its head cut off,
go to the supermarkets, go door to door, but he can't have a telephone
or rent an office. All he can do is have those two partial mailings under
your system.
I agree with you. I think if the incumbents are the best guys they
should be reelected. On the other hand, I think your limitation does
more to insure that a significant challenge cannot be made than any-
thing you are talking about.
Let me give you a specific example. In 1962 in the State of Minnesota
nobody would spend a dime to take on Walter Judd who was then
Minnesota's premier politician. As a result of redistricting a young
State senator by the name of Don Fraser said, "I have got a chance to
win this election." By admission of his campaign manager who hap-
pens to be his close personal relative, they spent $120,000. In today's
dollars that is a quarter. of $1 million. They toppled Walter Judd. They
did the impossible. They couldn't have done it without the redistrict-
ing or without the money. I was out on the street peddling Judd
literature. I would not deny to these people the right to use voluntary
funds by people who thought he was the right guy with the right phi-
losophy to get the same kind of recognition that the towering figure
already had, because of his prominence in politics. Without the `ability
to raise that money, he wouldn't be here.
Mr. OBEY. Can I make a speech in response?
Mr. FRENZEL. Certainly. That was an awful long speech not to let
you respond.
Mr. DENT. We have two more witnesses. It is all right to make
speeches.
Mr. OBEY. Let me say first of all there is no one in Congress whom I
have more respect for than Don Fraser. I think he is tremendously
valuable to the Congress, a tremendously decent man and a good Con-
gressman, but I don't care who the guy is. Given the view the public has
PAGENO="0312"
308
about big money in politics I don't think that it is worth the price for
anybody to be here if they have to spend that kind of money to get
elected.
Let me make a suggestion on newsletters. I think there are a number
of ways in which you could balance off the use of newsletters. It has
been my observation that a good many incumbents use the newsletter as
a defensive device. They put out newsletter after newsletter, some be-
cause they are generally concerned with some of the issues involved,
but a good many because they see it as a way of guaranteeing some
hedge against a potential onslaught of huge amounts of money being
spent by a guy with a lot of bucks in his pockets who may or may not
be a resident of his district, who may move in or who may have lived
there for a long time, and who will spend large `amounts of money out
of the blue to get elected.
I think almost every incumbent is worried `about that these days. I
think it would be much easier to legislate an end to the use of that kind
of a newsletter if that fear were gone. You could limit newsletters to
one, two, three, or four a year and you could cut them off after filing
date.
Mr. FRENZEL. We have tried that `and been unsuccessful.
Mr. OBEY. You haven't had that as part of this kind of package but
you could cut newsletters off as of the date people announce. You
could also, for instance, if you wanted to try something else, say: "All
right, the limit for the nonincumbent is increased by whatever dollar
value is represented by the number of newsletters sent out by an in-
cumbent in the time period after he is a candidate.
Mr. FRENZEL. I am for that too.
Mr. OBEY. I think the key is that if you have low spending limits,
so that incumbents aren't in the perpetual fear of having some money
pockets running and spending $200 and $300 grand against him, that
you can get that kind of low limit passed, and that low limit will
enable you to do a lot of these other things. I really believe that.
Mr. FRENZEL. Mr. Chairman, I just want to take a minute to say
that Congressman Obey, as Congressman Mollohan has already
pointed out, has made the first sensible argument for public financing
that I think this committee has heard. I still don't agree with you, but
thank you for raising it above the level of Anderson-Udall, and giving
us something to chew on.
Second, the point that you don't have repeal of 315 in your bill, and
it seems to me that if you really want to make a race or equalize the
scales, that ought to be included.
Mr. OBEY. I don't do that because first of all I didn't want to get
into that can of worms. It is tough enough to pass anything without
that. This is the most complicated thing I have ever looked at around
this place except for the reform of the budget process. But I also don't
frankly like, the idea of putting that much power in the hands of
local television people. In a congressional district-not so much like
my new one, because I have a great many TV district.s in my district-
but in my old district, the first time I ran, I ran against the news
director of the largest television station in my district. If you allow
them the power to choose how they are going to use television time,
they can have a tremendous influence on a local election.
PAGENO="0313"
3o~
Mr. DENT. Thank you kindly, Dave. I am sure that you have added
a great deal to our volumes here that we are trying to put together.
The next witness, and I apologize to him for being so late in this
matter, but as you know Members are given special consideration, the
Honorable Donald J. Mitchell from the State of New York. Donald,
please take your seat. Thank you for coming. We appreciate your
waiting.
STATEMENT OP HON. DONALD J. MITCHELL, A REPRESENTATIVE
IN CONGRESS PROM THE 31ST DISTRICT, STATE OP NEW YORK
Mr. MITCHELL. Chairman Dent, members of the Subcommittee' OD
Elections, thank you for giving me the opportunity to appear `before
your committee to discuss public funding of elections. Though I have
cosponsored legislation that addresses itself to this issue, I am not
speaking today for any specific measure. Rather I wish to add my voice
to the many who endorse the principle of public funding of elections.
Having tried and failed to draft an. original bill, I am aware of the
many pitfalls and complexities involved in developing a sound pro-
posal. Hopefully you will be successful in drawing up legislation that
will provide the type of campaign financing reform our country needs.
Widely publicized abuses within the present system of financing
has helped create a feeling of distrust and alienation among the Ameri-
can people toward their public officials. I am convinced most contribu-
tions to political campaigns are made without any thought of personal
gain. Nor do I believe there is a great deal of influence peddling. How-
ever, there is a cloud of suspicion above public officials which must be
removed if they are to provide the quality of leadership America needs
today.
It is difficult to think of any political scandal where money was not
a factor. Certainly it played a role in both the Agnew and Watergate
situations. How many more scandals must come to light before Con-
gress acts?
If the so-called funny-money, the money from questionable sources,
the money with strings attached, the unreported money, were elimi-
nated, we would be well on the way to restoring confidence in our pub
lic officials and in the system. The simplest way to eliminate suspicion
and restore credibility is for `Government to provide political candi-
dates with adequate campaign funds and to strictly limit campaign
expenditures.
One of the primary reasons campaign financing has become such a
Problem is because of the high cost incurred. My campaign for Con-
gress involved six different candidates and reported expenditures of
more than a quarter of a million dollars. I have heard of congressional
contests where far more was spent. Without public funding of elec-
tions, we are fast approaching that time when only the very wealthy or
highly subsidized can hold Federal office.
My campaign organization had difficulty raising funds. I loaned
more than $20.000 to the committee. This money is still owed. It
seems as difficult to reduce this deficit as it was to raise funds initially.
I don't feel the success of a campaign should be based on a candidate's
ability to raise money. Nor do I feel any candidate or elected official
PAGENO="0314"
310
should be put in the position of a fundraiser. It's not o.nly demeaning,
it's asking for trouble.
One additional advantage of public funding is that it should
encourage potential candidates who could not otherwise afford it to
seek public office. While some argue that public funding would give
incumbents an advantage, statistics show that incumbents out-spent
challengers 2 to 1 in 1972. Equalizing campaign spending through
public funding would give challengers a more equal opportunity.
Removing candidates from the role of fundraisers would allow them
more time to focus their attention on the issues and thus give the
American people the kind of elections they deserve and want.
In conclusion, public financing of election campaigns is an excellent
way to avoid the sometimes questionable and illegal practices involved
in our electoral process, to remove the cloud of suspicion related to
money, to open up politics to more people, and to make races more
equal.
Mr. Chairman, members of the committee, I commend you for the
thorough consideration you are giving the principle of public funding
of elections. I sincerely hope you will be successful in developing sound
legislation. The hour is late.
Mr. DENT. Thank you, Donald. I think the committee is trying to
gather all the thoughts that it can. While we may be moving slower
than some individuals and organizations would like us to move, I
think if you listen to our hearings for a day or two you will see why
we have to move rather slowly, because of the fact that every Mem-
ber of Congress has his own idea what the bill should contain. We think
like all other problems we will come before the House with some kind
of an approach that will reasonably resemble most of the suggestions
that have been given to us, maybe not in the degree that some of the
proponents would like us to, but I think that we will cover the main
points of what we feel ought to be in a reform bill. We are giving very
serious consideration to that portion of the testimony that you are
addressing yourself to. That is to the portion of the testimony dealing
with the reasonableness for public financing. So far the score has been
a little more in favor of nonpublic financing by the witnesses who
have come before us, but that will in no way prejudice us against
giving every consideration to your testimony.
Mr. Frenzel.
Mr. FRENZEL. No; thank you, Mr. Chairman.
Mr. MITCHELL. I would like to address myself to Mr. Frenzel's state-
ment about the last gentleman's testimony to the effect that it was the
first sensible argument he has heard. I can't believe he wants to have
that in the record. I think it is something like Nero might say about fire
prevention while Rome was burning. I think we have reached a time
in our history when there is a serious erosion of confidence. When I
see studies that indicate 51 percent of the American people think all
politicians are crooked. I think it is time we did something. We can't
foot-drag. We can nit-pick every piece of legislation to death. Every-
body knows that. I think it is time we forget whose ox is being gored,
whether it is the incumbent or challenger, Republican or Democrat
who will be hurt most by public funding of elections. The public 1S fed
up to their ears with daily disclosures of dishonesty in government. I
think unless we do something this year it is pretty darn late.
PAGENO="0315"
311
Mr. MOLLOHAN. Do you think the oniy way all of these things can
be done that you have enumerated so very eloquently and persuasively
here as being false and things we should address ourselves to do, you
think the only positive action this Congress could take is to provide
for public financing? Is that the only remedy you have in your mind?
Mr. MITCHELL. I think it could get the public's attention.
Mr. MOLLOHAN. That doesn't answer the question.
Mr. MITCHELL. Let me answer another way. I don't know what com-
mittees had charge of financing the handling of elections for the last
50 years, but so far they haven't come up with a very good system. I
think private financing has failed so far as the public is concerned.
I think it is very late. You can stick a couple of amendments in last
year's law, but there are enough loopholes in last year's law to drive
this Congress through.
Mr. MOLLOHAN. One of the reasons we have this situation was
funny money and huge campaign contributions. It seems to me it
would be far more intelligent and sensible for most of us to remedy
ourselves to remedying existing faults and procedures, rather than
innovating a completely new program of handling campaigns and
campaign financing. If we would withdraw from existing law, or
rather make very positive limitations in law with respect to the size
of contributions and sources of contributions, and the methods of
reporting, why then it seems to me that you would be withdrawing
the principal ob~e~tion here you have raised.
We had a very prominent Member of this Congress, a man for whom
I have tremendous respect, appear here and testify to the fact the
failure of the Corrupt Practices Act was because the law was not
complied with. Then he said the law which was presently on the books,
the reason for its failure was it hadn't been enforced. Enforcement and
compliance are one and the same to me.
This is a breakdown in my judgment in our law enforcement
agencies. I do not suggest in that regard and would not want anybody
else to suggest the responsibility lies with the Congress. We can pass
a law but we cannot compel the enforcement of it.
Mr. MITCHELL. We are beginning to enforce last year's law this
year and thank God for that, but as I understand it there hasn't been
any enforcement of or convictions under the old law since 1928.
Mr. MOLLOHAN. All of what has happened then in the last several
months has served a very useful purpose.
Mr. MITCHELL. It sure has.
Mr. MOLLOHAN. Then we are going in here with the premise we are
going to have law enforcement which would negate much of the argu-
ment and furor which has been raised in the last several months call-
ing for complete and radical renovation of campaign practices and
fund raisings.
Mr. MITCHELL. I think we are kind of late. This is just my opinion as
a freshman Congressman who financed his first 10 elections by himself.
Mr. MOLLOHAN. Your costs were not excessive. You said you had six
candidates and a quarter of a million dollars. That is $40,000 apiece.
Mr. MITCHELL. Two of us spent most of the money and I also
mentioned reported costs. I financed my elections myself for the State
legi siatiire and felt virtuous about it. Then when I came to raising
money for my run for Congress I found there wasn't anybody who
PAGENO="0316"
312
wanted to contribute very much anyway. We have to be innovative.
We can't patch the sore area with bandaids. It requires major surgery.
The most serious problem in America today is a lack of confidence
in its leaders. If we don't do something pretty dramatic or innovative
we are not going to keep their attention. They are going to look for
something else. I think this is one way they can understand we are
trying to do something to clean it up.
Mr. FRENZEL. I want to thank the witness for trying to correct my
record for me and keeping me in good shape. I do admire your en-
thusiasm and your obvious interest in this particular subject, and let
me also say it is good for our character up here to be called wrong
from the witness stand. However, I do want to say, Mr. Chairman,
that I stand on my statement and what I have said previously. I am
tired of having people come in here and say public money is going to
clean up all human frailties, and anything that is wrong with our
system can suddenly but cauterized with a vast injection of public
money. It isn't going to do that, and the gentleman before you came in
and told us what good purpose public money could be put to.
You can pass laws to prevent this and that, to prohibit this and that,
to limit this and that. As a matter of fact, I think we found that many
of the abuses that have come to light in 1972, there were plenty of
laws broken. Certainly we have things that need improvement in
prosecution.
I appreciate the coaching, but even more than that, I appreciate
your strong interest in this matter, but I think we really have to high-
light the specifics.
I would agree with you a lot of the members of the public do think
public financing would somehow suddenly make us all power. I only
wish that I shared that view, and I wish I thought it was that easy.
I think we have got a lot of other things to do as well or maybe to
the exclusion of public financing.
Mr. DENT. You know, Donald, one thing you should give a little
consideration to is the people of the elected officials oftentimes is a
rubofF of individuals that goes further than the individual's char-
acters. I would say if we had had television and public polls during
the Teapot Dome scandal, there was a very low opinion of public
officials at that time, those were Harding's days, during the scandals
in the Grant administration they had a very low opinion. When a
certain Governor just in a recent election got himself into a very
serious thing with the people, there was that, too.
That, too, they had a very low estimate of elected officials and wiped
out for the third time in a century a whole political party practically.
So sometimes we must not do things in the fever of the moment,
because we may do a great deal more damage.
I still point at one thing, bad as this system has been over the years,
maybe being held in such low contempt by so many people, yet we have
come pretty far. I remember the early elections. I went through many
of them. I can tell you that compared to what it was in the old days,
the elections today are so much cleaner that you would never recognize
them if they were put alongside the old days.
I remember when the whole election was run in a barbershop of
a coal mining town, where the ballot box was put on top of the table
with a hole in it which led to the floor below w~here the foreman of the
PAGENO="0317"
3.13
mine was downstairs, and every ballot went down to him and if it
was not marked right it went back until it was marked right. But the
advent of television has made the cost of elections so high that there
is a suspicion on the part of the people when persons spend $120,000,
$200,000, $300,000 to win an election, Yet these persons who come to
this committee, or to me personally, justify the expenditure in their
own mind.
You cannot make it an open and closed case.
Mr. MITCHELL. It is npt simple. This is why I do not have a bill.
In answer to Mr. Frenzel, it certainly is not going to solve all the
problems of human frailties. The weakness, as I see it, once again from
freshman eyes, is that fine, line between contribution to a fundraising
committee and influence peddling. The public has a terrible time
trying to make that distinction. I think if you can eliminate that, it
would help.
I am trying to set up a club to eliminate some of my deficit. We are
going to have $100 memberships. I heard someone say, very virtuously,
"I cannot be bought for $100." That immediately raises the question,
"What is the price ~"
What I am saying is, we should not have to get down to that level.
Thank you very much.
Mr. DENT. Congressman Bill Gunter. I am very sorry to keep you
waiting so long, Bill, but we took them according to the date of their
application for appearance. So we will give you all the time we can.
If we are disturbed, we will come back and hear you.
STATEMENT OP HON. BILL GUNTER, A REPRESENTATIVE IN
CONGRESS PROM THE STATE OP FLORIDA
Mr. GUNTER. Thank you very much, members of the committee.
I am certainly grateful for this privilege to testify in support of a
change-
Mr. FRENZEL. Excuse me, if we are interrupted and if we have to
come back, may we also hear at that time the testimony of the Secre-
tarv of the State of Washington?
Mr. DENT. Absolutely, absolutely.
Mr. GTJNTER. I certainly am grateful for the privilege to testify in
support of a change in the manner by which Federal election cam-
paigns are financed.
I believe this committee is in the fortunate position of being able to
improve a system whose abuses have become all too apparent this past
tumultuous year.
"Public financing of elections," ABC television news commentator
Howard K. Smith told the Nation September 20, "is clearly an idea
whose time has come.
"One of the troubles with ideas whose time has come," he went on to
say, "is that unless acted upon firmly and promptly, they soon become
ideas whose time has gone."
Nine short years ago, Americans opposed public financing of Presi-
dent~ial elections by the convincing margin of 71 to 11 percent. The
latest Gallup poll, howe.ver, reveals an incredible turnabout-nearly
two-thirds of those polled recently by Gallup said they favor public
financing of congressional as well as Presidential campaigns.
PAGENO="0318"
314
A lot of water has spilled over the gate in those 9 years. The chang-
ing attitude of the American people in favor of public financing is re-
flected in recent newspaper editorials of conservative, moderate, and
liberal persuasion:
"We must agree," wrote the Detroit Free Press in a September 24
editorial, "that the system of election financing does tend to corrupt
men and that it must be changed."
"Sentiment in Congress appears to be mounting to take elections out
of the grip of the rich special interests and place them in the hands of
the taxpayers," wrote the Portland (Oreg.) Journal approvingly on
September 20. And the Albuquerque Journal calls this the "season"
for election reform.
Mr. Chairman, if I may, I would like to skip some of the material in
the testimony but request unanimous consent that it be included in the
record.
Mr. DENT. Without objection.
Mr. GUNTER. This resolve to find a better method of electing our
Federal officeholders has been joined by a growing number of citizens'
organizations, including Common Cause, Public Citizen, and the Cen-
ter for Public Financing of Elections.
Mr. Agnew may not have intended it, but his farewell speech con-
tained the elements of a strong and compelling case for public financ-
ing of election campaigns. The former Vice President appeared as
stunned by events as those he supported and those who supported him.
The charges of accepting cash contributions from State contractors
were based, after all, he said, on common practices in politics as he
knew them to be. And there is more truth to what Mr. Agnew had to
say than many would care to admit.
The fact is that as long as candidates for public office are depend-
ent upon large private contributions for the financing of their cam-
paigns, there will continue to be influence peddling and favors to the
few at the expense of the general public.
But let us not put it all on the businessman and on the contributor,
for too many politicians themselves have been guilty of what amounts
to almost outright extortion in their fund raising tactics and tech-
niques. We saw it aplenty last year:
The setting of $100,000 quotas by the Committee To Re-Elect
the President on a number of firms which had legal and other matters
pending before Federal regulatory agencies.
The assessment of individuals at 1 percent of net worth for campaign
donations.
The outright shakedown of American Airlines and other businesses;
the laundering of money through Mexico; tax loopholes which permit
big donors to avoid gift taxes by breaking down large contributions
into smaller donations, and distributing them to various committees
supporting the same candidate.
Last year, the President and his supporters spent $60 million to
stay in office. Senator McGovern and his supporters spent neariy $24
million in a losing effort to remove the President. Both of the amounts
are staggering, and both carry the same disturbing implications.
A senatorial campaign in many States can cost upward of $2 million
per candidate, and $200,000 spent in a race for the House of Repre-
PAGENO="0319"
315
sentatives is not uncommon. But these are only the obvious costs-
the virtual tip of the iceberg.
Today the American citizen is being made increasingly and pain-
fully aware of what we might call the "hidden expenses" of election
campaigns. Hidden expenses are those increases you pay for milk `at
the grocery store and for oil at the gas pump because wealthy interests
gave major contributions to a politician in a position to grant favors.
There was the matter of the $400,000 in campaign contributions by
milk cooperatives to the President's reelection efforts, followed closely
in time by a healthy boost in Federal price supports for milk. Today,
this is costing. consumers between $500 and $700 million a year in
higher prices, no less `than 3 to 5 times the cost of financing every Fed-
eral election last year, from President down to my own fifth district
congressional seat in the State of Florida.
Then there was the half-million dollars donated in 1968 and tripled
to $1.5 million in 1972 by the oil lobby to the Nixon campaigns for
President. There are those who argue that there is a cause and effect
between that munificen't donation and the fact that, despite a recom-
mendation of his own Cabinet task force, the President resisted lifting
oil import quotas. This cost of those import quotas to you and me is es-
tim'ated at $5 billion a year-30 times the most expensive estimate of
the biennial cost of public campaign financing of all Federal elections.
"Should we publicly finance our election campaigns?" asked Jerry
Landauer in the Wall Street Journal. "I)on't kid yourself," he wrote,
"we already do."
These are some of the hidden costs of financing elections under the
present system. You and I could recount other examples. The price is
too high for the American people to pay. But there are other problems
a~s well with your present system, and I listened to some of your testi-
mony before this committee previously, points have been well made
along these lines.
This is a system which allocates money to incumbents that we are
presently operating under, a system which helps the so-called sure
winners. And I think that we need to change it.
Most Americans would agree th'at we should have vigorously com-
petitive elections. Mr. Obey touched on this point.
The truth is that most elections are decided virtually by default,
since the incumbent has the tremendous advantage of office and the
more ready access to the men with the money. If, however, through
public financing ea'ch candidate has equal access to campaign financing
and incumbent and challenger alike are beholden to the voters in the
purest meaning of the phrase, then we just might revitalize politics in
America.
The people mi~iht see more of their elected representatives and the
elected official might pay a little more attention to what the electorate
has to say. You would create a better climate of competition.
There are five major proposals pending before the U.S. Senate and a
sixth in the H'ouse of Representatives which advocates some form of
public financing. I recently submitted a bill which proposed total
public financing for all Federal elections `t'o include primary as well as
general election campaigns. My `bill `differs from the others in certain
key respects. Most importantly, it precludes private contributions to
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316
individual candidates; this, in my opinion, is vital if public financing
is to succeed.
It authorizes a unique petition procedure for a candidate to qualify
for Federal office, which also serves as a safeguard to prevent persons
from receiving public funds for their candidacies who do not have and
cannot demonstrate a reasonable base of support. It attacks the frivo-
lous candidate problem which some of you alluded to.
In the case of a primary election for the U.S. House of Representa-
tives, for example, the signatures of 3,000 individuals who are eligible
to vote would be necessary to qualify a candidate for disbursements
from the public fund.
The sum or spending limit per qualified candidate in this particular
race would be $40,000. In the event of a runoff election, each candidate
would receive $20,000 and the winner an additional $60,000 for the
general election. Similar petition procedures involving greater num-
bers of eligible voters are provided for campaigns for the U.S. Senate
and for the office of President and Vice President.
I have added several new features to H.R. 10899, including the crea-
tion of an Office of Special Counsel to answer any and all questions
about the election laws that candidates may have. This will hopefully
eliminate the confusion that was created in the application of the 1971
law.
Now, about the costs involved:
With two times the number of qualified candidates as we had in 1972,
under this formula, the total expenditures would be approximately
$175 million annually, or just $1.25 per year each eligible voter.
The question is: Is it worth $1.25 a year to you and to the American
people to get a fair break at the supermarket, at the corner gasoline
station?
Is it worth $1.25 a year to you and other Americans to be comfortable
in the knowledge that a new measure of fundamental integrity and
fairness has returned to our elective democracy and the operations of
Government?
Is it worth $1.25 a year to you to make manifest that principle of
democracy which we all were taught was so integral and essential to
America? That in America every person is guaranteed a fair shake,
and equality of opportunity, and that no one's vote, voice, nor wealth
shall be worth more than any other's on election day?
At a dollar and a quarter, it is probably the best bargain in America
today.
Thank you.
Mr. Chairman and members of the committee, thank you very
much.
Mr. DENT. Thank you very kindly, Bill. Certainly your testimony
shows that you have given a great deal of thought to it. You are
certaTnly helping the committee because you come up with brand
new ideas along the lines of how much and how to finance it and the
total financing by Federal funds.
Do you see that 3,000-signature provision to be a very difficult
thing to do, to get yourself qualified as eligible for the receipt
of $20,000 out of the public treasury?
Mr. GrINTER. Mr. Chairman, let me say to you and the other members
of the committee that I am not tied to that particular number. I
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317
believe in the concept. I think in the State of Florida 3,000 electors on
a petition, and of course the bill disallows any duplications, would
be a number that would be in keeping with a real strict requirement
to get on the ballot. I think it would eliminate the problem of candi-
dates without a true base of support.
However, I realize we are talking about a bill that deals with
congressional districts throughout the United States, and that number
may have to be adjusted accordingly.
Mr. DENT. That would be a very small number to get, in my expe-
rience anyway.
Mr. GTJNTER. I would say to you that I have participated in some
petition efforts in Florida, and of course the local laws that pertain
to those petitions are very stringent and therefore a large number
of the signers, in many cases, in Florida are eliminated. So we are
basing our experience, obviously, on Florida and, as I say, it may
well have to be adjusted because of the picture across the Nation.
Mr. DENT. Some of the proponents of public financing agree with
you, it ought to be on the basis of signatures, bona fide signatures
on a petition, and that would establish the qualifications. But I do
not think you would have any trouble at all in the area that I come
from, for instance-and in other States where I have had the expe-
rience serving on Council of State Governments for many years-
where you could have 30 or 40 persons qualify over a weekend, in my
district, on that kind of a setup.
Would you establish any kind of a financial qualification, as to
the amount that you would have to pay to get on the ballot?
Mr. GTJNTER. No, sir.
Mr. DENT. Do you have any costs in Florida?
Mr. GUNTER. Any cost to get on the ballot?
Mr. FRENZEL. Filing fee.
Mr. GUNTER. Yes; there is a filing fee in Florida, which amounts
to 5 percent of the salary of the office.
Mr. DENT. Five percent of the salary?
Mr. GUNTER. I believe that is the case.
Mr. DENT. $2,000 to file for Congress?
Mr. GUNTER. That is right.
Mr. DENT. That is harder to get than 3,000 signatures.
Mr. FRENZEL. That comes out of your pocket.
Mr. DENT. My gosh, we only demand 200 signatures and $35. If
you put $2,000 in my State, I would never have an opponent.
Mr. GUNTER. Right.
Mr. DENT. But you of course would recognize that would be elimi-
nated because if we established any kind of Federal funding, and
once we establish any part of establishing the qualifications to be
a bona fide candidate, we would also have to go into the filing fee,
don't you think?
In some States-at one time a large State had 5,000 names that you
had to get on a petition to run for Congress, and I think $3,000, $4,000,
$5,000. So they effectively kept opponents off that way. We would have
to preempt it, do you not think, in the whole field?
Mr. GUNTER. I certainly think so. I know the State legislature in
Florida is giving consideration to appropriate adjustments along
those lines.
25-239 O-73---21
PAGENO="0322"
318
Mr. DENT. You figured your basis of cost to the Treasury on two
times as many candidates as there were in 1972?
Mr. GUNTER. Right.
Mr. DENT. You get that little carrot out there, $40,000, you could
not count the candidates that would be running.
Mr. GtTNTER. It depends, I think, on whether or not these people
are able to get the signers on the petition, adjusting those figures to
what would be a realistic and proper number. It seems to me that you
can arrive at what is a proper number nationwide.
Mr. DENT. You might be able to. I am not discounting it, nor am
I trying to belittle your proposal. But where you have, say, 10 differ-
ent unions in your district and each one of them have anywhere from
1,200 to 12,000 membership, do you think you would have any trouble
getting 10 or 12 candidates out of that union membership, at $40,000
apiece? That would be more money than they would make if they lived
a whole lifetime.
I think we have a lot of problems, but I am afraid we have not yet
come to the formula. Maybe if we take all of these proposals and refine
them, we might get something that we can propose.
It is desirable, I guess, in the minds of some people but certainly
not at the moment.
In the Gallup poll, you know, that is one thing. Years ago, people
felt one way. If you go back to 9 years ago, they were rather tranquil
days in American. All the gates closed; we did not have very many
problems. Now, I guess you could probably get 20 to 1 in favor of
public financing if you get a couple of more incidents cropping up.
I would like to know what it would be next year, if you have a good
clean election, people financed it in the normal fashion. No one has
suggested that we get $100,000 out of Federal funds for an individual
candidate. You have $40,000 for the primary and $60,000 for the
general. That is a lot of money in some of these rural areas. Rural
areas, there the people would revolt at that proposition in the rural
area, I am sure.
I do not know about yours. What do you think?
Mr. MOLLOHAN. That is three times what I spent.
Mr. DENT. That is exactly right. That is three to four to five times
what the vast majority of Members of Congress make.
Mr. GUNTER. May I just respond a moment to some of the comments
of the chairman?
I again realize we are looking at a picture that invloves all of the
congressional districts in the United States. On the other side of that
issue, as I understand your mission, you are to develop, if you are
going to develop legislation in this field, some formula that will fit
that picture.
I earlier hear Mr. Frenzel quarreling with Mr. Obey's figures
because they were too low. My figures are apparently too high for the
chairman. But somewhere between the extremes, if those are extremes,
there must be figures which are right for the United States and
which can help to solve this terrible problem, as I see it.
Now, I do not introduce legislation in this Congress because of the
reading of the Gallup poll, but I can say that the present environment
and situation in this country, I think, lends itself to change the
system under which we operate today. And I tried to cite a few ex-
PAGENO="0323"
319
amples, not picking on any industries or interests in this Nation,
because there are many others that we could talk about, where it is the
voter, it is the citizen, it is the consumer who is paying the tab.
If we want to try and shrug our shoulders and say, well, we should
not go into this field because it is going to come from the Public
Treasury, you know, it just depends on which pocket the American
citizen is going to pay it out of. He is paying the cost.
I think that we can establish, within reason, some legislation in this
field that will be equitable to all.
Mr. Mollohan mentioned the concept that we need to set some new
limits, perhaps, with regard to campaign spending at the upper ceiling
level, or disclosure, things like that, and that those would solve some
of the money problems. I can only report to you, my colleagues, that in
Florida we have, I think, some tougth upper limitations of campaign
spending. We have disclosure in Florida. Yet we have still had prob-
lems of "funny money" and discrepancies and illegalities, which we are
trying to deal with today.
Mr. MOLLOJIAN. Mr. G-unter, I think I understand what you mean
or the reference that you made there to "steal your hat." I think you
are referring to the one that is pretty much in the news lately. There
would be no prohibition, there would be nothing that-there would
be a prohibition, but there would be nothing to keep side contributions
which were unreported and undisclosed, funny money, from coming
into a man's campaign or a candidate's campaign over and above and
beyond what might be provided by public financing. You would still
have this possibility.
You are talking about that which is not disclosed, not made known
in any way. Now, just the fact that you are going to have $100,000
from public financing does not mean that candidate A could not re-
ceive an improper, illegal contribution in cash or some other means.
Mr. GIINTER. No, I understand that.
You know~ obviously if you have someone who is willing to clearly
break the law, then that route is still open.
Mr. MOLLOHAN. Obviously, what we are talking about here is people
who have clearly broken the law. Some of them are shocking when
you consider the positions they occupy. This is what we are trying
to do.
Mr. GUNTER. Of course, my proposal, hopefully, would draw the
line and say that if the Congress should accept it and it became law,
say there would be no individual contributions to individual
candidates.
Mr. MOLLOHAN. Still this would not prohibit it, because on `the one
side we have Ie°al contributions today, on that same side you are going
to have public financing as a substitute.
On the other side of the page you have the illegal contribution,
whether it is under the 1971 law, under the corrupt practices law, or
under this public financing law which you are suggesting, you still
have this opportunity, this possibility for illegal campaign
contributions.
Mr. GUNTER. Right.
Mr. MOLLOHAN. The only thing you are doing is changing the cate-
gory of that which is legal.
PAGENO="0324"
320
Mr. GUNTER. Well, I thought that your suggestion was to provide
for some tighter language.
Mr. MOLLOHAN. Most emphatically. I think that will go to most of
the so-called funny-money thing that we are talking about. But still,
you are not going to eliminate the illegal, under-the-table contribu-
hon by legislation. A man who will break one law will break another
one.
Mr. GUNTER. The point I was trying to make candidly was that in
the Anderson-IJdall approach, I think you create just about as many
additional loopholes as those you might try to be closing.
Mr. MOLLOHAN. I completely agree with you.
Mr. GtJNTER. I think this approach would perhaps tend to give a
clear choice, to provide the opportunity to go totally one way or main-
tain our present position.
Mr. DENT. In all of the testimony that has come before us, and much
of it from practical, political figures, men who have been in office, have
participated in campaigns, they all seem to fail to recognize that there
are other elements in an election that have a great bearing on it, yet
you do not have the reporting of any money spent through these other
elements in elections; you have no report of where their money comes
from, you really do not know what motivates those people.
We have a catelog of approximately 2,500 private interest organi-
zations that in one manner or fashion influences the elections of Mem-
bers of Congress. Two days or three days before an election, out comes
a big fancy bulletin, three-color printing, that just condemns the devil
out of an incumbent or it praises an incumbent.
Lord knows how much money is spent for that. Yet it could influence
your election. It eggs you on then into getting something at the last
minute that you might have to raise $10,000 or $12,000 to counteract
this thing. No one has given thought to these propositions; no one has
given thought to the matter that if you happen to be friendly with a
certain news commentator, or you are buddy-buddy with a TV per-
sonality,. you get on their show and he asks you a lot of silly questions
and you give him a couple of silly answers, but you are on.
How do you measure that?
Mr. FRENZEL. I will bet you that the Ralph Nader report on you
got more press during your last campaign than everything you did
during the whole campaign.
Mr. DENT. During my life.
Mr. FRENZEL. You cannot control that.
Mr. DENT. He was nice to me.
Mr. FRENZEL. You are lucky.
Mr. DENT. He said I did everything for labor.
Mr. FRENZEL. That is the magic word in your district.
Mr. DENT. I was born in labor, so I have stayed kind of close to it.
But seriously, we do have a problem.
There are more and more of these organizations coming up. The
more there are, the more you bid for them. It used to be simple. The
issues were pretty well drawn. The farmers would have a program,
labor would have a program, industry would have a program, your
lines were pretty well drawn. But now today you know it is all frag-
mentized. Even the oil industry, that used to speak without voice,
speaks with as many voices as they have wells now. You know that.
So it is all along the line.
PAGENO="0325"
321
This committee has to go a little deeper into this situation than only
the matters coming from the witnesses before us. I feel very strongly
because here at the end of my career it does not matter much now, it
cannot affect me one way or the other. But I am very much disturbed
over the influences that are not categorized but which are tremen-
dously important in a campaign where any amount of money would
not save you.
Whether you have public financing or not, how are you going to stop
these people from interfering in elections?
Mr. GUNTER. I don't quite know how to do that, Mr. Chairman.
Mr. DENT. That is exactly right, and yet you know what I mean.
I think you understand TV well.
Mr. GUNTER. Right.
Mr. DENT. If we can I think we have got to write something along
that line. The Gallup poll or any other poii comes into your county
about a week before election. Some fellow you have never heard of
before comes in and he sits in a back room and writes it up. What is
your protection against that? It is not illegal. He doesn't have to say
where he got the money, who paid for it. If we really want to get down,
I think these are the 20th century changes that we have to make. We
were not in the game of politics years ago. There wasn't an influence
in the game of politics. In those days it was a job. You were given a
job in a factory or something. If you didn't vote right you would lose
it. There are those pressures and there have been since the beginning
of the Republic. We overcame them and we will overcomethis one too.
We must look ahead to those that are keeping up on us and could in-
fluence an election very seriously as you know, not always to the benefit
of the people. Most of these organizations save some kind of a motive,
don't you think?
Mr. GUNTER. Yes.
Mr. DENT. Are there further questions?
Mr. FRENZEL. No. I have been anxious to use the witnesses' time for
my own soapbox, but I think it is a good presentation and we are glad
to have it, Bill. I comment, is what you are saying worth $1.25 a year to
see that we get good elections? Of course it is. People who cry about
private financing, the $1.88 a head which it apparently will cost us
for national and local elections last year, I don't think that is too much
either. Whatever it costs to get a fair and decent election we ought to be
willing to pay, either publicly or privately, but I hope it is privately.
Thank you.
Mr. DENT. Thank you. We will be back as soon as we vote.
[Short recess.]
Mr. FRENZEL. I will call the meeting to order and ask Secretary of
State of the great State of Washington, who is here with us, for a
variety of reasons, to lay on the committee whatever wisdom is his
choice today.
STATEMENT OP A. LUDLOW KRAMER, SECRETARY OP STATE,
STATE OP WASHINGTON
Mr. KRAMER. Thank you very much. I will try to be brief, sir.
I appreciate the opportunity to put some thoughts from the State
of Washington into the subcommittee. First of all, I think what I
PAGENO="0326"
322
would like to try to stress, and I have been chief eleètions officer for
the State of Washington for 10 years now, I am in the middle of my
3d term, is that much of the testimony we hear before this subcommit-
tee, and I think other committees of the Congress, is that we come up
with singular simple answers to extremely complex problems facing
society.
To deviate for just a second, I happen to be chairman of the elderly
for the State of Washington, and everyone says give more money and
you will solve all the problems, and that does very little when you talk
about the total society.
What I think this committee really has before it, when it talks about
public financing, when it talks about campaigning, is five separate
areas, and if we try to meld those five areas into either a single bill or a
single thesis, it simply is not going to work, but without all five, you
are not going to have the continuity and the ability of cross-checking
that I believe is essential.
I would like to address myself initially to a new law in the State of
Washington that has now gone through its first test. I think the extent
of public concern over the abuses and inequities of our current method
of financing political campaigns was demonstrated in the general
election in the State of Washington in 1972. Dissatisfaction with the
lack of regulations of campaigning expenditures, and angered by the
legislature's attempt to either ignore or sabotage attempts at reform,
a `coalition of concerned organizations met and drafted a very compre-
hensive initiative proposal covering the areas of campaign financing,
lobbyist registration and reporting disclosure of financial interests by
elected officials and access to public records. They collected over 160,-
000 signatures of registered voters in Washington State in order to
qualify their measure to `be placed on the general election `ballot in
1972. Over 72 percent of the voters approved the initiative.
The provisions of the initiative dealing with the regulation of po-
litical camnaigns are based on the joint operation of three essential
elements. The first is a complete reporting of contributions and ex-
penditures by candidates and political committees. When we talk about
political committees under this sytem, there is only one political com-
mittee. There is only one treasurer, `and everything must go through
that single source.. The offsetting entry, to make sure, and there was
some discussion in the committee this morning of that, is that not only
must the candidate and his committee and treasurer report, but all
organizations that receive that money must also report, so that if you
advertise $10,000 worth of television, the stations report that they have
received $10,000 or the billboard industry or the paper industry or
whatever it might be.
The second essential element is the complete disclosure of financial
interests by elected officials, this means that I as a public official dis-
close all my income from all sources, all my real estate holdings or any
other factors I may have. I think probably the only liability to that
section is some of us don't like to admit how little we have as opposed
to those who are afraid to report what they do have.
The third essential ingredient of the initiative was regulating of the
campaign by an independent five-man commission, which is appointed
by the Governor, confirmed by the Senate, and can have only three
members of one political party on that commission. They interpret, en-
PAGENO="0327"
323
force and administer the act. A commission of this type was also a
feature of the Senate campaign reform proposal which is now I believe
before this subcommittee.
I have brought with me for the committee's examination copies of
this initiative measure approved `by the people of the State of Washing-
ton, and the materials used by the commission in their rules and
regulations.
The sponsors of the measure were particularly careful to draw very
comprehensive and specific definitions which avoided many of the
major loopholes which plague legislation of this type. For example,
contributions are defined to include loans, advances, pledges and for-
giveness of indebtedness. I also add in that section as well that a cam-
paign continues to report even after the campaign, if there is an in-
debtedness factor involved, so if you have a $10,000 debt at the end of
your campaign, you continue to report to the commission until that
debt is totally wiped out.
Similarly, the term "expenditure" is given a broad definition to
include not only direct payments but any kind of future obligation,
contract or promise where no actual cash transaction has taken place.
"Political advertising" is defined to include virtually all methods of
communication which candidates may use in the course of their politi-
cal campaigns. Also, all firms or individuals who provide political ad-
vertising services for candidates are required to report the financial
extent of these services. This serves as a cross-c'heck on the reporting of
expenditures by candidates and committees.
The definition of "political committee" in this State law, unlike the
definition of this term in the Federal statutes, includes any individual,
public or private corporation, association, candidate committee, politi-
cal party or executive committee, thereof, or any other group or orga-
nization of persons which has `the expectation of receiving any contri-
butions or making any expenditures in support of or opposition to
a candidate or a `ballot proposition. This definition has the effect of
identifying all political committees, although some may be exempted
from the majority.
I bring this to the attention of the committee because frankly this is
the most comprehensive election law on `the books now, and it was
very fearful as we went into this election, as to whether people would
not file for public office or what kind of reaction would you get. The
State of Washington, though it is a small State, has over 2,000 political
subdivisions and elects about 10,000 people to public office right down
to the lowest, smallest of political unit. lATe found two things in this
year's election under this extremely tough campaign reporting law.
No. 1 is there were very few candidates who did not file for public office
because of this. We are so stringent, Mr. Chairman, that we did lose
a few, in that a law firm, a. member running for any political office, must
report all the income of that total law firm from all its clients, and we
did have about four to six attorneys who did not seek reelection because
of that one section of the law. Those were about the only people who
did not file for public office.
Mr. DENT. Are you considering a change in that? It is none of my
business.
Mr. KRAMER. No.
Mr. DENT. You are not?
PAGENO="0328"
324
Mr. KRAMER. We are not anticipating any changes at this time. I am
just presenting this to the committee, sir, as an extremely stringent
law that has now operated for a year, including an election.
Mr. FRENZEL. Have you had a constitutional challenge on that?
Mr. KRAMER. We are in the midst of five constitutional challenges.
Mr. DENT. That are the five candidates who did not run?
Mr. KRAMER. The law profession is challenging. The superior courts
have upheld about 90 percent of this law and it is now being appealed
to the Supreme Court of the State of Washington.
The other factor we found, other than a few candidates not filing, is
that there was no reduction in the total amount of funds collected by
major candidates for major offices. You saw a spreading out of funds in
that you did not see as many large contributions. You saw more smaller
contributions, and you did not get as many companies giving $1,000
to each side and trying to cover the base, but there was no reduction in
the funds made available to the major candidates for the mayors.
Mr. FRENZEL. You didn't limit what a person could contribute?
Mr. KRAMER. We have limitations in this bill. Again these were
municipal elections and did not fall into that factor. They are limited
basically along what I have heard in other testimony, 10 cents a vote,
$5,000 for legislative-
Mr. FRENZEL. That is an expensive limitation.
Mr. KRAMER. Yes.
Mr. FRENZEL. But you didn't limit the contribution. You said
contribution.
Mr. KRAMER. No; we did not limit how much an individual could
give.
Mr. FRENZEL. But they still went down, the large ones did.
Mr. KRAMER. Yes. Any individual who gave over $100 also must
file with the commission his political, her political, or the organi-
zation's political contribution as well.
Mr. DENT. If you had a limitation like $5,000 for a legislator or
something like that, an individual wouldn't possibly be stupid enough
to give him $5,000.
Mr. KRAMER. That is correct. In a State our size, sir, your mayors
races have a limitation of right around $100,000, for the mayors of
your major cities, in round figures.
The other points I want to mention very briefly, because as I
stated at the beginning, I don't think singular answers-this accom-
plishes certain factors we believe. The public financing of course
we think has been well handled today by a number of Members of
Congress, but I would like to submit that I would hope the Congress
and this committee would not just look at two pieces of legislation
but look at the overall areas of public financing of elections, and the
overall interrelation of the different elements.
I would suggest that in our State, as an example, we believed
in this off-election year-and a lot of people are turning off to politics
in our State as in other States. I predicted less than 50 percent of the
people of the State of Washington would come out and vote. As it
turned out I was wrong. Over 60 percent came out and voted. It came
about through a massive public awareness campaign financed by the
State of Washington. I think this is an area that the Congress should
look at. The reason is this, sir.
PAGENO="0329"
325
We, the League of `Women Voters, political parties, and all of us
have spent the last few years trying to get people into the political
system, registration divisions. Certainly you are involved with the
postcard registration system, things of this nature. Through the
courts and through the legislative process we have people now in the
system. In 1972 the State of Washington had over 90 percent of the
people registered to vote, the fourth highest State in the Nation,
but what we have not given them is the information or the emotion
to get involved in that political system, and this is what I would like to
speak to just very briefly if I may, Mr. Chairman.
A public awareness campaign in our State started with a voters
pamphlet, sir, that was delivered to every home in the State of Wash-
irigton with a special provision from the u.S. Post Office. No name
or address is on this document. The post office must deliver this to
every home. It is also produced in Spanish for the Chicano popu-
lation of our State as I believe it should be in other States for Puerto
Rican or whatever it may be.
Second, we opened up a telephone system in the State of Washing-
ton toll free for anyone to get any information pertaining to the
election. We created massive television, radio, and newspaper ad
campaigns, and the State of Washington, a small State, spent $500,000
promoting the 1973 election to the public.
Fourth, I think that we have to look very, very strongly, sir, at
our methods of voting, and what is the role of the Federal Govern-
ment in that. As of course you are well aware, our Tuesday election
was created when very few people were in the political system. Yet in
1972 we asked well over 100 million people in the same 12- or 13-hour
period of time to go through that process, in just a 12-hour period of
time. California had 24 major issues on the ballot. The State of Wash-
ington had 24 major issues on the ballot. The average citizen in the
State of Washington had to go in, and in 2 minutes make approxi-
mately 75 major decisions as to what he or she wanted their lifestyle
or political candidates to be. Those 2 minutes are obviously not some-
thing where we slam the door at 2 minutes but if you take the total
number of people in each precinct and divide it out that is what you end
up with. It was an impossible task. I would hope some funding would
be made available to the Congress to look at alternatives. In the State
of Washington we will try two new methods during the next 2
years. No. 1, we will try a weekend election. We will take small sub-
political type elections and try weekend elections, including satellite
voting machines in churches. About half the people of our State go to
church on Sunday.
Secondly we will create the first telephone election in the country,
where we will work off of-it has to be a punch telephone system-we
will work off a key number and a voice recorder system to work off
the telephone. I am not saying either of these is the answer, but I think
they are ways of opening up the political system to more people
getting into them.
Lastly. I think that certainly in the field of financing of people into
the political system, I believe generally speaking that funds can be
made available, at the. State level to do as good a job as you could do
under a national registration system.
PAGENO="0330"
326
With that, sir, I sincerely appreciate your time. I know you are ex-
tremely busy members of the committee and I thank you for letting me
present this testimony.
[The statement follows:]
PREPARED STATEMENT OF WASHINGTON'S SECRETARY OF STATE A. LUDLOW KRAMER
Mr. Chairman and members of the committee, I appreciate the opportunity to
submit this testimony on the subject of campaign reform. The extent of public
concern over the abuses and inequities of our current method of financing
political campaigns was clearly demonstrated in Washington State during the
General Election of 1972. Dissatisfied with the lack of regulation of campaign
expenses and angered by the Legislature's attempt to either ignore or sabotage
attempts at reform, a coalition of concerned organizations met and drafted a very
comprehensive initiative proposal covering the areas of campaign financing, lobby-
ist registration and reporting disclosure of financial interests by elected officials
and access to public records. They collected over 160,000 signatures of registered
voters in Washington State in order to qualify their measure to be placed on the
General Election Ballot in 1972. Over 72% of the voters approved the initiative.
The provisions of the initiative dealing with the regulation of political cam-
paigns are based on the joint operation of three essential elements. The first is a
complete reporting of contributions and expenditures by candidates and political
committees. This is somewhat similar, but in certain respects more extensive,
than the reporting provisions of the Federal Election Campaign Act of 1971. The
second essential element is the complete disclosure of financial interests b~
elected officials and candidates. These provisions are somewhat similar to Sen.
Frank Church's amendment to S. 372 which was adopted by the Senate during
its debate of the measure in late July. The third essential ingredient of the
initiative scheme for regulating campaigns is an independent five~member com-
mission charged with the administration, interpretation and enforcement of the
act. A commission of this type was also a feature of the Senate campaign reform
proposal now before this subcommittee. I have brought with me for the Com-
mittee's examination copies of this initiative measure approved by the people of
Washington State and some of the explanatory material and forms prepared by
the commission which administers this law. I would particularly like to direct the
Committee's attention to the manner in which the essential terms of the initia-
tive are defined.
The sponsors of the measure were particularly careful to draw very compre-
hensive and specific definitions which avoided many of the major loopholes which
plague legislation of this type. For example, "contributions" are defined to include
loans, advances, pledges and forgiveness of indebtedness; and special care is
taken to distinguish and exempt part-time volunteer services. The definition also
includes the contribution of materials, equipment and professional services for
less than full consideration. Similarly, the term "expenditure" is given a broad
definition to include not only direct payments but any kind of future obligation,
contract or promise where no actual cash transaction has taken place. "Political
advertising" is defined to include virtually all methods of communication which
candidates may use in the course of their political campaigns. Also, all firms or
individuals who provide political advertising services for canilidates are required
to report the financial extent of these services. This serves as a cross-check on the
reporting of expenditures by candidates and committees.
The definition of "political committee" in this state law, unlike the definition
of this term in the federal statutes, includes any individual, public or private
corporation, association, candidate committee, political party or executive com-
mittee, thereof, or any other group or organization of persons which has the ex-
pectation of receiving any contributions or making any expenditures in support
of or opposition to a candidate or a ballot proposition. This definition has the
effect of identifying all political committees, although some may be exempted
from the majority of subsequent financial reports.
In odd-numbered years in Washington State, we hold all of our municipal elec-
tions and special district elections; and the date of the General Election in these
jurisdictions is also a State General Election for the purpose of voting on state
measures such as constitutional amendments and initiatives and referendums.
Our experience during the fall campaign just concluded indicates that the ex-
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327
tensive reporting provisions of this new initiative did not appear to discourage
any normal sources of contributions to political campaigns. From our experience
with the reporting of contributions and expenditures under this law by candi-
dates in Washington State and the subsequent attempt on the part of the press
to report the substance of these disclosures to the public, I would urge this corn-
niittee to make every attempt to keep the reporting provisions of any measure it
adopts as uncomplicated and direct as it can.
As approved by the voters of Washington State, the initiative contained a limi-
tation on total campaign expenditures based, alternatively, on the number of reg-
istered voters in .the constituency or the public salary which would be paid to the
office being sought. Within weeks after certification of the initiative, it was made
the subject of no fewer than five constitutional challenges. One of the suits which
challenged the constitutionality of this limitation on total campaign expendi-
tures was upheld by the Superior Court which heard the case. This decision and
the ruling on several other minor matters are now pending appeal before the
State Supreme Court.
In working on state campaign proposals in the past, we have always had the
impression that severe limitations were primarily advantageous to incumbents;
and, if the limits were raised sufficiently to avoid granting this kind of advantage
to the incumbent, they would not serve as a significant check on large individual
or special-interest contributions. The most significant abuse in the field of cam-
paign financing occurs when a candidate is obligated either openly or implicity to
those who have made excessively large contributions to his campaign. In this
respect, the kinds of limitations on the size of individual contributions incorpo-
rated in the Senate version of 5. 372 is the most promising suggestion to date for
eliminating this type of abuse. Such a restriction strikes at the heart of the prob-
lem by directly prohibiting the abusive practice. Limitations on total campaign
expenditures, although they may impose an indirect check on such large contribu-
tions, could in no way be expected to be as effective as the limits on individual
contributions.
This Committee has undoubtedly heard many different proposals which would
involve partial or full public financing of federal political campaigns. Such a
proposal is susceptible to the same kind of objection raised in connection with
the limits on total campaign expenditures. Public financing of political cam-
paigns does nothing in itself to prevent the obligation of an incumbent office-
holder or potential candidate by individuals or special interests. At the very
minimum, nearly complete public financing, coupled with strict limitations on
total campaign expenditures, would be necessary to keep large contributors and
special interests from donating money or favors to candidates independently of
the support they receive for their campaigns from the federal government. I
think the Committee should also consider any suggestion for public financing of
federal campaigns in light of its possible effect at the state and local levels. We
have seen the pattern in the area of elections legislation where action on the part
of the Federal Congress governing the campaigns under their jurisdiction has
virtually committed the states to take similar action. Even partial funding of the
campaigns for state legislature and other state elective offices would represent an
expenditure few states could afford at this time.
Some of the proposals for public funding of federal campaigns have included
funding for Presidential campaigns prior to the nominating conventions of the
two major political parties. In states which do not presently have Presidential
Primaries, the thought of having such public money used by Presidential as-
pirants to influence the relatively few people who are delegates to county and
state political conventions might force almost all of those states to adopt Presi-
dential Primaries of their own. If this were to occur, I feel Congress should seri-
ously consider providing a series of Regional Presidential Preference Primaries
to replace all of the individual state Presidential Primaries and to standardize
their nominating procedures.
From our experience with our own state's campaign reporting and disclosure
statutes and our past consideration of expenditure limitations, contribution limi-
tations and public funding of political campaigns, we would make the following
recommendations to the committee:
1. An Elections Commission is an effective administrative and enforcement
agency for a regulation of this type. The Commission should be as independent
as it can from the elected officials whose campaigns it must regulate, and it must
be assured of having an adequate staff and budget to monitor and enforce the
law it administers.
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2. Candidates for public office and elected officials should be required to make
a substantial disclosure of their financial interests. Such a disclosure should not
be administratively burdensome to the individual but should include any con-
siderable interest which might result in a subsequent conflict of interest.
3. The amount any individual can contribute either directly to a candidate or
through a political committee or series of political committees should be limited.
This will strike at the heart of most of the current abuse in the campaign financ-
ing system. It will also serve as an implicit limitation on the total amounts can-
didates spend, since a disproportionate amount of funds currently contributed
to political candidates comes from such large donors.
4. The Congress should consider the questions of public financing of political
campaigns and limitations on total expenditures as a separate matter. In both
of these matters, we would be embarking on new ground without the benefit of
any state's experience with similar statutory regulations and in an area fraught
with constitutional objections.
In my opinion, members of the Committee, the enactment of the three reforms
referred to previously must not be delayed while debating public financing and
expenditure limitation proposals.
I urge you to act now. The mood of the American public will not tolerate pro-
crastination. We as public officials cannot sustain a further erosion of public
trust. The time has definitely come to act decisively on the abuses and inequities
that exist in our election system.
Thank you.
CHAPTER 1, LAwS OF 1973-INITIATIvE MEASURE No. 276 TO THE PEOPLE----
PUBLIC DISCLOSURE Co~rMIssION, OLYMPIA, WASH.
Section 14, 18, 20 and subsection 4 of section 40 were declared unconstitutional
by the Thurston County Superior Court. As a result, these sections are currently
inoperable. The cases involved are now pending appeal before the State Supreme
Court.
CHAPTER 1, LAWS 173
INITIATIVE MEASURE No. 276 TO THE PEOPLE
DISCLOSURE-CAMPAIGN FINANCING-LOBBYING-RECORDS
AN ACT relating to campaign financing, activities of lobbyists, access to public records,
and financial affairs of elective officers and candidates; requiring disclosure of sources
of campaign contributions, objects of campaign expenditures, and amounts thereof;
limiting campaign expenditures; regulating the activities of lobbyists and requiring
reports of their expenditures; restricting use of public funds to influence legislative
decisions; governing access to public records; specifying the manner in which public
agencies will maintain such records; requiring disclosure of elective officials' and
candidates' financial interests and activities; establishing a public disclosure com-
mission to administer the act; and providing civil penalties
Be it enacted by the people of the $tate of Washington: That
SECTION 1. DECLARATION OF POLICY. It is hereby declared by the sovereign
people to be the public policy of the State of Washington:
(1) That political campaign and lobbying contributions and expenditures
be fully disclosed to the public and that secrecy is to be avoided.
(2) That the people have the right to expect from their elected represen-
tatives at all levels of government the utmost of integrity, honesty and
fairness in their dealings.
(3) That the people shall be assured that the private financial dealings
of their public officials, and of candidates for those offices, present no con-
flict of interest between the public trust and private interests.
(4) That our representative form of government is founded on a belief
that those entrusted with the offices of government have nothing to fear
from full public disclosure of their financial and business holdings, pro-
vided those officials deal honestly and fairly with the people.
(5) That public confidence in government at all levels is essential and
must be promoted by all possible means.
(6) That public confidence in government at all levels can best be sus-
tained by assuring the people of the impartiality and honesty of the officials
in all public transactions and decisions.
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(7) That the concept of attempting to increase financial participation of
individual contributors in political campaigns is encouraged by the passage
of the Revenue Act of 171 by the Congress of the United States, and in
consequence thereof, it is desirable to have implementing legislation at the
state level.
(8) That the concepts of disclosure and limitation of election campaign
financing are established by the passage of the Federal Election Campaign
Act of 1971 by the Congress of the United States, and in consequence thereof
it is desirable to have implementing legislation at the state level.
(9) That small contributions by individual contributors are to be en-
couraged, and that not requiring the reporting of small contributions may
tend to encourage such contributions.
(10) That the public's right to know of the financing of political cam-
paigns and lobbying and the financial affairs of elected officials and
candidates far outweighs any right that these matters remain secret and
private;.
(11) That, mindful of the right of individuals to privacy and of the
desirability of the efficient administration of government, full access to
information concerning the conduct of government on every level must be
assured as a fundamental and necessary precondition to the sound gover-
nance of a free society.
The provisions of this act shall be liberally construed to promote complete
disclosure at all information respecting the financing of political campaigns and
lobbying, and the financial affairs of elee;ted officials and candidates, and full
access to public records so as to assure continuing public confidence in fairness
of elections and governmental processes, and so as to assure that the public
interest will be fully protected.
SEC. 2. DEFINITIoNS.
(1) "Agency" includes all state agencies and all local agencies. "State `agency"
includes every state office, public official, department, division, bureau, board,
commission or other state agency. "Local agency" includes every county, city,
city and county, school district, municipal corporation, district, political subdivi-
sion, or any board, commission or agency thereof, or other local public agency.
(2) "Ballot proposition" means any "measure" as defined by R.C.W. 29.01.110,
or any initiative, recall, or referendum proposition proposed to be submitted to
the voters of any specific constituency which has been filed with the appropriate
election officer of that constituency.
(3) "Campaign depository" means a bank designated by a candidate or
political committee pursuant to section 5 of this act.
(4) "Campaign treasurer' and "deputy campaign treasurer" mean the in-
dividuals appointed by a candidate or political committee, pursuant to section
5 of this act, to perform the duties specified in that section.
(5) "Candidate" means any individual who seeks election to public office.
An individual shall be deemed to seek election when he first:
(a) Receives contributions or makes expenditures or reserves space or
facilities with intent to promote his candidacy for office; or
(b) Announces publicly or files for office.
(6) "Commercial advertiser" means any person who sells the service of
communicating messages or producing printed material for broadcast or dis-
tribution to the general public or segments of the general public whether
through the use of newspapers, magazines, television and radio stations, bill-
board companies, direct mail advertising companies, printing companies, or
otherwise.
(7) "Commission" means the agency established under section 35 of this
act.
(8) "Contribution" includes a loan, gift, deposit, subscription, forgiveness
of indebtedness, donation, advance, pledge, payment, transfer of funds between
political committees, or transfer of anything of value, including personal and
professional services for less than full consideration, but does not include ordi-
nary home hospitality and the rendering of "part time" personal services of the
sort commonly performed by volunteer campaign workers or incidental expenses
not' in excess of twenty-five dollars personally paid for by any volunteer cam-
paign worker. "Part time" services, for the purposes of this act, means services
in addition to regular full time employment, or, in the case of an unemployed
PAGENO="0334"
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person, services not in excess of twenty hours per week, excluding weekends.
For the purposes of this act, contributions other than money or its equivalents
shall be deemed to have a money value equivalent to the fair market value of
the contributions; however, the amount of any such contribution may be re-
duced for the purpose of complying with the reporting requirements of this act, by
the actual cost of consumables furnished in connection with the purchase of
such tickets, and only the excess over actual cost of such consumables shall be
deemed a contribution.
(9) "Elected official" means any person elected at a general or special
election to any public office, and any person appointed to fill a vacancy in any
such office.
(10) "Election" includes any primary, general or special election for public
office and any election in which a ballot proposition is submitted to the voters.
(11) "Election campaign" means any campaign in support of or in opposition
to a candidate for election to public office and any campaign in support of, or in
opposition to, a ballot proposition.
(12) "Expenditure" includes a payment, contribution, subscription, distri-
bution, loan, advance, deposit, or gift of money or anything of value, and includes
a contract, promise, or agreement, whether or not legally enforceable, to make
an expenditure. The term "expenditure" also includes a promise to pay, a
payment or a transfer of anything of value in exchange for goods, services,
property, facilities or anything of value for the purpose of assisting, benefiting
or honoring any public official or candidate, or assisting in furthering or
opposing any election campaign.
(13) "Final report" means the report described as a final report in section 8,
subsection 2, of this act.
(14) "Immediate family" includes the spouse and children living in the
household and other relatives living in the household.
(15) "Legislation" means bills, resolutions, motions, amendments, nomina-
tions, and other matters pending or proposed in either house of the state
legislature, and includes any other matter which may be the subject of action
by either house, or any committee of the legislature and all bills and resolutions
which having passed both houses, are pending approval by the Governor.
(16) "Lobby" and "lobbying" each mean attempting to influence the passage
or defeat of any legislation by the legislature of the State of Washington, or
the adoption or rejection of any rule, standard, rate or other legislative enact-
ment of any state agency under the state Administrative Procedure Acts,
chap. 34.04 R.C.W. and chap. 28 BiD ROW.
(17) "Lobbyist" includes any person who shall lobby either in his own or
another's behalf.
(18) "Lobbyist's employer" means the person or persons by whom a lobbyist
is employed and all persons by whom he is compensated for acting as a lobbyist.
(19) "Person" includes an individual, partnership, joint venture, public or
private corporation, association, federal, state or local governmental entity or
agency however constituted, candidate, committee, political committee, political
party, executive committee thereof, or any other organization or group of
persons, however organized.
(20) "Persons in interest" means the person who is the subject of a record
or any representative designated by said person except that if such person be
tinder a legal disability, the term "person in interest" shall mean and include
the parent or duly appointed legal representative.
(21) "Political advertising" includes any advertising displays, newspaper ads,
billboards, signs, brochures, articles, tabloids, flyers, letters, radio or television
presentations or other means of mass communication, used for the purpose of
appealing, directly or indirectly, for votes or for financial or other support in
any election campaign.
(22) "Political committee" means any person (except a candidate or an
individual dealing with his own funds or property) having the expectation of
receiving contributions or making expenditures in support of, or opposition to,
any candidate or any ballot proposition.
(23) "Public office" means any federal, state, county, city, town, school
district, port district, special district, or other state political subdivision
elective office.
(24) "Public record" includes any writing containing information relating to
the conduct of government or the performance of any governmental or pro-
PAGENO="0335"
331
prietary function prepared, owned, used or retained by any state or local ageticy
regardless of physical form or characteristics.
(23) "Writing" means handwriting, typewriting, printing, photostating,
photographing, and every other means of recording any form of communication
or representation, including letters, words, pictures, sounds, or symbols, or
combination thereof, and all papers, maps, magnetic or paper tapes, photo-
graphic films and prints, magnetic or punched cards, discs, drums and other
documents.
As used in this act, the singular shall take the plural and any gender, the
other, as the context requires.
CHAPTER I. CAMPAIGN FINANCING
SEC. 3. APPLICABILITY. The provisions of this act relating to election campaigns
shall apply in all election campaigns other than (a) for precinct committeeman;
(b) for the President and Vice President of the United States; and (c) for an
office the constituency of which does not encompass a whole county and which
contains less than five thousand registered voters as of the date of the most
recent general election in such district.
SEC. 4. OBLIGATIoN OF POLITICAL COMMITTEES TO FILE STATEMENT OF ORGANIZA-
TION. (1) Every political committee, within ten days after its organization or,
within ten days after the date when it first has the expectation of receiving con-
tributions or making expendiures in any election campaign, whichever is earlier,
shall file a statement of organization with the commission and with the county
auditor of the county in which the candidate resides (or in the case of a political
committee supporting or opposing a ballot proposition, the county in which the
campaign treasurer resides). Each political committee in existence on the effective
date of this act shall file a statement of organization with the commission within
ninety days after .snch effective date.
(2) The statement of organization shall include but not be limited to:
(t) The name and address of the committee;
(b) The names and addresses of all related or affiliated committees or other
persons, and the nature of the relationship or affiliation;
(c) The names, addresses, and titles of its officers; or if it has no officers,
the names, addresses and titles of its responsible leaders;
(d) The name and address of its campaign treasurer and campaign de-
pository;
(e) A statement whether the committee is a continuing one;
(f) The name, office sought, and party affiliation of each candidate whom
the committee is supporting or opposing, and, if the committee is supporting
the entire ticket of any party, the name of the party;
(g) The ballot proposition concerned, if any, and whether the committee is
in favor of or opposed to such proposition;
(h) What distribution of surplus funds will be made in the event of dis-
solution; and
(i) Such other information as the commission may by regulation prescribe,
in keeping with the policies and purposes of this act.
(3) Any material change in information previously submitted in a statement
of organization shall be reported to the commission and to the appropriate county
auditor within the ten days following the change.
SEC. 5. CAMPAIGN TREASURER AND DEPoSITORIES. (1) Each candidate, at or before
the time he announces publicly or files for office, and each political committee, at
or before the time it files a statement of organization, shall designate and file
with the commission the names and addresses of:
(a) One legally competent individual, who may be the candidate, to serve as
a campaign treasurer; and
(b) One bank doing business in this state to serve as campaign depository.
(2) A candidate, a political committee or a campaign treasurer may appoint as
many deputy campaign treasurers as is considered necessary and may designate
not more than one additional campaign depository in each other county in which
the campaign is conducted. The candidate or political committee shall file the
names and addresses of the deputy campaign treasurers and additional campaign
depositories with the commission.
(3) (a) A candidate or political committee may at any time remove a cam-
paign treasurer or deputy campaign treasurer or change a designated campaign
depository.
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(b) In the event of the death, resignation, removal, or change of a campaign
treasurer, deputy campaign treasurer or depository, the candidate or political
committee shall designate and file with the commission the name and address
of any successor.
(4) No campaign treasurer, deputy campaign treasurer, or campaign de-
pository shall be deemed to be in compliance with the provisions of this act until
his name and address is filed with the commission.
SEC. 6. DEPOSIT OF CONTRIBUTIONS-STATEMENT OF CAMPAIGN TREASURER-
ANoNmfoUs CONTRIBUTIONS. (1) All monetary contributions received by a candi-
date or political committee shall be deposited by the campaign treasurer or
deputy treasurer in a campaign depository in an account designated, "Campaign
Fund of " (name of candidate or political committee).
(2) All deposits made by a campaign treasurer or deputy campaign treasurer
shall be accompanied by a statement containing the name of each person con-
tributing the funds so deposited and the amount contributed by each person:
PROVIDED, that contributions not exceeding five dollars from any one person
may be deposited without identifying the contributor. The statement shall be
in triplicate, upon a form prescribed by the commission, one copy to be retained
by the campaign depository for its records, one copy to be filed by the campaign
treasurer with the commission, and one copy to be retained by the campaign
treasurer for his records. In the event of deposits made by a deputy campaign
treasurer, the third copy shall be forwarded to the campaign treasurer to be re-
tained by him for his records. Each statement shall be certified as correct by the
campaign treasurer or deputy campaign treasurer making the deposit.
(3) (a) Accumulated anonymous contributions in excess of one dollar from
any individual contributor, and
(b) Accumulated anonymous contributions in excess of one percent of the
total accumulated contributions received to date or three hundred dollars (which-
ever is less),
shall not be deposited, used or expended, but shall be returned to the donor, if
his identity can be ascertained. If the donor cannot be ascertained, the contribu-
tion shall escheat to the state, and shall be paid to the state treasurer for deposit
in the state general fund.
SEC. 7. AUTHORIZATION OF EXPENDITURES AND RESTRICTIONS THEREON. No ex-
penditures shall be made or incurred by any candidate or political committee
except on the authority of the campaign treasurer or the candidate, and a record
of all such expenditures shall be maintained by the campaign treasurer.
SEC. 8. CANDIDATES' AND TREASURERS' DUTY TO REPORT. (1) On the day the cam-
paign treasurer is designated, eachcandidate or political committee shall file with
the commission and the county auditor of the county in which the candidate re-
sides (or in the case of political committee supporting or opposing a ballot propo-
sition, the county in which the campaign treasurer resides), in additon to any
statement of organization required under section 4, a report of all contributions
received and expenditures made in the election campaign prior to that date:
Provided, That if the political committee is an organization of continuing exist-
ence not established in anticipation of any particular election the campaign
treasurer shall report, at the times required by this act, and at such other times
as are designated by the commission, all contributions received and expenditures
made since the date of his or his predecessor's last report. In addition to any
statement of organization required under section 4, the initial report of the
campaign treasurer of such a political committee in existence at the time this act
becomes effective need include only:
(a) The funds on hand at the time of the report, and
(b) Such other information as shall be required by the commission by
regulation in conformance with the policies and purposes of this act.
(2) At the following intervals each campaign treasurer shall file with the com-
mission and the county auditor of the county in which the candidate resides (or
in the case of a political committee supporting or opposing a ballot proposition
the county in which the campaign treasurer resides) a further report of the
contributions received and expenditures made since the date of the last report:
(a) On the fifth and nineteenth days immediately preceding the date on
which the election is held; and
(b) Within ten days after the date of a primary election, and within
twenty-one days after the date of all other elections; and
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(c) On the tenth day of each month preceding the election in which no
other reports are required to be filed under this section.
The report filed under paragraph (b) above shall be the final report if there is
no outstanding debt or obligation, and the campaign fund is closed, and the
campaign is concluded in all respects, and if in the case of a political committee,
the committee has ceased to function and has dissolved. If the candidate or
political committee has any outstanding debt or obligation, additional reports
shall be filed at least once every six months until the obligation or indebtedness
is entirely satisfied at which time a final report shall be filed. A continuing politi-
cal committee shall file reports as required by this act until it is dissolved, at
which time a final report shall be filed. Upon submitting a final report, the duties
of the campaign treasurer shall cease and there shall be no obligation to make
any further reports.
(3) The campaign treasurer shall maintain books of account in accordance with
generally accepted accounting principles reflecting all contributions and expendi-
tures on a current basis within three business days of receipt or expenditure.
During the eight days immediately preceding the date of the election the books of
account shall be kept current within one business day and shall be open for pub-
lic inspection during normal business hours at the principal campaign head-
quarters or, if there is no campaign headquarters, at the address of the cam-
paign treasurer.
(4) All reports filed pursuant to this section shall be certified as correct by the
candidate and the campaign treasurer.
(5) Copies of all reports filed pursuant to this section shall be readily available
for public inspection at the principal campaign headquarters or, if there is no
campaign headquarters, at the address of the campaign treasurer.
SEc. 9. CONTENTS OF REPORT. (1) Each report required under section 8 of this
act shall disclose for the period beginning at the end of the period for the last
report or, in the case of an initial report, at the time of the first contribution or
expenditure, and ending not more than three days prior to the date the report is
due:
(a) The funds on hand at the beginning of the period;
(b) The name and address of each person who has made one or more
contributions during the period, together with the money value and date of
such contributions and the aggregate value of all contributions received from
each such person during the preceding twelve-month period. Provided, That
contributions not exceeding five dollars in aggregate from any one person
during the election campaign may be reported as one lump sum so long as
the campaign treasurer maintains a separate and private list of the names
and amounts of each such contributor;
(c) Each loan, promissory note or security instrument to be used by or
for the benefit of the candidate or political committee made by any person,
together with the names and addresses of the lender and each person liable
directly, indirectly or contingently and the date and amount of each such
loan, promissory note or security instrument;
(d) The name and address of each political committee from which the
reporting committee or candidate received, or to which that committee or
candidate made, any transfer of funds, together with the amounts, dates and
purpose of all such transfers;
(e) All other contributions not otherwise listed or exempted;
(f) The name and address of each person to whom an expenditure was
made in the aggregate amount of twenty-five dollars or more, and the amount,
date and purpose of each such expenditure;
(g) The total sum of expenditures;
(h) The surplus or deficit of contributions over expenditures;
(1) The disposition made of any surplus of contributions over
expenditures;
(j) Such other information as shall be required by the commission by reg-
ulation in conformance with the policies and purposes of this act; and
(k) Funds received from a political committee not domiciled in Wash-
ington State and not otherwise required to report under this act (a "non-
reporting committee"). Such funds shall be forfeited to the State of
Washington unless the non-reporting committee has filed with the commission
a statement disclosing: (i) its name and address; (ii) the purposes of the
non-renorting committee; (iii) the names, addresses and titles of its officers
or if it has no officers, the names, addresses and titles of its responsible
25-239 O-73----22
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leaders; (iv) a statement whether the non-reporting committee is a con-
tinuing one; (v) the name, office sought, and party affiliation of each candi-
date in the State of Washington whom the non-reporting committee is sup-
porting, and, if such committee is supporting the entire ticket of any party,
the name of the party; (vi) the ballot proposition supported or opposed in the
State of Washington, if any, and whether such committee is in favor of or
opposed to such proposition; (vii) the name and address of each person
residing in the State of Washington or corporation which has a place of
business in the State of Washington who has made one or more contributions
to the non-reporting committee during the preceding twelve month period,
together with the money value and date of such contributions; (viii) the
name and address of each person in the State of Washington to whom an
expenditure was made by the non-reporting committee on behalf of a
candidate or political committee in the aggregate amount of twenty-five
dollars or more, the amount, date and purpose of such expenditure, and the
total sum of such expenditures; (ix) such other information as the com-
mission may by regulation prescribe, in keeping with the policies and pur-
poses of this act.
(2) The campaign treasurer and the candidate shall certify the correctness of
each report.
SEC. 10. SPECIAL REPORTS. In addition to the other reports required by this
act: (1) Any person who makes an expenditure in support of or in opposition
to any candidate or proposition (except to the extent that a contribution is
made directly to a candidate or political committee), in the aggregate amount
of one hundred dollars or more during an election campaign, shall file with
the commission a report signed by the contributor disclosing (a) the contrib-
utor's name and address, and (b) the date, nature, amount and recipient of
such contribution or expenditure; and
(2) Any person who contributes in the aggregate amount of one hundred
dollars or more during the preceding twelve month period to any political
committee not domiciled in the State of Washington or not otherwise required
to report under this act, if the person reasonably expects such political com-
mittee to make contributions in respect to any election covered by `this act,
shall file with the commission a report signed by the contributor disclosing (a)
the contributor's name and address, and (b) the date, nature, amount and
recipient of such contribution, and (c) *any instructions given as to the use
or disbursement of such contribution.
SEC. 11. CoMMERCIAL ADvEiiTlsims' Duv~ TO REPORT. (1) Within fifteen days
after an election each commercial advertiser who has accepted or provided
political advertising during the election campaign shall file a report with the
commission which shall be certified as correct and shall specify:
(a) The names and addresses of persons from whom it accepted political
advertising;
(b) The exact nature and extent of the advertising services rendered;
(c) The consideration and the manner of paying that consideration for
such services; and
(d) Such other facts as the commission may by regulation prescribe,
in keeping with the policies and purposes of this act.
(2) No report shall be required from any commercial advertiser as to any
single candidate or political committee when the total value of such political
advertising does not exceed fifty dollars.
SEC. 12. IDENTIFICATION OF CONTRIBUTIONS AND COMMUNICATIONS. No contri-
bution shall be made and no expenditure shall be incurred, directly or indi-
rectly, in a fictitious name, anonymously, or by one person through an agent,
relative or other person in such manner as to conceal the identity of the source
of the contribution.
SEC. 13. FORBIDS USE OF PUBLIC OFFICE FACILITIES IN CAMPAIGNS. No elective
official nor any employee of his office may use or authorize the use of any of the
facilities of his public office, directly or indirectly, for the purpose of assisting
his campaign for reelection to the office he holds, or for election to any other
office, or for election of any other person to any office or for the promotion or op-
position to any ballot proposition. Facilities of public office include, but are
not limited to, use of stationery, postage, machines and equipment, use of
employees of the office during working hours, vehicles, office space, publications
of the office, and clientele lists of persons served by the office: PROVIDED,
that this section shall not apply to those activities performed by the official
or his office which are part of the normal and regular conduct of the office.
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SEC. 14. CAMPAIGN EXPENDITURE LIMITATIONS. (1) The total of expenditures
made in any election campaign in connection with any public office shall not
exceed the larger of the following amounts:
(a) Ten cents multiplied by the number of voters registered in the con-
stituency at the last general election for the public office; or
(b) Five thousand dollars; or
(c) A sum equal to the public salary which will be paid to the occupant
of the office which the candidate seeks, during the term for which the
successful candidate will be elected: PROVIDED, that with respect to
candidates for the office of governor and lieutenant governor of the State
of Washington only, a sum equal to the public salary which will be paid
the governor during the term sought, ~iultip1ied by two; and with respect
to candidates for the state legislature only, a sum equal to the public salary
which will be paid to a member of the state senate during his term.
(2) In any election campaign in connection with any statewide ballot propo-
sition the total of expenditures made shall not exceed one hundred thousand
dollars. The total of such expenditures in any election campaign in connection
with any other ballot proposition shall not exceed ten cents multiplied by the
number of voters registered in the constituency voting on such proposition.
CHAPTER II. LOBBYIST REPORTING
SEC. 15. REGISTRATION OF LOBBYISTS. (1) Before doing any lobbying, or within
thirty days after being employed as a lobbyist, whichever occurs first, a lobby-
ist shall register by filing with the commission a lobbyist registration state-
ment, in such detail as the commission shall prescribe, showing:
(a) His name, permanent business address, any temporary residential and
business addresses in Thurston County during the legislative session;
(b) The name, address and occupation or business of the lobbyist's
employer;
(c) The duration of his employment;
(d) His compensation for lobbying; how much he is to be paid for
expenses, and what expenses are to be reimbursed; and a full and par-
ticular description of any agreement, arrangement or understanding
according to which his compensation, or any portion thereof, is or will be
contingent upon the success of any attempt to influence legislation.
(e) Whether the person from whom he receives said compensation em-
ploys him solely as a lobbyist or whether he is a regular employee per-
forming services for his employer which include but are not limited to
the influencing of legislation;
(f) The general subject or subjects of his legislative interest;
(g) A written authorization froju each of the lobbyist's employers con-
firming such employment;
(h) The name and address of the person who will have custody of the
accounts, bills, receipts, books, papers, and documents required to be kept
under this act;
(i) If the lobbyist's employer is an entity (including, but not limited to,
business and trade associations) whose members include, or which as a
representative entity undertakes lobbying activities for, businesses, groups,
associations or organizations, the name and address of each member of
such entity or person represented by such entity whose fees, dues, pay-
ments or other consideration paid to such entity during either of the prior
two years have exceeded five hundred dollars or who is obligated to or
has agreed to pay fees, dues, payments or other consideration exceeding
five hundred dollars to such entity during the current year.
(2) Any lobbyist who receives or is to receive compensation from more than
one person for his services as a lobbyist shall file a separate notice of represen-
tation with respect to each such person; except that where a lobbyist whose
fee for acting as such in respect to the same legislation or type of legislation is,
or is to be, paid or contributed to by more than one person then such lobbyist
may file a single statement, in which he shall detail the name, business address
and occupation of each person so paying or contributing, and the amount
of the respective payments or contributions made by each such person.
(3) Whenever a change, modification, or termination of the lobbyist's em-
ployment occurs, the lobbyist shall, within one week of such change, ~uodifi-
cation or termination, furnish full information regarding the same filing with
the commission an amended registration statement.
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(4) Each lobbyist who has registered shall file a new registration statement,
revised as appropriate, each January, and failure to do so shall terminate
his registration.
SEc. 16. EXEMPTION FROM REGISTRATION. The following persons and activities
shall be exempt from registration and reporting under secions 15, 17, 19, and 20
of this act:
(1) Persons who limit their lobbying activities to appearance before
public sessions of committees of the legislature, or public hearings of state
agencies.
(2) News or feature reporting activities and editorial comment by
working members of the press, radio, or television and the publication or
dissemination thereof by a newspaper, book publisher, regularly published
periodical, radio station, or television station.
(3) Lobbying without compensation or other consideration: PROVIDED,
such person makes no expenditure for or on behalf of any member of the
legislature or elected official or public officer or employee of the State of
Washington in connection with such lobbying. Any person exempt under
this subsection (3) may at his option register and report under this act.
(4) The Governor.
(5) The Lieutenant Governor.
(6) Except as provided by section 19(1), members of the legislature.
(7) Except as provided by section 19(1), persons employed by the legis-
lature for the purpose of aiding in the preparation and enactment of
legislation.
(8) Except as provided by section 19 elected state officers, state officers
appointed by the Governor subject to confirmation by the Senate, and em-
ployees of any state agency.
SEC. 17. REPORTING BY LoBBYISTs. (1) Any lobbyist registered under section 15
of this act and any person who lobbies shall file with the commission periodic
reports of his activities signed by both the lobbyist and the lobbyist's employers.
The reports shall be made in the form and manner prescribed by the commission.
They shall be due quarterly and shall be filed within thirty days after the end of
the calendar quarter covered by the report. In addition to the quarterly reports,
while the legislature is in session, any lobbyist who lobbies with respect to any
legislation shall file interim weekly periodic reports for each week that the legis-
lature is in session, which reports need be signed only by the lobbyist and which
shall be filed on each Tuesday for the activities of the week ending on the pre-
ceding saturday.
(2) Each such quarterly and weekly periodic report shall contain:
(a) The totals of all expenditures made or incurred by such lobbyist or
on behalf of such lobbyist by the lobbyist's employer during the period
covered by the report, which totals shall be segregated according to financial
category, including food and refreshments; living accommodations; adver-
tising; travel; telephone; contributions; office expenses, including rent
and the salaries and wages paid for staff and secretarial assistance, or the
proportionate amount thereof, paid or incurred for lobbying activities;
and other expenses or services: Provided however, That unreimbursed
personal living and travel expenses of a lobbyist not incurred directly or in-
directly for any lobbying purpose need not be reported: and Provided fur-
ther, That the interim weekly reports of legislative lobbyists for the legis-
lative session need show only the expenditures for food and refreshments;
living accommodations; travel; contributions; and such other categories as
the commission shall prescribe by rule. Each individual expenditure of more
than fifteen dollars for entertainment shall he identified by date, place,
amount, and the names of all persons in the group partaking in or of such
entertainment including any portion thereof attributable to the lobbyist's
participation therein but without allocating any portion of such expenditure
to individual participnnts.
(b) In the case of a lobbyist employed by more than one employer, the
proportionate amount of such expenditures in each category incurred on
behalf of each of his employers.
(c) An itemized listing of each such expenditure in the nature of a contri-
bution of money or of tangible or intangible personal property to any legisla-
tor or for or on behalf of any legislator. All contributions made to, or for the
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benefit of, any legislator shall be identified by date, amount, and the name of
the legislator receiving, or to be benefited by each such contribution.
(d) The subject matter of proposed legislation or rulemaking; the pro-
posed rules, standards, rates or other legislative enactments under chap.
34.04 R.C.W. and chap. 28B.19 R.C.W. (the state Administrative Procedure
Acts) and the state agency considering the same; and the number of each
senate or house bill, resolution, or other legislative activity which the
lobbyist has been engaged in supporting or opposing during the reporting
period; provided, That in the case of appropriations bills the lobbyist shall
enumerate the specific section or sections which he supported or opposed.
SEC. 18. REPORTS BY EMPLOYERS øF REGISTERED LOBBYISTS. Every employer
of a lobbyist registered under this act shall file with the commission on or before
January 31st of each year a statement disclosing for the preceding twelve
months the following information:
(1) The name of each elected official, candidate, or any member of his im-
mediate family to whom such employer has paid any compensation, the value
of such compensation and the consideration given or performed in exchange for
such compensation.
(2) The name of any corporation, partnership,~ joint venture, association,
union or other entity of which any elected official, candidate, or any member of
his immediate family is a member, officer, partner, director, associate or employee
and to which the employer has paid compensation, the value of such compensa-
tion and the consideration given or performed in exchange for such compensation.
SEC. 19. LEGISLATIVE ACTIVITIES OF STATE AGENCIES AND OTHER UNITS OF Gov-
ERNMENT. (1) Every legislator and every committee of the Legislature shall
file with the commission quarterly reports listing the names, addresses, and
salaries of all persons employed by the person or committee making the filing
for the purpose of aiding in the preparation and enactment of legislation
during the preceding quarter. The reports shall be made in the form and the
manner prescribed by the commission and shall be filed between the first and
tenth days of each calendar quarter.
(2) Unless expressly authorized by law, no state funds shall be used directly
or indirectly for lobbying: provided, this shall not prevent state officers or em-
ployees from communicating with a member of the legislature on the request
of that member; or communicating to the legislature, through the proper official
channels, requests for legislative action or appropriations which are deemed
necessary for the efficient conduct of the pubic business or actually made in the
proper performance of their official duties: Provided further, That this subsection
shall not apply to the legislative branch.
(3) Each state agency which expends state funds for lobbying pursuant to an
express authorization by law or whose officers or employees communicate to
members of the legislature on request of any member or communicate to the
legislature requests for legislation or appropriations shall file with the commis-
sion quarterly statements providing the following information for the quarter
just completed:
(a) The name of the agency filing the statement;
(b) The name, title, and job description and salary of each employee
engaged in such legislative activity, a general description of the nature of
his legislative activities, and the proportionate amount of his time spent
on such activities.
(c) In the case of any communications to a member of the legislaure in
response to a request from the member, the name of the member making the
request and the nature and subject of the request.
The statements shall be in the form and the manner prescribed by the com-
mission and shall be filed within thirty days after the end of the quarter covered
by the report.
(4) The provisions of this section shall not relieve any state officer or any
employee of a state agency from complying with other provisions of this act,
if such officer or employee is not otherwise exempted.
SEC. 20. GRASS RooTs LOBBYING CAMPAIGNS. (1) Any person who has made
expenditures, not reported under other sections of this act, exceeding five hun-
dred dollars in the aggregate within any three month period or exceeding two
hundred dollars in the aggregate within any one month period in presenting a
program addressed to the public, a substantial portion of which is intended, de-
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signed, or calculated primarily to influence legislation shall be required to regis-
ter and report, as provided in subsection (2), as a sponsor of a grass roots lobby-
ing campaign.
(2) Within thirty days after becoming a sponsor of a grass roots lobbying
campaign, the sponsor shall register by filing with the commission a registration
statement, in such detail as the commission shall prescribe, showing:
(a) The sponsor's name, address, and business or occupation, and, if the
sponsor is not an individual, the names, addresses and titles of the controlling
persons responsible for managing the sponsor's affairs.
(b) The names, addresses, and business or occupation of all persons or-
ganizing and managing the campaign, or hired to assist the campaign,
including any public relations or advertising firms participating in the cain-
paign, and the terms of compensation for all such persons.
(c) The names and addresses of all persons contributing to the campaign,
and the amount contributed by each contributor.
(d) The purpose of the campaign, including the specific legislation, rules,
rates, standards or proposals which are the subject matter of the campaign.
(e) The totals of all expenditures made or incurred to date on behalf of
the campaign, which totals shall be segregated according to financial cate-
gory, including but not limited to the following: advertising, segregated by
media and, in the case of large expenditures (as provided by rule of the
commission), by outlet; contributions; entertainment, including food and
refreshments; office expenses including rent and the salaries and wages paid
for staff and secretarial assistance, or the proportionate amount thereof paid
or incurred for lobbying campaign activities; consultants; and printing and
mailing expenses.
(3) Every sponsor who has registered under this section shall file monthly
reports with the commission, which shall be filed by the tenth day of the month
for the activity during the preceding month. The reports shall update the infor-
mation contained in the sponsor's registration statement and in prior reports and
shall show contributions received and totals of expenditures made during the
month, in the same manner as provided for in the registration statement.
(4) When the campaign has been terminated, the sponsor shall file a notice of
termination with the final monthly report, which notice shall state the totals of
all contributions and expenditures made on behalf of the campaign, in the same
manner as provided for in the registration statement.
SEa. 21. EMPLOYMENT OF LEGISLATORS, ATTACHES, OR STATE EMPLOYEES; STATE-
MENT, CONTENTS AND FILING. If any person registered or required to be registered
as a lobbyist under this act employs, or if any employer of any person registered
or required to be registered as a lobbyist under this act, employs any member of
the legislature, or any member of any state board or commission, or any employee
of the legislature, or any full-time state employee, if such new employee shall
remain in the partial employ of the State or any agency thereof, then the new
employer shall file a statement under oath with the commission setting out the
nature of the employment, the name of the person to be paid thereunder, and the
amount of pay or consideration to be paid thereunder. The statement shall be
filed within fifteen days after the commencement of such employment.
SEC. 22. EMPLOYMENT OF UNREGISTERED PERSONS. It shall be a violation of this
act for any person to employ for pay or any consideration, or pay or agree to pay
any consideration to, a person to lobby w-ho is not registered under this act except
upon condition that such person register as a lobbyist as provided by this act, and
such person does in fact so register as soon as practicable.
SEC. 23. DUTIEs OF LOBBYISTS. A person required to register as a lobbyist under
this act shall also have the following obligations, the violation of which shall
constitute cause for revocation of his registration, and may subject such person,
and such person's employer, if such employer aids, abets, ratifies or confirms any
such act, to other civil liabilities, as provided by this act:
(1) Such person shall obtain and preserve all accounts, bills, receipts,
books, papers, and documents necessary to substantiate the financial reports
required to be made under this act for a period of at least six years from the
date of the filing of the statement containing such items, which accounts,
bills, receipts, books, papers and documents shall be made available for in-
spection by the commission at any time: PROVIDED, that if a lobbyist is
required under the terms of his employment contract to turn any records over
to his employer, responsibility for the preservation of such records under
this subsection shall rest with such employer.
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(2) In addition, a person required to register as a lobbyist shall not:
(a) Engage in any activity as a lobbyist before registering as such;
(b) Knowingly deceive or attempt to deceive any legislator as to any
fact pertaining to any pending or nroposed legislation;
(c) Cause or influence the ili~roduction of any bill or amendment
thereto for the purpose of thereafter being employed to secure its
defeat;
(d) Knowingly represent an interest adverse to any of his employers
without first obtaining such employer's written consent thereto after full
disclosure to such employer of such adverse interest;
(e) Exercise any undue influence, extortion, or unlawful retaliation
upon any legislator by reason of such legislator's position with respect to,
or his vote upon, any pending or proposed legislation.
CHAPTER III. REPORTING OF ELECTED OFFICIALS FINANCIAL AFFAIRS
SEC. 24. ELECTED OFFICIALS REPORTS OF FINANCIAL AFFAIRS. (1) Every elected
official (except President, Vice President and precinct committeemen) shall on or
before January 31st of each year, and every candidate (except for the offices of
President, Vice President and precinct committeeman) shall, within two weeks of
becoming a candidate, file with the commission a written statement sworn as to
its truth and accuracy stating for himself and his immediate family for the pre-
ceding twelve months:
(a) Occupation, name of employer, and business address; and
(b) Each direct financial interest in excess of five thousand dollars in a
bank or savings account or cash surrender value of any insurance policy; each
other direct financial interest in excess of five hundred dollars; and the name,
address, nature of entity, nature and value of each such direct financial
interest; and
(c) The name and address of each creditor to whom the value of five
hundred dollars or more was owed; the original amount of each debt to
each such creditor; the amount of each debt owed to each creditor as of the
date of filing; the terms of repayment of each such debt; and the security
given, if any, for each such debt: PROVIDED, that debts arising out of a
"retail installment transaction" as defined in chap. 63.14 R.C.W. (Retail
Installment Sales Act) need not be reported; and
(d) Every public or private office, directorship and position as trustee
held; and
(e) All persons for whom actual or proposed legislation, rules, rates, or
standards has been prepared, promoted, or opposed for current or deferred
compensation; the description of such actual or proposed legislation, rules,
rates or standards; and the amount of current or deferred compensation
paid or promised to be paid; and
(f) The name and address of each governmental entity, corporation, part-
nership, joint venture, sole proprietorship, association, union, or other busi-
ness or commercial entity from whom compensation has been received in any
form of a total value of five hundred dollars or more; the value of such com-
pensation; and the consideration given or performed in exchange for such
compensation; and
(g) The name of any corporation, partnership, joint venture, association,
union or other entity in which is held any office, directorship or any general
partnership interest, or an ownership interest of ten percent or more; the
name or title of that office, directorship or partnership; the nature of owner-
ship interest; and with respect to each such entity the name of each govern-
mental entity, corporation, partnership, joint venture, sole proprietorship,
association, union or other business or commercial entity from which such en-
tity has received compensation in any form in the amount of five hundred
dollars or more during the preceding twelve months and the consideration
given or performed in exchange for such compensation; and
(h) A list, including legal descriptions', of all real property in the State of
Washington, the assessed valuation of which exceeds two thousand five
hundred dollars in w-hich any direct financial interest was acquired during the
preceding calendar year, and a statement `of the amount and nature of the
`financial interest and of the consideration given in exchange for such inter-
est: and
(i) A list, including legal descriptions, of all real property in the State of
Washington, the assessed valuation of which exceeds two thousand five
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hundred dollars in which any direct financial interest was divested during
the preceding calendar year, and a statement of the amount and nature of
the consideration received in exchange for such interest, and the name and
address of the person furnishing such consideration; and
(j) A list, including legal descriptions, of all real property in the State of
Washington, the assessed valuation of which exceeds two thousand five
hundred dollars in which a direct financial interest was held: Provided,
That if a description of such property has been included in a report previ-
`ously filed, such property may be listed, for purposes of this provision, by
reference to such previously filed report; and
(k) A list, including legal descriptions, of all real property in the State of
Washington, the assessed valuation of which exceeds five thousand dollars,
in which a corporation, partnership, firm, enterprise or other entity had a
direct financial interest, in which corporation, partnership, firm or enterprise
a ten percent or greater ownership interest was held; and
(1) Such other information as the commission may deem necessary in order to
properly carry out the purposes and policies of this act, as the commission shall
by rule prescribe.
(2) Where an amount is required to be reported under subsection (1), para-
graphs (a) through (k) of this section, it shall be sufficient to comply with such
requirement to report whether the amount is less than one thousand dollars, at
least one thousand dollars `but less than five thousand dollars, at least five thou-
sand dollars but less than ten thousand dollars, at least ten `thousand dollars but
less than twenty-five thousand dollars, or twenty-five thousand dollars or more.
An amount of stock may `be reported by number of shares instead of by market
value. No provision of this subsection shall `be interpreted to prevent any person
from filing more information or more detailed information than required.
(3) Elected officials and candidates reporting under this section shall not be
required to file the statements required t'o `be filed with the Secretary of State
under R.C.W. 42.21.060.
CHAPTER IV. PUBLIC RECORDS
SEC. 25. DUTY TO PUBLISH PROCEDUREs. (1) Each state agency shall separately
state and currently publish in the Washington Administrative Code and each
local agency shall prominently display and make available for inspection and
copying at the central office of such local agency, for guidance of the public:
(a) descriptions of its central and field organization and the established
places at which, the employees from whom, and the methods whereby, the
public may obtain information, make submittals or requests, or obtain
copies of agency decisions;
(b) statements of `the general course and method by which its operations
are channeled and determined, including the nature and requirements of all
formal and informal procedures available;
(c) rules of procedure;
(d) substantiv'e rules of general applicability adopted as authorized by
law, and statements of general policy or interpretations of general appli-
cability formulated and adopted by the agency; and
(e) each amendment or revision to, or repeal of any of the foregoing.
(2) Except to the extent that he has `actual and timely notice of `the terms
thereof, a person may n'ot in any manner be required t'o resort to, or be adversely
affected by, a matter required to be published or displayed and not so published
or displayed.
SEC. 26. DOCUMENTs AND INDEXES TO BE MADE PUBLIC. (1) Each agency. in ac-
cordance with published rules, shall make available for public inspection and
copying all public records. To the extent required to prevent an unreasonable in-
vasion of personal privacy, an agency shall delete identifying details when it
makes available or publishes any public record; however, in each case, the justifi-
cation for the deletion shall be explained fully in writing.
(2) Each agency shall maintain and make available for public inspection and
copying a current index providing identifying informa'tion `as to the following rec-
ords issued, adopted, or promulgated after June 30, 1972.
(a) final opinions, including concurring `and dissenting opinions, as well
as orders, made in the adjudication of cases;
(b) those statements of policy and interpretations of policy, statute and
and the Constitution which have been adopted by the agency;
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(c) administrative staff manuals and instructions to staff that affect a
member of the public;
(d) planning policies and goals, and interim and final planning decisions;
(e) factual staff reports and studies, factual consultant's reports and
studies, scientific reports and studies, and any other factual information
derived from tests, studies, reports or surveys, whether conducted by public
employees or others; and
(f) correspondence, and materials referred to therein, by and with the
agency relating to any regulatory, supervisory or enforcement responsibili-
ties of the agency, whereby the agency determines, or opines upon, or is
asked to determine or opine upon, the rights of the state, the public, a sub-
division of state government, or of any private party.
(3) An agency need not maintain such an index, if to do so would be unduly
burdensome, but it shall in that event:
(a) issue and publish a formal order specifying the reasons why and the
extent to which compliance would unduly burden or interfere with agency
operations; and
(b) make available for public inspection and copying all indexes main-
tained for agency use.
(4) A public record may he relied on, used, or cited as precedent by an age~icy
against a party other than an agency and it may be invoked by the agency for any
other purpose only if--
(a) it has been indexed in an index available to the public; or
(b) parties affected have timely notice (actual or constructive) of the
terms thereof.
(5) This act shall not be construed as giving authority to any agency to give,
sell or provide access to lists of individuals requested for commercial purposes,
and agencies shall not do so unless specifically authorized or directed by law.
SEC. 27. FACILITIES FOR COPYING. Public records shall be available to any person
for inspection and copying, and agencies shall, upon request for identifiable
records, make them promptly available to any person. Agency facilities shall be
made available to any person for the copying of public records except when and
to the extent that this would unreasonably disrupt the operations of the agency.
SEC. 28. TIMEs FOR INSPECTION AND COPYING. Public records shall be available
for inspection and copying during the customary office hours of the agency:
Provided, That if the agency does not have customary office hours of at least
thirty hours per week, the public records shall be available from nine o'clock n.m.
to noon and from one o'clock p.m. to four o'clock p.m. Monday through Friday,
excluding legal holidays, unless the person making the request and the agency
or its representative agree on a different time.
SEC. 29. PROTECTION OF PURLIC RECORDS. Agencies shall adopt and enforce rea-
sonable rules and regulations, consonant with the intent of this act to provide full
public access to official records, to protect public records from damage or dis-
organization, and to prevent excessive interference with other essential functions
of the agency. Such rules and regulations shall provide for the fullest assistance
to inquirers and the most timely possible action on requests for information.
SEC. 30. CHARGES FOR COPYING. No fee shall be charged for the inspection of
public records. Agencies may impose a reasonable charge for providing copies of
public records and for the use by any person of agency equipment to copy public
records, which charges shall not exceed the amount necessary to reimburse the
agency for its actual costs incident to such copying.
SEC. 31. CERTAIN PERSONAL AND OTHER RECORDS EXEMPT. (1) The following
Shall be exempt from public inspection and copying:
(a) Personal information in any files maintained for students in public
schools, patients or clients of public institutions or public health agencies,
welfare recipients, prisoners, probationers or parolees.
(b) Personal information in files maintained for employees, appointees
or elected officials of any public agency to the extent that disclosure would
violate their right to privacy.
(c) Information required of any taxpayer in connection with the assess-
ment or collection of any tax if the disclosure of the information to other
persons would violate the taxpayer's right to privacy or would result in
unfair competitive disadvantage to such taxpayer.
(d) Specific intelligence information and specific investigative files com-
piled by investigative, law enforcement and penology agencies, and state
agencies vested with the responsibility to discipline members of any profes-
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sion, the non-disclosure of which is essential to effective law enforcement
or for the protecton of any person's right to privacy.
(e) Informati9n revealing the identity of persons who file complaints with
investigative, law enforcement or penology agencies, except as the com-
plainant may authorize.
(f) Test questions, scoring keys, and ether examination data used to
administer a license, employment or academic examination.
(g) Except as provided by chap. 8.26 R.C.W., the contents of real estate
appraisals, made for or by any agency relative to the acquisition of property,
until the project is abandoned or until such time as all of the property has
been acquired, but in no event shall disclosure be denied for more than three
years after the appraisal.
(h) Valuable formula, designs, drawings and research data obtained by
any agency within five years of the request for disclosure when discIo~ure
would produce private gain and public loss.
(1) Preliminary drafts, notes, recommendations, and intra-agency momo-
randums in which opinions are expressed or policies formulated or recom-
mended except that a specific record shall not be exempt when publicly cited
by an agency in connection with any agency action.
(j) Records which are relevant to a controversy to which an agency is
a party but which records would not be available to another party under
the rules of pretrial discovery for causes pending in the superior courts.
(2) The exemptions of this section shall be inapplicable to the extent that
information, the disclosure of which would violate personal privacy or vital
governmental interests, can be deleted from the specific records sought. No ex-
emption shall be construed to permit the nondisclosure of statistical information
not descriptive of any readily identifiable person or persons.
(3) Inspeeton or copying of any specific records, exempt under the provisions
of this section, may be permitted if the superior court in the county in which
the record is maintained finds, after a hearing with notice thereof to every person
in interest and the agency, that the exemption of such records, is clearly un-
necessary to protect any individual's right, privacy or any vital governmental
function.
(4) Agency responses refusing, in whole or part, inspection of any record
shall include a statement of the specific exemption authorizing the withholding
of the record (or part) and a brief explanation of how the exemption applies
to the record withheld.
SEC. 32. PROMPT RESPONSES REQUIRED. Responses to requests for records shall
be made promptly by agencies. Denials of requests must be accomplished by a
written statement of the specific reasons therefor. Agencies shall establish
mechanisms for the most prompt possible review of decisions denying inspection,
and such review shall be deemed completed at the end of the second business dar
following the denial of inspection and shall constitute final action for the pur-
poses of judicial review.
SEC. 33. COURT PROTECTION OF RECORDS. The examination of any specific record
may be enjoined if, upon motion and affidavit, the superior court for the county
in which the movant resides or in which the record is maintained, finds that such
examination would clearly not be in the public interest and would substantially
and irreparably damage any person, or would substantially and irreparably
damage vital governmental functions.
SEC. 34. JUDICIAL REVIEW OF AGENCY ACTIONS. (1) Upon the motion of any
person having been denied an opportunity to inspect or copy a public record by an
agency, the superior court in the county in which a record is maintained may re-
quire the responsible agency to show cause why it has refused to allow inspection
or copying of a specific record or class or records. The burden of proof shall
be on the agency to establish that refusal to permit public inspection and copying
is required.
(2) Judicial review of all agency actions taken or challenged under Sections
25 through 32 of this act shall be (le novo. Courts shall take into account the
policy of this act that free and open examination of public records is in the
public interest, even though such examination may cause inconvenience or em-
barrassment to public officials or others. Courts may examine any record in
camera in any proceeding brought under this section.
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(3) Any person who prevails against an agency in any action in the courts
seeking the right to inspect or copy any public record shall be awarded all costs,
including reasonable attorney fees, incurred in connection with such legal action.
In addition, it shall be within the discretion of the court to award such person
an amount not to exceed twenty-five dollars for each day that he was denied the
right to inspect or copy said public record.
CHAPTER V. ADMINISTRATION AND ENFORCEMENT
SEC. 35. COMMISSION-ESTABLISHED--MEMBERSHIP. There is hereby established
a "Public Disclosure Commission" which shall be composed of five members who
shall be appointed by the governor, with the consent of the senate. All appointees
shall be persons of the highest integrity and qualifications. No more than three
members shall have an identification with the same political party. The original
members shall be appointed within sixty days after the effective date of this
act. The term of each member shall be five years except that the original five
members shall serve initial terms of one, two, three, four and five years, respec-
tively, as designated by the governor. No member of the commission, during his
tenure, shall (1) hold or campaign for elective office; (2) be an officer of any
po1itical party or political committee; (3) permit his name to be used, or make
contributions, in support of or in opposition to any candidate or proposition; (4)
participate in any way in any election campaign; or (5) lobby or employ or assist
a lobbyist. No member shall be eligible for appointment to more than one full
term. A vacancy on the commission shall be filled within thirty days of the
vacancy by the governor, with the consent of the senate, and the appointee shall
serve for the remaining term of his predecessor. A vacancy shall not impair the
powers of the remaining members to exercise all of the powers of the commission.
Three members of the commission shall constitute a quorum. The commission
shall elect its own chairman and adopt its own rules of procedure in the manner
provided in chap. 34.04 R.C.W. Any member of the commission may be removed
by the governor, but only upon grounds of neglect of duty or misconduct in office.
Members shall serve without compensation, but shall be reimbursed for neces-
sary traveling and lodging expenses actually incurred while engaged in the
business of the commission as provided in chap. 43.03 R.C.W.
SEC. 3G. CoMMissioN-DUTIEs. The commission shall:
(1) Develop and provide forms for the reports and statements required
to be made under this act;
(2) Prepare and publish a manual setting forth recommended uniform
methods of bookkeeping and reporting for use by persons required to make
reports and statements under this act;
(3) Compile and maintain a current list of all filed reports and
statements;
(4) Investigate whether properly completed statements and reports have
been filed within the times required by this act;
(5) Upon complaint or upon its own motion, investigate and report appar-
ent violations of this act to the appropriate law enforcement authorities;
(6) Prepare and publish an annual report to the governor as to the
effectiveness of this act and its enforcenment by appropriate law enforce-
ment authorities; and
(7) Enforce this act according to the powers granted it by law.
SEC. 37. Co1~f~fIssIoN-ADDITIoNAL POWER. The commission is empowered to:
(1) Adont, promulgate, amend and rescind suitable administrative rules
and regulations to carry out the policies and purpose of this acI;
(2) Prepare and publish such reports and technical studies as in its
judgment will tend to promote the purposes of this act, including reports
and statistics concerning campaign financing, lobbying, financial interests of
elected officials, and enforcement of this act;
(3) Make from time to time, on its own motion, audits and field
investigations;
(4) Make public the fact that an alleged or apparent violation has
occurred and the nature thereof:
(5) Administer oaths and affirmations, subpoena witnesses, compel their
attendance, take evidence and require the production of any books, papers,
correspondence, memorandums or other records which the commission deems
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relevant or material for the purpose of any investigation authorized under
this act, or any other proceeding under this act;
(6) Adopt and promulgate a Code of Fair Campaign Practices;
(7) Relieve, by published regulation of general applicability, candidates
or political committees of obligations to comply with the provisions of this
act relating to election campaigns, if they have not received contributions
nor made expenditures in connection with any election campaign of more
than one thousand dollars; and
(8) Enact regulations prescribing reasonable requirements for keeping
accounts of and reporting on a quarterly basis costs incurred by state
agencies, counties, cities and other municipalities and political subdivisions
in preparing, publishing and distributing legislative information. The term
"legislative information," for the purposes of this subsection, means books,
pamphlets, reports and other materials prepared, published or distributed at
substantial cost, a substantial purpose of which is to influence the passage or
defeat of any legislation. The state auditor in his regular examination of
each agency under chap. 34.09 R.O.W. shall review such regulations, accounts
and reports and make appropriate findings, comments and recommendations
in his examination reports concerning those agencies.
(9) The commission, after hearing, by order may suspend or modify
any of the reporting requirements hereunder in a particular case if it finds
that literal application of this act works a manifestly unreasonable hard-
ship and if it also finds that such suspension or modification will not
frustrate the purpose of the act. Any suspension or modification shall be
only to the the extent necessary to substantially relieve the hardship. The
commission shall act to suspend or modify any reporting requirements only
if it determines that facts exist that are clear and convincing proof of the
findings required hereunder. Any citizen shall have standing to bring an
action in Thurston County Superior Court to contest the propriety of any
order entered hereunder within one year from the date of the entry of such
order.
SEC. 38. SECRETARY OF STATE, ATTORNEY GENERAL-DTJTIES. (1) The secre-
tary of state, through his office, shall perform such ministerial functions as
may be necessary to enable the commission to carry, out its responsibilities
under this act. The office of the secretary of state shall be designated as the
place where the public may file papers or correspond with the commission and
receive any form or instruction from the commission.
(2) The attorney general, through his office, shall supply such assistance as
the commission may require in order to carry out its responsibilities under
this act. The commission may employ attorneys who are neither the attorney
general nor an assistant attorney general to carry out any function of the
attorney general prescribed in this section.
SEC. 39. CIvIL REMEDIES AND SANCTIoNS. (1) One or more of the following
civil remedies and sanctions may be imposed by the court order in addition to
any other remedies provided by law:
(a) If the court finds that the violation of any provision of this act by
any candidate or political committee probably affected the outcome of any
election, the result of said election may be held void and a special election
held within sixty days of such finding. Any action to void an election shall
be commenced within one year of the date of the election in question. It is
intended that this remedy be imposed freely in all appropriate cases to
protect the right of the electorate to an informed and knowledgeable vote.
(b) If any lobbyist or sponsor of any grass roots lobbying campaign vio-
lates any of the provisions of this act, his registration may be revoked or
suspended and he may be enjoined from receiving compensation or making
expenditures for lobbying: PROVIDED, however, that imposition of such
sanction shall not excuse said lobbyist from filing statements and reports
required by this act.
(c) Any person who violates any of the provisions of this act may be
subject to a civil penalty of not more than ten thousand dollars for each
such violation.
(d) Any person who fails to file a properly completed statement or
report within the time required by this act may be subject to a civil penalty
of ten dollars per day for each day each such delinquency continues.
(e) Any person who fails to report a contribution or expenditure may be
subject to a civil penalty equivalent to the amount he failed to report.
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(f) The court may enjoin any person to prevent the doing of any act herein
prohibited, or to compel the performance of any act required herein.
SEc. 40. ENFORCEMENT. (1) The attorney general and the prosecuting authori-
ties of political subdivisions of this state may bring civil actions in the name
of the state for any appropriate civil remedy, including but not limited to the
special remedies provided in Section `39.
(2) The attorney general and the prosecuting authorities of political sub-
divisions of this state may investigate or cause to be investigated the activities
of any person who there is reason to believe is or has been acting in violation of
this act, and may require any such person or any other person reasonably
believed to have information concerning the activities of such person to appear
at a time and place designated in the county in which such person resides or
is found, to give such information under oath and to produce all accounts, bills,
receipts, books, papers, and documents which may be relevant or material to
any investigation authorized under this act.
(3) When the attorney general or the prosecuting authority of any political
subdivision of this state requires the attendance of any person to obtain such in-
formation or the production of the accounts, bills, receipts, books, papers, and
documents which may be relevant or material to any investigation authorized
under this act, he shall issue an order setting forth the time when and the place
where attendance is required and shall cause the same to be delivered to or sent
by registered mail to the person at least fourteen days before the date fixed for
attendance. Such order shall have the same force and effect as a subpoena, shall
be effective state-wide, and, upon application of the attorney general or said
prosecuting authority, obedience to the order may be enforced by any superior
court judge in the county where the person receiving it resides or is found, in the
same manner as though the order were a subpoena. The court, after hearing, for
good cause, and upon application of any person aggrieved by the order, shall
have the right to alter, amend, revise, suspend, or postpone all or any part of
its provisions. In any case where the order is not enforced by the court according
to its terms, the reasons for the court's actions shall be clearly stated in writing,
and such action shall be subject to review by the appellate courts by certiorari
or other appropriate proceeding.
(4) Any person who has notified the attorney general in writing that there is
reason to believe that some provision of this act is being or has been violated may
himself bring in the name of the state any of the actions (hereinafter referred to
as a citizen's action) authorized under this act if the attorney general has failed
to commence an action hereunder within forty days after such notice and if the
attorney general has failed to commence an action within ten days after a notice
in writing delivered to the attorney general advising him that a citizen's action
will be brought if the attorney general does not bring an action if the person who
brings the citizen's action prevail's, he shall be entitled to one-half of any judg-
ment awarded, and to the extent the costs and attorney's fees he has incurred ex-
ceed his share of the judgment, he shall be entitled to be reimbursed for such costs
and fees by the State of Washington: Provided, That in the case of a citizen's
action which is dismissed and which the court also finds was brought without
reasonable cause, the court may order the person commencing the action to pay all
costs of trial and reasonable attorney's fees incurred by `the defendant.
(5) In any action brought under this section, the court may award to the state
all costs of investigation and trial, including a reasonable at'torney's fee to be
fixed by the court. If the violation is found to have been intentional, the amount of
the judgment, which shall for this purpose include the costs, may be trebled as
punitive damages. If damages or treble damages are awarded in such an action
brought against a lobbyist, the judgment may be awarded against the lobbyist,
and the lobbyist's employer or employers joined as defendants, jointly, severally,
or both. If the defendant prevails, he shall be awarded all costs of trial, and may
be awarded a reasonable attorney's fee to be fixed by the court to be paid by the
State of Washington.
SEC. 41. LIMITATIoN ON AcTIoNs. Any action brought under the provisions of this
act must be commenced within six years after the date when the violation
occurred.
SEC. 42. DATE OF MAILING DEEMED DATE OF RECEIPT. When any application, re-
port, statement, notice, or payment required to be made under the provisions of
this act has been deposited post-paid in the United States mail properly ad-
dressed, it shall be deemed to have been received on the date of mailing. It shall
PAGENO="0350"
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be presumed that the date shown by the post office cancellation mark on the en-
velope is the date of mailing.
SEC. 43. CERTIFICATION OF REPORTS. Every report and statement required to be
filed under this act shall identify the person preparing it, and shall be certified
as complete and correct, both by the person preparing it and by the person on
whose behalf it is filed.
SEC. 44. STATEMENTS AND REPORTS PUBLIC RECORDS. All statements and reports
filed under this act shall be public records of the agency where they are filed, and
shall be available for public inspection and copying during normal business hours
at the expense of the person requesting copies, provided that the charge for such
copies shall not exceed actual cost to the agency.
SEC. 45. DUTY TO PRESERVE STATEMENTS AND REPORTS. Persons with whom state-
ments or reports or copies of statements or reports are required to be filed under
this act shall preserve them for not less than six years. The commission, however,
shall preserve such statements or reports for not less than ten years.
SEC. 46. SEVERABILITY. If any provision of this act or its application to any per-
son or circumstances is held invalid, the remainder of the act, or the application
of the provision to other persons or circumstances is not affected.
SEC. 47. CONSTRUCTION. The provisions of this act are to be liberally construed
to effectuate the policies and purposes of tills act. In the event of conflict be-
tween the provisions of this act and any other act, the provisions of this act shall
govern.
SEC. 48. CHAPTER AND SECTION HEADINGS NOT PART OF LAW. Chapter and section
captions or headings as used in this act do not constitute any part of the law.
SEC. 49. EFFECTIVE DATE. The effective date of this act shall be January 1, 1973.
SEC. 50. REPEALS. Chap. 9, Laws of 1965, as amended by sec. 9, chap. 150, Laws
of 1965 ex sess., and R.C.W. 29.18.140; and chap. 1.31, Laws of 1967 ex. sess. and
R.C.W. 44.64; and chap. 82, Laws of 1972 (42nd Leg. 2nd Ex. Sess.) and Refer-
endum Bill No. 24; and chap. 98, Laws of 1972 (42nd Leg. 2nd Ex. Sess.) and
Referendum Bill No. 25 are each hereby repealed.
STATEMENT OF PUBLIC DISCLOSURE COMMISSION, STATE OF WASHINGTON
INSTRUCTIONS-CAMPAIGN FINANCE REPORTING
The following is intended as a brief explanation of the reporting requirements
for candidates and political committees in the 1973 election according to the
provisions of Initiative 276.
E~vemptions
The following candidates are exempt from campaign finance reporting (the
"C" forms).
1. For precinct committeeman,
2. For President and Vice-President of the TJriited States and
3. For an office whose constituency does not encompass a whole county and
which contains less than 5,000 registered voters (as of the date of the most recent
general election in the district).
Candidates and committees who do not intend to receive contributions or make
expenditures in the aggregate of $1,000 or more and receive no single contribu-
tion in excess of $100 may be exempted from filing campaign finance reports. (The
term "aggregate" means the total of all contributions received or all expenditures
made by such committee together with those of all political committees formed by
or with the express or implied knowledge or consent of the candidate.) If you
wish such an exemption, please file a declaration with the Public Disclosure
Commission indicating that you do not intend to exceed those limits. Further
information will be forwarded to you following receipt of your declaration.
The following candidates are exempt from reporting their financial affairs
(F-i form):
1. For precinct committeemen, and
2. for President and Vice-Pre4dent of the TTnited States.
All other candidates must file a financial affairs statement within two weeks of
becoming a candidate.
Forms
If all of a candidate's financing is handled through a committee, only the
committee need file reports on the campaign finances. PLEASE NOTE, however,
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that all candidates except those listed above must file a financial affairs state-
ment, form F-i.
Enclosed you will find the forms for the reports required:
The first form designated "C-i" is a statement of organization to be completed
by political committees. This statement of organization should be filed within
10 days of the committee's organization or within 10 days after the date when it
first has the expectation or receiving contributions or making expenditures in
any election campaign, whichever is earlier. Each political committee in exist-
ence on January 1, 1973, should file this form immediately. One copy of the
form should be filed with the Public Disclosure Commission and one copy with
the auditor of the country in which the candidate resides. This statement is filed
only once, unless there is a change in information previously submitted, in which
case you should file an amended statement. Be sure to reverse the carbon before
completing the back of the form.
The second form, designated "C-2" is simply a designation of your campaign
treasurer and depository. A candidate should complete this form at or before the
time he announces publicly or files for office. A political committee should file
this form at the same time it files a statement or organization. This form need
be filed only with the Public Disclosure Commission. Any changes should be
filed with the Commission immediately. No campaign treasurer or depository will
be deemed to be in compliance with the provisions of this act until his name and
address are filed with the Public Disclosure Commission.
"C-3" is a statement of contributions deposit which should accompany any
deposit made into your campaign fund. One copy should be forwarded to the
Public Disclosure Commission, one copy is retained by the depository for its
records, and the third copy is for the treasurer's record. Please note that con-
tributions of $5.00 or less from any one person may be deposited as a lump sum
without identifying the contributor. The account should be designated "Cam-
paign Fund of " (name of candidate or political committee).
Accumulated anonymous contributions in excess of one dollar from any indivi-
dual contributor and in excess of 1% of the total accumulated contributions
received to date or $300 (whichever is less), must either be returned to the
donor or escheat to the state. Payment should be made to the state treasurer
for deposit in the state general fund. The law states that no contribution shall
be made and no expenditure shall be incurred, directly or indirectly, in a ficti-
tious name, anonymously, or by one person through an agent, relative or other
person in such a manner as to conceal the identity of the source of the
contribution.
Expenditures may be made only on the authority of the campaign treasurer
or the candidate.
The "C-4" form is for your periodic reports of contributions and e~vpenditures.
Please note the definitions of "contribution" and "expenditure"-they vary
somewhat from common usage:
Contribution.-" `Contribution' includes a loan, gift, deposit, subscription,
forgiveness of indebtedness, donation, advance, pledge, payment, transfer of
funds between political con~mittees, or transfer of anything of value, including
personal and professional services for less than full consideration, but does
not include ordinary home hospitality and the rendering of "part time" personal
services of the sort commonly performed by volunteer campaign workers or
incidental expenses not in excess of twenty-five dollars personally paid for by
any volunteer campaign worker. "Part time" services, for the purposes of this
act, means services in addition to regular full time employment, or, in the case
of an unemployed person, services not in excess of twenty hours per week,
excluding weekends. For the purposes of this act, contributions other than
money or its equivalents shall be deemed to have a money value equivalent to
the fair market value of the contribution. Sums paid for tickets to fund-raising
events such as dinners and parties are contributions; however, the amount of
any such contribution may be reduced for the purpose of complying with the
reporting requirements of this act, by the actual cost of consumables furnished
in connection with the purchase of such tickets, and only the excess over actual
cost of such consumables shall be deemed a contribution."
E~,penditure.-" `Expenditure' includes a payment, contribution, subscription,
distribution, loan advance, deposit, or gift of money or anything of value, and
includes a contract, promise, or agreement, whether or not legally enforceable,
to make an expenditure. The term "expenditure" also includes a promise to
pay, a payment or a transfer of anything of value in exchange for goods, services,
PAGENO="0352"
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property, facilities or anything of value for the purpose of assisting, benefiting
or honoring any public o1~lcial or candidate, or assisting in furthering or opposing
any election campaign."
When a political committee which was already in existence on January 1,
1973, files its initial report, item No. 1 should be used to report any funds on
hand on March 31-contributions received and expenditures made prior to
that date, need not be itemized. For all other committees, this report should
contain contributions received and expenditures made in the election campaign
prior to the date of its first report. The reporting period ends not more than
three days prior to the date the report is due. Note that contributions not
exceeding $5.00 in the aggregate from any one person may be reported in one
lump sum so long as the treasurer maintains a list of names and amounts of each
such contributor. Only aggregate expenditures of $25.00 or more need be reported.
The treasurer must maintain his books within three business days of receipt
or expenditure. During the eight days immediately preceding the date of the
election, the books of account must be kept current within one business day and
be open for inspection at the headquarters or at the campaign treasurer's
address.
One copy should be filed with the Public Disclosure Commission and one
copy with the auditor of the county in which the candidate resides. Campaigns
for the 1973 fall elections should file on the following days:
1. On the day the campaign treasurer is designated
2. July 10
3. August30
4. September 13
5. September28
6. October 18
7. November 1
8. November27
9. If there is an outstanding debt or obligation, once every six months until
indebtedness is satisfied.
The initiative does contain expenditure limitations, but that section of the
initiative has been declared unconstitutional. This declaration of unconstitu-
tionality has the effect of suspending the effectiveness of these provisions until
such time as a higher court might reverse this decision.
If you receive funds from a political committee not domiciled in Washington
State, please review section 9(k) on the back of the form. That committee may
be required to report to the Commission. If we can be of assistance to you,
please don't hesitate to call on us.
INSTRUCTIONS-CAMPAIGN FINANCE REPORTING FOR CONTINUOUS POLITICAL
COMMITTEES
Definition
A "political committee" is any "person" (except a candidate or an individual
dealing with his own funds or property) who expects to receive contributions or
make expenditures in support of, or opposition to, any candidate or ballot prop-
osition. (A "person" can be any organization or group of persons however
organized.) A continuous political committee is an organization of continuing
existence not established in anticipation of any particular election. The most
obvious examples of such organizations are the central committees of the
major political parties.
Ewemptions
Committees that do not intend to receive contributions or make expenditures
in the aggregate of $1,000 or more and receive no single contribution in excess
of $100 in connection with any election campaign for public office or with any
ballot proposition may be exempted from filing campaign finance reports. (The
term "aggregate" means the total of all contributions received or all expendi-
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tures made by such committee together with those of all political committees
formed by or with the express or implied knowledge or consent of the candidate.)
If you wish such an exemption, please file form E-1 with the Public Disclosure
Commission. Further information regarding the exemption will be forwarded
to you following receipt of your form.
Forms
Enclosed you will find the forms for the reports required:
The first form designated "C-i" is a statement of organization. Each political
committee in existence on January 1, 1973, should file this form immediately. The
deadline for filing was March 31. One copy of the form should be filed with the
Public Disclosure Commission and one copy with the auditor of the county in
which the candidate resides. This statement is filed only once, unless there is a
change in information previously submitted, in which case you should file an
amended statement. Be sure to reverse the carbon before completing the back of
the form.
The second form, designated "0-2" is simply a designation of your campaign
treasurer and depository. A political committee should file this form at the same
time it files a statement of organization. This form need be filed only with the
Public Disclosure Commission. Any changes should be filed with the Commis-
sion immediately-no campaign treasurer or depository will be deemed to be in
compliance with the provisions of this act until his name and address are filed
with the Public Disclosure Commission.
"0-3" is a statement of contributions deposit which should accompany each
deposit made into your campaign fund. One copy should be forwarded to the
Public Disclosure Commission, one copy is retained by the depository for its
records, and the third copy is for the treasurer's record. Please note that con-
tributions of $5.00 or less from any one person may be deposited as a lump
sum without identifying the contributor. The account should be designated
"Campaign Fund of " (name of political committee). Ac-
cumulated anonymous contributions in excess of one dollar from any individual
contributor and in excess of 1% of the total accumulated contributions received
to date or $300 (whichever is less), must either be returned to the donor
or escheat to the State. Payment should be made to the state treasurer for de-
posit in the state general fund. The law states that no contribution shall be made
and no expenditure shall be incurred, directly or indirectly, in a fictitious name,
anonymously, or by one person through an agent, relative or other person in such
a manner as to conceal the identity of the source of the contribution.
Expenditures may be made only on the authority of the campaign treasurer
or the candidate.
The "0-4" form is for your periodic reports of contributions and expenditures.
Please note the definitions of "contribution" and "expenditure"-they vary some-
what from common usage:
Contribution.-" `Contribution' includes a loan, gift, deposit, subscription, for-
giveness of indebtedness, donation, advance, pledge, payment, transfer of funds
between political committees, or transfer of anything of value, including personal
and professional services for less than full consideration, but does not include
ordinary home hospitality and the rendering of `part time' personal services of
the sort commonly performed by volunteer campaign workers or incidental ex-
penses not in excess of twenty-five dollars personally paid for by any volunteer
campaign worker. `Part time' services, for the purposes of this act, means serv-
ices in addition to regular full time employment, or, in the case of an unemployed
person, services not in excess of twenty hours per week, excluding weekends. For
the purposes of this act, contributions other than money or its equivalents shall
be deemed to have a money value equivalent to the fair market value of the con-
tribution. Sums paid for tickets to fund-raising events such as dinners and
parties are contributions; however, the amount of any such contribution may be
reduced for the purpose of complying with the reporting requirements of this
act, by the actual cost of consumables furnished in connection with the purchase
25-239 O-73-----23
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of such tickets, and only the excess over actual costs of such consumables shall
be deemed a contribution."
Ecopenditure.-" `Expenditure' includes a payment, contribution, subscription,
distribution, loan advance, deposit, or gift of money or anything of value, and
includes a contract, promise, or agreement, whether or not legally enforceable,
to make an expenditure. The term `expenditure' also includes a promise to
pay, a payment or a transfer of anything of value in exchange for goods, serv-
ices, property, facilities or anything of value for the purpose of assisting, bene-
fiting or honoring any public official or candidate, or assisting in furthering or
opposing any election campaign."
When a political committee which was already in existence on January 1,
1973, files its initial report, item No. 1 should be used to report any funds on
hand on March 31-contributions received and expenditures made prior to that
date need not be itemized. All other reports should contain contributions received
and expenditures made in the election campaign for the period from the date of
its last report. The reporting period ends not more than three days prior to the
date the report is due. Note that contributions not exceeding $5.00 in the aggre-
gate from any one person may be reported in one lump sum so long as the
treasurer maintains a list of names and amounts of each such contributor. Only
aggregate expenditures of $25.00 or more need be reported. One copy of this
form should be filed with the Public Disclosure Commission and one copy with
the auditor of the county in which the candidate resides.
The treasurer must maintain his books within three business days of receipt
of expenditure. During the eight days immediately preceding the date of the
election, the books of account must be kept current within one business day and
be open for inspection at the headquarters or at the campaign treasurer's address.
The law requires that the C-4 form be filed:
1. on the 10th day of each month in which no other report is required;
2. on the 5th and 19th days immediately preceding the election (both primary
and general);
3. within 10 clays after the primary; and
4. within 21 clays after all other elections.
Committees must file form 0-4 on the following dates for the 1973 fall
campaign:
1. August 30
2. September 13
3. September 28
4. October 18
5. November 1
6. November 27
The initiative does contain expenditure limitations, but that section of the
initiative has been declared unconstitutional. This declaration of unconstitu-
tionality has the effect of suspending the effectiveness of these provisions until
such time as a higher court might reverse this decision.
If you receive funds from a political committee not domiciled in Washington
State, please review section 9(k) on the back of the form. That committee may
be required to report to the Commission.
If we can be of assistance to you, please don't hesitate to call on us.
PAGENO="0355"
351
STATE OF WASHINGTON
PUBLIC DISCLOSURE COMMISSION
INSURANCE BUILDING, OLYMPIA, WASHINGTON 98504 Phone 153-1111
(Date)
(Name of committee or candidate)
does not intend to receive contributions or make expenditures
in the aggregate of more than $1,000 and receive any single
contribution within that aggregate of more then $100.
I understand that the term "aggregate" means:
1. If the above relates to a campaign for public office, the
total of all contributions received or expenditures made
by the candidate together with all contributions received
and all expenditures made by all political comittees
formed by or with the express or implied knowledge or
consent of the candidate in connection with his campaign.
2. If the above relates to a campaign for or against a
ballot proposition, the total of all contributions re-
ceived or all expenditures made by this coniaittee together
with those of all political committees working in conjunction
or in cooperation with each other in ~ny manner on the
same side of any ballot proposition.
I understand that current records of this campaign must be kept in
sufficient detail to allow the reporting otherwise required by
Chapter I of Initiative 276. I also understand that I may not exceed
these limits without the permission of the Public Disclosure Commission.
Signature of treasurer or candidate
Name (please print)
Address
Phone Number
PAGENO="0356"
352
WAC 390-04-200 CAMPAIGNS FOR PUBLIC OFFICE INVOLVING
$1000 OR LESS--EXEMPTION. No candidate and no political
committee, as those terms are defined in S 2 of Initiative
276, shall be required to comply with the provisions of
55 4-9 of said act in any election campaign for public office
in which neither the aggregate contributions nor the aggregate
expenditures on behalf of such candidate exceed $1,000, and
no single contribution within such aggregate exceeds $100.
The term `aggregate" as used in this regulation, means a
total of all contributions received or expenditures made
by the candidate together with all contributions received
and all expenditures made by all political committees formed
by or with the express or implied knowledge or consent of
such candidate in connection with such campaign.
WAC 390-04-210 BALLOT PROPOSITIONS--EXEMPTION. No
political committee, as that term is defined in S 2 of
Initiative 276, shall be required to comply with the provisions
of SS 4-9 of said act in connection with any ballot proposition
in which neither the aggregate contributions nor the aggregate
expenditures exceed $1,000, and no single contribution within
such aggregate exceeds $100. The term `aggregate," as used
in this regulation, means the total of all contributions
received or all expenditures made by such committee together
with those of all political committees working in conjunction
or in cooperation with each other in any manner on the same
side of any ballot proposition.
WAC 390-04-22Q EXEMPTIONS--CONDITIONS FOR GRANTING.
The exemptions allowed in MAC 390-04-200 and MAC 390-04-210
shall be granted to a candidate or political committee only
upon compliance with the following conditions.
(1) The candidate or political committee must, at the
time of organization, or at the time of receipt of contri-
butions or the making of expenditures or at the time of
reservation of space or facilities with intent to promote
or oppose a candidacy for office or with intent to promote
or oppose a ballot proposition, whichever comes first, file
a declaration with the commission indicating that the candi-
date or political committee does not intend to exceed the
expenditure limitations set out in MAC 390-04-200 and 390-
04-210.
(2) The candidate or political committee must, through-
out the ensuing election campaign, keep current records in
sufficient detail to allow the candidate or political
committee to make reports otherwise required by sections
4-9 of the initiative in the event that the filing of such
reports becomes necessary as a result of the permissive
exceeding of the expenditure limitation by the candidate or
political committee.
MAC 390-04-230 EXCEEDING LIMITATIONS--PERMISSION TO
FILE. Whenever there is reason to -believe that any of the
aggregate limitations specified in MAC 390-04-200 or WAC
390-04-210 will or may be exceeded in any campaign in which
the requirements of 55 4-9 of Initiative 276 have been avoided
pursuant to WAC 390-04-200 and MAC 390-04-210, the candidate,
committee or other person legally interested in such campaign
may apply to the commission for authorization to meet such
requirements on a nunc pro tunc basis and thereafter to exceed
such limitations, The commission shall conduct a hearing on
the application as soon as practicable to determine why the
applicable requirements were not complied with in the first
instance; including a determination as to whether or not the
probability of exceeding such aggregate lcmitations was
reasonably foreseeable. The commission shall, if sufficient
cause is shown, grant such authorilation conditioned upon
the full compliance with all applicable requirements of
Initiative 276 within a time specified in the commission's
order.
Any person who knowingly or negligently causes or permits
the aggregate limitation specified in these regulations to be
exceeded without compliance with 55 4-9 of the initiative and
without a permissive order of the commission granted under
these regulations, shall be deemed to have violated the appli-
cable requirements of SS 4-9 of the initiative.
WAC 390-04-240 MINIMUM LIMIT ON CAMPAIGN EXPENDITURES.
Section 14 of Initiative 276 shall not be deemed to limit
expenditures to any amount less than $1,000 in any election
campaign wherein aggregate contributions and expenditures, as
those terms are defined in MAC 390-14-180 and MAC 390-14-190
each amounted to $1,000 or less.
MAC 390-04-250 EXPENDITURES--AGGREGATE TOTALS. The
totals of expenditures referred to in S 14, chapter 1, Laws
of 1973 shall be deemed to mean aggregate totals, as those
terms are defined in WAC 390-04-200 and 390-04-210.
PAGENO="0357"
353
PUBLIC DISCLOSURE COMMISSION ~ POUTICAL COMMITTEES
THIS SPACE FOR OFFICE USE ~
DATE RECVD. ITEM NUMBER
D REPLACES AMENDS
(MR.I (D~e) tYrl
-~--
J:VSTRUC7100'S ITEM 4
WHO SHOUL DFILE TH IS FORM: All Political eorrrrrrittees (see definitioR
on eeopesc ride) cscept those listed on instroction sheet.
FILING DEADLINE: SEitItie 10 doys oftor OIfORIOOtIOH, or soithin 10 doys
~ftcr dote ttl:to firtt it has expectation of receistog cooteibstionr or oak-
jog expooditorer. echioheser OCCOt5 first.
NEW FILING REQUIRED: Witltic 90 doyr Scoot 0000tettnt oflosc, 10
sLsys froor dot OHf any clltoge of infottootion prooiossly ssbtoittod. ITEM 5
FORM TO RE FILED WITH: Registrotion ond Reportioo Gootiott. Pabtio
Disciosoro Cotoroissioo, t nssrasoe Boddotg Otympto, Wothotgton
98504, ood ssith Ito Coattty Aoditor of rho ooonty io tohich rIte Candidate
rondos for in tI:o cane of Potitioal Cototttittcc toppontiog 01 opposang
ballot proponition, ho coosty in othioh the Catntpoign Trootarerrettdet(.
DENIGNATIO1'~)FESOIBPO
C II REOOSURER5HB~RB &
DESIGNATION OF CAMPAIGN DEPOSITORY leaRn &radrnssl
SFotioII 4 ojtltio LoRis pt'ieted iofotl Ott rIte teterac side.
ITEM I ALL RELA
21
3
See completion instructions at bottont eaf page.
fTcrre or orient cteaarlct
REVERSE CARBON & COMPLETE ITEM ON BACK
PAGENO="0358"
354
ITEM BALLOT PROPO~
~`IONISI THE COMMITTEE IS SUPPORTING OR OPPOSING
6 NAME OF PROPOSITION
BALLOT NUMBER
INDICATE,FOR OR AGAINST
,,,~,,] STATEMENT AS TO OISTRIBUTIO~4 OF ANY SURPLUS CAMPAIGN FUNDS IN THE EVENT
OF DISSOLUTION
P I I MMIT ~ IS ASNNGRGANIZATION
IS NOT
CERTIFICATION: I hoecby codify thst (no oboac u sue, coloplote sod
0015001 ststeoneot 0 sccHsd0000 o'ilh Seclion 4 0f 1101 Lao'.
EXCERPTS FROM PUBLIC DISCLOSURE LA (V
SecURes 2. DEFINITIONS. (1) Agency" includes all state agencieR and all local
agencies. "State agency" includeR everys tate office, public official, department, division,
bureau, board, commission or other state agency. "Local ageocy" includes every county,
city, city and county, school district, municipal col'poratioo, district, political nubdivi-
sian, or any board, ccslcninsion or agency thereof, or otlser lucal public agency.
(2) "Ballot proposition" means any "meuauce" as defined by R.C.W. 29.01.110, or
any initiatit'e, recall, ur referendum prupunitiun propuned to be oubmitled to the totem
of any speoific cunstitu000y ns'hich boo been filed Sn'lth the apploprsute election cffioes'
`of that constituency.
(3) "Campaign depository" means a bank designated by a candidate or political
eusnonittee pucnualut to section 5 of thin act,
(4) "Campaign treasurer" and "deputy campaign treasurer" mcun the individuals
appototed by a candidate or pulitical comsuiltee, pus'nuaot tu section 5 of Ibis act, to
perform the duties specified Isu that section,
(5) "Candidate" means any individual noho seeks election to public office. An in'
d.ividual shall be deemed to seek election token he first:
(a) Receives contributions or makes enpenditares or rose~eoopuce or faciS-
ties with intent to pramote his candidacy foe clfice; or
(b) ~ounces pubbcly ar files for office,
(22) "Potiticol committee" meson soy peenos (eseept s esnditlote 05 15 inditidust deoltog
n'ith bin cnn funds cc pecpceta) honing the expee lotion 01 erceitiog cooteibaticos as moking ex-
pcoditueeo in noppoet of, ue opponition to, soy rssditstr or soy boost peuponitios.
Sertion 4. OBlIGATION OF POLITICAL COMMITTEES TO FILE STATEMENT
OF ORGANIZATION, (1) Every pulit)cal committee, ox'ith)ei ten days after (to organ).
oution or, no'itb)n ten days after the date nvhen it first has thc enyvotution of receiving
contributions or mal:ing copen dituren in any elect000 campaign, nvhichco'er in curlier,
nholt file o statemeot of organisutiun oo'ith tltc ccmm)ns(oo cod on'ith :he cuunty oud)tce
of the couot in nnh)ch the candidate rentdeo nv in the case of u puiltivul coo:: mittee
nopportisng or opponing a ballot proponilius, the county in xvhich the campu)gn treasurer
rcnidcs(, Each pulit)cul committee to enistence ctt the effcctivc data af this act shall file
a statement of organisatiun onith the cumminnion nvithbn ninety dayn after such effec-
tine date.
(2) The statement of nrganimtios shall include but not be lim)ted to:
(a) The name and address of the committee;
(hi The canoes and nddrennet of all related or affiliated committees or sthee
persons, and the nuturc of the relationship or affiliation;
cl Tbenaotes, addreones, and titles of its officers; or If It has no officers, the
names, adds cones and titles of its responsible leaders;
(dl The name and addrens of Its casnps.ign treasurer and campaign depsnltsr)c;
el A statement whether the commIttee is a continuing one;
fl The name, office sought, and party affiliation of each candidate nn'hom the
committee Is sopporting or opposing, and, if the committee is nupporting the entire
ticket of any party, the name of the party;
(g( The ballot proponition concerned, if any, and nrhether the enenossittee is 1st
favor of or opposed to such propositIon;
(hI What distribution of surplus funds will be made In the event of dissoluUsn;
an (I) Such other hsformntlon as the commission may by regulation prescribe, in
keeping with the policies and purposes of this act.
(3) Any' muterial change in information previously submitted in a statement of or~
guntmtion shall be reported to the comminsios and to the appropriate county anditor
within the ten days following the change.
PAGENO="0359"
See completion instructions at bouonz of page.
(Type or print clearly)
ITEM F
TEM
lOOM I ADDITIC
4 ~
INSTRUCTIONS
355
sTy.
CAMPAIGN TREASURER AND DEPOSITORY
.
CANDIDATES AND
POLITICAL COMMITTEES
~PO
~f
00 SOSRE OP 0050155005
PUBLIC DISCLOSURE COMMISSION
TIllS SPACE FOR OFFICE USE
DATE RECVD. ITEM NUMBER
E REPLACES
AMENDS
(Mn.)
lOop)
(Vt)
ITEM CAMPAIGN TREASURER*
DEPUTY CAMPAIGN TREASURER(S) *
(AL DEPOSITORIES * (ND ORG Sltt DIll PIt snotty)
!f)5P55OULD FILE THIS FORM: All Condsdates end PUhIleol
CUmmltleesoSctpl hose sit OR IRtttOOtIOn tIbet.
FILING DEADLINE: Condidott . ot so befote the timt tseonRUUoeet
pobliCly Ut filtt fet UffieO. Politico) Coossssiltet - nt ot befno ho tiose
It fiIetotIotosne~t of otgoniootion.
Chock with ho Poblie Dioe(ototeCosnmistion fotothetfotmtyoomoy
btttqoited to 000lp(ote.
NOTE: I
B No Campaign Treasurer, Deputy Campaign Treasurer, or
`Campaign Depository shall be deemed to be in compliance
with she provisions of this Act until his name and address
is filed with tho Public Disclosure Commission.
CERTIFICATION: I tsttoby eettify shot tht oboes in o stop, eotnplttt
oRd eotteet stotPRoot iR neeotdoReo o'iIh Otetion 5 of thin Low.
ANDIDATE'S SIGNATURE DATE
FORM TO BE FILED WITH: Rtgisttotion osd Reposing Otetion, Poblie
Dinelosott CottttnittioR, Insototsee Ouilding, . Olympio, Wothissgton
98504.
DATE
(It politietI Consnsittttl
Section 5 of tlsit Loss' in printed in fell on the s-eees-ne tide.
PAGENO="0360"
356
EXCERPTS FROM PUBLIC DISCLOSURE LAW
Section 5. CAMPAIGN TREASURER AND DEPOSITORIES. (1) Each candidate,
at or before the tlnoe he announces publicly or files for office, and each political com-
mittee, at or before the time it files a statement of organization, shall designate and file
with the commission the cameo and addresses of:
(a) One legally competent individual, who may be the candidate, to serve as a
campaign tre000rer; and
(hi One bunk doing business in this state to oorve as campaign depository.
(2) A candidate, a political committee or a campaign treasurer may appoint as
many deputy campaign treasurers as is considered necessary and may designate not
mare than one additional campaign depository in each other county in which the cam-
paign is conducted. The candidate or political committee shall file the names and ad-
dresses of the deputy campaign treasurers and additional campaign depositories with
the commission.
(3) (a) A candidate or political committee may at any time remove a campaign
treasurer or deputy campaign treasurer or change a designated campaign de-
pository.
(b) Is the event of the death, resignation, removal, or change of a campaign
treasurer, deputy campaign treasurer or depositary, the candidate or political com-
mittee shall designate and file with the commission the name and address of any
(4) No eamspoign treasurer, deputy campaign treasurer, or compaign depository
shall be deemed to be in compliance with the provisions of this act until his name and
address is filed with the commission.
PAGENO="0361"
PUBUC D~CLOS COMMIS~ON c-a
~
CAMPAIGN TREASURER
THIS SPACE CO
R OFFICE USE
See completion instructions at bottom of page. PM. DATE DATE RECVD ITEM NUMBER
CAMPAIGN FUND OF: (Csndidnte on PaI:tIceI Committee eanm & eddmss)~ DATE PREPARED
* Coneeibueions not exceeding $5.00 in aggtegate from any one peeson may be deposited as one lump sum u'ishoue identsfysng the contnbutoe.
INFORMATION IS CONTINUED ON ATTACHED PAGE(S)
WHO SHOULD FILE THIS FORM: Campaign Teeasunee on Dopaty
Campaign Tneasueee foe a campaign except those shown on inste-
insteuclion sheet.
FILING FREQUENCY: Etch lime a deposit is made
FORM TO BE FILLED OUT: In Iniplicate
FORM TO BE FILED WITH: White original lobe submilled Ia
Registmlion and Repoeliang Section, Pablic Dinclosure Commission,
Inmeance Building - Olympia, Washioglan 98504, - Canary espy
retained by Campaign Depanilo:y, Pitnk copy retained by Campaign
$ I
CERTIFICATION: I heeeby certify that the ahace is a lean, complete and
connect statement in accoedance with Section 6 of thin Law.
357
NAME OF CONTRIBUTOR* Last name
TOTAL
Seceion 6 of ahh Lao is piinted in fall on she tecetee side.
PAGENO="0362"
g ~
xc
8
PAGENO="0363"
TO THE STATE OF WASnnSGT ON CANDIDATES AND
~ PUBLIC DISCLOSURE COMMISSION 4 POLITICAL COMMITTEES
- TEllS SPACE FOR OFFICE USE ~
See completion instructions at bottom of page. _________________________________________________
,sypeecpnenetcnnyj
REPLACES AMENDS
(MC) (O~y)(Yr.)
ITEM FUNDS ON HAND AT BEGINNING DF REPORTING PERIOD $
*Contcibueions not exceediog $5.00 Jtorn any one peceoo dcn.ug the election may be s-epot-cedas one lUmp aurn.
ITEM NAME - ADDRESS DATE AMOUNf 12 MONTH TOTAL
TOTAL $
TOTAL
CONTRIBUTIONS $
INFORMATION IS CONTINUED ON ATTACHED PAGE(S) TO DATE:
INSTRUCTIONS
WIlD SHOULD F)LE THIS FORM: Candidate or Treasurer or Deputy
Treasurer of a Political Committee far a campaign, eccept those listed
on instruction sheet.
FILING FREQUENCY:
.
). Each Candidate an Pallticul Committee shall Ole:
* a. Day Campaign Treasocet in designated,
b. On the 5th day and 19th day peeceeding election.
c. Within tO days aftce (ho dale of the Peimaty election,
d. Within 2) days aftee the dale of all othee elections.
e. On the 10th day of each month ptecetding an election in which
fO h yP m hf ml w~t h
stasding obligation at indebtedness.
g. Final report - day Campaign fund a closed, an when all
abhguttons and indebtednesses ate satisfied.
FORM TO BE FILED WITH: Reginteation and Reporting Section,
Public Diaclosuec Commission, Insurance Building-
Olympia, Washington 98504-Original copy a be fded with the
Comminsion, Copy No. 2 with the County Auditor of rho county
in which the Candidate resides (no in the case of a Political
Committee supporting on opposing a Ballot Peaposition, the county
in which the Campaign Teeasureteesidetl.
~
NOTE: Camplats lanes 1 thea 7 Reaeesa full length earbu~1
C I
Section 8 & 9 of chh Law ace pt-ineed iofull no the tecetae ride of
the lace page.
359
PAGENO="0364"
360
ITEM ~~NDSREEEE~EDFROMA COMMITTEE NOT DOMIALED IN WASHINC
AGREEMENT
NAME AND ADDRESS
NAME AN ADDRESS
DOCUMENT
AMOUNT
TOTAL
$ I
ITEM FUNDS RECEIVEfl
~ROM OTHER CANDIDATES OR POLITICU
COMMITTE
DURING
IS REPORTING PERIOD
TOTAL
I
S
HERWISE REQUIRED TO
TOTAL
S
6 NAME
ADDRESS
DATE
AMOUNT
TOTAL TO DATE
TOTAL $
ITEM TOTAL CONTRIBUTIONS RECEIVED IITEMS 2. 3, 4. 5, & 61 TOTAL
S
PAGENO="0365"
361
TOOTHEF~CANDDATESORPOUTICAL COMMITTEES (ERt~Oth~CEE tt~/E
~~j1 XPENO~IURES MADE
TOTAL $
DUFONG THS ~:E::ROo (IIROIO ~tE~ AMOUNT
PURPOSE
TOTAL
S
~OTAL EXPENDITURES ToIS REPORTING PERIOD 5
10 TOTAL EXPENDITURES TO DATE
ITEM
~
~I SURPLUS OR
- A OU T j DEFICIT 0 I U 0 0 R EX IT A
CONTRIBUTIONS OVER EXPENDITURES
ITEM THE DISPOSIITON MADE OFSUP.PLUS
.~
CERTIFICATION: heeeby teetify (itt the abeRe 1 teUc, eeeeplete tEd taeeett ttatemeflt in ayteedaRee wtth Sectiene 8 & 9 of thit Law.
~
PAGENO="0366"
-3
-3
PAGENO="0367"
REPORT OF CONTRIBUTIONS & EXPENDITURES
TO THE STATE OF WASHINGTON POLITICAL COMMITTEES NOT I
PUBLIC D~CLOSURE COMMISSION i~-5 DOMICILED IN WASHNGTON STA~j
THIS SPACE FOR OFFICE USE
See completion instructions at bottom of page.
(Type or print clearly)
NAME AND ADDRESS OF POLITICAL COMMITTEES DATE
PREPARED THIS FORM
0 REPLACES
0 AMENDS
IM0.I
I
baY)
I"r.I
I
,]_~URPOSE(SI OF THE POLITICAL COMMITTEE
ITEM POLITICAL COMMITTEES OFFICERS OR FE
~PONSIBLE LEADERS
2 r NAME
ADDRESS
TITLE
jcANDIDATEISI THE COMMITTEE ISSUPP
~rING If the Co tte slippoetlea an antler patty tick
ITEM BALLOT PROPOSITIONISI THE COMMITTE
4 r~ NAME OF PROPOSITION
IS SUPPORTING OR OPPOSING
BALLOT NUMBER
~.
INDICATE FOR OR AGAINST
WHO SHOULD FILE THIS FORM: Each Committee not domiciled in
Walhington State that makes contributions to in-state Candidates or
Fotiticot Committees.
FORM TO BE FILED WITH: Registration and Reporting Section, Fobtic
Disclosure Commission, Insurance Building - Olympia, Washington
9B504.
363
P.M. DATE
I~j T~S POLmCAL COMMrETEE El IS 0 SNOT A
Section 9 of slur Law is printed in fob! on recerae ride.
PAGENO="0368"
ITEM CONTRIBUTIONS TO THIS POLITICAL COMMITTEE DURING THE PRECEDING 12 MONTHS FROM WASHINGTON RESIDENTS OR
fi CORPORATIONS WITH A PLACE OF BUSINESS IN WASHINGTON.
, NAME ADDRESS 1 DATE MONEY VALUE
ITEM[ EXPENEOTURES MADE BY THE COMMITTEE ON BEHALF OF A CANDIDATE OR POLITICAL COMMITTEE IN THE AGGREGATE
_________ $____
"EXCERPTS FROM PUBLIC DISCLOSURE LA ~V'~
eeetloe 0. CONTENTS OF REPORT~ (1) E&olt POpCPt Peqlatoed GodeP soetloR 8 of
this not ehoil dleeloee foP the pedod begtoolog et the eod of the pe~tod foP the lost
poPt of, lot the Bose of no toltisi Pt, nt the Uooe of the floet nantPthuUon Go eopeo.
ltltGPe, nod eadloog not elope thsoo thPeedny. petop to the date the ee Pt te dueI
(to) Foods peoetned fpooo libel ooonenlttoe not dontiotled to Wnetologtaet
State nod not othepopise eeqalPed to ee Pt IlodeP this net (n `moo-ne oaen-
n0100ee"). Sanlo foods shell be fopfelted to the State of Wesldtogtoo ese the oon-
nepoptlog oaenonl toe, hoe fIled oolth the otnnonl.esloo a etntoooeot diseloetog: (II Its
nod nddo-eu; (II) the poPpo.es of the noo-nepoethog ooennolttee; hG) the
eanoes, nddo'es.ees nod Otlee of Its offloene o~ If tO boos no offloene the nsoneo ad-
deesses nod titles of Its tespoos)hle teedene; (to') n etatoeteot olbethep the
~OfOOBoOdPteeteneonnaGtogooe~theoseoEoffleeeought nod peatyaf.
ooeoolttee Is solppoPtlog, nod, if stoh ooeeeltt.e Is eoppontleg the notlee Ueket of
noy petty the ooze, of the petty; (HI the ballot pPo~osItloe eoppoptsd op oppesed
0000oolttee dGl'loIg the pPeeedlog too'elee enoath peo'Oad, tagethep SoOth the enoney
ee.lGe nod date of 50011 toeltotbouoos; tRIal the noooe nod adipose of eneb pepean
of tneoty floe dollops op nope the eotooont, dots nod plIPpose of eGOlI nopeeldlttiPe.
nod the total soon of eooll ettpnodltese~; (Ix) eaeb o ne lofanenatlon no the
nolsetaso noay by o'egGlatloa peesoelbe, too beeptetg ndth the policIes nod pnepos.e tO
364
CERTIFICATION: I heeeby ceetify that the above it a troo,
complete and c0000ct olatemeot in accoodance toth Section 19
of (hio Lam.
PAGENO="0369"
365
REPORT OP CONTRIBUTIONS FILING FORM TO BE FILED BY: -
PUBLIC ~SCLOSURE COMMISSION [c_61 CAMPAIGN CONTRIBUTORS~_]
THIS SPACE OR OPtICS USE
See completion instructions at bottom of page.
(Typo cc point ds'aclv)
support of or in opposition to a candidate or ballot proposition (excluding
contribotions made direotly toacandidate or political committee) in the
aggregate amount of $100 or more daring an eteoSian oampaicn.
FORM TO BE FILED WITH: Registration and Reporting Section, Public
Disclosure Commission, Insurance Building - Olympia, Washinglon 98504
ITEM EXPENDITURES IN SUPPORT OF OR IN OPPOSITION TO A CANDIDATE OR BALLOT PROPOSITION IN ThE AGGREGATE
AMOUNT OF RIOt OR MORE DURING AN ELECTION CAMPAIGN (ESCLUDING CONTRIBUTIONS MADE DIRECTLY TO A
1 CANDIDATE OR POLITICAL COMMITTEE).
INSTRUCTIONS
CERTIPICAT$ON: I hereby certify that She ahooe ira true, complete
and correct statement in accordance with Section 10(1) of this Law.
Section 10 (1) of this Lao' io printed in full on the eeverse side.
25-239 O-73----24
PAGENO="0370"
366
"EXCERPTS FROM PUBLIC DISCLOSURE LA W'~
Secilen 10. SPECIAL REPORTS. In addition th the other reports reipileed by
th)e act
(1) Any person who makes an expenditure In support of or In opposition to any
candidate or preposition (except to tho extent that a contribution Is made directly to
o candidate or political committee), In the aggregate amount of one hundred dollars or
more durIng an election campaign, shall file with the commission a report signed by the
contributhr disclosing (a) the contributor's emcee and address, and (b) the data, nature,
amount and retiplent of such contribution or expenditure; and
PAGENO="0371"
367
OUT'OF-STATE REPORT OF CONTRIBUTIONS F F M T BE FILED BY
~~~PUBLIC DISCLOSURE COMMISSION [ciui~7' I CONTRIBUTORS
* THIS SPACE FOR OFFICE USE
See completion instructions at bottom of page.
(Type oc pnilrt neatly)
REPLACES AMENDS
(Mo.) (Day) (Yr.)
ITEM CONTRIBUTIONS IN THE AGGREGATE OF $100 OR MORE DURING THE PRECEDING 1WELVE MONTH PERIOD TO A POLITICAL
1 COMMITTEE NOT DOMICILED IN THE STATE OF WASHINGTON.
WHO SHOULD FILE THIS FORM: Any peeson echo contributes in the
aggregate of $100 on more dutiog the preceding (2 month period to any
political committee not domiciled in the State of Washington or not othee.
mite required to enport undne (hit act, it the peenon reasonably expects
such political coennitlee to make contributions in teepeot to any elec(ion
cooerrd by this act.
FORM TO BE FILED BY: Registration and Repoeting Section, Public
Disclosuee Commission, Insunance Building `Olympia, Watbiogton
9R504.
CERTIFICATION: I hereby certify that the aboce is a true, complote
and connect statement io accordance xcith Section (0 (2) of this
Law.
INSTRUCTIONS G,VEN AS TO THE USE OR DISBURSEMENT OF SUCH CONTRIBUTION.
Section 10 (2) of thin Lao it peierred in full ott eeceere ride.
PAGENO="0372"
k
p
0
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PAGENO="0373"
See completion instructions at bottom of page.
(Type or g:rinr clonic)
peonidiog political advertising of morn thor $50 from any err candidate or
political committee daring rho election campaign.
FILING DEADLINE: Within fifteen days after an
FORM TO BE FILED WITH: Registration and Reporting Section, Pobtie
Disctosaee Commission, tesansece Boitdiog. Olympia, Washington 98S04
369
::~::::::~~:::~: [c-81 0 COMMERCIAL ADVERTISERS
THIS SPACE IOR OFFICE USE
SUCH ADVERTISING DOES NOT EXCEED 550 FROM ANY SINGLE CANDIDATE DO POLITICAL COMMITTEEI.
INSTRUCTIONS
CERTIFICATION: I hoeoby certify Chat the shove is altar, comploto
and coeeect statement in accordance with Section Il of this Law.
.
WHO SHOULD FILE THIS FORM: Cemmerciot Adcoetiseeaecepting
SIGNATURE OF COMMERCIAL ADVERTISER
Section II of Ohio Lee.' io printed in fall on meteor ride.
PAGENO="0374"
370
`EXCERPTS FROM PUBLIC DISCLOSURE LA JV'~
Section U. COMM~ERCIAL ADVERTISERS' DUTY TO REPORT. (1) Within fif-
teen days after an election each commercial advertiser who has accepted or provided
political advertising during the election caenpaign shall file a report with the comssis-
Mon which shall be certified as correct and shall specify:
(a) The names and addresses of persoss from whom it accepted political ad-
vertising;
(b) The exact nature and extent of the advertising services rendered;
to) The comideration and the manner of paying that consideration for ouch
services; and
(di Such other facto as the commission may by regulation prescribe, in keep-
ing with the policies and purposes of this act.
(2) No report shall be required from any commercial advertiser as to any single
candidate or political committee when the total value of such political advertising does
not exceed fifty dollars.
PAGENO="0375"
371
Mr. DENT. Thank you very kindly, Mr. Secretary. Are these forms
that we have here. C--i to C-5. I believe.
Mr. KRAMER. It goes a little higher. I think 8 is the last one.
Mr. PENT. Do these all have to be filed?
Mr. KRAMER. These are the different forms. Each candidate would
not fill out all the forms. These are the different forms that are avail-
able to the public to use for the public disclosure commission. Only
two of them relate directly to the candidate. One is set there for spe-
cial committees that are set up, thines of this nature. No, each can-
didate would not have to fill out all of these forms.
Mr. DENT. You have candidates and political committees, campaign
treasurer, political committee, they all file and you have a form for
them.
Mr. KRAMER. That is correct. The form is made available as a
public service. They could use any filing system that they want to.
They don't have to stay with these forms.
Mr. DENT. They don't?
Mr. KRAMER. No. We ask they do this simply because it makes your
filing system better.
Mr. PENT. What type of registration law do you have?
Mr. KRAMER. We have a totally open registration law. No one regis-
ters by political party. In the primary, he can cross-vote during the
primary vote.
Mr. PENT. You do register along political lines?
Mr. KRAMER. No.
Mr. DENT. Open?
Mr. KRAMER. Open.
Mr. DENT. So you are just an individual who can go in and vote any
way you want.
Mr. KRAMER. Bounce back and forth in the primary.
Mr. DENT. Do you get a separate ballot for each set of candidates?
Mr. KRAMER. No. All are on one ballot, sir. To a large extent we are
using an unpunched card voting system in the State of Washington.
Mr. FRENZEL. Is that the Votomatic business?
Mr. KRAMER. There are four different companies involved in it.
Mr. DENT. That was demonstrated to us I do not know how many
years ago. They could never sell it in my State. We tried to but could
not.
Mr. KRAMER. It is extremely inexpensive, accurate, and it works. As
a matter of fact, for whatever it is worth, you can create a lot more
fraud with a paper ballot than you can with a punchcard voting
system.
Mr. PENT. Or a regular voting machine?
Mr. KRAMER. Or a regular voting machine, yes.
Mr. FRENZFL. Except when you make a mistake on a punchcard you
have to start all over again.
Mr. KRAMER. On a paper ballot you would the same way.
Mr. PENT. You cannot alter a paper ballot.
Mr. KRAMER. You would have to reauest a new paper ballot as well.
A lever machine, that is correct, you could push it back.
Mr. PENT. You also have nroblems with bent cards.
Mr. KRAMER. A new machine, just for clarification, has been created
by one of the major companies that costs only $22,000 that replaces
PAGENO="0376"
372
your huge 360's and others that you used to have. You had to go to a
central place with a large computer. For $22.000 now, machines can
be purchased so you can have satellite counting booths to get away
from this problem of transportation of IBM cards to 50 miles away or
something like that.
Mr. DENT. We put the first computerized tallying system in about
6 or 7 miles from the courthouse. Under our law in Pennsylvania, you
have to bring the ballots to the courthouse or the talley sheets from
the machines. Then from there they are taken down and put in the
machine. Lucky for some candidates, it broke down about 1 o'clock;
there were some very bad experiences at the beginning.
I think punchcard voting went 10 years backward from some very,
very badly programed machines the first few times around, no ques-
tion about it. But there is a very simple way to create a check of fraud.
What is your percentage of voters that exercised their privilege of
voting as compared to after you got the punchcard system and all
of these innovations that you have made, Spanish language ballots,
everything else? What happened after that?
Mr. KRAMER. We have moved up in registration about 22 percent
when we opened up the system through the courts mainly. Our voter
turnout factor has to relate to a degree to the emotions of the national
election. In 1972, we were at 78 percent.
Mr. DENT. I think-
Mr. KRAMER. The Kennedy year we were at 80 percent. So we are
running right around 80 percent.
Mr. DENT. We have a higher percentage sometimes for voting for
constable in my district, sometimes. I do not know that there is any
recorded fact that we have really yet discovered a method of getting
people to the polls who do not want to go.
Mr. KRAMER. No. But I would submit that I would hope you would
consider as time goes on not just looking at whether you fund political
campaigns, but that you look at the overall information of campaigns~
to the general public. This was the point I was trying to make before.
Mr. DENT. I think that is a very worthwhile point.
Mr. KRAMER. One example again in a small State like ours, this docu-
ment with which the Post Office does nothing other than deliver, there
is no sorting. If you have 100 people on your route, you just pick up 100.
Mr. DENT. Can we have a copy of that?
Mr. KRAMER. Yes, sir. But we must pay the same posta~e as Time
magazine or whatever the bulk rate is for a document of this nature:
We nay out in our State $200,000 in postage for a really very small
service.
I am not condemning the Post Office, but if you talk about public
financing of information, I am not sure franking privileges for a docu-
ment such as this would not be a legitimate direct aid.
Mr. DENT. What do you put in there, what kind of information?
Mr. KRAMER. We have two books. That is an off year election one.
We can send you the others. Book one is the voters' pamphlet that
places in it all the ballot issues that will be on the ballot, referendum,
constitutional. It has the Attorney General's legal opinion as to what
the bill does, it has a proper argument, an antiargument, then it has a
rebuttal statement.
PAGENO="0377"
373
So after you write your proargument, the other side can have 75
words to say these are the points that are incorrect. So it is a
minidebate.
In the back of the book it has the total legal text of the bill. It also
has absentee ballots in it.
Mr. DENT. You do nothing about candidate information?
Mr. KRAMER. The second pamphlet is a candidates pamphlet which
places in it all candidates down through the legislative races. So you
have House Members, Senate Members, congressional candidates, state-
wide officials, and the Presidency.
Mr. DENT. Who writes the material on this?
Mr. KRAMER. The material is written by the individual candidates or
committees. We have looked for 12 years, we do not believe there is
any censorship system you can create that is fair. So that is why we
put the rebuttal sections in there, for some of the debate.
Mr. DENT. The rebuttal sections are not in the candidates informa-
tion?
Mr. KRAMER. No. A legislator gets 75 words to say whatever he or
she wants. You get abuses, sure; we had one who owned a laundry,
he put shirts $1, suits $2.25, he advertised his business. But the abuse
factor is so minimal it is worth a couple of bucks.
Mr. DENT. Would that be like Johnny Heinz; he says he has 57
varieties.
Mr. KRAMER. That is correct. Of course you have a couple of abuses,
but generally it is a legitimate document.
Mr. DENT. Did you put it in for him?
Mr. KRAMER. Sure, sure. We are not going to censor. You lmow, you
create censorship and then you are in deep trouble. The statement
automatically excluded him from being elected. He maybe made a
little money.
Mr. DENT. You know you might have a funny one going one day
with someone putting in specifications 36-34-36. If you get a young
girl, she might put her specifications in.
Mr. KRAMER. The only thing we exclude is language factors, things
like that, obviously.
Mr. DENT. Certainly. But apparently it works for you. You do not
seem to have many infractions. You feel the results are worth it.
Mr. KRAMER. We believe both in voter registration and voter turn-
out it is very well worth it. A major election costs our State $1.1 mil-
lion in additional services; an off-election look this year, about a half
million dollars.
Mr. DENT. But you do not, as I understand your answer to my col-
league's question, you do not put an overall limitation on the expendi-
ture but you do put it on to the limit of the contribution?
Mr. KRAMER. No, it is the other way around. We have expenditure
limitations, not the contributions.
Mr. DENT. Well, from what we are seeing around here, probably we
would have to go the other route more or less, we would have to limit
contributions. .
Mr. KRAMEii. We believe when you have total openness in reporting,
sir, that a large contribution would be such a negative political factor
that if an individual wants to take that route, he or she must pay the
political consequence to it. If campaigns in our State run $100,000
PAGENO="0378"
374
statewide. If I took $50,000 from a single individual, it would be
disaster since I have to report everything down to $5.
Mr. DENT. In Florida, I think you have to absolutely report any-
thing of value, anything of value. Actually, it is down, down so far
and refined so much, Mr. Bennett told me that he reports-for in-
stance, if you meet him and buy his dinner, he reports it.
Mr. KiL&i~1ER. You cannot afford under $5 for a dinner any more.
Mr. DENT. He would have to report it.
Mr. KRAMER. I would, too, if it was over $5.
Mr. DENT. You mean items too?
Mr. KRAMER. Yes, anything. You can contribute up to 20 hours of
volunteer work to a campaign without reporting that, but over 20
hours you then have to compute that on an avera gewage scale for what
that person is doing and put that in as a financial contribution.
Mr. DENT. That is really drawing a fine line.
Mr. KRAMER. We pull it all the way down.
Mr. DENT. They say Oregon has a very tight law on what you can
use in a campaign inducement-you are not allowed to give out a box
of paper matches in the State of Oregon.
Mr. KRAMER. The only thing we do on election day, a candidate can-
not buy a drink in a bar for anybody, that is all.
Mr. DENT. We close all our bars, there is nothing open in the State
of Pennsylvania during election.
Mr. KRAMER. I was kidding. That law changed last year. We opened
up our drinking establishments on election day. Some Senator wanted
that in there because he was afraid in his own town he would go broke.
Knowing that Senator, that is the only way he could have won, too.
Mr. DENT. It is an awful hard job to try to reconcile 50 laws into
one piece of legislation. I do not relish the job before this committee.
Mr. FRENZEL. Can I ask a question on that point?
Mr. DENT. Certainly.
Mr. FRENZEL. You have a very strict set of laws. Apparently your
State likes them. Apparently you passed them on your own initiative.
Mr. KRAMER. It was, correct.
Mr. FRENZEL. The people ratified them by 72 percent of the vote, I
think you said 72 percent of the people in the state, but I think you
mean 72 percent of those voting the issue.
Mr. KRAMER. Yes.
Mr. FRENZEL. Maybe you were not here, but we were talking seriously
about preempting State laws. A lot of Members are concerned about
meeting two standards.
How would your State feel if we preempted that neat law that you
guys have, for national offices?
Mr. KRAMER. We would obviously be opposed to it, simply because
we think we have something going for us that is working, that is tough.
I have to use another example. When billboard controls nationally
went into effect, they were a lot looser than our State had. There was
an example of where the will of the people was changed by law. I
would like to see minimum standards in any legislation, but the pro-
vision where States would have the right to make those standards more
difficult.
Mr. FRENZEL. I agree with you.
PAGENO="0379"
375
It tears me up. I saw what happened in the last election with people
having to follow two totally different standards, particularly with re-
spect to reporting within different time frames, but also laboring under
specific limits, for instance.
Mr. DENT. Yes, that was terrible.
Mr. FRENZEL. I would agree, I would like to have you exempted as
much as possible to do your own thing because I guess I am a states-
righter instinctively. But I think that gives us some really tough
problems.
Mr. KRAMER. I think, though, if you set minimums-in my opinion,
which may be totally incorrect-you simply cannot write a law to
govern, my campaign in the State of Washington in relationship to
New York, New Jersey or Delaware, in the sense that our media costs
are so totally different. That is why we set our limits for legislators;
rural America, where you have no television, you have radio stations
at $1.20-a-minute spots, and Joe Farmer knows the community, can
get elected even in a tough race for $1,000 or $2,000.
You get into urban society, where you are talking $14,000 for a spot
on television, you are talking about a totally different set of facts.
That is why I would hate to create a singular system, because it would
place-offsetting an Eastern city or making one that an Eastern
city Congressman could run in, you would allow multimillion dollar
campaigns in our State for the very rich that have never been held.
Mr. FRENZEL. Not with John here. He will not let us.
Can we negotiate? How about reporting? If we reported on our
forms and responded to your limitations, if we preempted your re-
porting procedures but did not preempt the limitations you felt were
reasonable in your State, would that satisfy you?
Mr. KRAMER. It would satisfy me if you filled the loopholes.
In other words, the single treasurer, no one else able to contribute
to a political campaign other than through `a single source, and that
those sources that receive the money in our State also `had to report
back at the State level.
Mr. FRENZEL. I think we would want to do that.
Mr. DENT. You see there is one thing you cannot do in a farfiung
district, one that has rural, urban, industrial, wholly business commu-
nities, wholly residential communities that you find in `almost every
congressional district, dealing with 475,000 to 500,000 people in each
district. All of the elements that are in a State you might have in one
district, such as mine, for instance.
But I tend to go to the single responsibility of the spending of the
money and the reporting of the money received and put that responsi-
bility directly onto the candidate. He cannot slough it off on to a treas-
urer or anybody else. But in that kind of an area, you would have to
have almost more than one committee raising funds for you, but all re-
ports must be kept by that committee; they are controlled too by the
amount that they can collect from individuals and turn it back into
the central committee. That central committee has to make, a report,
for whatever standards we set.
You would not stop a man, for instance, from having somebody try-
ing to collect funds for him in a little committee 180 miles away from
his central county seat. Some of our districts, you know, run 190, 200
miles one way; 170 miles another way. You have different committees
PAGENO="0380"
376
in isolated communities up there that reach people where they give
$5, $10, $25, $50. In those areas you do not often get more than $100.
You usually get more than $100 in the urban districts, people who are
in a better position to give money. But not to that extent for Congress,
at least we do not in our area.
How do you see anything wrong with a person who has a large geo-
graphical area to cover collecting, so long as it is reported, and the
resopnsibility for all of it rests with the main elections committee,
both on the receipt of the money and the spending of it?
Mr. KRAMER. I apologize if I was incorrect in my testimony or you
did not understand the way I tried to say it.
What I was saying is,. we have no opposition to all the committees
you want, but those committees cannot spend the money themselves.
If you go out in a rural area here and pick up that $300, that check
goes to the central treasurer.
Mr. DENT. That is exactly the thought we had in mind.
Mr. KRAMER. But for that $300 that committee has to file separately.
Mr. DENT. This is a copy of the law?
Mr. KRAMER. That is the law.
Mr. DENT. I will read it very carefully. You do not see anything
wrong with that, having more than one committee?
Mr. FRENZEL. I do not care how many people raise it.
Mr. DENT. As long as the responsibility goes to one person?
Mr. KRAMER. Exactly.
Mr. FRENZEL. How many employees in your operation are filing and
playing with these things?
Mr. KRAMER. Three.
Mr. FRENZEL. What do you do before and after an election? Do you
take on extra employees?
Mr. KRAMER. No.
Mr. FRENZEL. What time do you catch up with your filing, about a
year later?
Mr. KRAMER. No.
Again, if you create a system, and forms are basically used, it be-
comes an automatic thing-when you say three, it should be six. You
should have two investigators. We do not have investigators at this
point because the legislature would not give us the money, very simply.
It runs on an annual budget of $180,000 for a 2-year period; three
employees, eventually hopefully five or six.
Mr. FRENZEL. What is your population?
Mr. KRAMER. 3.4 million.
Mr. DENT. What is your voter registration?
Mr. KRAMER. 2 million.
Mr. DENT. What is that?
Mr. KRAMER. 2 million in round figures.
Mr. FRENZEL. You have a fantastically high registration. Tell us
how you did that?
Mr. DENT. Do you not have any children? You must use the pill a lot.
Mr. KRAMER. We operate-to a very large extent, we have fewer
registrars than most States. Two things I would like to point out to
put in the back of your mind as to the public's mood now.
PAGENO="0381"
377
We had an election last Tuesday that said: Should all precinct com-
mitteemen be deputy registrars, have the right to register? Seventy-one
percent of the people turned that law down.
Mr. DENT. That is wide open.
Mr. KRAMER. They did not like that.
Mr. DENT. Do you have traveling registrars, a certain period before
election go to precincts far away, isolated?
Mr. KRAMER. You cannot register outside of your county.
Mr. DENT. We cannot register outside of our county, but they are as
big as some States.
Mr. KRAMER. You have county registrars; yes, and city registrars.
Mr. DENT. They are on the scene in the county courthouse. However,
we establish a system known as deputy registrars and they go out and
sit on certain days, the people are notified in their post offices, daily
newspapers as to when the registrar will sit, to give the housewives who
do not have two cars in the family an opportunity to register, because
some of our people have to go pretty near 200 miles to register. They
just will not do it.
Mr. KRAMER. We put registrars in every school so that every 18-year-
old can do it, plus all the parents.
Mr. DENT. Then you have the deputy registrar system?
Mr. KRAMER. But we do not have statewide registrars. That has
caused some problems in minority registration.
Mr. DENT. I imagine it would.
Mr. FRENZEL. You had a 60-percent vote turnout this year without
anybody to elect?
Mr. KRAMER. That is correct.
Mr. FRENZEL. Was that because of the salary matter?
Mr. KRAMER. The issues would have to `be the factor, yes, but we
still did not believe that many would come out from the total number
of absentees requested, things of that nature.
Mr. FRENZEL. What I am getting at is, does that pamphlet you put
out stimulate the voters?
Mr. KRAMER. We believe the pamphlet, the total selling of an elec-
tion, have $1 million we spent on the pamphlet, television, newspapers,
radio, hotline, speakers on any issue.
Mr. DENT. But in that type of advertising that you do, in that
type of publicity that you set up, you really do not advertise the can-
didates, do you?
Mr. KRAMER. We just advertise the election. We can do it `any way
we want.
Mr. DENT. Do you go into advertising candidates?
Mr. KRAMER. No.
Mr. DENT. That is the point I am trying to make.
Mr. KRAMER. We advertise the offices. There are mayor races up,
county executive races up.
Mr. DENT. But you also advertise some 18 or 20 issues.
Mr. KRAMER. That is right. We have to make awfully certain we do
not advertise for or against an issue. Tax reform is on the ballot.
Mr. DENT. You would make both sides of the argument available,
would you not, or at least let them know they are on the ballot?
Mr. KRAMER. But it is not advertising.
Mr. DENT. Are the initiatives separate ballots?
PAGENO="0382"
378
Mr. KRAMER. It depends. It is a single ballot.
Mr. DENT. Go ahead.
Mr. FRENZEL. On that initiative that was defeated to give the reg-
istration capabilities to committeemen, what was t'he vote on that?
Mr. KRAMER. Seventy-one percent opposed.
Mr. FRENZEL. We have a bill coming up that is something like that,
where we give anybody the right to run around with post cards. Only
your State would not even give them to party officers.
Mr. KRAMER. We would not give them to party officers. The argu-
ment against it is that obviously someone must have read in the voter's
pamphlet because it was not used in the campaign, per se, was that
what you were doing, in effect, is creating 12,000 people with no train-
ing, no experience, no knowledge, and that, in effect, you were disen-
franchising many, many people, because people-I do not know where
their precinct boundaries are. Our forms are not that complicated, but
it is not just signing your name.
There are a number of things you have to check off. This must have
been the reason. I do not know. If this was 2 weeks ago, I would be
testifying saying this is on the ballot and it would pass easily. I do
not know. They cut our salaries in half in one measure, and say, "We
do not want more people in the political process" on the other.
Mr. FRENZEL. I will say your legislature, even though they have not
given you your investigators, they have certainly been openhanded in
funding. This is a terribly interesting voter information service. Half
a million dollars for a publication, three employees to sort all that
junk out, your telephone hot line services. I think you are doing some
terribly interesting things there.
I am just trying to find out how you do on that telephone voting. I
am glad I am not running there.
Mr. DENT. Would it not be awful if they end up after 4 or 5 years
of this `and still have the same Congressmen?
Mr. FRENZEL. It would ruin all my arguments.
Mr. KRAMER. `Obviously on the telephone voting you have a great
many years of experiment. When 1 am talking about elections, we
are going to take water districts, where you have 80 people voting
different things, and do a cross-check system, do `a regular vote-by-
mail system and a regular telephone voting system
Mr. DENT. Do you make it easy for absentee voters?
Mr. KRAMER. We can absentee vote up through the day of the
election.
Mr. DENT. But you have to be in before the last day of the election?
Mr. KRAMER. No. We just changed it again this year, including the
day of the election.
Mr. DENT. How do you get a ballot? If you are an absentee, you
cannot aet a ballot.
Mr. KRAMER. You would have to go to the courthouse.
Mr. DENT. They will give you a ballot on election day?
Mr. KRAMER. That is right.
Mr. DENT. If you go there election day you are not absent.
Mr. KRAMER. The reason we do it is for this reason: We found we
were disenfranchising, for example, every woman who had a child on
election day, anyone who went into prison for drunken driving picked
up that day, anyone who was sick in the hospital. What in effect we
PAGENO="0383"
379
do is, we say that a person designated by the hospital can go through
all the wards, have blank forms, pick up all the absentee ballots, go
down to the courthouse, say 212 people in our hospital or county jail.
Mr. DENT. They get them there and bring them out to them, the
individual does not have to go out to get them?
Mr. KRAMER. That is correct, as long as the person signs it. Then of
course we cross-check to see whether they then went and voted.
Mr. DENT. That is a very interesting law. I am going to look into it.
You do not have post card registration?
Mr. KRAMER. No.
Mr. DENT. Do you favor it?
Mr. KRAMER. No.
Mr. DENT. I guess you have some common ground to work with.
Mr. KRAMER. It is not something we will battle over though. If we
get post card registration, fine. It is another factor involved.
Mr. DENT. I believe in making registration very, very easy, and
voting.
Mr. KRAMER. I want to say again, the system is now open, now let's
make people be able to react to that system. I maintain that in any
State where you have 24 major issues on the ballot, plus congressional
candidates, State officials, et cetera, that the average citizen, without
some form of assistance from the Congress in helping to fund those,
you simply are not going to allow the electorate to go in. They are
going to be confused, they will panic, they will not show up.
Mr. FRENZEL. Did you endorse the voter candidate registration bill?
Mr. KRAMER. The majority of it, yes, sir.
Mr. FRENZEL. Mr. Chairman, I am certainly grateful for the secre-
tary coming up here. We have had a number of State officials and
every one of them has been most helpful. We sure need your inputs.
A few minutes ago we were all ready to go out and preempt everything
you have. We sure have to know some of your problems, too. I am
awfully glad you came up.
Mr. DENT. Of course that is a very important point because pre-
emption in many instances, if we write a good law that is as near fool-
proof as you can get one-none of them are completely foolproof, as
you know-but preemption has some virtues because some of the State
laws are absoluteiy impossible, really, for a person to comely with the
Federal law and then try to dovetail his report into a State law. It
makes it very difficult.
Preemption of course would be only for Federal elections, is our
thought. It would be subject of course to some input by the secretaries
of state who handle most of the elections all over the country.
Mr. KRAMER. Could there be a compromise? If you formed a com-
mission to handle this, could there be written into the law, as our
commission can do with candidates, the right of compromise between
States and the Federal Oommission, except that exceptions are
changed to fit those States?
Mr. DENT. I like my colleague's suggestion better, that we preempt
in certain areas, sensitive areas that really could not be considered
to be a violation of what you are trying to do out there.
But I think there is a place where we have to have some kind of a
preemption. For instance, this form applies to every district in your
State; is that right?
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380
Mr. KRAMER. It applies to 10,000 elected officials.
Mr. DENT. What would you do if you had a law that said there is a
different basis for a different type of reporting in the city of Seattle
than there is in a rural area?
Mr. KRAMER. What we do today is we have both filings. The mayor's
race they just finished in the city of Seattle files in two different sys-
tems, the city of Seattle system and the State of `Washington system.
Mr. DENT. Of course I am talking about a Member of Congress,
which is a little bit different. He covers all kinds of things.
Mr. KRAMER. You are right. The State has usurped the cities.
Mr. DE~r. Not in all instances?
Mr. KRAMER. I am saying in our State.
Mr. DENT. Yes, but our problem is that you might have this. For in-
stance, I think I have 78 municipalities. In our area a municipality is
a local government, an entity of government. They could amend the
election law and make you file 78 different reports. They all have
different ideas of what you are to report. One would say you have to
report everything over $5. Another might say you report everything
over $100. It just gets to the point-
Mr. KRAMER. Our constitution plays municipalities as tools of the
State, and they may not enact legislation without authority from the
State.
Mr. DENT. It is pretty well we follow custom and usage of State
provisions. It is the only way to live through most of it. Cross juris-
dictions is the thing.
Mr. FRENZEL. The biggest rub is the reporting. We don't want a
candidate to have a cutoff day for the Federal and 3 days later some-
thing else and haul out all his accountants again for the same thing,
or expense categories, where on one it is a communication expense and
on another something else.
Mr. DENT. Let's take a real for instance. You don't have to report
under the Federal law as it is now anything under $100.
Mr. FRENZEL. You have to have records.
Mr. DENT. But not report it but everything over $10 has to be re-
ported, so when you turn in your total report of what you spend, you
have one figure over here different than the figure you have for re-
porting to the Federal Government. Right away that creates a lot of
flak. People don't understand it. .We get letters here at the Secretary's
House Office saying, "So and so reported in the newspaper so many
thousand dollars spent for his election to Congress, but in the State
he reported $5,000 more than that. How come? What happened? Did
he cheat? Did he report honestly?"
It is really a problem, because they have a different reporting
feature.
Mr. KRAMER. There are two answers to that. First of all, I would dis-
agree with the Congressman who files a lower report with the con-
gressional committee. Go all the way down. You don't lose anything
by doing that. Secondly, do like in banking. The State accepts the
Federal bank's audit of a State bank and vice versa. This is what I am
saying about compromise, a commission saying yes your laws go far-
ther but we will accept your report from the State of Washington or
whatever State that might be, in lieu of the Federal report, because it
carries all of those provisions plus more.
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381
Mr. DENT. I am not too testy on that.
Mr. FRENZEL. We don't object to negotiations, but our guys have
some problems, too, of accepting some weird things.
Mr. DENT. Thank you very kindly, Mr. Kramer. We enjoyed having
you with us.
Mr. FRENZEL. Thank you, Mr. Secretary.
[Whereupon, at 1 :50 p.m., the hearing adjourned, to meet at the
call of the Chair.]
25-239 O-73-----25
PAGENO="0386"
PAGENO="0387"
FEDERAL ELECTION REFORM
THURSDAY, NOVEMBER 29, 1973
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON ELECTIONS OF THE
COMMITTEE ON HOUSE ADMINISTRATION,
Washington, D.C.
The subcommittee met, pursuant to notice, at 9:45 a.m., in room
2172, Rayburn House Office Building, Hon. John H. Dent (chair-
man of the subcommittee) presiding.
Present: Representatives Hays (chairman of the full committee),
Dent (chairman of the subcommittee), Jones, Mollohan, Frenzel, and
Cleveland.
Also present: John T. Walker, staff director; John G. Blair, assistant
to the staff director; Ralph Smith and Ralph Murphy, minority coun-
sels; Committee on House Administration; Richard Oleszewski, clerk,
and Barbara Lee Giaimo, assistant clerk, Subcommittee on Elections.
Mr. DENT. The committee will come to order for the purpose of
taking testimony on election reform legislation before this committee.
We are privileged this morning to have a leader in the field of election
reform over many years.
I have known Mr. Gardner a great number of years, and have had
many occasions to listen to his testimony on much of the legislation that'
has been passed in the last 10 years. So I greet you here this morning,
Mr. Gardner, on behalf of the committee and I know your testimony
will be valuable to us.
You may proceed in any fashion you desire.
STATEMENT OF JOHN W. GARDNER, CHAIRMAN, COMMON CAUSE,
ACCOMPANIED BY JACK CONWAY, PRESIDENT OF COMMON
CAUSE, AND FRED WERTHEIMER, LEGISLATIVE DIRECTOR,
COMMON CAUSE, AND DIRECTOR, CAMPAIGN FINANCE MONITOR-
ING PROJECT
Mr. GARDNER. Thank you, sir.
I would like to begin with two or three comments not in the testi-
mony. I am encouraged by the reports that the House Democratic
leadership is moving to support the Senate action on the public financ-
ing of Presidential elections. As I understand it, Congressman Hays,
you are in support of that move. I think it has to be understood that
this issue will not go away until Congress also provides public financ-
ing for House and Senate races.
The issue will be with us until some comprehensive action is taken
to clean up our political financing system at all levels.
(383)
PAGENO="0388"
384
If I may proceed with my testimony, Mr. Chairman, I `want to
express our appreciation to you and other members of this committee
for providing us with the opportunity to testify. I am accompanied
today by Jack Conway, president of Common Cause and Fred Wert-
heimer, legislative director of Common Cause and director of our
campaign finance monitoring project.
With your permission Mr. Chairman, I would like to insert in the
hearing record today a full text of my statement and the following
supporting exhibits: (1) Statements of national support for public
financing, (2) Common Cause public financing proposal summary,
(3) Common Cause legal memorandum on the constitutionality of
public financing for Federal elections, (4) Common Cause study of
1972 congressional campaign finances, and (5) Contributions and ex-
penditures for all monitoring projects.
Mr. DENT. Without objection, so ordered.
[The information referred to follows:]
PREPARED STATEMENT OF JOHN W. GARDNER, CHAIRMAN OF COMMON CAUSE
The Watergate break-in occurred on June 17, 1972, more than 17 months ago.
The event broke open the greatest political scandal in our history. That scandal
has already produced 8 civil suits, 7 Congressional inquiries, 6 Grand Jury
investigations, 9 trials and many federal agency investigations.
But it has yet to produce a single legislative remedy to prevent recurrence of
the shocking events.
There are a number of remedial measures that must be taken but we are
concerned here today with one in particular-a means of financing political
campaigns that does not corrupt and destroy the integrity of public life. Water-
gate was, among other things, a blockbuster of a scandal in campaign financing.
No doubt Watergate will have many consequences; but quite possibly its biggest
historical impact will be this-that it demonstrated once and for all the moral
bankruptcy of existing campaign financing practices. When Stans and Kaimbach
had finished, the old system of financing campaigns lay in wreckage.
Public financing of elections is the only workable alternative. It is the means
of returning control and ownership of our government to all of its citizens.
For the past half dozen years or more, the confidence of American citizens in
their own institutions, public and private, has dropped at an alarming rate. The
result has been confirmed in study after study. There is evidence that a very
substantial portion of American people are disgusted over what they have
seen of Watergate and indeed disgusted by the whole display of corruption in
politics. They are sick of being had. They are sick of big money buying political
favors. They are sick of people who scramble to positions of power, and then
abuse that power.
The American people are familiar with political corruption. But anyone who
imagines that they shrug it off has not read our political history. Scandals have
ended thousands of political careers, toppled administrations, shattered polit-
ical machines, altered the structure of government and put reform candidates in
at every level of office including the White House.
Public reaction to scandals may be slow at times, but it runs deep, as illus-
trated in the recent Texas experience. The Sharpstown bank scandal broke in
January, 1971, and it was almost a year and a half before anything approaching
a significant level, of public reaction manifested itself. But when the wave of
revulsion was translated to action, the citizens of Texas threw out the Governor,
the Lieutenant Governor, the Speaker of the House, and more than half the
legislature.
There is every reason to believe that public reaction to Watergate will be
similarly slow *and deep. The issue of political corruption will loom large in
the elections of 1974. And the question then will not be "Which of the Watergate
conspirators committed what misdeeds?" The question will be Which of our
elected representatives moved forcefully to prevent recurrence of the shocking
episode ?" If politicans fail to understand that, we could see in 1974 the greatest
overturn of incumbents in 40 years.
In this regard it is shocking that an entire year has passed now without the
House of Representatives acting on any campaign finance legislation whatsoever.
PAGENO="0389"
385
Months ago the Senate passed one major reform bill. Since then it has proceeded
to hold comprehensive hearings on public financing and during this week the
issue was considered on the Senate floor.
In the House excellent leadership has been provided by Representatives
John Anderson and Morris Udall, among others. Their bill introduced last spring
now has more than 140 co-sponsors. It has provided an excellent framework for
considering campaign finance reform. Representative Bill Frenzel, Chairman of
the House Republican Task Force has also played an active role in pushing for
action on campaign finance legislation.
The critical importance of this issue to the nation was recognized last summer
by House Majority Leader Tip O'Neill. Shortly after the Senate passed 5. 372
Majority Leader O'Neill issued a statement saying:
It is clear that one of the highest national priorities for restoring con-
fidence in the government is the fundamental reform of our campaign fi-
nance system. Despite the important legislation enacted in 1972, Congress
once again has the obligation to move forcefully on this vital issue. It is up to
Congress to provide the leadership for the country in eliminating the basic
evils which still exist in our system of financing political campaigns.
When the House returns from the summer recess campaign finance legisla-
tion must be at the very top of our agenda.
Unfortunately, in a year which has seen almost unbelievable revelations of
political financing corruption, the House Administration Committee has treated
this issue as though it were the lowest of priorities. The first hearing was not held
until the tenth month of this year on October 2, 1973. Since then the hearings
have been spread out in a leisurely manner, averaging less than one day a week.
This included October 2, October 10, October 16, October 2~, November 14 and
now today, November 29. Even trivial legislation gets more urgent attention than
that.
The Nation deserves better treatment. The people of this country are entitled
at a minimum to have critical issues decided by all of their elected representa-
tives, and not tied up and buried by a few disapproving members not interested
in providing remedies to the scandal of Watergate.
These intentional delays in House consideration have already raised grave
problems in providing new legislation in time to cover the full course of the 1974
Congressional elections. This is remarkably similar to what happened in late
1971 when the effective date of the new law was successfully delayed in the
House for five weeks without any legitimate reason. Among other things this
allowed Maurice Stans and Herbert Kaimbach to conduct their now infamous
nationwide fundraising drive in March and early April based on the pitch that
contributors should get their secret contributions in before the effective date of
the new law. It also led to numerous fund raising efforts by House and Senate
candidates designed to beat the April 7 effective date of the new disclosure
requirements.
In refusing to provide for timely House consideration of campaign finance
legislation in 1973, this Committee has set the stage for continuing scandals
and chaos in campaign financing during the 1974 elections. It is a tragedy for
this Nation and for the millions of Americans who have looked for a Congres-
sional response to the evils of Watergate.
NEED FOR PUBLIC FINANCING
Common Cause believes that the root evils of campaign financing can never be
eliminated until candidates are assured of adequate funds to run a creditable
and competitive campaign without having to rely on big-money contributors.
This can never be accomplished until a comprehensive system of public financing
is adopted.
The dangers of the campaign contribution as a possible instrument of cor-
ruption have long been recognized. So has the need for a system of political
financing rooted in the hands of all of our citizens.
More than a half century ago President Theodore Roosevelt sounded a warning
in his 1907 State of the Union message. He attacked the evils of private campaign
contributions and called for a new system to finance election costs-the public
financing of federal elections.
The message was ignored.
In 1936 the Senate created a Special Committee to Investigate Campaign Ex-
penditures of Presidential, Vice Presidential, and Senatorial candidates. It
PAGENO="0390"
386
reached conclusions some thirty-seven years ago which remain remarkably appli-
cable and appropriate for us today.
The Committee recommended that the prohibition of contributions from cor-
porations and banks should be extended to prevent contributions from all orga-
nizations, associations and enterprises whose aims or purposes were the further-
ance of groups, classes, or special interests. The reasoning was as obvious then
as it is today-that as a rule such contributions are made for the purpose of
influencing legislation directly or indirectly in behalf of the special interest
involved.
The recommendation was ignored.
In 1966 Senator Russell Long introduced an amendment providing a tax
subsidy for Presidential campaigns. The Long Act was passed on the last day
of the second session of the 89th Congress, and the President signed it. But it
was repealed the following year.
In a 1967 report-after repeal of the Long Act-the Senate Finance Committee
under the leadership of Senator Long made the following findings:
when the people elect a person to represent them, that person should
consider himself-and be considered by others-to be the people's repre-
sentatives, not the representative of those few who might have made sub-
stantial contributions to his election campaign, merely because they could
afford the contributions, whether or not they intended the contributions as a
means of gaining influence.
In the last few years, the inadequacy of our methods of financing political
campaigns has been the focal point of much concern and debate. Increasingly,
it has been recognized that the necessity for candidates to depend on con-
tributions from wealthy persons who may be seeking special benefits con-
stitutes a shortcoming of our political system.
The Committee recommended public financing of federal elections as the
solution. Once more the recommendations was ignored.
It is an issue that can no longer be ignored. Nothing less than the integrity of
the electoral process and of our system of representative government is at stake.
WIDESPREAD NATIONAL SUPPORT
There is widespread support for public financing of campaigns in the country
today. A June 1973 Gallup Poll demonstrated that public financing was favored
by a clear majority. Fifty-eight percent of those polled favored public financing
while only twenty-nine percent were opposed, a two to one ratio. A later Gallup
Poll in September showed even greater support for public financing. Numerous
statements throughout the country by public~figures, of all political persuasions
and by newspapers and columnists of all beliefs similarly demonstrate broad
political support for public financing. (See Exhibit 1).
In a recent speech, a key leader of the nation's business community stated the
reasons well why support for public financing has become a necessity. Henry
Ford II, chairman of the board of the Ford Motor Company, on October 18, 1973
said:
I believe the time has come to establish public financing of election cam-
paigns for Federal office on a direct, systematic and substantial basis. Such
a program would impose no great drain on the treasury but it would have to
be carefully devised to avoid opening up new kinds of inequities and
abuses. . . . I would not support the use of public funds to help finance
Federal elections if I thought there was a better way to clean up the present
system. But even with the other reforms I have suggested, I am afraid that
nothing short of a significant degree of public financing will get at the root
of the problem. Making candidates rely entirely on raising money from pri-
vate sources produces a kind of atmosphere that is not in the public interest.
As long as the present system continues the principle of one-man-one-vote
will be compromised by the power of money.
A similar view was expressed by Leonard Woodcock, President of the UAW,
in a September 21, 1973 statement where he said:
The public mood may present a once in a lifetime chance really to reform
the financing and conduct of federal campaigns. . . . The only answer is
direct public financing of primaries and general elections . . . [based upon]
the creation of a matching program for small contributions to enable candi-
dates and parties to meet their real needs and to give those who wish a
direct feeling of participation."
PAGENO="0391"
387
PUBLIC FINANCING PROPOSAL
Common cause supports a mixed system of public financing combining public
funds with small, private contributions. The system would provide qualified
candidates for President `and Congress in the general election with sufficient
public support to enable a candidate to conduct an effective campaign. It is vital
that the amount be sufficient to allow non-incumbents to present their point of
view as against better known opponents.
Public financing should cover primaries as well as general elections and should
make use of the matching of small private contributions as the method for
determining candidate viability and entitlement to public funds in the primary.
Public financing should provide partial public funding for candidates of minor
parties `and new parties and for independent candidates. Where possible, the
level of funding should be based on their vote performance in the last election.
If they have no track record, their showing in the present election should provide
a basis for reimbursement. They should be free to raise the rest of their funds
privately. Public financing should also provide a role for the political parties in
the general election.
Public financing must include strict limits on the size of any private contribu-
tion from any source, such as $250 for Congressional candidates and $500 for
Presidential candidates. It should bring to an end organized interest group giving
and the pooling of contributions above these private individual limits.
Public financing must be accompanied by an effective nonpartisan independent
enforcement agency.
These various elements of our public financing proposal are spelled out in more
detail in our Exhibit 2. We offer this proposal not for the purpose of presenting
legislative recommendations on precise details but rather to provide an example
of how we have envisioned public finance working.
The question comes up as to how much public'financing of elections would cost.
We estimate that the 1972 Presidential and Congressional elections cost approx-
imately $225 million. If public financing were to cost us that amount each year,
an average of one dollar per American citizen, it would be a bargain basement
price.
The cost of one Trident submarine to the American taxpayer is one billion
dollars.
The cost to American consumers of just the one increase in milk price supports
that immediately followed the dairy industry's campaign contributions to Presi-
dent Nixon's Re-Election Committee was estimated to be between $500 million
and $700 million.
The question has been raised whether any constitutional rights would be
infringed by enactment of public financing legislation. Our lawyers have examined
these issues extensively, including the effect of public financing on the First
Amendment's freedom of speech and freedom of association guarantees. It is
our view that public financing not only meets the requirements of our Consti-
tution; it serves to foster and protect those fundamental rights. A legal memo-
randum we have prepared on the constitutionality of public financing for federal
elections (Exhibit 3) (p. 399) deals thoroughly with these issues.
CONGRESSIONAL CAMPAIGN FINANCES
Prior to enactment of the 1971 federal disclosure law, it was impossible to
obtain comprehensive financial data on Congressional elections. With the pas-
sage of the 1971 law. Common Cause conducted a nationwide Campaign Monitor-
ing Project to monitor campaign finances in the 1972 federal elections. In Sep-
tember we released our first study based on that project. The findings are the
first comprehensive spending figures on Congressional races ever made public and
are based on the analysis of tens of thousands of reports filed by 1,896 Con-
gressional candidates and their supporting political committees.
One significant finding of our study is that there~ is a tremendous financial
imbalance in favor of incumbents over challengers, regardless of party. Indeed
the imbalance is so marked that it raises grave doubts as to whether we have
at present a competitive system of representation.
The results of our study make ~it clear that it is incumbency more :than any-
thing else that determines whether a candidate can obtain adequate financial
support. Congressional incumbents averaged a 2 to 1 financial advantage over
their opponents in the 1972 elections. Our most recent finding furthermore shows
that of the money given to 1972 Congressional candidates by special interest
PAGENO="0392"
- 388
groups, $2 out of every $3 went to incumbents. The study also shows that while
spending substantial sums does not guarantee victory it is essential to running
a closely contested race. We also found that more than $2 out of every $3 made
available to Congressional candidates came in gifts of more than $100.
There is really only one solution to this fundamental problem. If we are to
return to a competitive system of representative government, then we must have
public financing of elections.
Mr. Chairman, I would like to ask that a copy of our study on 1972 Congres-
sional campaign finances (Exhibit 4) (p. 421) be made a part of the record at
this point, as well as our most recent analysis-a list of the total contributions
and total expenditures for each of the 435 House races in 1972, (Exhibit 5).
THE NEED TO AVOID LOW LIMITS ON CAMPAIGN SPENDING
The bill passed by the Senate (S. 372) would allow candidates for the House
to spend $90,000 in primary races, and another $90,000 in the general election.
Some have advocated expenditure limits substantially lower than those con-
tained in S. 372-$35,000, $42,500, and $50,000 are among the figures which have
been mentioned as preferable. Common Cause considers that any substantial
reduction of the figures in S. 372 would virtually guarantee permanent re-election
of incumbent members of Congress.
Common Cause favors real competition for all elected offices. This means that
Congressional challengers as well as incumbents must be able to spend enough
money to wage an effective campaign. Incumbents start off with advantages-
they are well known, have free mailing privileges, travel allowances, radio/TV
broadcasts to their community and other publicity-generating devices. Challen-
gers have to spend considerable money to get their views known to the voters.
Incumbents, furthermore, have a critical edge over their challengers in terms
of campaign funds. These advantages nearly assure re-election. Between 1954
and 1970, only 8% of those who challenged House incumbents were successful.
In the 1972 elections, only ten congressional incumbents were defeated. The aver-
age spent by those who beat incumbents was $125,521, as opposed to an average
of $50,000 spent by winning incumbents. Many incumbents are so firmly en-
trenched that they are not challenged at all. In 1972, for example, there were
52 uncontested House races.
The results of the Common Cause study indicate that a limit below $90,000
would be a serious mistake. In fact, from the results of our survey, it would
appear that in a general election, House candidates should be able to spend at
least $120,000. A limit at this level would check the advantage of some well-
financed candidates. In last year's election 131 House candidates spent over
$90,000. So clearly a limit of $90,000-or $120,000-would restrict expenditures
and not be meaningless as some have claimed.
It would certainly be a mistake to set a spending limit based on 1972 overall
average expenditures in House races. Major party candidates in the general elec-
tion spent an average of $48,500. But this figure reflects the small amounts spent
in uncontested races and the fact that most challengers to incumbents cannot
raise ample funds under the present system of financing. It does not show the
level of spending in competitive races. In the sixty-six races won by less than 55%
of the vote, both candidates spent an average of over $100,000 each.
What Common Cause is most concerned about is that candidates-challengers
and incumbents alike-have equal access to the political arena. In our society
today, it takes substantial sums of money for candidates to communicate their
views effectively to the electorate. Costs today are high, but perhaps not excessive
for a function as essential as electing our nation's office-holders. On a per capita
basis, this country spends far less than several other Western democracies, in-
cluding Sweden, Israel, and Germany. Of course, Common Cause would like to
see careful attention given to various methods to reduce candidates' campaign
costs-e.g., providing free TV time, providing free mailings to challengers, etc.
This would help curb the spiraling costs of campaigning and might make it pos-
sible to reduce spending limits at some later date.
THE NEED FOR AN INDEPENDENT FEDERAL ELECTIONS COMMISSION
Common Cause considers establishment of an independent federal elections
commission to be absolutely essential to any effective system of campaign fi-
nancing. The long history of almost total non-enforcement of campaign financing
laws in this country is well-known and well-documented. Certainly this abysmal
PAGENO="0393"
389
record of enforcement was a major underlying cause for the Watergate scandals
and other campaign financing abuses which have shaken this nation in the past
year. It is hardly surprising to find candidates and their agents ignoring or
circumventing the law when past history would give them every assurance that
their violations of law would go unpunished, even if detected.
A comparison with income tax legislation is instructive. One argument against
the imposition of personal income tax is the difficulty of securing compliance
with the law. However, because of early efforts by the government to enforce
that law, self-enforcement has become the rule. If the government had similarly
cracked down on violators of campaign financing laws from the outset, voluntary
compliance would have become the standard of conduct.
A root cause of the lack of enforcement is the unsatisfactory enforcement
mechanism originally established under the Federal Corrupt Practices Act and
closely replicated under the Federal Elections Campaign Act which went into ef-
fect last year. Under the current law, jurisdiction to oversee and enforce cam-
paign finance legislation is split among three different supervisory officers and
the Justice Department.
In the case of the supervisory officers, not only is this an inefficient, confusing
and burdensome method of doing business; it has also been obvious from the
outset that the Clerk of the House and the Secretary of the Senate were faced
with inherent and impossible conflicting pressures in trying to oversee the ac-
tivities of their own employers.
While we found all three supervisory officers extremely cooperative with us
during our 1972 campaign monitoring project, it is clear that the tri-partite ar-
rangement makes no sense. And it is clear that the Clerk and the Secretary
should not be involved in the supervisory process.
The record of the Justice Department-the sole governmental agency em-
powered to prosecute campaign abuses-is shockingly bad. In 1972, the Depart-
ment did virtually nothing to enforce the new law and there is no reason to
believe this will change at any time in the future. During the forty-seven years
the Corrupt Practices Act was in effect, it was never enforced against a single
member of Congress.
It should be clear that this is not a case where filing criminal suits was the
only alternative available to the Justice Department to bring about compliance.
The 1971 law clearly provides the Department with civil enforcement powers
regarding the disclosure provisions thereby allowing them to use this less strin-
gent remedy as a means of achieving compliance. The Justice Department, how-
ever, made no effective use of this alternative remedy.
When the campaign finance law originally passed the Senate in 1971, it
contained a provision sponsored by Senator Pearson, to create an independent
elections commission to oversee the new law. This provision, adopted by an
89-2 vote in the Senate, was rejected by the House and eventually killed in
Conference.
During 1972, Common Cause undertook a number of efforts designed to make
candidates aware that someone was concerned about whether they were com-
plying with the new law. We filed hundreds of complaints with the Clerk of
the House last spring and summer regarding late filing and no filing violations-
to this day we have never heard a word from the Clerk about any of them.
We made public numerous instances of improper filing and other violations of
the law. We filed lawsuits designed to achieve compliance with key provisions
of the new law.
We believe our efforts were helpful in creating some semblance of enforcement.
We intend to continue these efforts for as long as the appropriate government
authorities fail to carry out their clearly delegated responsibilities. But what is
desperately needed today is a government body that has the power, the ability
and the commitment to enforce this legislation-a truly independent and non-
partisan federal elections commission. The oversight, investigation and enforce-
ment functions must be unified in a single entity and the Justice Department
must be relieved of its central role in the enforcement process.
We believe it is critical, therefore, that any new Commission have the powers
to investigate, to subpoena and to go to court to enforce violations, powers that
are set forth in the Senate-passed bill (S. 372), in the Anderson-Udall "Clean
Elections Act," and in numerous other reform proposals currently pending before
this Committee. The members of the Commission should be nominated, two each,
by the President. the Majority and Minority Leader of the House, and the Major-
ity and Minority Lemider of the Senate, thus giving all those regulated by the Com-
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390
mission a role in choosing its members. As a seventh statutory member of the
Commission, Common Cause urges inclusion of the Comptroller General, the one
current supervisory officer who can operate without a conflict of interest and who
has shown a genuine inclination to pursue possible violations with vigor. Such a
Commission has already received overwhelming approval in the Senate. We
strongly urge this Committee to include such a provision in any bill it reports out
for floor consideration.
IMPROVEMENTS IN THE DISCLOSURE LAW
There are other important ingredients to be included in any campaign reform
package. Although the Federal Elections C'ampaign Act of 1971 contained strong
disclosure provisions, experience during last year's elections confirmed the need
to strengthen the Act in the following respects:
(1) Place stringent limits on the role of cash in campaigns
There isno legitimate role for large sums of cash in campaigns. The revelations
of Watergate, involving $100 bills stuffed in satchels and secret cash payments to
conspirators, have proven the need to restrict the role of cash. Specifically, cash
contributions and expenditures in excess of $50 should be prohibited during the
course of a political campaign. The Senate-passed bill contains such a provision
and we urge this Committee to write the restriction into any legislation it drafts.
It will not eliminate all secret cash transactions, any more than the homicide
laws eliminate all murders, but it `will help.
(2) Require candidates to establish a single reporting committee
`The effectiveness of the disclosure provisions of Title II of the 1971 Act could
be greatly improved we believe, by adopting the requirement of a single reporting
committee for each candidate, a recommendation `contained in 5. 372, the Ander-
son-Tidall bill, and many of the other reform proposals. The use of multiple com-
mittees makes it extremely difficult, sometimes almost impossible, to get a true
picture of the candidate's financial activities during the campaign. In our 1972
campaign monitoring project, literally thousands `of hours were spent combining
the reports of candidates and their various committees. factoring out transfers
and cross checking contributions and expenditures, in order to know what the
actual financial picture was for each candidate.
A single reporting committee would not require the elimination of all other
committees but would establish a central bookkeeping committee for purposes of
filing reports and of making clear comprehensive disclosure. It would substantially
reduce paperwork.
(3) Require candidates to establish a central campaign bank account
An additional aid to enforcement would be to require each candidate to estab-
lish a single, centralized bank aecount through whi'ch all contributions and ex-
penditures would flow. The account would provide a complete record of all finan-
cial transactions during the course of the campaign, `a tremendous help both to
those filing reports and those charged with responsibility for enforcing campaign
laws.
(4) Listing of occupation and principal place of business
An important provision of the 1971 Act was the requirement to list occupation
and principal place of business for each contri'bution of more than $100. A `major
purpose of disclosure is to inform the voting public concerning the iden'tity of the
candidate's financial backers. The occupa'tion requirement helps to accomplish
that.
The record o'f compliance with this provision in 1972 was mixed. In many re-
ports the information was partially or totally absent. But in other reports, prac-
tically complete information on occupation and principal place of business was
supplied by candidates-which proves `that this important provision can be com-
plied with by someone motivated to do so. We believe that those who supply this
vital information in their report's should not be penalized for complying with the
law by allowing their opponent's `to avoid filing the same information. It is there-
fore essential not only that this provision be retained in the law but that it be
vigorously enforced. One way to assure better compliance would be to amend the
law to provide that any contribution over $100 received by a candidate or politi-
cal committee must be returned within five day's unless it is accompanied by the
donor's occupation and principal place of business.
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(5) Bar contributions by Government contractors
The 1971 Act specifically prohibits direct or* indirect campaign contributions
from government contractors. It sets the highest possible standard of conduct
for those who are in a business and profit relationship with the government. We
believe this standard is extremely important and that it should in no way be
amended.
(6) Make candidates legally responsible for their campaign finances
The present system of financing elections is designed to insulate the candidate
from legal responsibility for his campaign finances. The result i's that candidates
disassociate themselves publicly from their campaign finances despite the fact
that these activities play a critical role in their political lives. We propose that
candidates share the legal responsibility with their campaign treasurers and fund
raising committees for the periodic disclosure reports and other obligations im-
posed by the Act.
(7) Strengthen criminal and civil sanctions
The law presently provides for criminal penalties ranging from a maximum
of $1000 and one year in jail for violation of disclosure provisions to a maximum
of $5000 and 5 years in jail for violating the communications media provisions.
There is clearcut need for a much broader range of sanctions.
We recommend the law be amended to allow maximum criminal penalties up
to $100,000 and 5 years in jail for the violation of any of the campaign law pro-
visions. In addition, `the alternative of maximum civil fines up to $100,000 for any
violation of the campaign finance laws should be created. The establishment of
this range of sanctions would provide enforcement authorities with much greater
flexibility in carrying out their mandate. It would create a stronger deterrent and
provide more effective tools for punishing violators.
CONCLUSION
Mr. Chairman, history will look back at this Congress and the question it will
pose is a very simple one-after the shattering experiences of Watergate, did
the Congress act courageously and decisively to remedy clear and present evils?
We urge this Committee to act immediately to make it possible for the House
to consider the most important electoral reform of its kind in our history-the
public financing of federal elections.
EXHIBIT No. 1
NATIONAL SUPPORT FOR PUBLIC FINANCING
Common Cause supports public financing of elections as essential to restoring
integrity to the government. John Gardner, Chairman of Common Cause recently
stated:
There are honest donors to political campaigns and honest recipients, hut
the existence of these does not outweigh the fact that the present system
of financing campaigns legitimizes the buying and selling of politicians. The
old-style, flat-footed cash bribe has been replaced by the campaign gift, its
all-purpose, pre-packaged modern equivalent. If we are to speak of remedies,
the first step is the total redesign of our systems of campaign financing.
The solution is public financing of election campaigns. (September 7, 1973)
It is now clear that there is widespread public support for public financing of
campaigns. Perhaps the most important evidence of current support was provided
by the June 1973 Gallup Poll which revealed the public financing is now favored
by a clear majority of the American people. 58% of those polled favored public
financing while only 29% were opposed, a 2: 1 ratio.
Common Cause has gathered the following statements by public figures and
newspapers across the country. These statements indicate the broad national
support, throughout the political spectrum, which now exists for public financing.
Senate Majority Leader Mike Mansfield (D-Mont.), January 3, 1973
"To insure open access to politics, I can think of no better application of
public funds than, as necessary, to use them for the financing of elections so
that public office will remain open to all, on an unfettered and impartial basis for
the better service of the nation."
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Senate Minority Leader Hugh Scott (ft-Pa.), Testimony, September 18, 1973
"I have concluded that public financing of elections is the only answer. Two
years ago I was persuaded that disclosure alone would cure the ills-but I mis-
judged that as much as I misjudged the deviousness of certain individuals who
sought to humiliate the law from the day it was enacted. Congress has since set
new limits on both contributions and expenditures-but with these limits comes
a morass of enforcement problems not to mention the problem of fairness to less
well-endowed challengers. The next logical step . . . is full public financing.
It is our last best hope to restore full confidence in public officials and govern-
ment."
President Theodore Roosevelt, Stats of the Union Message, 1907
"The need for collecting large campaign funds would vanish if Congress pro-
vided an appropriation for the proper and legitimate expenses of each of the
great national parties . . . Then the stipulation should be made that no party
receiving campaign funds from the treasury should accept more than a fixed
amount from any individual subscriber or donor; and the necessary publicity
for receipts and expenditures could without difficulty be provided."
President Lyndon B. Johnson, May 25, 1967
"... I believe that our ultimate goal should be to finance the total expense of
this vital function of democracy [the elective process] with public funds, and
to prohibit the use or acceptance of money from private sources . . . I believe.
we are ready to make a beginning. We should proceed with all prudent speed to
enact those parts of such a program which appear feasible at this time."
Vice-President Spiro Agnew, Newsweek, July 30, 1973
"As a matter of fact, I'm beginning to come around to the point of view that
they [campaigns] should be financed publicly, even though some abuses would
still go on. The real problem is to make certain that every serious candidate has
enough money to put on a creditable campaign."
George Spater, Chairman, American Airlines, July 6, 1973
"Under the existing laws, a large part of the money raised from the business
community for political purposes is given in fear of what would happen if it
were not given. A fair and honest law is one that would remove the need of any
candidate to exert such pressures, as well as the need for any businessman to
respond.
"I fully support the proposals made by Common Cause and many legislators of
both parties to reform existing elections laws relating to the support of political
candidates. I urge others in our position to come forward. I urge the business
community to get behind campaign financing legislation that will really work,
and that will put a stop to pressures to which officers of companies are subject
when solicited for campaign contributions."
Senator Russell Long (D-La.) Congressional Record, April ~, 1967
"Insofar as [public financing] would result in long-term economies in govern-
ment, it is the one approach that the favored few would want the least. Of all
expenditures by government, this is the one which the robber barons will oppose
the most. The cost of financing a presidential campaign is one expense that they
welcome. Investments in this area can often be viewed as monetary bread cast
upon the water to be returned 1,000-fold."
"With [public financing] in operation, no longer would government have to
operate so inefficiently and ineffectively. Because candidates need worry no
longer where their campaign funds were to come from, they could run on their
principles and convictions and if elected see that these principles and convic-
tions were acted upon in the best interests of all the people without paying
wasteful and dangerous heed to the interests of the well-heeled few."
Ralph Nader, speaking on "Face the Nation", September 2, 1973
"I think the principal lesson of Watergate has got to be to turn it into a
watershed for reform-campaign finance reform, cleaning up government so it
isn't sold to the highest bidder."
Senator Charles Mathias (ft-Md.) Congressional Record, June 6, 1973
". .. A system of public financing would have three major benefits: it would
equalize access to the political arena among candidates and among members of
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the general public; it would permit us to control the incredible growth in cam-
paign expenditures; and perhaps most important, it would enable us to remove
a large part of the corrosive influence of big money from our political campaigns
and our governing process."
Andrew Biemiller, Director, Department of Legislation, AFL-CIO, April 4, 1973
"The AFL-CIO who wholeheartedly supports complete federal campaign
financing for all offices and a complete bar on any private contributions to such
candidates."
Senator Walter Mondale (D-Minn.) Congressional Record, June 24, 1973
"Public financing of campaigns is the most fundamental and important reform
we can adopt in this decade. At stake is nothing less than the integrity of our
political system and the kind of quality of government we are going to have in
this country."
Representative John Anderson (R-Ill.) Chairman, House Republican Conference,
September 13,1973
"If the revelations of recent months contain any lesson it is that our elections
must be taken off the auction block. A new system of public financing built on a
broad base of small contributions is our best hope for restoring public confidence
in the electoral process."
Senator John Stennis (D-Miss.) press conference, August 7, 1973
"I am just about ready to vote for something that I didn't think I ever would
and that's to finance some of these campaigns out of federal funds, that is tax-
payers' money."
Senator Richard Schweiker (B-Pa.) Congressional Record, July 26, 1973
"Today's high-cost campaign climate makes action today to enact a public
financing system an urgent necessity."
Senator Edward Kennedy (D-Mass.) Congressional Record, July 31, 1973
"If Watergate has taught us anything, it is that disclosure is not enough, that
sunlight is not an adequate disinfectant, that public financing is the only effec-
tive antidote to the infectious power of money in political campaigns
"I believe that the provision of public funds for Senate and House elections is
the best investment the American taxpayer can make today to end what has
become the most flagrant single abuse in our democracy, the unconscionable power
of money. Rarely have we had the opportunity to act to meet so great a need.
It is time to take a step that can keep our political system running and
responsive."
Senator John Sparkman (D-Ala.) radio interview, August 24, 1973
Question: "Would you prefer our government, or I'll put it another way, the
taxpayers' footing the bill of the political campaigns ?"
Answer: "Yes, I think we're going to have to come to a publicly financed cam-
paign and leave out private financing altogether."
Leonard Woodcock President United Auto Workers, September 21, 1973
"The public mood may present a once in a lifetime chance really to reform the
financing and conduct of federal campaigns .. . The only answer is direct public
financing of primaries and general elections [based upon] the creation of a
matching program for small contributions to enable candidates and parties to
meet their real needs and to give those who wish a direct feeling of participation."
Senator Hubert Humphrey (D-Minn.) Congressional Record, July 26, 1971
"Searching for campaign money is a disgusting, degrading, demeaning experi-
ence. It is about time we cleaned it up. The public expects this body, the Con-
gress of the United States, not to be just the critic of the President or the
President's reelection committee, but have some self-analysis, self-criticism, stand
up, and do what is right...
"[Public financing] gives us a chance to clean up campaign financing. It gives
us a chance to do what needs to be done in American politics. I want to say to the
American people it will be the best investment they ever made, the very best.
It will lift American politics out of the quagmire, out of suspicion, doubt, fear,
degradation, and corruption."
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senator Edmund Muskie (D-Me.) Congressional Record, July 25, 1973
"And the conclusion I have reached from this evidence. . . is that the pernicious
influence of money in politics can only be removed by adopting public financing
of all campaigns."
Representative Morris Udall (D-Ari~&) I~eptember 14, 1973
"I think the American people are willing to pay $1 a year for honest govern-
ment . . . What the public doesn't know is that the current system of special
interest financing costs them much more. But the costs are hidden in rising milk
prices, defense contracts, and utility rates."
,S~enator Philip Hart (D-Mich.) Congressional Record, July 25, 1973
"The first hurdle, then, to any form of meaningful public financing is to con-
vince the public that this is not merely a new raid on the Treasury by greedy
officeholders but is, in fact, about as wise an investment as the electorate in a
democracy can make."
stephen Hess, Former White House Assistant to President Nixon, column in
WashingtOn Post, June 16, 1973
"The overriding consideration . . . must be that public confidence in the elec-
toral system is now so low that federal financing should be given a try.
"I cannot think of any sound reason not to allow the political process to ex-
periment with public financing for at least one election."
senator Alan Cranston (D-Cal.) Congressional Record, June 26, 1073
"We must reconstruct our archaic political financing system, so that we no
longer rely solely or even primarily on private funds to finance ever-more ex-
pensive election efforts.
"We must develop a program of public financing for a major percentage of the
total a candidate is allowed to spend."
senator Joseph Biden (D-Del.) Congressional Record, July 25, 1973
"Public subsidy would allow eandidates-incumbents and challengers alike to
compete more on the basis of merit than on the size of the pocketbook-free from
potentially corroding dependence on personal or family fortune or the gifts of spe-
cial interest backers-be they those of business, organized labor or conservative
or liberal interests
"All I know is that I have felt that pressure, and I am one young fellow at 30
years of age who may not only be the youngest Senator but the youngest 1-term
Senator here. But the fact remains I know I have felt it, and I think that it is
in the public interest to see to it that we who are running for public office can get'
about the business of telling the people what we think and not have to worry that
if we take a position that is in opposition to any major interest group, whether it
be labor or big business, that we are going to have campaign funds cut off that
we need to get our case before the public.
"I think if there is nothing else that I am able to do in one term-if there is
nothing else I do to make some little impact on moving us toward the public fi-
nancing of elections, I would consider my service in the Senate a success."
senator James Abourezk (D-EiLD.) Congressional Record, July 25, 1973
"For a per person charge of about the cost of a couple of McDonald's ham-
burgers the voting public can buy back into elective politics. For the psychic
cost of perhaps the tiniest increase in the possibility of future defeat, each of
us can increase immensely the influence and the iiltegrity of his own office. I
think it is a good deal. I urge that we back up our support for the ceilings of S.
372 with support for public financing at the very earliest date.
Resolution unanimously adopted by senate Democratic Caucus, May 9, 1973
"Be it therefore resolved that the Majority Caucus of the Senate commit it-
self to the immediate enactment of proposals to provide for the open public fi-
nancing of federal elections."
James J. Kilpatrick, Washington star-News, August 3, 1973
"[Public financingi is an idea, I submit whose time has just about come . .
"It seems to me, on balance, that drastic measures are needed if we are to
remove the curse of money that now corrupts our political process. If we do not
learn at least this lesson from Watergate, we are doomed to repeat that wretched
course of instruction. By fixing tight limitations on individual contributions, the
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Senate early this week moved in the right direction; yet a great deal remains to
be done."
Jerry Landauer, "Another View of Election Spending," Wall Street Journal,
May 14, 1973
"The issue no longer is whether government should pay. The real question is
how-furtively, as at present, or openly and with some semblance of fair play."
"Should we publicly finance our election campaigns? Don't kid yourself. We
already do-through direct subsidies to incumbents, through tax subsidies for big
contributors, through dodges and loopholes and regulations the average tax-
payer hasn't the time to try to understand. The issue is whether we can do it
honestly."
Clayton Fritehey, Washington Post, May 5, 1973
"Now is the time for all good men, Democrats and Republicans alike, to come to
the aid of their parties-by enacting a campaign financing bill that will make it
impossible for there ever to be another Watergate case."
- There is only one certain way of stopping it [the utter degration of
American Government], and that is for the taxpayers, through congressional
appropriations, to take over the privilege (the word is used advisedly) of financ-
ing all candidates for President, Senate and House."
Boward K. Smith, ABC Evening News, August 8, 1973
"The only way is federal financing of elections.
"Congress should drop the patch-work reform it is debating and which slick
lawyers are waiting to punch loopholes in.
"The solution of federal financing is simple and decisive. It would make our
representatives independent at last . . . end the maldistribution of wealth by
government favors to special interests . . . and end Watergates and the corrup-
tion, and suspicions of corruption, endemic in our states and cities. I don't know
what we are waiting for."
Mason City (Iowa) Globe Gazette editorial, May 14, 1973
"When the nation has reached the point that qualified candidates are prevented
from running seriously for office because of lack of funds, then public financing
is needed under a mandatory check-off provision."
Cleveland Plain Dealer editorial, July 26, 1973
"We see plenty of good sense in paying for election costs with public tax
money. .
"Millionaires and bought candidates obliged to this lobby or that, or officials
manipulated by concentrations of cash and selfish purposes, are the bane of the
citizens who feels his interest is ignored.
"Clearly public funding of political campaigns, with flexible rules to give
unknowns as good a chance as known incumbents, can be cleaner than the dis-
tasteful methods now in force in national elections."
Washington Star-News editorial, August 26, 1973
"If this country is to regain its political health, the prevalent impression that
big money buys its way in government must be erased-or at least greatly
diminished.
"The Senate's severe limitations on contributions are a good enough start
toward that goal. They might pose problems in financing the next presidential
campaigns, and some congressional races. But this prospect of austerity, we sus-
pect, would move Congress toward a system of public financing-in whole or in
part-of campaigns for all federal offices. And that seems, ultimately, the most
appealing of all solutions.
"The best approach to it could very well include a low limit on private con-
tributions, which would be supplemented with whatever public subsidy is needed
to conduct an adequate campaign."
St. Petersburg Times editorial, August 1, 1973
"The fault with the Senate reform lies not in its toughness, but in its limita-
tions. It does not go far enough. And the first need in an expanded reform bill is
for public financing of elections.
"Public financing of elections has hazards, too. But it rules out the laundered
money, secret money, late-reported money, ambassador money and other corrup-
tions exposed by the Watergate investigations.
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"Humans cannot contrive a flawless system. They can, however, provide reason-
able safeguards against bought elections. Public financing of campaigns is an
antidote to that poison in the nation's political system."
Cheyenne (Wyo.) Eagle editorial, August 1, 1973
"The huge sums spent by candidates and their supporters have tended to make
campaigns contests between campaign funds rather than between candidates.
"We . . . have favored some system of financing presidential (and possibly
congressional) campaigns from public funds rather than by private contributions.
Hopefully, something may be done about that later this year."
Washington Post editorial, August 9, 1973
". . . [Plublic underwriting of all or part of the necessary cost of campaigns
would not only benefit challengers and citizens. It would also extricate incumbents
from the business of raising large sums from private interests, a business which
Sen. Hubert H. Humphrey (D-Minn.) has rightly called "the most demeaning,
disgusting, depressing and disenchanting part of politics."
Pottsville (Pa.) Republican editorial, June 28, 1973
"The American people can do much to insure that Watergate will not happen
again by building a fire under Congress with public pressure for reform. They also
can end special interest government by exhibiting a willingness to share in some
of the responsibility for clean elections.
"Public financing of campaigns can be the detergent that cleanses our political
system.
"The 1972 federal elections cost between $200 million and $2~0 million. Under
the public financing system that Common Cause supports Americans can own
their own government for less than $2 per citizen. It's a small price to pay."
New York Times editorial, Auqust 1, 1973
"Since political campaigns are indispensable to self-government and since
campaign costs have to be paid by some source, the central question is not how
to break the nexus between politics and money. Rather, it is how to make that
connection clean and open.
"What is really needed is a system of public financing to supplant the flow
of interest-group contributions. That is the purpose of the plan developed by
Common Cause, to be the subject of hearings in the fall. Small individual con-
tributions would still be possible but the interest group committees would pass
from the scene."
Fort Myers (Fla.) News-Press editorial, April 7, 1973
"... Congress could very simply provide ample federal funds for election cam-
paigns out of general revenue, at the same time limiting private contributions
to candidates and setting a ceiling on expenditures for a given race.
"The more people learn about the current checkoff system, the more will re-
spond with support for public financing. But that's only a small step in the right
direction."
~t. Louis Post-Dispatch editorial, August 7, 1973
"[AJn old idea that is gaining more and more adherents ought to be em-
bodied in any campaign financing act passed by Congress this session. That is the
public financing of elections, the only sure means of reducing the power of the
rich man's contribution. A start toward this desirable goal already has been made
with the one dollar tax checkoff and Congress should carry it forward.
Dayton Journal-Herald, May 30, 1973
"While public financing is not without its problems, we are inclined to go along
with Gardner and others who view this approach as the best way to clean up
the present grimy mess that is called campaign financing...
"The existing method of financing campaigns corrupts the political system
and enhances an already prevalent cynicism about the way things work. To con-
tinue down the present path can only lead to a complete loss of faith . . . Public
financing can represent the first step in wrestling the electoral process away
from the special interests and in returning it to the people.
". . - The check-off, however, could very well prove inadequate and ultimately
a direct appropriation may be required.
"Whatever the method finally decided upon, public financing in some form is
necessary `to prevent political process from being sold to the highest bidder."
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Ripon Forum, June 1973
"It is time to adopt public financing of elections, thereby ending the pernicious
influence of the fat cats on candidates and elected officials, and improving both
the quantity and quality of citizen participation in politics."
Henry Ford II, Chairman of the Board of the Ford Motor Company,
October 18, 1973
". . . I believe the time has come to establish public financing of election cam-
paigns for Federal office on a direct, systematic and substantial basis. Such a
program would impose no great drain on the treasury but it would have to be
carefully devised to avoid opening up new kinds of inequities and abuses . . . I
would not support the use of public funds to help finance Federal elections if I
thought there was a better way to clean up the present system. But even with
the other reforms I have suggested, I am afraid that nothing short of a signifi-
cant degree of public financing will get at the root of the problem. Making can-
didates rely entirely on raising money from private sources produces a kind of
atmosphere that is not in the public interest. As long as the present system con-
tinues the principle of one-man-one-vote will be compromised by the power of
money."
ExHIBIT No. 2
COMMON CAUSE PUBLIC FINANCIAL PROPOSAL-SUMMARY
The events surrounding Watergate have highlighted as never before the need
for a different system of financing elections. Common Cause supports public
financing of elections as essential to restoring integrity to our government. Essen-
tial to our approach is the establishment of a mixed system which would combine
public funds with small private contributions. Outlined below is an explanation
of how such a system would work.
Our present estimates are that the 1972 federal elections cost between $200
million and $225 million. The full expense of the 1972 elections could have been
financed from federal funds at a per capita cost of $1 for each American citizen.
PUBLIC FINANCING PROPOSAL-GENERAL
The basic ingredients of public financing legislation should, we believe, include
the following:
1. The provision of ample federal funds for the conduct of election campaigns
by qualified candidates.
2. An additional role for private contributions, but with a strict limit placed
on the amount of individual gifts, such as $250 for a House or Senate race, and
$500 for a Presidential race.
3. An overall maximum limit on the amount that can be spent on a given race.
4. A strict limit on the amount of organized interest group giving and pooling
of contributions.
5. A bar to the transfer of cash over $500 in political campaigns.
6. A role for the political parties in the financing of general elections.
7. The creation of a hard-nosed oversight and enforcement agency to ensure
compliance.
PUBLIC FINANCING PROPOSAL-SPECIFIC
1. A Miaed System-This proposal does not rely solely on funds from the
federal treasury; rather, it creates a mixed system combining for each eligible
candidate, funds from the federal treasury with an additional amount from
private contributions. It thus allows for a candidate's supporters to make reason-
able contributions to his campaign. It also promotes competition in traditional
one-party states and districts.
No private individual or group could provide more than $250 for a House or
Senate candidate, or more than $500 for a Presidential candidate. Organized
group giving and pooling of funds would be severely restricted.
There would be an overall total spending limit per candidate for House, Senate,
and Presidential races determined by the number of voting age residents in the
given election.
Example-For a House race, each eligible major party candidate could spend
a maximum total of $90,000 in the primary and $120,000 in the general elections.
Of these amounts, 80 percent would come from public funds and the remaining
20 percent would be raised through contributions from private individuals sub-
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ject to the $250 limit or from the political parties. A candidate could still decide
against taking any public funds and raise all his funds up to the spending limit
through private contributions of no more than $250.
2. "Eligibility" for federal fnnds.-A critical issue involves how to eliminate
frivolous and nonserious candidates from receiving federal funds at the primary
stage in order to prevent public financing from becoming an unacceptable raid
on the federal treasury. This proposal sets forth a system of matching federal
payments which insures that the candidate will have to demonstrate popular
support throughout his primary campaign in order to receive federal funding.
A candidate in order to be eligible to receive federal funds during a primary
race must demonstrate his viability in two ways. First, he must raise a specified
sum of money in small contributions before he can qualify for any federal funds.
For example, a House candidate might be required to raise $5000 in contributions
of $250 or less. Then, once the candidate has been able to raise this threshold
amount, all contributions of up to $50 will be matched in a 4:1 ratio by federal
funds.
By thus requiring the candidate initially to raise a certain amount of money to
demonstrate some breadth of support and by requiring the candidate to continue
raising small contributions throughout the primary campaign in order to receive
matching federal funds, any problem with publicly subsidizing non-serious candi-
dates wou~d be avoided. In this manner, individual citizens, rather than the
government, would determine which candidates deserve and would receive finan-
cial support for running their election campaigns.
3. Major party, minority party, and independent candidates-The amount of
federal funds available to a candidate at both the primary and general election
stages, wou1d vary depending on whether he was a major party, minor party or
independent candidate. While major party candidates usually would receive
more than the others, minor party and independent candidates would receive
increasing amounts on a sliding scale depending on their strengths demonstrated
in past elections or their showing in the present election. In a case, for example,
such as Senator Harry Byrd who ran for a second term as an independent and
won, this past record would entitle him to the same public funds as would be
available for a major party nominee.
In all cases where minor party and independent candidates were receiving
smaller federal amounts than major party candidates, they would of course have
the right to make up the difference between their allotted public funds and the
overall spending limit by raising private contributions.
This distinction between major party and minor party candidates, with regard
to the amount of federal funds they are eligible for, is the same concept as is
found in the dollar tax check-off program enacted last year for Presidential
elections.
4. Political Parties-The proposal outlines a specific financing ro'e for the
political parties. Each party could raise funds from the pub1ic for the purpose of
providing funds to candidates in the general elections. These funds would go into
a campaign account and could be used by the party to provide any amount up to
the ceiling for private funds for a candidate in the general e1ection. Thus in a
general House race, the Democratic or Republican nominee could raise his allow-
able private funds either in individual gifts of $250 or less, or alternatively
could get some or all of it from the party campaign account.
Individuals and groups would be free to give up to $100 to a party campaign
account in addition to being able to make private contributions up to $250 for
a House race and $500 for a Presidential race. Donations to a party, however,
cou1d not be earmarked to any specific candidates.
5. Enforcement-Enforcement would be carried out by an independent federal
e1ections commission with its own subpoena powers to enforce the law-. Penalties
for violations would include broad civil sanctions as well as criminal penalties;
civil fines would be available up to $100,000 and it would be poSSible to impose
sanctions jointly on both the candidate and those responsible for handling his
finances.
Citizens would be specifically authorized to file complaints with the federal
elections commission and to bring court actions if enforcement were not forth-
coming.
6. Administration-The public funds would come directly from general reve-
nues. Each candidate would designate one central campaign account at a federal
bank, either in his local community or wherever else he might choose. Public
funds would be deposited directly in this account by the government. All private
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contributions would also have to go into this account. Campaign expenditures
similarly would be made by writing checks on the campaign account. There would
be a specific bar to all cash transactions in the campaign over $50.
The central bank account would thus provide the equivalent of a complete set
of financial records and copies would go to the federal elections commission. In
addition, candidates would continue to file periodic disclosure reports to provide
the public with information concerning their financial activities.
All funds would be required to be spent for legitimate campaign expenses and
there would be a specific bar on the use of funds for any non-campaign purposes.
Candidates would have the freedom to determine in what manner they allocate
their spending for campaign purposes.
The proposed system would allow candidates to operate their campaign finances
in an expeditious and orderly manner at the local level. At the same time it
would provide complete records available for review and monitoring by the
federal enforcement agency and the voting public.
7. Constitutional Issues.-ln proposing a fundamental change in our system
of financing elections, nothing less than the integrity of our political system is
at stake. In upholding past laws involving fraud, bribery and corruption in the
electoral process, the Supreme Court has always recognized the necessity to
insure fair and equal participation by all citizens in the electoral process in
cases involving voters rights and reapportionment. Public financing legislation
would not invade rights of association protected by the First Amendment and
would enhance, not demean, protected First Amendment rights of free expression.
Specific safeguard are provided in the proposal to assure free expression for
issue-oriented groups which do not support or oppose candidates, such as the
American Civil Liberties Union, and to allow for limited independent activity
taken on behalf of a candidate but not at his suggestion or request.
EXHIBIT No. 3
COMMON CAUSE LEGAL MEMORANDUM ON THE CONSTITUTIONALITY OF PUBLIC
FINANCING FOE FEDERAL ELECTIONS
The fairness, honesty and basic integrity of elections and post-election decision-
making by elected officials is of paramount concerii in a democratic society. The
disclQsure requirements of the Federal Election Campaign Act of [071 and the
amendments passed by the Senate this year were important steps toward more
open and fair elections. Nevertheless, more fundamental reforms are necessary,
however, if the electoral process in the United States is to be freed from the
corrupting influence of campaign contributions.
The recent "Watergate" scandals have vividly illustrated the corrosive effect
on the American political process of large secret campaign contributions. These
assorted corruptions are only the latest and most dramatic examples of a less
obvious but chronic and systemic problem. In its report on thq Federal Election
Campaign Act of 1071, a House committee declared that the present system of
private financing of election campaign leads:
To a closed, insulated, self-perpetuating system, dominated by special
interests and unresponsive to the public will . . . which often creates the
impression that only the rich can run for public office, and that a candidate
can buy an election by spending large amounts of money in a cam-
paign. . . . [It] works an inequitable hardship on the candidate who cannot
compete with the resources of great wealth, but of even greater significance,
it is unfair to the electorate which is entitled to have presented to it for its
evaluation and judgment candidates from all walks of life and not just
those persons who, because of their wealth, can conduct a campaign which
resorts to techniques which are more appropriate to merchandizing a prod-
uct than to familiarizing the public with a candidate's qualities as a poten-
tial public official and his program for the country. H.R. Rep. No. 02-564
at 4, 02 Cong., 1st Sess. (1071).
In a democratic society, to win an election is to win political and economic
power. One commentator has recently written:
The citizen's act of voting and the election campaign which is designed
to influence it are of central importance in a democracy. The rules govern-
ing elections are the primary rules by which we live together in society and
by which the governed determine who their governors will be and what
policies they will pursue. Elections are democracy's primary means of re-
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400
solving group competition and of apportioning the costs and benefits of life
in society among competing interests. They are the basic mechanism whereby
the citizens make value judgments-the final and most authoritative means
for democratic choice-making. No democratic process is more important or
powerful, and, therefore no point of influence is more attractive to those
who would skew post-election policy to their private advantage. In add!.
tion, no aspect of democracy is more vulnerable.1
Pending before this committee are a number of proposals for funding of
campaign costs by the government and for establishing a ceiling on campaign
contributions and expenditures in both primaries and general elections. Although
each of the proposals differs on the specifics, they are basically similar in that
they recognize the need for dramatic revision of the way campaigns are financed.
Enactment of public finance legislation poses a number of constitutional ques-
tions, relating primarily to the possible infringement of the First Amendment's
freedom-of-speech and freedom-of-association guarantees.2 In order to be ef-
fective and still withstand these challenges, public financing legislation should
contain certain basic provisions. Candidates should be provided with an adequate
amount of money to finance campaigns and a realistic ceiling on campaign expend-
itures determined by the number of voting age residents in the relevant area
should be imposed in order to insure against the freezing out of the political
procss nonindumbents and their supporters. Candidates of major parties should
be given an unencumbered federal subsidy large enough to cover their necessary
expenses, while candidates of minor parties should be allotted a lesser amount
of federal support based on their strength in the last election or their showing in
the present election. Both types of candidates should then be free to raise addi-
tional money in small private contributions up to the specified maximum for the
election. Certain threshold eligibility requirements, such as a certain amount
of privately raised funds would have to be met to qualify for federal subsidies at
the primary stage, although a candidate ineligible for government funds would
still be free to raise campaign funds in small private contributions up to the
relevant ceiling. The total amount any individual should be allowed to contribute
for the use of any Presidential, Senate, and House candidate in primary and
general elections should be limited. Organized interest groups should be prohibited
from using any method to amass sums of money above the individual contributors
limit to support candidates for political office although organizations should still
be allowed to spend money to lobby, communicate with their members, and pub-
licize the need for legislation as long as their actions did not constitute endorse-
ment of a candidate. All expenditures which a candidate controls, either directly
or indirectly, should be charged against the candidate's allowable total.
If a citizen desired to engage in political activity for a candidate independently
of the candidate, he should be allowed to spend up the allowable limit on con-
tributions to a candidate in that election, but he should not then be able to make
a direct donation to the candidate as well. The limit on contributions should not
apply to time voluntarily spent working for a candidate. Citizens engaging in in-
dependent political activity for a candidate should not be able to pool their con-
tributions to fund an "independent" organization. Political parties should be al-
lowed to raise funds from the general public which could be used by the party to
provide up to the entire amount of private funding allowed to a candidate in the
general election.
The issues raised by these proposals may be grouped for purposes of discussion
into two categories. The limitations on individual contributions or upon expendi-
tures on behalf of a candidate, and the prohibitions against organizational pooling
of contributions in excess of the individual limitations and independent partisan
1 Fleishman, "Freedom of Speech and Equality of Political Opportunity: The Constitu-
tionality of the Federal Election Campaign Act of 1971," 51 NC. L. Rev. 389. 426 (1973).
2 For a discussion of the constitutional issues involved in the regulation of election
campaign practices, see Lobel, "Federal Control of Campaign Contributions," 51 Minn. L.
Rev. 1 (1966) ; Fleishman, "Freedom of Speech and Equality of Political Opportunity:
The Constitutionality of the Federal Election Campaign Act of 1971," 51 N. Car. L. Rev.
389 (1973) ; Rosenthal, Federal Regulation of Campaign Finance: S'ome Constitutional
Questions (1971): Redish, "Camnaign Spending Laws and the First Amendment," 46
N.Y.U. I,. Rev. 900 (1971) ; Court & Harris, "Free Speech Implications of Campaign
Expenditure Ceilings," 7 Harv. Civ. R.-Civ. Lib. Rev. 214 (1972). See also Court & Harris,
"Campaign Spending Regulation: Failure of the First Step," 8 Harv. J. Leg. 640 (1971)
Berry & Goldman. "Congress and Public Policy: A Study of the Federal Election Cam-
paign Act of 1971." 10 Harv. J. Leg. 331 (1973) Roady, "Ten Years of Florida's `Wha
Gave It-Who Got It' Law," 27 Law & Contemp. Prob. 434 (1962) ; Note, "Statutory Regu-
lation of Political Campaign Funds," 66 Harv. L. Rev. 1259 (1953).
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401
political activity raise the issue of the constitutionality of contribution limitations
and prohibitions. The limitation upon the amount a candidate may spend on his
campaign raises separate issues.
At times in the discussion which follows, the right of a political contrIbutor to
donate money to a candidate is grouped, for purposes of analysis, with the right
of a political candidate to spend money for his election or reelection; although
the right to give and the right to spend obviously entail different acts, the First
Amendment questions arising from government limitations of these two rights
are essentially similar. Moreover, a number of subsidiary issues are subsumed
under the basic question of the power to Congress to impose ceilings on contribu-
tions and expenditures. For example, in order to be effective, a public financing
system such as Common Cause advocates would necessarily entail prohibiting a
candidate's spending an unlimited amount of his own personal funds in an elec-
tion campaign. Since expenditure ceilings could otherwise be easily evaded by
wealthy candidates, it appears to be a fortiori within the power of Congress to
enact such a prohibition on the use of personal funds if the overall expenditure
ceiling is constitutional.
Until the enactment of the Federal Elections Campaign Act of 1911, federal
law had contained contribution and expenditure limitations for approximately
60 years, and 29 states now have some form of these ceilings in their corrupt
practices acts.3 These laws had as their primary function the dual goals of (1)
reducing the corrupting influence of large campaign contributions, and (2) reduc-
ing the costs of campaigns thus reducing the pressures to secretly evade the
limit on contributions. Due to virtual nonenforcement in the past of laws con-
taining contribution and spending ceilings, there is no federal case ruling in-
directly on the constitutionality of such limits, and there is only one state case
construing the validity of such ceilings, $tate v. Kohier, 200 Wis. 518, 228 N.W.
895 (1930), in which the Wisconsin Supreme Court upheld against constitutional
attack a statute limiting the amount which might be spent by candidates and
their personal campaign committees.4 Although these constitutional questions
merit serious discussion and careful analysis, we believe that public financing
of campaigns and contribution and expenditure limits clearly pass constitutional
muster under existing precedents. In fact, they foster and protect the exercise
of First Amendment freedoms in three ways: (1) they protect the rights of the
less affluent to express themselves by running for office; (2) they help prevent
the drowning out of all other political viewpoints by well financed candidates
and interest groups; and (3) they ensure the equality of the voting rights of
each citizen by limiting the influence on candidates of the large contributions.
(I) Despite certain communicative aspects, contributions of money to,
and expenditures of money by. political candidates partake more of action
than of speech and may be reasonably regulated under the police power of
the federal government.
The proposition that only "speech" and not "action" is protected by the First
Amendment is now discredited, and it is clear that the Amendment at times
covers more than sheer verbal communications. See e.g., West Virginia Board of
Education v. Barnette, 319 U.S. 024 (1943) (right to refuse to salute flag)
~tromherg v. California, 283 U.S. 359 (1931) (right to display a red flag)
NAACP v. Button, 371 U.S. 415 (1903) (right to solicit legal business). It is still
true, however, that the permissibility of regulating First Amendment rights
varies with their mode of expression, and that usually the nonverbal exercise
of such rights, particularly when joined with acts which are not necessarily
communicative, is more susceptible to regulation than is pure speech. Giving and
Fleishman. "Freedom of Speech and Equality of Political Opportunity: The Constitu-
tion"lity of the Federal Election Campaign Act of 1971," 51 N.C.L. Rev. 389, 450 (1973).
Wisconsin Supreme Court declared: "It is a matter of common knowledge that men of
limited financial resources aspire to public office. It is equally known that successful
candidacy often requires them to nut themselves under obligation to those who contribute
financial support. If such a candidate is successful, these obligations may be carried over
so that they color and sometimes control official action. The evident purpose of the act
is to free the candidates from the temptation to accept support on such terms and to place
candidates during this period upon a basis of enuality so far as their personal ambitions
are concerned, permitting them, however, to make an appeal on behalf of the princinles
for which they stand, so that such sunport as may voluntarily be tendered to the candidacy
of a person will be a support of principle rather than a personal claim upon the candidate's
consideration should he be elected. . . . It may be replied that the act seeks to throw
democracy back upon itself, and so induce spontaneous political action in place of that
which is produced by powerful nohitical and group organizations." State er rd. LaFollettee
v. Kohier, 200 Wis. 518, 228 NW. 895, 912 (1930).
PAGENO="0406"
402
spending money do not constitute acts of verbal communication. In the words
of Professor Freund, "We are dealing here not so much with the right of personal
expression or even association, but with dollars and decibels. And just as the
volume of sound may be limited by law, so the volume of dollars may be limited
without violating the First Amendment."
For First Amendment purposes, giving and spending money is communicative
action with a potential for disrupting normal political processes; in this respect,
it is analogous to picketing or demonstrating. In Cow v. Louisiana, 379 .U.S. 536,
555 (1965), the Supreme Court "emphatically" rejected the notion that the First
Amendment afforded the same kind of freedom to those who "communicate ideas
by patrolling, marching, and picketing on streets and highways" as it offers those
"who communicate ideas by pure speech." The Court upheld the facial con-
stitutionality of a Mississippi statute which banned picketing in such a manner
as to obstruct or interfere with free entrance to and exit from public buildings.
En Cameron v. Johnson, 390 U.S. 611 (1968), it declared that such communicative
activity was sufficiently "intertwined" with action to be regulable, and it em-
phasized that such a statute was "a valid law dealing with conduct subject to
regulation so as to vindicate important interests of society[;] . . . the fact that
free speech is intermingled with such conduct does not bring it within con-
stitutional protection." 390 U.S. at 617. In a second Cow v. Louisiana case, 379
U.S. 559 (1965), the Court upheld against First Amendment attack the con-
victions of defendants for violating State statutes prohibiting breach of the
peace, obstructing public passages, and picketing near a court house: "The con-
duct which is the subject of this statute-picketing and parading-is subject to
regulation even though intertwined with expression and association." 379 U.S.
at 563. The Court's explanation of its rationale in this case is applicable to the
question of the permissibility of limiting campaign contributions and expendi-
tures: "We are not concerned here with such a pure form of expression as news-
paper comment or a telegram by a citizen to a public official. We deal in this case
not with free speech alone, but with expression mixed w-ith particular conduct."
379 U.S. at 564. See also Central Hardware Co. v. National Labor Relations
Board, 407 U.S. 539 (1972) ; Lloyld Corp. v. Tanner, 407 U.S. 551 (1972).
That not all communicative conduct is protected by the First Amendment is
clear from the Supreme Court's decision in United S'tates v. O'Brien, 391 U.S.
367 (1968), upholding the constitutionality of a provision of the Selective Service
Act which made it a crime to knowingly destroy a Selective Service registration
certificate. The Court held that draft card burning was not "symbolic speech"
protected by the First Amendment: "We cannot accept the view that an ap-
parently limitless variety of conduct can be labeled `speech' whenever the person
engaging in the conduct intends thereby to express an idea." 391 U.S. at 376.
Campaign contributions and expenditures are communicative only in the sense
that burning a draft card is communicative; all such acts are subject to regula-
tion because, in the words of the O'Brien Court, "`speech' and `nonspeech' ele-
ments are combined in the same course of conduct." 391 U.S. at 376. The Court
recently held that a State's prohibition of various forms of explicit sexual enter-
tainment by live performers in establishments selling liquor did not violate the
First Amendment:
"{A]s the mode of expression moves from the printed page to the com-
mission of public acts which may themselves violate valid penal statutes,
the scope of permissible state regulations significantly increases. States may
sometimes proscribe expression which is directed to the accomplishment
of an end which the State has declared to be illegal when such expression
consists. in part, of `conduct' or `action'." California v. LaRve, 41 U.S.L.W.
4039, 4042 (:1972).
Many kinds of "communications," such as deceptive advertising,5 certain kinds
Commentary of Pro. Paul A. Freund, the Harvard Law School, in Rosenthal, Federal
Regulation of Campaign Finance: $ome Constitutional Questions, 72 (1971).
6 The Court has held that "purely commercial advertising" is subject to much greater
regulation than communication which is not inspired by a profit motive, Valentine v.
Christensen. 316 15.8. 52, 54 (1942) ; Breard v. City of Alerandria, 241 U.S. 622. 642, 643
(1951), although the fact that the dissemination of a communication takes place under
commercial auspices does not remove it from all First Amendment protection. Sma~h v.
California. 361 U.S. 147. 150 (1959) New York Times Co. v. S'nlliran, 376 U.S. 254,
265-266 (1964). The power of the FCC to ban cigarette advertising from television has
been upheld. Banzlrnf v. FCC, 405 F. 2d 1082 (CA DC 1968), cert. denied. 396 U.S. 842
(19691. These cases imply that the federal government has power to require that political
advertising on television and radio be for certain minimum periods (e.g.. .30 seconds), on
the theory that very short "spot" ads are (like commercial advertising) intended simply
to condition rather than inform and are likely to be somewhat deceptive because they
convey a simplistic "Image" of a candidate.
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403
of libels, the false activation of a burglar alarm, the shouting of "fire" in a
crowded theatre (c.f. Schenck v. United States, 249 U.S. 47, 51 (1919) (Holmes
J.)) may be criminalized without violating the First Amendment because they
cause directly or embody themselves evils which the government is authorized
to prevent. That a reasonable limitation on campaign contributions and expendi-
tures is not barred by the First Amendment is indicated by the constitutionality
of the federal anti-bribery law, 18 U.S.C. § 201(e). Cf United States v. Brewster,
408 U.S. 501 (1972) (upholding the constitutionality of the indictment of a
Senator for soliciting and receiving a bribe). A bribe is certainly a form of direct
and unequivocal "communication," but no oiie has seriously suggested that the
First Amendment protects it. Anti-bribery statutes are constitutional because
they are aimed at action which, though communicative, violates notions of public
policy. Campaign contributions are all too often only an attenuated form of
bribery: the donation of money is likely to communicate to the candidate the
information that the donor seeks either a direct quid pro quo (such as favorable
action by an administrative agency) or, more usually, an indirect form of in-
fluence (such as access or consultation when certain decisions are pending).
(II) There is no constitutional right to make unlimited contributions to a
political campaign or for a candidate to expend as much money as be chooses
in an effort to be elected or reelected.
In order to foster "[e]ffective advocacy of both public and private points of
view, particularly controversial ones," NAACP v. Alabama, 357 U.S. 449, 460
(1958), the Supreme Court has recognized an independent constitutionality pro-
tected right of association, see e.g., Louisiana ex rel. Gremillion v. NAACP, 366
U.S. 293 (1961).
In order to argue that a limitation on campaign contributions/expenditures is
unconstitutional because it infringes this right of association or violates the right
to freedom of speech an individual is directly guaranteed by the First Amend-
ment, however, it is necessary to demonstrate that an individual possesses an
absolute discretion to make as large a political campaign contribution or expendi-
ture as he wishes. A number of Supreme Court holdings establish the power of
Congress to limit, in certain circumstances, the associational rights and the ability
to participate in the political process of certain individuals and groups.
Where the governmental interest is compelling, the Court has upheld registra-
tion statutes which require the disclosure of identity of certain individuals or the
disclosure of membership in certain organizations even though such dsclosure
will limit and impair the ability of such individuals and organizations to exercise
their political and civil rights. See e.g., Communist Party of' the United States v.
Subversive Activities Control Board, 367 U.S. 1 (1961) (registration of Com-
munist Party officials and members) ; T7iereck v. United States, 318 U.S. 236
(1943), Rabinowitz v. Kennedy, 376 U.S. 605 (1964) (registration of foreign
agents and of activities engaged in on behalf of a foreign principal); New York
ex re. Bryant v. Zimmerman, 278 U.S. 63 (1929) (registration of Ku Klux Klan
members). Cases striking down State attempts at compelling disclosure of
NAACP membership lists (e.g., NAACP v. Alabama, 357 U.S. 499 (1958) ; Louisi-
ana cx re. Gremillion v. NAACP, 366 U.S. 293 (1961)) may be distinguished on
the ground that in such cases, no valid State interest in disclosure was evident:
in the context of Southern hostility to civil rights organizations, the true purpose
of such laws was the destruction of the NAACP.
The compelling State interest which campaign contribution/expenditure limi-
tations foster was described by the Court in Burroughs and Cannon v. United
States, 290 U.S. 534 (1934), a case which held constitutional the disclosure-of-
contributors requirements of the 1925 Corrupt Practices Act: "Congress reached
the conclusion that public disclosure of political contributions, together with the
names of contributors and other details, would tend to prevent the corrupt use
of money to affect elections. The verity of this conclusion reasonably cannot be
doubted." 290 U.S. at 548. The Court adverted to this same rationale when it up~
held the constitutionality of a statute requiring the registration of lobbyists in
United States v. Harriss, 347 U.S. 612 (1954) : "Congress has . . . merely pro-
vided for a modicum of information from those who for hire attempt to influence
legis1ation . . . It wants only to know who is being hired, who is putting up
the money, and how much. It acted in the same spirit and for a similar purpose in
passing the Federal Corrupt Practices Act-to maintain the integrity of a basic
governmental process." 347 U.S. at 625. Although these two cases deal with dis-
closure requirements, their rationale is applicable to a law establishing a ceiling
on political campaign contributions and expenditures because the government is
PAGENO="0408"
404
aiming at the same serious evils (corruption, undue influence of special interest
groups) and because the incidental effect of limiting political participation is
also the same, although in the former cases it stems simply from the effects of dis-
closure rather than direct governmental restraint.
Two other lines of precedents indicates that there is no constitutional right to
quantitatively unlimited participation in the financing of federal elections. The
Supreme Court has thrice upheld the validity of the 1925 Corrupt Practices Act's
flat prohibition of union contributions and expenditures in connection with politi-
cal campaigns, 18 U.S.C. § 610, although it has avoided passing upon the constitu-
tional questions raised by such a prohibition. United States V. ClO, 335 U.S. 160
(1948); United States v. UAW, 352 U.S. 567 (1967) ; Pipefltters' Local 562 v.
United States, 407 U.S. 385 (1972). There have been no Supreme Court cases
dealing with § 610's ban on corporate political contributions or expenditures, but
a lower court has upheld the predecessor of § 610 against constitutional attack,
United States v. United States Brewers' Assn., 239 F. 163 (W.D. Pa. 1916) ; but
cf. United States v. First National Bank of Cincinnati, 329 F. Supp. 1251 (S.D.
Ohio 1971), and its validity as applied has also been sustained, although the
constitutional question was avoided. United States v. Lewis Food Co., 366 F.
2d 710 (CA 9 1966). See also Egan v. United States, 137 F. 2d 369 (CA 8 1943)
(upholding constitutionality of Public Utility Holding Company Act's ban on
political contribution by registered public utility companies). If an absolute ban
on the political activities of groups of individuals organized into unions and cor-
porations is permissible, it would seem a fortiori acceptable to set a ceiling
on contributions and expenditures by individuals. It may, of course, be argued
that the concentration of funds in organizations makes their contributions and
expenditures more susceptible to regulation than those of individuals. There are
two answers to this argument, however: organizations are themselves entitled
to assert First Amendment rights, G-ros Jean v. American Press Co., 297 U.S.
233 (1936); New York Times Co. v. Sullivan, 376 U.S. 254 (1964), and the asso-
ciational rights protected by the First Amendment have been held to reach con-
tributors to organizations, Bates v. City of Little Rock, 361 U.S. 516 (1961)
United States v. Runwly, 345 U.S. 41 (1953). The cases which have arisen under
§ 610 do, therefore, support the constitutional validity of the proposed contribu-
tion/expenditure limitations because they arise out of a context in which all the
First Amendment rights applicable to individuals could be asserted.
The second line of precedents upholding limitations on political activity are
those eases sustaining the constitutionality of statutes such as the Hatch Act,
5 U.S.C. § 7324, which prohibit government employees from engaging in certain
political activities. In United Public Workers v. Mitchell, 330 U.S. 75 (1947)
(opinion of Reed J.), a plurality of the Supreme Court upheld the Hatch Act's
flat prohibition of officers and employees of the Executive branch from taking "an
active part in political management or in political campaigns." The Court sus-
tained the discharge of a roller in the United States Mint who had taken part in
election day campaigning, stating that a law such as the Hatch Act might be
necessary to preserve the integrity of the government:
"To declare that the present supposed evils of political activity are beyond
the power of Congress to redress would leave the nation impotent to deal with
what many sincere men believe is a material threat to the democratic system.
Congress is not politically naive or regardless of public welfare or that of the
employees. [The Hatch Act] leaves untouched full participation by employees
in political decisions at the ballot box and forbids only the partisan activity of
federal personnel deemed offensive to efficiency. With that limitation only,
employees may make their contributions to public affairs or protect their own
interests as before the passage of the Act.. . . Congress may regulate the poli-
tical conduct of government employees `with reasonable limits' even though
the regulation trenches to some extent upon unfettered political action. 330
15.5. at 99-102.~
Recently, the Hatch Act limitations upon political activity by federal emiiloyees
was challenged as vague and overhroad and therefore in violation of the United
States Constitution, relying upon First Amendment cases decided since United
Public Workers v. Mitchell, supra. The Supreme Court in United States Civil
Service Commission v. National Association of Letter Carriers, 41 U.S. LW. 5122
(June 26, 1973) affirmed its earlier decisions in United Public Workers v. Mitchell,
Oklahoma v. Civil Service Commission, aao ITS. 127 (1947) decided the same day.
used a similar rationale to sustain the constitutionality of a ban on political activity by
federally financed state officials.
PAGENO="0409"
405
supra, and ruled that the Hatch Act was not unconstittuionally overbroad or
vague. In so doing, the Court stated:
Neither the right to associate nor the right to participate in political acti-
vitives is absolute in any event. (Citations omitted.) Nor are the manage.
ment, financing and conduct of political campaigns wholly free from gov~
ernmental regulation. We agree with the basic holding of Mitchell *that
plainly identifiable acts of political management and political campaigning
may constitutionally be prohibited on the part of federal employees. 41 U.S.
LW. at 5127-28.
The Court has upheld the validity of other similar statutes. In United states
v. TVurzbach, 280 U.S. 396 (1930), the Court sustained the constitutionality of a
law which forbade members of Congress from receiving contributions "for any
political purpose whatever" from any other federal employees. Justice Holmes
declared shortly, "It hardly needs argument to show that Congress may provide
that its officers and employees neither shall exercise nor be subjected to pressure
for money for political purposes, upon or by others of their kind, while they retain
their office or employment." 280 U.S. at 398-399. In Ea parte Curtis, 106 U.S. 371
(1882), the Court held that Congress might, within reasonable limits, regulate
the political conduct of its employees, and sustained the constitutionality of a law
which forbade government employees from giving or receiving money from other
government employees for political purposes. Such a law was intended "to pro-
mote efficiency and integrity in the discharge of official duties, and to maintain
proper discipline in the public service. Clearly such a purpose is within the just
scope of legislative power, and it is not easy to see why the act now under con-
sideration does not come fairly within the legitimate means to such an end." 106
U.S. at 373. Er parte Curtis is a fiat holding that there is no constitutional bar to
the prohibition of political contributions by government employees as long as the
exercise of the ballot is not restrained. It is not clear that the broad statements of
Curtis are still good law, but it at least stands for the proposition that contribu-
tions, because of their manifest tendency to foster corruption, extortion, and illegal
privilege, are more subject to regulation than the right to vote and to run for office.
In United Public Workers v. Mitchell, supra, for example, the Court relied heavily
on Er parte Curtis, stating that: "The conclusion of the Court [in Curtis] that
there was no constitutional bar to regulation of such financial contributions of
public servants as distinguished from the exercise of political priveleges such as
the ballot, has found acceptance in the subsequent practice of Congress and the
growth of the principle of required political neutrality for classified public serv-
ants as a sound element for efficiency." 330 U.S. at 97 (footnote omitted).
An important factor in these cases is that the restrictions on political activity
apply to government employees, but the Court's rationale has been significantly
broader than the protection of such employees from political extortion. Laws
against corruption and bribery antedate such statutes, and would seem to make
unnecessary, except that the Court upheld the power of Congress to take broad
prophylactic measures to insure the integrity of government officials. Further-
more, the employment relation to the government is not enough to justify the
restraints if they are otherwise unconstitutional, since the Court has clearly
prohibited "unconstitutional conditions" on public benefits: "[T]he theory that
public employment which may be denied altogether may be subjected to any
conditions, regardless of how unreasonable, has been uniformly rejected."
Keyisltian v. Board of Regents, 385 U.S. 589, 605-906 (1967).
(III) Ceilings on political campaign contributions and expenditures are
constitutional because they are a reasonable regulation of the manner in
which First Amendment rights may be exercised.
The campaign financing legislation which Common Cause advocates would
not prohibit the making of political contributions and expenditures but would
instead simply impose limitations on the overall amounts which could be con-
tributed and spent. Common Cause supports a ceiling upon the amount that any
one individual may contribute to a candidate and a limit upon the amount
that may be spent upon a candidate's behalf. In addition Common Cause supports
a prohibition upon all organized interest groups from using any method to
amass larger sums of money to use to support candidates for political office.
Yet Common Cause supports permitting independent expenditures upon a candi-
date's behalf, even if done in cooperation with others, so long as the aggregate
expenditures do not exceed the ceiling on individual contributions. Common
Cause does not favor imposing a limitation on organizations, such as the Ameri-
can Civil Liberties Union, which address themselves to public issues and do
not endorse or support candidates for office; they can spend money to influence
PAGENO="0410"
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legislation and even place advertisements taking a public position so long as
their actions do not constitute and endorsement of or opposition to a candidate.
Additionally, Common Cause advocates the exclusion from the limitation or~
contributions the cost of communication by an organization, such as a tra(1f
association, corporation, labor union, or citizens' group, exclusively with its
members on any subject, even regarding whether a particular candidate is worthy
of support, so long as the money is exclusively that of the organization and
not contributed from an outside source for such purposes.
These limitations are designed to eradicate the undue influence of large con-
tributions and unlimited expenditures while not prohibiting the legitimate exer-
cise of First Amendment freedoms.
This legislation would thus be far less drastic than the flat prohibition against
a union or corporation making any campaign contributions or expenditures con-
tained in 18 U.S.C. § 610. "[Alithough the rights of free speech and assembly
are fundamental, they are not in their nature absolute." Whitney v. California,
274 U.S. 357, 373 (1927) (Brandeis, J. Concurring). The Supreme Court has
frequently held that First Amendment rights may be reasonably regulated accord-
ing to the time, place, and manner of their exercise. Cameron v. Johnson, 390 U.S.
611, 617 (1968) ; Adderley v. Florida, 385 U.S. 39, 48 (1966) ; Con v. New Hamp-
shire, 312 U.S. 569, 574-576 (1941) ; Con v. Louisiana, 379 U.S. 536, 555 (1965).
The proposed contribution/expenditure ceilings may be regarded as simply a
nondiscriminatory regulation of the manner in which First Amendment rights
are exercised.
Such limitations are neutral with respect to the content of political expression.
They do not operate censorially to suppress unpopular views, and they do not
single out persons who advocate particular political beliefs, or penalize anyone
for association with persons or organizations oriented to such advocacy. See e.g.,
United states v. Robel, 389 U.S. 258, 278 (1967) ; Keyishian v. Board of Regents,
385 U.S. 589, 604 (1967). Like the "Fairness" and "Equal Time" doctrines
enforced by the Federal Communications Commission, the contribution/expendi-
tare limitations apply in exactly the same way regardless of the viewpoint sought
to be advocated or the beliefs of the person making the contribution or expendi-
ture. See Bed Lion Broadcasting Co. v. Federal Communications Commission,
395 U.S. 367, 392 (1969). Finally, these ceilings do not represent a sweeping proi
hibition of all political expression through contributions and expenditures, but
instead modulate the level of political discourse so that more voices may partici-
pate and so that weak voices may not be drowned out. These ceilings are unlike
the State corrupt practices legislation which the Supreme Court unanimously
held unconstitutional in Mills v. Alabama, 384 U.S. 214 (1966). In that case, an
Alabama law had made it a crime "to do any electioneering or to solicit any
votes . . . in support of or in opposition to any proposition that is being voted on
on the day on which the election affecting such candidates or propositions is
being held." The statute had been applied to convict a newspaper editor for
writing an editorial on election day regarding a question on the ballot. The
Court asserted, "no test of reasonableness can save a state law from invalidation
as a violation of the First Amendment when that law makes it a crime for a
newspaper editor to do no more than urge people to vote one way or another in a
publicly held election." 384 U.S. at 219-220.
It is clearly established that differences in the media of communication justify
differences in the First Amendment standards applied to them. Red Lion Broad-
casting Co. v. Federal Communications Commission, supra, at 386; Joseph Bur-
styn, Inc. v. Wilson, 343 U.S. 495, 503 (1952). In campaign finance, the medium
of expression is money, and for large contributors, the medium is, indeed, the
message. The proposed ceilings on campaign contributions and expenditures
resemble the municipal ordinances regulating sound trucks upheld in Kovacs
v. Cooper, 336 U.S. 77 (1948) (opinion of Reed J.). See also California v. LaRue,
41 U.S.L.W. 4039, 4042, n. 4 (1972). Although there was no majority opinion in
Kovacs, the case was approved and explicated by a Court majority in Red Lion
Broadcasting Co. v. Federal Communications Commission, supra, at 387 in lan-
guage which might well apply to limitations on private campaign financing:
"[T]he ability of new technology to produce sounds more raucous than
those of the human voice justifies restrictions on the sound level, and on the
hours and places of use, of sound trucks so long as the restrictions are rea-
sonable and applied without discrimination. . . . [T]he Government may
limit the use of sound amplifying equipment potentially so noisy that it
drowns out civilized private speech. . . . The right of free speech of a broad-
PAGENO="0411"
407
caster, the user of a sound truck, or any other individual does not embrace a
right to snuff out the free speech of others."
See also Associated Press v. United States, 326 U.S. 1, 20 (1945).
(IV) Any restriction upon the exercise of First Amendment rights im-
posed by limitations upon campaign contributions and expenditures is justi-
fied by the compelling and overriding governmental interest in preserving
the integrity of the electoral process and in preventing the improper influence
of money on the decision-making of public officials.
The First Amendment freedoms of speech, association, press, religion, assembly,
and petition have traditionally been given special protection because they are
the indispensable preconditions for the exercise and protection of all other rights
and freedoms. Curtis Publishing Co. v. Butts, 388 U.S. 130, 145 (1967). Although
the proposition that First Amendment rights occupy a "preferred" position, see
Thomas v. Collins, 323 U.S. 516, 530 (1945), has been criticized, see
Kovacs v. Cooper, 336 U.S. 77, 90 (1949) (Frankfurter J. concurring), a number
of constitutional doctrines indicate the elevated and specially protected status
of such rights. Cf. e.g., the "clear and present danger" rule, Brandenburg v. Ohio,
395 U.S. 444, 447 (1969) ; Dennis v. United States, 341 U.S. 494, 510 (1950); the
overbreadth doctrine, United States v. Robel, 389 U.S. 258, 265-266 (1967) ; nega-
tive presumptions, Speiser v. Randall, 357 U.S. 513, 526 (1958) ; the alternative
means test, Aptheker v. Secretary 0 State, 378 U.S. 500, 512 (1964). First
Amendment rights are said to need "breathing space" to survive, Thomas v.
Collins, 323 U.S. 516, 530 (1945), because they are "delicate and vulnerable,"
NAACP v. Button, 371 U.S. 415, 433 (1963), and because their exercise is easily
deterred or "chilled" by governmental action. Dombrowski v. Pfister, 380 U.S.
479, 486-487 (1965). Therefore, the Supreme Court has ruled that the exercise
of First Amendment rights may be limited only if the government demonstrates
reasons or interests which are "compelling," NAACP v. Button, supra at 438
(1963), "substantial," NAACP v. Alabama, 357 U.S. 449, 464 (1958), "subordinat-
ing," Bates v. City of Little Rock, 361 U.S. 516, 524 (1960), "paramount," Thomas
v. Collins, supra at 530 (1945), "cogent," Bates v. City of Little Rock, supra,
at 524, "strong," Sherbert v. Verner, 374 U.S. 398, 408 (1963), or "overriding
and compelling," Gibson v. Florida State Investigating Comm., 372 U.S. 539,
546 (1963). The Court also requires that the means chosen to limit the exercise
of First Amendment rights be "precise," Keyishian v. Board of Regents, 385 U.S.
589, 603 (1967), have as narrow an impact as possible, NAACP v. Button, supra,
at 430, and not be vague, overbroad or indiscriminate in their sweep, Elf brandt
v. Russell, 384 U.S. 11, 18 (1965) ; Aptheker v. Secretary of State, supra, at
512. Finally, it must be established by the government that no "less drastic
means" exist which might be alternatively used to implement the State's interest
without infringing First Amendment rights. Shelton v. Tucker, 364 U.S. 479, 488
(1960) ; United States v. Robe!, supra, at 265.
Whatever the adjectival test chosen to describe the nature of the interest which
the government must demonstrate in order to limit the exercise of First Amend-
ment rights, it is clear from the Court's own language in numerous cases that
the preservation of the integrity of the electoral process from the corrupting
effect of money is a "compelling and overriding" State interest. There have been
no Supreme Court holdings dealing directly with the constitutionality of cam-
paign contribution/expenditure limitations, but the Court has often asserted
that Congress has broad authority to protect American political institutions
against "the corroding effect of money employed in elections by aggregated
power": "Speaking broadly, what is involved here is the integrity of our
electoral process, and, not less, the responsibility of the individual citizen for
the successful functioning of that process. [A case involving 18 U.S.C. § 610, ban-
ning union political contributions and expenditures] thus raises issues not less
than basic to a democratic society." United States v. UATV, 332 U.S. 567, 582,
570 (1957). The following quotations indicate the high priority and presumptive
constitutionality the Court has accorded to laws aimed at preventing fraud
and corruption in the electoral process:
That a government whose essential character is republican, whose execu-
tive head and legislative body are both elective, whose most numerous and
powerful branch of the legislature is elected by the people directly, has no
pow-er by appropriate laws to secure this election [of the President] from
the influence of violence, of corruption, and of fraud, is a proposition so
startling to arrest attention and demand the gravest consideration.
PAGENO="0412"
408
If this government is anything more than a mere aggregation of delegated
agents of other States and governments, each of which is superior to the
general government, it must have the power to protect the elections on which
its existence depends from violence and corruption.
If it has not this power it is left helpless before the two great natural
and historical enemies of all republics, open violence and insidious corruption.
Ba parte Yarbrough, 110 U.S. 651, 657-658 (1884) (emphasis added).
The Congressional act under review seeks to preserve the purity of presi-
dential and vice presidential elections.
The President is vested with the executive power of the nation. The
importance of his election and the vital character of its relationship to
and effect upon the welfare and safety of the whole people cannot be too
strongly stated. To say that Congress is without power to pass appropriate
legislation to safeguard such an election from the improper use of money to
influence the result is to deny to the nation in a vital particular the power
of self protection. Congress, undoubtedly, possesses that power, as it possesses
every other power essential to preserve the department and institutions of
the general government from impairment or destructions whether threatened
by force or by corruption.
Burroughs c~ Cannon v. United States, 290 U.S. 534, 545-548 (1934) (emphasis
added).
It cannot be doubted that these comprehensive words [of article I of
the Constitution which grant Congress power to regulate the "times, places,
and manner" of holding Congressional elections] embrace authority to
provide a complete code for congressional elections, not only as to times
and places, but in relation to notices, registration, supervision of voting,
protection of voters, prevention of fraud and corrupt practices, counting of
votes, duties of inspectors and canvassers, and making and publication of
election returns; in short, to enact the numerous requirements as to procedure
and safeguards which experience shows are necessary in order to enforce
the fundamental right involved.
Smiley v. Hoim, 285 U.S. 355, 366 (1932) (emphasis added). See also Eco parte
Siebold, 100 U.S. 371, 387 (1880).
It seems clear that ceilings on campaign contributions and expenditures are
not vague or imprecise. Nor are such prohibitions overbroad because they indis-
criminately suppress activity wihch can be constitutionally forbidden and that
which cannot, cf. United States v. 1?obel, supra at 265, although admittedly the
overbreadth analysis necessitates a judgment as to the size of contributions
which are likely to have a corrupting effect on the political process. This is an
area in which the Court should properly defer to the expertise of Congress,
however, as it has done in cases involving other election laws. In United States
v. Classic, 313 U.S. 299, 320 (1941), the Court declared:
"`Let the end be legitimate; let it be within the scope of the Constitution,
and all means which are appropriate, which are plainly adapted to that end,
which are not prohibited, but consist with [sic] the letter and spirit of the
Constitution, are constitutional.' McCulloch v. Maryland, 4 Wheat, 310,
421. That principle has been consistently adhered to and liberally applied,
and extends to the congressional power by appropriate legislation to safe-
guard the right of choice by the people of representatives in Congress."
Finally, there are no alternative means available to accomplish the task of such
ceilings, since the very evil which Congress is seeking to extirpate is the corrupt-
ing effect of money. Disclosure laws alone are not adequate because even if en-
forced, they will not prevent large contributors from seeking to influence candi-
dates through their contributions. The judgment of Congress that no alternative
means exist to protect the electoral process will be given great deference by the
Court, particularly in light of Congress' long experience with disclosure require-
ments:
"The power of Congress to protect the election of President and Vice Pres-
ident from corruption being clear, the choice of means to that end presents
a question primarily addressed to the judgment of Congress. If it can be
seen that the means adopted are really calculated to attain the end, the de-
gree of their necessity, the extent to which they conduce to the end, the
closeness of the relationship of the means adopted and the end to be attained
are matters for congressional determination alone."
PAGENO="0413"
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Burroughs d~1 Cannon v. United States, supra at 547-548.
(V) Any restriction upon the exercise of First Amendment rights imposed
by limitations upon campaign contributions and expenditures is justified by a
governmental interest in effectuating the First Amendment rights of less
affluent citizens (1) by protecting the ability of even poor candidates to run
for office, (2) by preventing the drowning out of other political viewpoints
by the best financed voices, and (3) by ensuring the equality of the voting
rights of less affluent citizens by limiting the influence on candidates of
affluent contributors.
In previous sections, the ceilings on campaign contributions and expenditures
have been defended negatively, in the sense that the evils at which such legisla-
tion is aimed have been demons:trated to justify the incidental infringement of
the First Amendment rights of contributors or candidates who wanted to give
or spend more than the ceilings allowed. But the legislation Common Cause
advocates also has an important positive impact on the exercise of the First
Amendment rights of many citizens who are now prevented from effectively
participating in the political process. Many lack the good fortune to possess a
good fortune, and this handicaps both their ability to run for office (ef. the
withdrawal from candidacy, allegedly for insufficient funds, of Eugene Nickerson
from the 1969 gubernatorial race in New York and Senator Fred Harris from the
presidential race in the spring of 1971) and their ability to communicate their
views to their elected representatives on an equal basis with large contributors.
The contribution/expenditure limitations implement true democratic self-govern-
ment by opening the political process to all citizens, regardless of their personal
wealth. As John Stuart Mill wrote:
We need not suppose that when power resides in an exclusive class, that
class will knowingly and deliberately sacrifice the other classes to them-
selves; it suffices that, in the absence of its natural defenders, the interest
of the excluded is always in danger of being overlooked; and, when looked
at is seen with different eyes from those of the person whom it directly
concerns.
J. S. Mill, Consideration on Representative Government 67 (1875).
The proposed campaign finance legislation fosters and protects the exercise of
First Amendment freedoms in three ways: (1) it protects the rights of the less
affluent to express themselves by running for office; (2) it helps prevent the
drowning out of all other political viewpoints by well financed candidates and in-
terest groups; and (3) it ensures the equality of the voting rights of each citizen
by limiting the influence on candidates of the large contributor.
As the costs of campaigning have skyrocketed, it has become almost an
unwritten amendment to the Constitution that only those Americans with
money or access to it may participate in governing. The question is not whether
wealthy political representatives can provide dedicated and compassionate lead-
ership. The point is rather that each citizen should have an equal opportunity
to participate in the electoral process. As the Supreme Court declared in
Kramer v. Union School District, 395 U.S. 621, 626 (1969), "Any unjustified
discrimination in determining who may participate in political affairs
undermines the legitimacy of representative government." Partial government
financing of campaigns will enable candidates to run for office even though they
are not themselves wealthy and even if they do not possess wealthy backers.
The government's interest in protecting the openness of the political process
against racial discrimination is well established, see e.g., Terry v. Adams, 345
U.S. 461 (1953); Smith v. Aliwi-ight, 321 U.S. 649 (1944), and this rationale
extends to the prevention of other invidious and irrational barriers to participa-
tion in democratic self government. As the Court remarked in invalidating the
poll tax, "Wealth, like race, creed, or color, is not germane to one's ability to
participate intelligently in the electoral process." Harper v. T7iryinia Board of
Elections, 383 U.S. 663, 668 (1966).
As the sound truck case, Kovacs v. Cooper, 336 U.S. 77 (1948) (opinion of
Reed J.) makes clear, the First Amendment does not guarantee the right of
the loudest voice to drown out all others. One authority has noted that "the
most important effect of money in a political campaign is not that the candidate
with the most money will win, but that the candidate with the lesser amount
of money will not be able to present his case to undecided voters." Lobel, "Fed-
eral Control of Campaign Control," 51 ATinn. L. Rev. 1, 3 (1966). "It is now
well established that the First Amendment protects the right to receive informa-
PAGENO="0414"
410
tion and ideas." Stanley `v. Georgia, 394 U.S. 557, 564 (19439). Spending ceilings
help insure a balanced flow of differing points of view to the public; by keeping
any person or group from flooding the media with material advocating a single
point of view, the limits prevent a candidate from destroying, by sheer volume
instead of reason, the effectiveness of the communications of other candidates.
In order to protect the information flow to the public, the Government is author-
ized to act affirmatively to insure that the First Amendment rights of all citizens
to receive a variety viewpoints are respected. In a medium of technological
scarcity, such as radio or television, the government has been allowed to enforce
such regulations as the Fairness and Equal Time doctrines on the ground that
the public has a right "to receive suitable access to social, political, esthetic,
moral and other ideas and experiences." Red Lion Broadcasting Co. v. FCC,
395 U.S. 367, 390 (1969). One of the justifications for applying the antitrust
laws to newspapers has been to prevent a single source from controlling all the
channe1s of newspaper communication with the public:
It would be strange indeed, however, if the grave concern for freedom
of the press which prompted adoption of the First Amendment should be
read as a command that the government was without power to protect
that freedom. The First Amendment, far from providing an argument against
application of the Sherman Act, here provides powerful reasons to the
contrary. That Amendment rests on the assumption that the widest possible
dissemination of information from diverse and antagonistic sources is es-
sential to the welfare of the public, that a free press is a condition of a
free society. Surely a command that the government itself shall not impede
the free flow of ideas does not afford non-government combinations a refuge
if they impose restraints upon the constitutionally guaranteed freedom.
Freedom. to publish means freedom for all and not for some. Freedom to
publish is guaranteed by the Constitution, but freedom to combine to keep
others from publishing is not. Freedom of the press from governmental
interference under the First Amendment does not sanction repression of
that freedom by private interests. The First Amendment affords not the
slightest support for the contention that a combination to restrain trade
in news and views has any constitutional immunity.
Associated Press v. United States, 326 TJ.S. 1. 20 (1945). See also Citizen Pnb-
lishing Co. v. United States, 394 U.S. 131, 139 (1969).
Even the associational rights of organizations must give way when necessary
to protect the First Amendment rights of free expression of their members.
Railway Employees' Department v. Hanson, 351 U.S. 225 (1956) ; International
Association of Machinists v. Street, 367 U.S. 740 (1961) ; Lathrop v. Donohue,
367 U.S. 820 (1961).
Finally, the campaign financing legislation Common Cause proposes will en-
sure the equality of votes cast in primary and general elections, an interest the
Supreme Court has recognized not only in the reapportionment cases, see e.g.,
Baker v. Carr, 369 U.S. 186 (1962), Reynolds v. Sims, 377 U.S. 533 (1964), but
in cases Overturning State laws that imposed financial burdens (see Harper v.
Virginia Board of Elections, 383 U.S. 063 (1966)) and property qualifications
(see City of Phoenia~ v. Kolodziejski, 399 U.S. 205 (1970) ; Cipriano v. City of
Houma, 395 U.S. 701 (1969)) on the right to vote. The Court has asserted that
"The right to vote freely for the candidate of one's choice is of the essence of a
democratic society, and any restrictions on that right strike at the heart of rep-
resentative government," Reynolds v. Sims, supra, at 543, and that "No right is
more precious in a free country than that of having a voice in the election of
those who make the laws under which, as good citizens, we must live. Other
rights, even the most basic, are illusory if the right to vote is undermined."
Wesberry v. Sanders, 376 U.S. 1, 17 (1964). Limitations on contributions help
equalize the weight of each ballot cast in much the same way as does redistrict-
ing to ensure that legislative districts have equal number of voters. Dollars
magnify the voting power of the big contributor. Large donations almost in-
evitably buy increased influence over and access to candidates, declaring propor-
tionately the power of smaller contributors to have a candidate meaningfully
consider their views. In addition to effectuating the principle of "one man, one
vote," the financial realities of campaigning make it necessary also to limit con-
tributions and expenditures in order to assure that some voters are not "more
equal" than others in the eyes of candidates or elected officials.
PAGENO="0415"
411
(VI) The proposed ceilings on contributions and expenditures and the
plan for partial government financing do not unconstitutionally discriminate
against minority parties.
Neither the Constitution nor any statute sanctifies the two party system in
this country, and the two major parties have no inherent legal right to a spe-
cially protected position in any system of government financing of campaigns. "All
political ideas cannot and should not be channeled into the programs of our two
major parties. History has amply proved the virtue of political activity by minor-
ity, dissident groups, who innumerable times have been in the vanguard of
democratic thought and whose programs were ultimately accepted. . . . The ab-
sence of such voices would be a symptom of grave illness in our society." ~S'weezy
v. New Hampshire, 354 U.S. 234, 250-251 (1957). Any system for the public sup-
port of campaign financing must be absolutely neutral vis-a-vis particular polit-
ical parties. This does not mean that all parties must be equally treated re-
gardless of their size and degree of organization, but it does mean that the
government cannot contribute to the entrenchment of established parties or place
special obstacles in the path of smaller parties which seek to displace the es-
tablished parties of the moment.
The principles of government neutrality are illustrated by two recent Supreme
Court cases, Williams v. Rhodes, 393 U.S. 23 (1968), in w-hich State laws regulat-
ing political parties were struck down, and Jenness v. Fortson, 403 U.S. 431
(1971), in which they were upheld. In Williams v. Rhodes, supra, the American
Independent Party and the Socialist Labor Party challenged the constitutionality
of certain Ohio laws which required a party other than the Democrats or the
Republicans to obtain petitions signed by qualified electors totaling 15% of the
votes cast in the preceding gubernatorial election in order to win a place on the
Presidential ballot. Numerous other burdens were imposed on the establishment
of new parties. In order to be recognized on a ballot, a party had to elect a
county central committee for each county in Ohio and elect a State central
committee consisting of two members from each Congressional district, it had
to elect delegates to a national convention, and its candidates for nomination in
the primary had to file petitions signed by qualified electors. Technicalities of
State law which disqualified persons who had voted in another party's primary
in the last four years from serving as convention delegates and from signing
primary nominating petitions made the selection of delegates and the collection
of petition signatures extremely difficult. The Democrats and the Republicans
faced substantially smaller burdens, since they were allowed to retain their
ballot position simply by obtaining 10% of the vote in the last gubernatorial
election and did not need to obtain any signature petitions to appear on the
Presidential ballot. The Supreme Court held that these restrictions on minority
parties unconstitutionally denied Equal Protection of the laws to persons
who wanted to organize themselves into minority parties and to persons who
wished to vote for minority party candidates, because the Ohio law-s made it
"virtually impossible," 393 U.S. at 24, 25, for a new political party, even though
it might have hundreds of thousands of members, to get its candidates placed on
the Presidential ballot. The Court stated that "the Ohio laws before us give
the two `old, established parties a decided advantage over any new parties
struggling for existence and thus place substantially unequal burdens on
both the right to vote and the right to associate." 393 U.S. at 31. The rationale of
the Court's decision is contained in the following, passage:
"[Ohio] claims that the State may validly promote a two-party system
in `order to encourage compromise and political stability. The fact is, how-
ever, that the Ohio system does not merely favor a `two-party system'; it
favors two particular parties-the Republicans and the Democrats-and
in effect tends to give them a complete monopoly. There is, of course, no
reason why two parties should retain a permanent monopoly on the right
to have people vote for or against them. Competition in ideas and govern-
mental policies is at the core of our electoral process and of the First Amend-
ment freedoms."
393 U.S. at 31-43.
A valid State interest in the prevention of "multitudinous fragmentary groups"
on the `ballot was recognized, but the Court stated that this danger was in the
instant case no more than "theoretically imaginable," 393 U.S. at 23.
Jenness v. Fortson, supra, concerned a challenge by the Socialist Workers Party
to a Georgia law which provided that a candidate for elective public office who
PAGENO="0416"
412
did not enter and win a political party's primary (a "political party" was defined
as an organization whose candidate received 20% or more of the vote at the most
recent gubernatorial or presidential election) could have his name printed on
the ballot at the general election `only if he has filed a nominating petition
signed by at least 5% of the number of registered voters at the last general
election for the office in question. The Court unanimously upheld the Georgia
statute, distinguishing Williams v. Rhodes primarily on the basis that the Ohio
qualifications were significantly more restrictive and comprehensive:
"But the Williams case, it is clear, presented a statutory scheme vastly
different from the one before us here. Unlike Ohio, Georgia freely provides
for write-in votes. Unlike Ohio, Georgia does not require every candidate
to be the nominee of a political party, but fully recognizes independent
candidacies. Tjnlike Ohio, Georgia does not fix an unreasonably early filing
deadline for candidates not endorsed by established parties. Unlike Ohio,
Georgia does not impose upon a small party or a new party the Procrustean
requirement of establishing elaborate primary election machinery. Finally,
and in sum, Georgia's election laws, unlike Ohio's, do not operate to freeze
the political status quo."
403 U.S. at 438.
The dispositive factors for the Court were apparently the fact that the impact
of the overall Georgia scheme did not weigh as heavily upon the organizational
abilities of minor parties or independent candidates as did the Ohio requirements.
Also, the Court emphasized that the major party candidates were not especially
favored, since a major party candidate would have to win a difficult and perhaps
costly primary battle to get his name on the ballot, a barrier which could be
roughly approximated to the difficulty of collecting the signatures of 5% of the
electorate. The Court closed its opinion with a statement of principle which should
be borne in mind in considering the treatment of minor parties in a system of
public financing of campaigns:
"The fact is that there are obvious differences in kind between the needs
and potentials of a political party with historically established broad sup-
port, on the one hand, and a new or small political organization on the other.
Georgia has not been guilty of invidious discrimination in recognizing these
differences and providing different routes to the printed ballot. Sometimes
the grossest discrimination can lie in treating things that are different as
though they were exactly alike.
"There is surely an important state interest in requiring some preliminary
showing of a significant modicum of support before ~irinting the name of
a political organization's candidate on the ballot-the interest, if no other,
in avoiding confusion, deception, and even frustration of the democratic
process at tha general election." 403 U.S. at 441-442.
The system of public financing of political campaigns advocated by Common
Cause does not discriminate invidiously against minority party or independent
candidates. It is clear that some reasonable precautions are necessary against
fraudulent candidacies which seek merely to obtain public moneys. In order to
qualify for full Federal funding for a primary, a candidate would have to demon-
strate viability by raising private contributions in small amounts. Candidates
of all parties are treated absolutely alike here, and a candidate who does not
qualify for Federal support is still entitled to raise the full amount of money is
is eligible to spend for the primary by small private contributions. The amount of
government funds available to a candidate at a general election would vary on
a sliding scale, depending on the support his party demonstrated at the last elec-
tion or on its showing in the present election. In either case. no special barriers
are thrown in the path of minority parties. and such parties are still eligible to
raise the entire amount they may spend for the election (an amount which is
the same for all parties) by small private contributions.
EXHIBIT NO. 4
CoM~soN CAUSE RELEASES STUDY OF 1972 CONGRESSIONAL CAMPAIGN FINANCES
The 1,116 House and Senate candidates who ran in the November 1972 elec-
tions reported raising $69.7 million and spending $66.4 million, according to the
first of a series of studies by Common Cause. The study released today shows
that less than $1 out of every $3 raised came from small givers ($100 or less).
When the expenditures of 780 primary losers are included, the total Congres-
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413
sional spending reported for the period April 7-December 31, 1972, comes to $77
million.
The findings released by Common Cause are the first comprehensive spending
figures on Congressional races ever made public. Prior to enactment of the
1971 federal disclosure law, it was impossible to obtain comprehensive financial
data on Congressional elections. The findings are based on analysis by the
Common Cause Campaign Finance Monitoring Project of tens of thousands of
federal reports filed by 1,896 Congressional candidates and the political com-
mittees supporting those candidates.
FINANCIAL ADVANTAGES OF INCUMBENTS
In addition to providing overall campaign finance data, the Common Cause
study focused on the relationship of campaign financing to three major areas-
incumbents vs. challengers; Democrats vs. Republicans; and victory margins.
The results, according to Common Cause, overwhelmingly demonstrate that it
is incumbency and not party affiliation which determines whether a candidate
can obtain substantial financial support. The study also shows that while spend-
ing substantial sums does not guarantee victory, it is essential to running a
closely contested race.
Here are some examples:
(1) In the House, opponents of incumbent Congressmen, whether Democratic
or Republican, had a hard time raising money while the incumbents of both
parties had an easier time and raised similar sums-
Democratic incumbent $56, 364
Republican challenger 32, 709
Republican incumbent 60, 842
Democratic challenger 29, 656
However, where no incumbent was involved at all (52 races) both the Demo-
cratic and Republican candidates received substantially greater amounts in
almost equal amounts-
Democratic candidate $89, 430
Republican candidate 88, 375
Conclusion: With the incumbent out of the race both major party candidates
received ample funding. With an incumbent in the race, the major party chal-
lengers received scant support regardless of party.
(2) Over three-fourths of House seats were won in 1972 by pluralities of 60%
or more. The average cost to the winner was $55,000 or less-far more than his
opponent raised. On the other hand, sixty-six races were won by less than 55%
of the vote. In those races the average cost to the winner and loser was over
$100,000 for each.
Winner $107, 378
Loser 101, 166
There were only ten incumbents defeated in the November elections. The
average spent by those who beat incumbents was $125,000 as opposed to an average
of $86,000 spent by the losing incumbent. Eight of the ten winning challengers
outspent their incumbents while the other two incumbents outspent their winning
opponents by a total of $16,000.
Conclusion: To run a closely contested race requires ample financing. Sub-
stantial financial support is also a prerequisite for defeating an incumbent.
(3) Tn the Senate races where there was no incumbent, campaign financing
was available to major party candidates in approximately equal amounts and
in substantial quantity.
Average con-
tribution
Democrat $496, 297
Republican 465,264
By contrast where there was an incumbent in the race campaign money flowed
to the incumbent over the challenger by more than two to one. Incumbents out-
spent their major party challengers in 19 of the 25 incumbent-challenger races
in 1972.
Average con-
tribution
Incumbent $525, 809
Challenger 243,070
25-239 O-73----27
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414
Winners furthermore outspent losers in 28 of the 33 Senate races.
Conclusion: Incumbency rather than party played the major role in the
financing of Senate races as well as House elections. Where the incumbent dropped
out of the picture challengers from both parties raised substantial and approx-
imately equal sums. Winners consistently outspent losers.
"The fact that incumbency rather than party determines the availability of
Congressional campaign financing is no accident," Fred Wertheimer, Legislative
Director of Common Cause, said. "It is the direct result of a system which allows
the campaign contribution to serve as a vehicle for buying political decisions,"
Wertheimer said. "The money flows to incumbents because it is an incumbent who
has the power to provide help and assistance. The result is that in Congress
today we have neither a Democratic or Republican party. Rather, we have an
Incumbency party which operates a monopoly. The only solution is to enact
a system for public financing of elections. Such a move is essential to restoring
integrity to our government and to recreating a new competitive system of
representation," Wertheimer said.
BREAKDOWN OF CONTRIBUTION TOTALS
The contributions reported by general election candidates included $62.3
million raised from April 7 to December 31, 1972, and $7.4 million held on
April 6, 1972, as cash on hand. Some $5.9 million of the April 6 cash on hand
was held by incumbents.
The $62.3 million in contributions included:
(a) $21.7 million (35%) from 41,600 individuals who gave more than $100.
More than half of this amount represents contributions of $500 or more, while
one out of every five dollars came from out-of-state givers.
(b) $16.5 million (26%) were contributions of more than $100 from political
and special interest committees. The special interest committees contributed a
total of $10.1 million including $8.9 million directly to candidates and $1.2 mil-
lion indirectly through Republican and Democratic Congressional committees
which in turn gave those dollars to various Congressional candidates.
(c) $19.6 million (32%) represents contributions of $100 or less.
(d) $4.4 (7%) reflect net loans of more than $100. Candidates borrowed $5.9
million to meet their expenditures and by December 31, 19~2, had repaid $1.5
million of such loans.
General election candidates reported spending $22.5 million ($1 out of every
$3) on "communications media" including TV, radio, newspapers, magazines,
billboards, and telephone banks. This included $8.5 million by Senate candidates
and $14 million by House candidates.
TOTAL CAMPAIGN FINANCES IN THE 1972 CONGRESSIONAL RACES
During 1972 Common Cause conducted a nationwide project to monitor cam-
paign finances in the federal elections. The 1971 campaign finance disclosure law
provided the first opportunity ever to obtain comprehensive data on the financ-
ing of Congressional and Presidential elections.
The findings released today are the first in a series of studies to be issued
by Common Cause on House and Senate campaign finances during 1972. They
are based on the analysis by the Common Cause Campaign Monitoring Project
of tens of thousands of reports filed by more than 1,100 general election candi-
dates (and more than 700 primary losers) and the political committees support-
ing those candidates. The reports covered the period from April 7, 1972, through
December 31, 1972.
Campaign finances for each candidate were determined by combining the
candidate's reports with the reports of all of the candidates' supporting political
committees. House and Senate candidates were given the opportunity to review
our findings and to offer any corrections they felt should be made.
Because the new law did not become effective until April 7, 1972, we can never
know the total financial picture for the 1972 Congressional elections. Campaign
contributions received and spent prior to April 7, for example, are not accounted
for. This particularly effects the campaign finance data covering the 1972 primary
elections. Our findings, however, do cover all contributions (including April 7
cash on hand) and all expenditures (including debts outstanding) reported for
the period April 7 through December 31.
The number of reports, candidates, political committees, contributors, and en-
tries covered by these reports, make it impossible to guarantee absolute accuracy.
The General Accounting Office made this point clear with respect to the study
PAGENO="0419"
415
they recently released on Presidential finances in the 1972 elections. We have
taken every possible step, however, to assure the accuracy of our findings, in-
cluding providing candidates with the opportunity to review them.
HOIJSE AND SENATE CAMPAIGN FINANCES-iD 72
During the 1972 elections, 1,890 House and Senate candidates who ran in the
primary and general elections reported total expenditures of $77,255,087 for the
period April 7 through December 31. These figures included 1,116 candidates in
the general election who reported expenditures of $66,405,769 plus an additional
780 primary losers who reported spending $10,849,309.
The 1,116 candidates who ran in the general elections (106 Senate, 1,010
House) raised a total of $69.7 million to finance their campaigns which included
$7.4 million held as cash on hand on April 7. Approximately 68% of the $62.3 mil-
lion received during April 7-December 31, represented contributions of more
than $100. Less than $1 out of every $3 came from small givers ($100 or less).
(See Table 1.)
The $62.3 million in contributions included:
(a) $21.7 million (35%) from 41,600 individuals who gave more than $100.
More than half of this amount represents ëontributions of $500 or more. One out
of every five dollars was given by out of state donors.
(b) $16.5 million (26%) were contributions of more than $100 from political
and special interest committees. The special interest committees contributed a
total of $10.1 million, including $8.9 million directly to candidates and $1.2 million
indirectly through Republican and Democratic Congressional campaign commit-
tees which in turn contributed those dollars to various Congressional candidates.
(c) $19.6 million (32%) represents contributions of $100 or less.
(d) $4.4 million (7%) reflects net loans of more than $100. Candidates have
borrowed $5.9 million to meet their expenditures and by December 31, 1972, had
repaid $1.5 million of such loans.
The general election candidates listed $22.5 million as "communications media"
expenditures on their reports or approximately $1 out of every $3 spent. "Com-
munications media" expenditures include TV, radio, newspapers, magazines, bill-
boards, and telephone banks. Of this $22.6 million, some $8.5 million was re-
ported by Senate candidates and $14.1 million by House candidates.
There is a stark difference between the cash on hand held `by incumbents and
by challengers as of April 7, 1972. Some $5.9 million out of $7.4 million cash on
hand was held by incumbents on April 7, 1972.
The average held by a House incumbent was $8,108 as opposed to an average of
$933 held by his major party challenger. In the Senate, the average cash on hand
on April 7, 1972, for an incumbent was $112,208 as opposed to $11,080 held by his
major party challenger.
TABLE 1.-CONGRESSIONAL CAMPAIGN FINANCES, 1972
Total
Senate
House
Cash on hand (Apr. 7)
Total receipts (Apr. 7-Dec. 31)
Individual contributions
Out of State, $101 and over
In State, $500 and over
In State, $101 to $499
Committee contributions, $101 and over
Political parties, $101 and over
Other committees, $101 and over
Net loans of $101 and over
Loans of $101 and over
Loans repaid
Other receipts ($100 and less)
Total contributions
Total expenditures
Media expenditures
$7, 358, 393
62, 285, 985
21, 723, 868
4, 169,954
12, 222, 431
5,331,483
16, 547, 108
7,654,097
8, 893, 011
4, 390, 682
5, 886, 270
1,495,588
19, 624, 327
69,644,378
66, 405, 769
22, 591, 222
$3, 573, 787
23,767, 291
9, 696, 320
2, 413, 029
5, 298, 171
1,985,120
6, 106, 390
3,263,480
2, 752,910
1, 432,612
1, 967, 324
534,712
6, 621, 969
27,341,078
26, 446,393
8, 522,624
$3, 784,606
38, 518, 694
12, 027, 548
1,756, 925
6,924, 260
3,346,363
10, 530, 718
4,390,617
6, 140, 101
2, 958, 070
3,918, 946
960,876
13, 002, 358
42,303,300
39,959, 376
14, 068, 598
Number of Candidates
1,116
106
1,010
Source: Campaign Finance Monitoring Project by Common Cause 1973.
SUMMARY OF HOUSE RACES
Political reporters are familiar with the power of incumbency in campaigns
for the House. What has never been documented before is the link between
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416
ample financing and a winning campaign. Until the 1972 elections, financial
data just were not available for House races.
The figures that Common Cause's Campaign Monitoring Project compiled lead
to these conclusions:
Incumbent Congressmen running for re-election had a built-in financial advan-
tage over their opponents. Some were so entrenched that the major opposition
party didn't even put up a candidate against them (there were 52 uncontested
races in 1972). When a race was contested, the incumbent raised almost twice
the amount of money available to his opponent. The opponent's handicaps in
raising money almost guaranteed his defeat. (See House Appendix B, p. 417)
Both Democratic and Republican incumbents in the House were able to raise
money equally well, while challengers of both parties were equally disadvantaged.
Differences in financial resources were minor between parties, but major between
incumbents and their challengers.
When competing in a district where no incumbent was running, candidates of
both parties were able to raise sizable war chests. In these races challengers
spent about $90,000 on the average, and the winner was the one who outspent
his opponent (the average was $104,064 to $75,766).
One-sided campaigns (won by 60% or more of the vote) cost the average
winner $55000 or less. Close races (won by less than 55% of the vote) cost the
winner and loser over $100,000 each, on the average. (House Appendix A)
To unseat an incumbent Congressman in either the primary or general election
was even more expensive. Only 17 non-incumbents were able to do so in 1972 and
their average expenditures for a full campaign were $141,153 (primary winners')
and $125521 (general election winners). (Three races in which incumbents faced
one another are excluded from this summary.)
In the 10 races where incumbents lost to non-incumbents in the general elec-
tion, the incumbents raised and spent less. on the average, than did their oppo-
nents, raising $93837 and spending only $86,075. (House Appendix B)
The top 25 House spending races in 1972 cost more than $8 million. Attached
is a list of the expenditures for the more than 50 candidates involved in those
races. (House Appendix C, p. 418.)
APPENDIX A
1972 CAMPAIGNS FOR THE HOUSE OF REPRESENTATIVES
Over three-fourths of House seats were won in 1972 by pluralities of 60%
or more. The average cost to the winner was $55,000 or less-far more than his
opponent raised.
In the remaining fourth of the House races the contests were competitive
and the costs higher. In the really close races, won by less than 55%, average
costs to the winner and loser were over $100,000 for each.
Conclusions: To run a closely contested race required ample financing. Incum-
bents could raise money much more easily than challengers could, regardless of
party.
TABLE 2.-ELECTION COSTS COMPARED TO WINNERS' MARGINS
Winning percentage (range) Number
Winner's
expenditure
(average)
Loser's
expenditure
(average)
70 to 90 percent 97
65 to 70 percent 66
60 to 65 percent 91
55 to 60 percent 60
Up to 55 percent 66
$38, 729
42, 212
55, 065
73,616
107, 378
$7, 479
16, 060
30, 483
54, 600
101, 166
Note: Unopposed candidates omitted.
TABLE 3.-AVERAGE EXPENDITURES
Up to 55
percent
55 to 60
percent
60 to 65
percent
Winning percentage:
Incumbents who won (159) $91,906
Losers to incumbents 88, 875
$64,854
48, 020
$49,962
29,632
Source: Campaign Finance Monitoring Project by Common Cause 1973.
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417
APPENDIX B
AVERAGE FINANCES FOR HOUSE CANDIDATES IN 1072
Averages for House candidates are misleading unless the data is divided
between Incumbents and Challengers.
Opponents of incumbent Congressmen, whether Democratic or Republican, had
a hard time raising money ($31,335 on the average) and therefore very little
chance of winning. However, where no incumbent was involved, both the Demo-
cratic and Republican candidates received substantially greater amounts. The
spending figures for the 17 challengers who did manage to defeat incumbents are
at least four times greater than the average challenger's total.
Democratic candidates were able to raise about the same money as Republicans
on the average.
TABLE 4.-AVERAGE FINANCES FOR HOUSE CANDIDATES IN 1972
Contributions
Expenditures
Major party candidates:
Democratic $49, 224
Republican 51,389
Races with no incumbent in primary or general election (52):
Democrat 89, 430
Republican 88, 375
Winner 102, 338
Loser 75,213
$47, 479
49,564
90, 074
90, 030
104, 064
75,766
Races where incumbents were defeated by nonincumbents:
In the general election (10):
Incumbent 93,837
Winning challenger 123, 450
In their party primary (7):
Winning challenger 1 132, 411
Opponent in general election 59, 167
Incumbents with major party challengers (318):
Incumbent 58,359
Challenger 31, 355
Democratic incumbent 56, 364
Republican challenger 32,709
Republican incumbent 60, 842
Democratic challenger 29, 656
Incumbents with no major party opponents (52): Incumbent 24, 984
86,075
125, 521
141, 153
59, 379
50,873
32, 127
50, 009
33, 587
51, 947
30, 295
17, 372
I Totals cover primary and general election.
APPENDIX C
TABLE 5.-THE 25 MOST EXPENSIVE RACES FOR THE HOUSE OF REPRESENTATIVES
Vote and
percentage
in general
Rank, State (district) and candidate election
Total
expenditures
1-Massachusetts (5):
John Kerry (Democrat) 44. 7 $279, 746
Paul Cronin (Republican) 53. 5 171, 414
Roger Durkin (Independent) 1. 8 62, 952
Total 514,112
2-California (17):
Paul McCloskey (Republican) 1 54. 6 321, 558
James Stewart (Democrat) 35. 9 109, 418
James Knapp (Republican) 9. 5 75, 970
Total 506, 946
3-Arizona (4):
Jack Brown (Democrat) 47. 0 318, 254
John Conlan (Republican) 53. 0 154, 662
Total 472,916
4-Massachusetts (12):
William Weeks (Republican) 49. 7 269, 046
Gerry E. Studds (Democrat) 50. 3 195, 758
Total 464, 804
Footnote at end of table.
PAGENO="0422"
418
APPENDIX C-Continued
TABLE 5.-THE 25 MOST EXPENSIVE RACES FOR THE HOUSE OF REPRESENTATIVES-Continued
Vote and
percentnge
in general Total
Rank, State (district) and candidate election expenditures
5-Illinois (10):
Abner Mikva (Democrat)' 48.4 $218, 543
Samuel Young (Republican) 51. 6 206, 166
Total 424, 709
6-California (6):
Roger Boos (Democrat) 47. 9 266, 760
William Mailliard (Republican) 1 52. 1 148, 550
Total ----- 415,310
7-New York (24): -
Ogden Reid (Democrat)' 52. 5 209, 007
Carla Vergari (Republican) 47.8 190, 890
Total 399, 897
8-New York (14): -
Allard Lowenstein (Liberal) 28. 1 285, 475
John J. Rooney (Democrat) 1 53. 9 110, 054
Total 395,529
9-Louisiana (3):
Louis Watkins (Democrat) 46. 0 229, 767
David Treen (Republican) 54. 0 155, 629
Total 38539
10-Massachusetts (4):
Robert Drinan (Democrat) ` 48. 8 199, 703
Martin Linsky (Republican) 45. 8 148, 285
John Collins (Independent-Conservative) 5. 4 22, 579
Total ---370,567
11-Texas (13):
Robert Price (Republican) ` 54. 8 206, 171
Graham Purcell (Democrat) ` 45. 2 149, 453
Total ------- 355, 624
12-New York (23):
Richard Ottinger (Democrat) 49. 6 195, 784
Peter Peyser (Republican) ` 50. 4 154, 567
Total ------_ 350,351
13-New Mexico (1):
Manuel Lujan (Republican) 1 55. 7 212, 093
J. E. Gallegos (Democrat) 44. 3 126,219
Total 338,312
14-California (8):
Fortney Stark (Democrat) 52. 9 266, 684
Lew Warden (Republican) - 47.144,499
Total 311,183
15-Georgia (5):
Andrew Young (Democrat) 52. 8 159, 431
Rodney Cook (Republican) - 47. 2 149,616
Total 309,047
16-Hawaii (1):
Fred Rohlfing(Republican) 45.3 179, 221
Spark Matsunaga (Democrat) 1 54. 7 127,753
Total 306, 974
17-Missouri (6):
Jerry Litton (Democrat) 54. 6 188, 642
Russell Sloan (Republican) 45. 4 100,059
Total 288,701
Footnote at end of table.
PAGENO="0423"
Vote and
percentage
in general
Rank, State (district) and candidate election
Total
expenditures
18-Mississippi (5):
Ben Stone (Democrat) 44. 2 $163,976
Trent Lott (Republican) 55. 3 119, 190
Total 283, 166
19-Kansas (2):
William Roy (Democrat) 1 60. 6 148, 995
Charles McAtee (Republican) 37. 1 115, 985
Total 264,980
20-California (38): -
George Brown (Democrat) 55. 9 154, 743
Howard Snider (Republican) 43.4 108,537
Total 263,280
21-Nevada (1):
James Bilbray (Democrat) 47.8 179,406
David Towell (Republican) 52.2 83, 106
Total 262,512
22-Maryland (4):
Werner Fornos (Democrat) 40.6 145,973
Marjorie Holt (Republican) 59.4 113, 513
Total 259, 486
23-Tennessee (6):
Robin Beard (Republican) 55.3 151,605
William Anderson (Democrat)' 43. 1 105, 022
Total 256,627
24-California (7):
Ronald Dellums (Democrat)' 55.9
Peter Hannaford (Republican) 38. 1
Frank Cortese (American Independent) 6.0
Total
25--Massachusetts (9):
John Moakley 43.2
Howard Miller (Republican) 14. 2
Louise Day Hicks (Democrat)' 41.1
Total
100,853
100, 286
48,980
250, 119
157, 560
58,240
29,686
245, 486
`Incumbent.
Source: Campaign finance monitoring project, copyright, by Common Cause 1973.
SUMMARY OF SENATE RACES
The importance of incumbency in a Senate election campaign has long been
recognized. What is established by the Common Cause Campaign Monitoring
Project, and set forth in the following tables, is the power of an incumbent
candidate for the Senate to draw funds so vast in size as to dwarf the challenger
opponent and place him or her at a distinct disadvantage in the contest. In ad-
dition, the Senate figures show that party affiliation played more of a role in
fund raising in the Senate than in the House.
The figures for Senate races compiled by the Monitoring Project lead to these
conclusions:
Incumbenc~ij. Incumbency is the most important factor in the ability of a
candidate to raise and spend substantially more money than his opponent. This
conclusion comes from the following evidence reflected in the 1972 Senate cam-
paign-financing figures:
When there is no incumbent in the race, campaign money will tend to be
availab1e to major party candidates in approximately equal amounts and in sub-
stantial quantity: (See table 6, p. 421)
419
APPENDIX C-Continued
TABLE 5.-THE 25 MOST EXPENSIVE RACES FOR THE HOUSE OF REPRESENTATIVES-Continued
PAGENO="0424"
420
By contrast, when there is an incumbent in the race, campaign money will
tend to flow to the incumbent and not to the challenger in amounts that will
allow the incumbent to outspend the challenger by a least two to one. Incumbents
outspent their major party challengers in 19 of the 25 incumbent-challenger
races in 1972. (See table 6, p. 421.) The incumbent's two to one advantage holds
true irrespective of party. Democratic incumbents outraise Democratic chal-
lengers and so do Republican.
Party Affiliation. In the 1972 Senate races, the initial advantage of incumbency
was further strengthened for Republicans by their party affiliation. Although
both Republican and Democratic incumbents had stronger financing than their
challengers in the bulk of the races (19 out of 25), the average Republican in-
cumbent had an additional advantage. The average Republican incumbent raised
$605,903 while the average Democratic incumbent raised $383,314, or a ratio of
$1.58 to $1.00. (By comparison, the average incumbent within each party was
able to raise money at almost a 2 :1 ratio over a party colleague who was a
challenger).
However, the advantage of party affiliation in Senate races must not be over-
emphasized for several reasons. First, the apparent advantage for average Re-
publican incumbents was due in large part to h'uge sums raised by four candidates
(Sens. Tower, Griffin, Percy, and Baker) that distort the averages. (See Table
B and explanation.) These four candidates raised $6 million out of the $16.3
raised by all 3 Republican candidates. Second, in most non-incumbent races the
Democratic candidates raised approximately the same amount of money as their
Republican opponents (see table 6, sec. I p. 421 and table 7 p. 422). If party affili-
ation were the dominant factor in fund raising, the non-incumbent Republican
candidates should have (but didn't, in fact) raised much more money than their
non-incumbent opponents. Third, the 1972 Senate races included numerous races
in which Republican funding normally is expected to be good and relatively few
races (such as most big industrial states) in which generous Democratic fund-
ing is traditional.
IMPORTANCE OF INCUMBENCY IN SENATE CAMPAIGN FINANCING
Table 6 (p. 421) demonstrates that incumbents can raise, and therefore spend,
substantially larger amounts of money than their challengers. It also demon-
strates that when a seat is vacant both parties can raise substantial and approxi-
mately equal amounts of money, which will make for a fairer and more equal
election campaign.
Section I of the table presents figures for Senate races in which there was no
incumbent in the November election. It shows that when a seat is up for grabs,
both parties have available to them approximately equal amounts of money in
substantial sums.
Section II shows similar findings for races in which there was an incumbent
in November, and demonstrates how a challenger is at a substantial disadvan-
tage in the race because of the incumbent's dominance of fund raising. The first
set of figures are the most striking: they show that all incumbents in last fall's
Senate races raised $2.16 and spent $2.03 for every $1.00 raised and spent by
their challenger opponents. In addition, Section III shows that within each party
the incumbent has a substantial advantage in obtaining money over his party
colleague who is only a challenger; the latter will have much more difficulty in
getting money even though his need for it, in his race against a better-known
incumbent opponent, is usually greater.
The other figures in Sections II and III suggest that party affiliation plays
more of a role in fund-raising in the Senate than it does in the House. Section
III shows that the average Republican incumbent raised substantially more
dollars than the average Democratic incumbent. (Republican incumbent:
$605,963, Democratic incumbent: $383,314, or a ratio of $1.58 to $1.00)
In addition, the figures in Section II indicate that a Republican challenger will
have a somewhat easier time of raising money than will a Democratic challenger
although both are at a disadvantage vis-a-vis their incumbent opponent.
However, the apparent advantage flowing to Republicans because of their
party affiliation must not be overemphasized for several reasons. First, the large
averages for Republican incumbents were influenced by huge sums raised by
four Republican candidates. Senators Tower, Griffin, Percy and Baker together
PAGENO="0425"
421
raised $6 million of the $16.3 million raised by all 3~ Republican candidates.
Second, in non-incumbent races Democratic candidates tended to raise approxi-
mately the same amount of money as their Republican opponents (Section I);
if party affiliation were the crucial factor in fund raising, these non-incumbent
Republicans would have far outdistanced their Democratic opponents in fund
raising, but they did not. Third, the 1972 races involved numerous states with
traditionally strong Republican financing and relatively few states (such aa
most industrial states) with traditionally strong Democratic financing.
TABLE 6.-IMPORTANCE OF INCUMBENCY IN CAMPAIGN FINANCING-SENATE
Contributions
Expenditures
Average Ratio of
contribution contributions
Average Ratio of
expenditure expenditures
I. Races without an incumbent:
Democrat
Republican
II. Races with an incumbent:
$496, 297
465,264
$1. 07
1.00
$481, 156
458,484
$1. 05
1.00
All incumbents
All challengers
Democratic incumbents
Republican challengers
Republican incumbent
Democratic challenger
Ill. Effect of incumbency within each party:
Democratic incumbent
Democratic challenger
Republican incumbent
Republican challenger
525, 809
243, 070
383, 314
318, 130
605, 963
200, 850
383,314
200, 850
605, 963
318, 130
2. 16
1. 00
1. 21
1. 00
3. 02
1. 00
1. 91
1. 00
1. 90
1. 00
495, 424
244, 126
381, 080
312, 403
559, 742
205, 720
381, 080
205, 720
599, 742
312, 403
2. 03
1. 00
1. 22
1. 00
2. 72
1. 00
1. 85
1. 00
1. 92
1. 00
Source: Campaign finance monitoring project.
TEN MOST EXPENSIVE SENATE RACES, IMPACT OF INCuMBENCY ON FINANCING
Of the ten most expensive races, five had an incumbent and five did not (the
former are shown on Tables in roman type, the latter in italic).
The figures for incumbents demonstrates the significance of incumbency status
in raising large amounts of money for an election campaign. By contrast, the
figures for the non-incumbency races show that the candidates of both parties
can raise large and approximately equal amounts of money and thus help pro-
vide a more equal race. The role of party affiliation also is reflected in the
figures for the five most expensive incumbent races. Republican incumbents
raised substantial sums relative to their Democratic challengers. The importance
of party affiliation should not be overemphasized, how-ever, in relation to in-
cumbency: in the non-incumbent races set forth in table B (p. 422) the Demo-
cratic candidates raised approximately the same amount of money as their Re-
publican opponents. In addition, within parties Republican incumbents raised sub-
stantially more money than Republican challengers.
Incnrn bent Races. Of the five incumbent Faces, the candidates in four raised
and spent substantially more than their challengers could muster. The differences
ranged from Illinois, where Senator Charles Percy spent $4.20 for each $1.00
spent by Roman Pucinski, to Michigan, where the ratio was $2.54 for Senator
Robert Griffin to each $1.00 for his challenger, FFank Kelley. In the fifth race,
Alabama, the incumbent Senator, John Sparkman, spent less than his opponent.
Non-incumbent Races. The five most expensive races in which there was no
incumbent show a much more even division of money between the two candi-
dates. It is significant that in qach of these races the margin of victory was
under 55% of the vote and thus can be considered a close race.
Less Ewpensive Races. The other 23 relatively less expensive contests which
do not appear on the table show a similar pattern. In these other races where
there was an incumbent, the incumbent tended to outspend the challenger by
margins of two, three and four dollars to one dollar. Overall, of the 25 Senate
races with an incumbent (including the 10 most expensive races), the incumbent
in 19 races outspent the challenger; in 14 of these races, the incumbent outspent
the challenger by a margin of at lqast two to one and in a number of instances
it was much higher.
PAGENO="0426"
422
TABLE 7-10 MOST EXPENSIV
E SENATE RA
CES-IMPACT OF INCUMBEN
CY ON FINANCING
Vote
margin
(percent)
Contributions
Expenditures
Contribution
Total ratio between
contributions candidates
Expenditure
Total ratio between
expenditures candidates
Texas: I
John Tower 2
Barefoot Sanders
Michigan: 1
Robert Griffin 2
Frank Kelley
Illinois:1'
53. 4
44. 5
52. 2
46. 7
$2, 303, 355 $3.65
630, 440 1. 00
1, 443, 304 2.65
544, 009 1. 00
$2, 301, 870 $3. 66
629, 008 1. 00
1, 394, 927 2. 54
547, 819 1. 00
Charles Percy 2
Roman Pucinski
Alabama: 1
61. 4
~38. 6
1, 399, 374 4. 12
339, 402 1. 00
1, 408, 822 4. 20
335, 482 1. 00
John Sparkman 2
Winton Blount
Kentucky: 3
Walter Huddleston
Louie Nunn
Oklahoma: 3
63. 9
32. 5
51. 0
47. 6
703, 342 . 90
774, 039 1. 00
653, 412 1. 07
611, (.13 1. 00
702, 109 . 92
764, 961 1. 00
658, 590 1. 09
603, 649 1. 00
Dewey Bartlett
Ed Edmondson
North Carolina: 3
51. 5
45.9
625, 639 1. 19
525,900 1.00
625, 095 1. 22
512,058 1.00
Jesse Helms
N. Galifianakis
54. 1
45. 9
659, 895 1. 33
496, 667 1. 00
654, 246 1. 39
470, 093 1. 00
Tennessee: 1
Howard Baker 2
Ray Blanton
Louisiana: 3
BennettJohnston
John McKeithen
Ben Toledano
61. 8
38.2
54.9
23. 2
19. 0
887, 817 3. 70
239,699 1.00
556,912 1.09
394, 510 1. 00
118, 906
830, 769 3. 40
244,653 1.00
511,616 1.00
394, 510 1. 00
116, 347
Georgia: 3
Sam Nunn
Fletcher Thompson
53. 6
46. 4
629, 570 1. 39
454, 586 1. 00
567, 968 1. 28
444, 635 1. 00
1 Incumbent involved in race.
2 Incumbent.
3 No incumbent in race.
Source: Campaign finance monitoring project.
GENERAL ELECTION RACES WITHOUT AN INCUMBENT-SENATE
In the eight Senate races in which there was no incumbent in the November
election, the division of money available to each candidate is about evenly di-
viided in all except the Idaho contest.
In six of the contests, there was no incumbent from the beginning (Louisiana
is included in this category even though Sen. Ellender had begun his campaigu
for re-election before his death). In the other two races, the incumbent was de-
feated in the primary.
The conclusion to be drawn from these figures is that when a seat is open the
non-incumbent candidates have similar access to substantial sums of money. This
is in sharp contrast to figures (on other tables) showing that in the bulk of races
with an incumbent, the incumbent can raise and spend substantially more money
than his challenger. It is noteworthy that in seven of the eight non-incumbent
races, the margin of victory was under 55% of the vote. Undoubtedly, the gener-
ally equal division of money in these races helps insure a vigorous and often
close contest.
PAGENO="0427"
423
TABLE 8.-GENERAL ELECTION RACE
S WITHOUT AN INCUMBENT-SENATE
Percent of
the vote
Contributions
Total con- Ratio between
tributions candidates
Expenditures
Total expendi-
tures
Ratio between
candidates
I. Raceswhere incumbent retired:
Louisiana:
J. B. Johnston (Democrat) - 54. 9
John McKeithen (Independ-
ent) 23. 2
BenToledano(Republican)
Idaho:
$556, 912 $1. 09
394, 510
118,996
$511, 616
394, 510
116,347
$1. 00
*
James McClure (Republican). 52. 3
William Davis (Democrat) - - 45. 5
Kentucky:
W. Huddleston (Democrat)_ - 51. 0
LouieNunn(Republican)____ 47.6
New Mexico:
446, 382 2. 00
222, 963 1. 00
653, 412 1. 07
611,013 1.00
405, 788
204, 878
658, 590
603,649
1. 98
1. 00
1. 09
1.00
Pete Domenici (Republican) 54. 1
Jack Daniels (Democrat) - - - 45. 9
Oklahoma:
Dewey Bartlett (Republican) 51. 5
Ed Edmondson (Democrat)_ - 47. 9
South Dakota:
JamesAbourezk(Derr.Ocrat)_ 57.0
Robt. Hirsch (Republican) -- 43. 0
II. Races in which incumbents were de-
489, 380 1. 06
463, 735 1. 00
625, 639 1. 19
525, 900 1. 00
421,215 1.33
316, 313 1. 00
517, 310
496, 980
625, 095
512, 058
427,063
300, 800
1. 04
1. 00
1. 22
1. 00
1.42
1. 00
feated in primary:
Georgia:
SamNunn(Democrat) 53.6
Fletcher Thompson 46. 4
North Carolina:
629,570 1.39
454, 586 1. 00
567,968
444, 635
1.28
1. 00
Jesse Helrns(Republican).__ 54.1
Nick Galifianakis (Democrat)_ 45. 9
659,895 1.33
496, 667 1. 00
654,246
470, 093
1.39
1. 00
Source: Campaign finance monitoring project.
EXHIBIT NO. 5
TABLE 9.-CoNTRIBUTIONS AND EXPENDITURES FOR ALL NOVEMBER 1972 HOUSE
RACES COMPILED BY THE COMMON CAUSE CAMPAIGN MONITORING PROJECT
The winning candidate is listed first. The contests printed in italics are those
in which there was no incumbent. Incumbents are indicated by an asterisk. The
candidates included here are major party candidates and significant third party
or independent candidates. The source of vote percentage figures is Congressional
Quarterly. Contribution and expenditure figures are based on the information
listed on the reports filed with the Clerk of the House of Representatives through
January 31, 1973, and in most cases cover expenditures since April 7, 1972, when
the 1971 campaign disclosure law took effect.
Campaign finances for each candidate were determined by combining the can-
didate's reports with the reports of all of the candidates' supporting political com-
mittees. Candidates were given the opportunity to review our findings and to offer
any corrections they felt should be made. Contributions include loans to the cam-
paign which were not listed as repaid as of January 31, 1973. The 1971 law defines
contributions as including loans. Expenditures include debts, other than loans,
outstanding as of January 31, 1973. Because of these and other factors, surpluses
cannot be determined by subtracting total expenditures from total contributions.
Primary vote percentages are those of a runoff where a runoff occurred. Double
asterisks (**) indicate a runoff.
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435
TABLE 9.-CONTRIBUTIONS AND EXPENDITURES FOR ALL NOVEMBER 1972
HOUSE RACES COMPILED BY THE COMMON CAUSE CAMPAIGN MONITORING
PROJEcT-Continued
General
State, congressional district, and candidate
Primary
vote,
percent
election
vote,
percent
Contribu-
tions
Expendi-
tures
Wyoming:
1-Teno Roncalio (D)*
1-Bill Kidd (R)
(1)
51. 1
51. 7
48. 3
$65,646
122,712
$50, 548
122, 580
* Incumbent.
** Runoff.
1 No opposition.
2 Rooney and Lowenstein were both involved in a court ordered second Democratic primary.
`Contributions for W. R. Poage exclude over $18,000 in returned contributions.
Mr. GARDNER. I believe that the House has misread the country.
We suffered through Watergate L'fld politics will never be the same
again. This issue will not go away. It will return to nag you and
nag you until you deal with it. There is no place to hide. The Senate
has read the public mood and it has sent a message to the country that
it is ready to act. The country will be watching you. The complex
arguments against the Senate amendment or portions of it will carry
you only so far. Elections of 1974 are coming and we in Common
Cause are going to be out in every congressional district. We are
going to be asking not whether you approved or disapproved of
certain portions of the Senate bill, but what you did yourself to deal
with the scandals of Watergate in the unforgettable Watergate year
of 1973.
Thank you very much, Mr. Chairman.
Mr. DENT. Thank you, Mr. Gardner.
You have an opinion and you express it well. Like every other
piece of legislation that comes before this body, there are many opin-
ions. Much as we like to be able to put our fingers on that particular
opinion that would serve the people best, it is very difficult, as you
well know. You have been in public life. I remember once when you
expressed an opinion that had some rather direct results. You ex-
pressed those opinions because you felt them. I give you credit for
that and for your efforts to better the system. But the system does
not change that fast, Dr. Gardner. I had to come up through it for
a long time. I have been a legislative member of the State and Fed-
eral legislative body for 42 years. Every 2 years or every 4 years,
depending which office I was holding, I faced the people of my dis-
trict. You said you can't hide. Nobody in public life can hide, especially
those who run for office. The only way they hide is if "we allow the
unlimited expenditures of money. I personally have felt and have
fought over the years to put a limitation on the amount of money
that can be spent. If you do that, it treats all alike.
I have been studying all of the reports of the last election. District
by district, incumbent against contestant, nonincumbent districts, and
it is peculiar how the figures run. The percentage between winning
and losing does not vary more than maybe 11/2 to 2 percent in the same
district where in one election there was a total spent of less than
$50,000 and in another election where over $400,000 was spent. So it is
a question as to whether we are not substituting the use of artificial
presentation of what we stand for with highly paid publicity direc-
tors; those who have the means can gain a seat in `Congress by never
PAGENO="0440"
436
once exposing themselves to a handshake of a farmer across a fence.
Some of us were never blessed with too much money. and some cam-
paigns have always been a personal matter. Nothing is going to substi-
tute for that, whether we take the money out of the Treasury or what
we do; nothing in the law, which happened to have been sponsored on
the floor without one day of hearings, to substitute for the b111 that
this committee took months and months of adequate hearings. So when
we are condemned about not holding hearings, we have had the ex-
perience of knowing that they do not mean anything if outside in-
fluence is strong enough to put a pressure upon the Congress for an
act that has never been heard.
The Udall-Anderson substitute is responsible for the acts of Water-
gate, and prior to that. It substituted for a bill that was studied by
this committee that set a limitation within the reach of every indi-
vidual citizen of the United States to run for office. How can anybody
hope to come from a coal mining town, with the only qualifications
he needs, citizen, of age, and a registered voter-how can he hope to
compete when we allow in this Senate bill that is coming over a per-
sonal contribution or family contribution of $50,000. Immediately
you have eliminated the vast majority of Americans with that. The
vast majority of Americans cannot even hope to start to run.
The handicap of being an incumbent has never bee.n realized. There
is no greater handicap than the record, your record of voting. That's
why many of us don't just rush into every popular thing that comes
along. We try to study it, we try to find out. There are pitfalls in this
legislation that will be rushed through today, and yet the election
for President does not come until 1976.
Mr. HAYS. If the chairman will yield, it will not be rushed through
today, may I say. The Rules Committee gave a rule unanimously
to reject the whole package, and that will pass the House, in my judg-
ment, by 300 to less than a hundred, if it comes to a vote at all. The
leadership has tried to make a compromise with the Senate leadership
which I think they are willing to accept, to accept public financing
for the Presidential race on a trial ba.sis.
I don't know what the House will do. I would judge they might ac-
cept that onto the debt ceiling bill. If you will yield further, I would
like to point out two thin~s that somehow or another Mr. Gardner has
overlooked. One is that all of the scandals that have come to light-and
you people have researched every filing of every candidate, I know-
have been in the Presidential race. I won't say there are not any scan-
dals in the senatorial. There are a couple of possibilities if what the
press said is true. There has not been one in the House race. Mr. Dent
pointed out to you that the bill the committee sponsored was substi-
tuted by the bill written by you folks along with two gentlemen you
praised, Mr. Anderson and Mr. Udall, who you said are leaders. Their
trouble is that they are leaders without too many followers. In this in-
stance, your substitute prevailed not because they advanced, but be-
cause the House had been debating the bill 3 days, and there was a quick
way to get out on Thursday without going into Friday with more
amendments.
Those are the facts of the matter. But all of the violations that oc-
curred, occurred under this bill. If the bill the committee had written
had been law, the Republicans could not have raised that amount of
PAGENO="0441"
437
money. He would have been illegal on the face of it to have more than
$15 million in their campaign committee. If they had not had more
than $15 million, they probably would not have been tempted to do a
lot of stupid things-and I use that word advisedly-stupid things that
they did do.
I am willing to listen to your presentation, Mr. Gardner. I agree with
some parts of it, and I disagree with some parts of it. I would just like
to point out that I do not think either omnipotence or omniscience
rests solely with Common Cause. You make a big to-do about the fact in
one of your portions of your testimony that you did not read-and I ap-
preciate the fact that you did not read it all-that a nonincumbent
cannot raise as much money as an incumbent. Well, Mr. Dickinson,
the ranking member of the full committee is not here, but his opponent
last year-and the Democratic Committee supported him, not with
money, except for $1,000-he raised $121,000 to Mr. Dickinson's
$50,000. Mr. Mailliard, who is the ranking member of the Committee
on Foreign Affairs on which I sit, his opponent raised $270,000 to Mr.
Mailliard's $155,000. Up in Connecticut, Mr. Monagan raised $102,000
to his opponent's, who was not then in the House, $82,000, but Mr.
Monagan lost.
Down in Florida, Mr. Gibbons' opponent spent twice as much as Mr.
Gibbons did.
Out in Hawaii, Mr. Matsunaga's opponent spent $180,000 to Mr.
Matsunaga's $129,000. So he was .able to raise the money.
In Iowa, Mr. Culver's opponent spent $73,000, which he was able to
raise somewhere or another, to Mr. Culver's $42,000.
Out in Chicago, Mr. Mikva, who was defeated and incumbent, raised
$216,000, his opponent who defeated him raised $215,000, so there was
only a $1,000 difference there. Father Drinan's opponent raised $218,-
000 which was nearly $25,000 more than the reverend raised. Right
here next door to Washington, Mr. Gude's opponent raised $103,000-
I don't know how a Democrat raises that kind of money but he did-
to Mr. Gude's $71,000. Up in Massachusetts, we had the championship
of all, Mr. Studds raised $212,000, but his Republican opponent whom
he defeated raised $300,000.
Now, none of that would have been possible if our bill had prevailed
last year. I don't know whether you think $500,000 is too much to spend
on a congressional campaign or not.
Mr. GARDNER. Let me say first that I completely agree with the bulk
of the scandal lies. No congressional races in the past 10 years, all put
together, could equal the bizarre scandals of Watergate surrounding
the Presidential election.
Mr. HAYS. Are you willing to compromise, Mr. Gardner, and say not
all of the congressional races put together in the history of this Re-
public could compare with it?
Mr. GARDNER. That is right. I would agree with that. I would like
very much to have Fred Wertheimer comment on the incumbent chal-
lenger statistics if I may.
Mr. HAYS. I could read a lot more of these. I won't bother to do it.
I would like to read one more. Mr. Rooney spent $100~0O0, Mr. Lowen-
stein spent $316,000 and was not able to defeat Mr. Rooney after the
courts called another election, even. Mr. Koch, who is on this commit-
tee and 1 consider him a valuable member, his opponent outspent him
PAGENO="0442"
438
2 to 1. The point I am trying to make, and I know Mr. Wertheimer has
some statistics the other way and they exist and I have them here, too-
I will put the whole thing in the record-I am just pointing out that
there is no rule that says that a nonincumbent cannot raise as much or
more than an incumbent, and frequently they do.
I don't really think that that is what makes the difference, Mr.
Gardner. I defeated an incumbent when I came here, and I spent
$3,000. The reason I didn't spend more is because I couldn't raise any
more back in 1948. I don't remember what my opponent, but six or
seven times that, not anything greatly significant, something like
$18,000 or $20,000. But in 40 years, and I have researched this, there
has only been one election in my district where either candidate spent
over $25,000. That was the same election in which I spent $41,000 and
my opponent claimed to have spent a half million but he lied because
I spent dollar for dollar in the media and dollar for dollar in the
newspapers and dollar for dollar in the billboards, and I checked how
much mail he sent, and when he filed, he didn't file a quarter of a
million. But he told everybody he was spending that. That was part
of the campaign tactic. He got less than 40 percent of the vote. I don't
find anything seriously wrong with being an incumbent, and neither
do the people back home, if you are doing your job. I think the in-
cumbents get beat a lot of times in States where there is a single party
ballot, by a landslide. It didn't hold true in the last election. But in
some instances, it was a factor. I think probably Mr. Mikva's race
which was 51-49, you could say the factor was there.
In Ohio when I was first elected, we had a single column ballot, and
that is how I got here, on Mr. Truman's coattails. I have not forgotten
that after 25 years.
The second time around, the Republicans changed the ballot in
Ohio, so Mr. Lausche could not take Senator Taft down to defeat.
You have to vote for each office separately. That is how I stayed the
second time around.
I think an incumbent's chances of survival depend really on whether
he does his job and the people believe he does his job. You say you
are going to be in every congressional district in the next election.
There is one big favor you can do me. I will get the word around,
but if you will help me, that will be better, that Wayne Hays was
against taking $90,000 of the taxpayers' money to finance his cam-
paign and another $90,000 for his opponent. If we can get that word
to every house in the district, my majority will go up from 70 percent
to about 85 percent, because I'm in touch with my district. I am in
that district every weekend.
If there is one thing the people out there are unanimously against,
it is spending $90,000 of their money to finance two candidates for
Congress. They might accept $20,000 or $15,000 or what they considerS
a reasonable figure, but to go back to the point Mr. Dent has made
many a time, you will not sell the average steelworker and coal miner
that the Congress should spend out of the Treasury more than his
salary is going to be for the term of his office.
Mr. DENT. Thank you, Mr. Hays.
Mr. GARDNER. May I ask Mr. Werthheimer to comment?
Mr. DENT. Certainly.
PAGENO="0443"
439
At this point I might suggest that the contents of the Senate bill
set up an $80,000 or $90,000 expenditure allowance in the primary and
$90,000 in the general election for a Member of Congress. If my cal-
culations are anywhere near right, that is just 200 percent within
$10,000 of the total salary that is earned in the total number of years
you are elected to office. It is almost unbelievable that people would talk
in those kinds of figures.
Mr. HAYS. One of my former opponents said yesterday that if this
bill passed, he was going to be a candidate and his brother-in-law would
be his campaign manager, and his salary would be $75,000 for the
campaign. There are all sorts of abuses that could lie in that particular.
Mr. FRENZEL. If the gentleman will yield, if your majority goes
up over 75 percent, you don't have to worry because the Kennedy bill
would consign your opponent to a minor party status and he won't
get his $90,000.
Mr. HAYS. I am not worrying about his getting his $90,000. I am
saying I cannot usefully spend that much, and I would not if I got it.
Mr. DENT. You put your finger on something that no one is paying
attention to. What is that opponent's constitutional rights and who
has the right to delegate him to a position as a minor party candidate
and not getting any money out of the Treasury that he is contributing
to?
Mr. FRENZEL. Senator Kennedy and God.
Mr. DENT. Yes, but Senator Kennedy has not talked to God recently.
Mr. FRENZEL. If the gentleman would yield, I would like to inform
the chairman of the committee that I have not been identified as a
strong supporter of public financing. -
Mr. DENT. If that is the doctrine you believe in, that Kennedy and
God are the ones who are treated the best, maybe you ought to read
Bob Kennedy's treatise on public financing, which is the greatest
condemnation of public financing ever written. The two brothers
could not see eye-to-eye. If they cannot see eye-to-eye, you will pardon
me if I don't see eye-to-eye with Ted.
Proceed.
Mr. WERTIIEIMER. Thank you, Mr. Chairman.
Mr. Hays, you read the amounts spent in 10 or 15 races. We sub-
mitted to the committee today the information regarding 435 races
that were run.
Mr. DENT. I might state, if you went to a lot of bother working
that out, you could have picked it right up-it is available for any-
one that asks for it-at the Clerk's office: Race by race, dollar by
dollar, and expenditure by expenditure.
Mr. HAYS. We pick it up. We picked up the reports and spent the
year 1972 analyzing them, working on them, putting the information
together, to try to make it available to the public.
Mr. DENT. Thank you for saying. I want to say that we have spent
the entire year of 1972 trying to get the information together to try
to get some kind of answer to Watergate. I think that is a bigger
problem than what you are trying to give us, and you took a whole year
to work out figures that are available, and you add them up and sub-
tract and you get the answer. This you can't do with a reform bill.
That is our problem. We are going to be rushed into a reform bill
that there are not 10 men in the United States that have any idea
PAGENO="0444"
440
what the repercussions will be any more than they were when th~
Udall-Anderson substitute was offered. I made that statement on the
floor at that time. I believe that it takes longer to undo a wrong than
it does to do it.
Mr. WERTHEIMER. The facts pretty clearly show that most chal-
lengers do not raise money in American politics today; that we don't
have the competitive system in American politics today; that the
opportunity for differing viewpoints to be presented by candidates at
the local level is very limited. You mentioned the cost factor; the
potential cost of public financing, that is.
This year the Congress will spend $23 million in exercising the
franking privilege. Next year the budgeted cost for the franking
privilege is $38 million. That is an average cost of $70,000 per Member
of Congress to be used to communicate with their constituents. The
average cost of one single mailing to a congressional district by a
candidate running for office is $12,000. That is one mailing. The costs
of running a campaign are high, they are not low in this system we
have today of campaigning. TV costs are high, getting your message
across is a difficult proposition when you are unknown. It is very dif-
ficult. Incumbents have a natural advantage in their access to the media
and their use of franking privileges and the TV and radio time that is
made available to them. They have the opportunity to present their
viewpoints.
What we are asking for is that those people in their congressional
districts have the opportunity to hear differing viewpoints and be
able to make up their own minds. If you put very low expenditure
limits on the amount of money that can be spent in elections, what you
have done is created a situation in which there is only one voice going
to a congressional district. That is the voice of the person in office. If
you put reasonable expenditure limits, reasonable in the context of
today's society, which allow differing viewpoints to be heard, what
you have done is created the opportunity for the people in any con-
gressional district to have a choice. That choice is eliminated by put-
ting low expenditure limits. It allows one voice to speak to the people
and not two. So we think there is a very strong case for expenditure
limits that are not $50,000, that are not $30,000, that are $90,000, or
perhaps higher.
You mentioned the handicaps of incumbency.
Mr. H~s. If I may interrupt, what is the magic thing about $90,000
all of a sudden, Mr. Wertheimer? What gives you the right to sit
there and seem omniscient on a figure? Why do you say $90,000 as
against $60,000 or $125,000?
Mr. WERTHEIMER. I would not argue $90,000 as a magic figure.
Mr. HAYS. You are picking a figure out of the air?
Mr. WERTHEIMER. The average amount spent by an opponent who
beat an incumbent was $125,000.
Mr. HAYS. If we could get you to go on television in my district
and make the speech you are making now, I probably would not have
an opponent. You are sitting down here and telling us about doing
a year's work and that you have labored and slaved a year on this.
You must have been sitting at your desk too long and not getting enough
exercise.
Mr. WERTHEIMER. It was 2 years.
PAGENO="0445"
441
Mr. HAYS. I think you are 20 pounds heavier than the last time I
saw you. So you are living a good life.
Mr. WERTHEIMER. I think we both gained weight.
Mr. HAYS. I lost 7 pounds.
Mr. WERTHEIMER. You are doing better than I.
Mr. HAYS. The average citizen is not going to take your word for
it. The American people are not as unsophisticated as they were. I do
not think there is a district in Ohio that an incumbent who had voted
to take $90,000 out of a till for his campaign could get reelected. You
say we are not reading the message, Mr. Gardner. I am saying you are
not reading the message of the American people. Sure, they are sick
of Watergate. My mail indicates they want the President impeached
by about 20 to 1. My mail also indicates that they do not want $90,000
of their money spent on me or anybody to run against me. They might
accept a limited matching amount, but they just think $90,000 is too
much and there are about three-fourths of the districts of the United
States, Mr. Gardner, where people believe that $90,000 per candidate
is too much money to spend.
Mr. GARDNER. But they are beginning to catch on to something else.
They are also not unsophisticated about corruption and what happens
when you leave financing to private sources. They are beginning to
understand they pay through the nose not in their taxes to support a
public financing bill but through the kinds of favors that flow back
when you have a system of private donors. They are beginning to un-
derstand that.
Mr. HAYS. Mr. Gardner, my people are accustomed to paying $25
for a ticket to a reception. That is how I raise my money. The county
chairman gave a reception a few weeks ago to celebrate my 25th anni-
versary of being elected here and they had a big squabble about it, be-
cause the place would only accommodate 550 people and there were
a lot of people upset and indignant because they could not get tickets
to it. Maybe we ought to limit it to something like that. Maybe we
ought to limit the contributions. I have that in mind about how much
anybody can contribute.
Mr. GARDNER. We are for that.
Mr. HAYS. Anybody can contribute to a campaign and a maximum
on how much they can contribute to all campaigns.
I atm thinking in terms of $25,000, although I am flexible and open
to compromise, that a.nybody can give to all campaigns, and that only
a certain percentage can be given to the Presidential campaign and not
more than a certain percentage to congressional candidates and senato-
rial candidates. So that he can't just choke the whole $25,000 into one
campaign for Congress. Then I am for putting a limit on how much
he can give to a congressional candidate, maybe $1,000 or $2,000-
again I am flexible and ruled by the majority-but I think that is the
way to get at it. I do not feel obligated at the moment and have not in
the 25 years I have been here, to anybody who has contributed to my
campaign because there have never been any big contributions. Maybe
that is the reason I have been as independent as I have. I remember
the advice I got when I first went to the State senate when I was 27
years old and an old fellow who was about 65 had been there for 30
years called me in.
PAGENO="0446"
442
I worked there when I was at the university so I knew most of the
Senators. He said, "You know, Wayne, you are going to see more lobby-
ists at this place than you ever imagined existed. The lobbyist could
come right iii behind the rail and still can and tap the Members on
the shoulder and talk to them behind the rail." He said, "I want to
give you one piece of advice." He said, "They are going to be around
wanting to buy you meals, they are going to be around wanting to buy
a beer for you." He said, "The only test of a good Member up here is
whether you can eat their food and drink their liquor and vote against
them. When you give off the implications, Mr. Gardner, that legisla-
tion is bought around here by big contributors and big favors, I think
it is really unfair. I was quizzed. One of the politicians who has been
in politics as long as anybody in Ohio is the new Attorney General-
designate. I figured he was going to be offered the job a day or two be-
fore because the FBI came to see what I knew about him bad and
I didn't know anything bad about him. I am a little surprised that the
President offered him the job after what he said, when they asked
him if he thought the President knew about it, he said, "Well, I don't
know, he reminded me of a pianoplayer in a house of illfa.me who
played the piano downstairs for 25 years and claimed he didn't know
what was going on upstairs." Maybe the President was up against the
wall on that one. I don't know. I think you `are doing a disservice to
the American political system. I don't think your organization has all
the answers any more than we have all the answers.
Obviously you didn't have all the answers in the Anderson-TJdall
substitute because the significant fact is that although that law was
on the books-and as you say, a lot of the corruption occurred before
the April 7 deadline-a lot of it occurred afterward. I am surprised
if you have an `organization in every district you have not zeroed in on
one of the biggest misstatements of all and in one of the President's
press conference when he said, you know, the law was changed and
a lot of these big corporations didn't know it-Mr. Gardner, the law
was not changed. It went into effect at noon one day and it had the
same prohibition against corporate contributions that had been in the
law since 1907.
Mr. GARDNER. That is right.
Mr. HAYS. So the point I am trying to make, and I am going to try
not to take any more time, but Mr. Wertheirner stimulates me when
he talks, the point I am trying to make is that just passing the law is
not going to wipe it out. Passing the law against murder, as I think
you said in the part of your testimony that you did not read, does not
stop murder. I agree we have to have a law. I agree we have to have
enforcement. I agree more than that, that the average level of people
have to be involved. If there is `any way I can think of to write a section
in the law to involve them I will do it. Maybe you ought to loan us the
public relations people that raise the money for your organization. You
seem to do all right *by getting the public to send you voluntary
contributions.
When we give a reception and charge $25 and pay the hotel $11.50
for the food, I do not feel that~ the ~uv who buys a $25 ticket has very
much coming from me. except the right to come to my office and talk
to me. That is about all.
PAGENO="0447"
443
Mr. GARDNER. We are very much for the small gifts. Obviously that
is a o~reat pattern to pursue and we agree.
I ~vould like to comment on the extent that money does buy influ-
ence. In every speech I make I point out that there are honest donors
who give out of conviction and there are honest recipients who receive
the money with no intent to be influenced. But the bulk of the money
given over the country is given to buy influence and all you have to
do is talk to the big giver. I have talked to innumerable big givers.
There is no question. It even appears in their committee letters, and
their handouts among themselves, as to how they are going to do this,
how they are out to get a beneficial attitude for their industry or what-
ever it is. .
Mr. HAYS. From reading your testimony the implication lies that
they come to an office here and lay down some cash and get a favor.
You were Secretary of HEW for some months, did anybody come in
and lay any cash on your desk?
Mr. GARDNER. No.
Mr. HAYS. Do you think they generally do at a Cabinet officer level?
Mr. GARDNER. I would be surprised if they did.
Mr. HAYS. Do you think it happens up here?
Mr. GARDNER. I think that the pattern up here, I think that the
necessity of walking in and laying money on your desk is circum-
vented by the broad avenue of campaign giving. You can give enough
money in a normal campaign to make it totally unnecessary to walk
in and put money on a man's desk.
Mr. HAYS. I was going to tell you, it did not happen to me, what
do you think we ought to set as a limit, Mr. Gardner, to get down to
specifics on the amount that anybody can give to a congressional cam-
paign or senatorial or Presidential?
Mr. GARDNER. We have tried not to be inflexible on that.
Mr. HAYS. I am not inflexible either, but we would like to have your
ideas in the record.
There are a lot of other ideas in the record. I think our limit was
around $1,000 or $2,500.
Mr. WERTHETMER. That is right.
We would like to see the limit go lower in a system of public financ-
ing because we share your view that the very small gift is not a
corrupting gift. But the problem is that of the approximately $75
million raised for the congressional races in 1972, more than 66 per-
cent of them were raised in gifts of over $100, larger gifts, not smaller
gifts. We would like to see the contribution limit be as low as possible.
But to put a very, very low contribution limit in without in some way
providing the resources from another source, this is why we support
public financing.
Mr. HAYS. Would $2,500 be a fair figure? That is a figure that has
been tossed around.
Mr. WERTT-TETMER. $2,500 is a figure that has been tossed around
for Presidential elections; $1,000 is a figure tossed around for congres-
sional elections. Yes; we think that is a fair figure.
Mr. HAYS. A lot of people want a three-tier system and your pro-
posal has a system which I think is patently unfair in a couple of
cases.
PAGENO="0448"
444
You propose to give $90,000 in my district, yet you propose to give
$175,000 in Wyoming which has half the population or two-thirds
the population of my district, simply because it is a single Congress-
man State; or the State of Delaware, which has the equivalent of my
district and is much less in area than many congressional districts but
the same I judge as mine. Why $90,000 in mine and $175,000 in Dela-
ware? There are a lot of things I think maybe you have not thought
through in this bill of yours.
Mr. GARDNER. We have taken great pains not to stick on details.
We are perfectly willing to see that kind of thing argued out.
Mr. DENT. How and when? How can we argue it out when it comes
to the floor attached to another bill and comes over and we are ex-
pected to move on it? I understood from your conversation earlier that
you would be pleased if we did not drop the public financing for
congressional and senatorial seats, and take the package that came
over from the Senate.
Mr. GARDNER. Mr. Chairman, you have had 11 months.
Mr. DENT. What is 11 months? For instance, I was just called to
the phone. I have been 7 years on a bill to reform the pension system
and didn't get any support for it until 3 months ago.
Mr. GARDNER. How did the Senate manage it ~
Mr. DENT. My dear friend, I think you ougl~t to run for the House
and then the Senate, and then come back and ~tsk yourself that ques-
tion. How does the Senate do anything?
Mr. HAYS. They never have any hearings on anything.
Mr. DENT. They don't have hearings.
Mr. HAYS. One of the things we have been~ waiting for, Mr. Gar-
dner-I suppose maybe in some people's view i~nreasonably-we were
confronted with the proposition, did we investigate the Watergate
thing in this committee. I had a resolution for subpena power ready.
We met with the Senate, and Mike Mansfield said they were going
to do it with a select committee and Sam Ervin was going to be the
chairman. Now, I was an Ervin fan before the Watergate television.
I thought and still think he is the best constitutional lawyer in the
Congress. I simply said if Sam Ervin is going to chair a committee
to do it, there is no use having two committees to do it. So we have
refrained. There was a great chance for us to get some publicity, but
we thought one was adequate. WTe have hoped-I have given that up
in the last couple of days-to wait before we finally write a bill to
see what their recommendations were. I understand they were sup-
posed to have them ready by the 15th of February, but they are not
going to.
Mr. Dent and I made a decision after we found that out, to try to
have our own bill ready by the 15th of February.
Mr. DENT. We intend to.
Mr. HAYS. It was not unreasonable. I don't believe, for us to want
to get the recommendations of the Erviii committee who ought to
be the greatest experts on God's green earth on corruption from all the
hearings they have had. Some of us have watched some of it.
I have one more thing. I am trying to find an article of last Sunday
in the Plain Dealer in which it said that you were-it quoted Mr.
Conway saying-that yours was not a political organization. Here
PAGENO="0449"
445
it is. It quotes Mr. Conway: "Common Cause is not a political or-
ganization.
"`No, we are a lobby and not a political organization,' insists John
W. Gardner, `We don't get involved in political races on the basis of
personalities.'"
That is a sort of anomaly there: ""We get involved in issues.'"
A little further over it says: "`By next fall,' says Jack Conway"-
I am throwing these out, and if t.hey are not accurate, say so-"presi-
dent of Common Cause, we are going to be in every single congressional
district and in every Senate race and are and will be felt.'"
The final paragraph is a very short one. It is only six words. It
says: "`That,' says `Wayne Hays, `is politics.'"
Are you a lobbying organization or are you a political organization,
or are you some of each?
Mr. GARDNER. We are a lobbying organization. Lobbying is inevi-
tably a part of politics. I have never in any speech that I have given
denied that we were involved in politics. We are not a political com-
mittee or political organization in the sense that we endorse or oppose
or contribute to candidates; we are concerned with issues.
Mr. HAYS. Mr. Gardner, if you put out a sheet, and I don't know
whether you do or not-some people do, the Americans for Democratic
Action do; the Americans for Conservative or something or another,
CSA, Conservative Society of America, puts out one; the Farm Bu-
reau sometimes puts out one; AFL-CIO puts out one-picking 10
votes out of 200 or 300 and purporting a Congressman is good or bad
on the basis of their 10 particular key votes.
Mr. GARDNER. We do not make such rankings.
Mr. HAYS. But you are going to be in every congressional district.
In what way are you going to be in there?
Mr. GARDNER. Very much the same way we were in 1972-posing
questions, insisting that these questions be answered by all the candi-
dates that are in the race.
Mr. HAYS. Do you have any objection if we write into the bill that
we are going to say that any organization which attempts to influence
an election in any way shall come under the same reporting laws as
the candidates and their committees?
Mr. GARDNER. I would think you would want to specify what you
mean by "influencing an election."
Mr. HAYS. If you send out a brochure-not you, but anybody, I am
using you in a plural term-saying John Dent voted wrong on 8 out
of 10 key issues, do you think that is attempting to influence an
election?
Mr. GARDNER. I think that we would very quickly come under the
definition of a political committee and in fact violate our charter if
we told anybody to vote or not vote for John Dent.
Mr. HAYS. I am not saying you do this. You say you don't. But any
organization that sends out a general mailing and says-and I have
seen them-Congressman Dent or Congressman Jones or Congressman
Hays voted wrong on 8 of 10 issues. Here is the record. Do you or don't
you consider that an attempt to influence the election?
Mr. GARDNER. I think that anyone who is out speaking in the course
of an election campaign, speaking to the issues, is inevitably going to
25-239 O-73---29
PAGENO="0450"
446
leave implications as to his views of candidates. But that is a far cry
from endorsing or opposing or contributing.
Mr. HAYS. Mr. Gardner, you do not answer my question. I am just
trying to pose a simple question. Is sending out a piece of paper saying
a Congressman voted wrong on 8 of 10 issues and signing an organi-
zation's name to it, is that in your view, or is that not, attempting to
influence an election? I am not saying it is wrong. I am asking you, do
you think it is attempting to influence, or do you think nobody is going
to pay any attention to it?
Mr. GARDNER. We assume that they will weigh those issues with all
the other issues. Common Cause does not do an across-the-board rank-
ing on what the Congressmen vote on. We have very few issues, as you
know. We report on what people do on those issues. We do not attempt
to rank the candidates overall.
Mr. HAYS. One other question. This might save a special hearing. I
have on my desk several letters which asks the committee which has
oversight to investigate this, and your organization's name is men-
tioned. You are not under oath, but your word is good enough for me
anyway.
Did you or did you not have members of your organization using
phones in Members' offices to call people around the country and ask
them to write letters advocating impeachment?
Mr. WERTHEIMER. Members of Congress office?
Mr. HAYS. Yes.
Mr. GARDNER. We have never taken a position on impeachment.
Mr. DENT. That is a great common cause. How do you duck under
that issue?
Mr. WERTHEIMER. The answer is no.
Mr. HAYS. Your organization, along with Mr. Nader's, is charged
with having people in Congressmen's offices over weekends and in
the evening using Government-paid-for phones to call people around
the country to stimulate-
Mr. GARDNER. No such calls from us.
Mr. HAYS.-I think that is wrong as I think it is wrong for the White
House to use Government phones to solicit mail in support of the
President.
I don't think the taxpayers really get much kick out of that.
Mr. GARDNER. I would agree.
[The following article was submitted for the record:]
[From the Washington Post, Nov. 28, 1973]
LETTERS TO THE EDITOR
ZIEGLER AND COMMON CAUSE
White House Press Secretary Ronald Ziegler made completely unjustified com-
ments about Common Cause in speaking to reporters en route to Macon, Georgia
on November 18. As reported in Carroll Kilpatrick's news story in The Post,
Ziegler characterized the outpouring of mail to Capitol Hill after the firing
of Archibald Cox as "manufactured" by "traditional adversaries of the Presi-
dent." Ziegler went on to charge that staff members of Ralph Nader's organization
and Common Cause used congressional offices to "drum up" criticism of the
President.
Common Cause has never used congressional offices to "drum -up" public opin-
ion on any subject. Through our own phones and bulletins to our members Com-
mon Cause has encouraged thousands of letters to Congress urging support of
PAGENO="0451"
447
legislation to provide for a court-appointed Special Prosecutor. We are proud
of the success of this legitimate lobbying technique.
Common Cause is not a "traditional adversary" of President Nixon. We have
opposed his position on specific issues, including the firing of Cox, and supported
him on others, most recently the highway trust fund. The Common Cause board
has taken no position on the President's resignation or impeachment though, nat-
urally, some of our 280,000 members have expressed their strong personal views
to their congressmen.
Common Cause, unlike some former White House officials, has not "manufac-
tured" public opinion in hidden ways. Copies of our communications with mem-
bers, including telephone "alerts," are open for anyone to see.
JOHN W. GARDNER,
Chairman, Common Cause.
Washington.
Mr. DENT. I don't want to pursue it any further, but I just want
to say we have cataloged some 2,500 different organizations in the
United States who, to a greater or lesser degree, monitor Congress.
There isn't a living human being who could please 2,500 self-interest
groups in the United States, so there is a great deal more to this legis-
lation than what appears in the public press. That is the reason Mem-
bers send out newsletters. They do this because in many instances
there is no way in God's Earth that they can get across to the public
a view of legislative action.
Mr. HAYS. Tell them about the postcard bill we reported out. Post-
card voting I thought was a big issue. There wasn't a word in the
Washington Post, the Washington Star or the New York Times that
that bill has ever been reported out of committee.
Mr. DENT. Not one word. I have sent one newsletter out in 3 years
and it has to be sent out because my denials of a committee action
which was portrayed completely opposite to the committee action, the
paper I sent out correcting the action, giving the vote, was never used
in any paper and I had to do it. One newsletter.
There are some Members who use it a lot. I know that. But I am like
Mr. Hays. I go home every weekend. I have never been stricken with
this Washington disease, Potomac fever. First of all, I don't run a
hot fever very often but I am very much convinced that somewhere
along the line we must do something about those self-serving groups
that measure your vote in Congress on their issues alone and send them
out-they have mailings-to everybody in the whole district. Not one.
I received a score from the ADA. I think I got 4 percent or something
like that one year.
But I represent farmers, coal miners, business people, professionals,
poor people, rich and medium income. I can't vote one way all the
time.
The Member votes according to his district and when the majority
of the Members vote for a piece of legislation it represents the majority
of the people of the country. But these influences want us to vote
one way regardless of our districts.
Now, the way to get an incumbent out is to talk to him into voting
the way you want him to on all legislation, the way the labor people
want him to on all legislation, the way ADA wants him to. That is
the way to get him out of office, but if he pays attention, he will pay
attention to what you say; he will review it. I talk to your people
back home. I know them all. We are very friendly. We just happen
to disagree on some things, that is all, and they understand that.
PAGENO="0452"
448
But don't you ever believe that you don't use an influence in an
election when the name of your ADA man is in the paper in a pre-
aritele stating that they are opposed to Congressman Dent's stand on
this or that. That is politicking. You do have a fine reputation. I even
have a legislator who sends you $15. I don't mind sending you $15
myself because I like to read what you say and I like to see how you
do it.
I think you ought to run for office some time and try our end of the
field.
Mr. GARDNER. The fact that you have 2,500 groups monitoring you
is not a problem. The legislature is the accesible branch of Government
and it has a lot to do with your effectiveness.
Mr. DENT. But you know you can't get the bankers to agree with the
homeowner on the matter of interest, and yet the bankers will come
out against you-they tell me-if you don't vote the way they want
you to.
Mr. GARDNER. Indeed they will.
Mr. DENT. The garage owners, the automobile dealers. Everybody
has an organization and now they have learned they can make a living
representing these people so they have splintered off into I don't know
how many different units.
For instance, the National Banking Association used to speak for
them but now I know of at least 150 organizations that represent
banking in one field or another. Many times they are on opposite sides
of the fence on the very piece of legislation that maybe the National
Bankers would like to have.
You see, our decision, regardless of how they look to all of your
followers, are usually made in the interest of the majority of the people
of the district on that particular issue. If you don't do that, you don't
stay in Congress by accident or by spending money, in my humble
opinion. You stay in Congress or in any elective office by what you do.
When you put on these limits you are talking about, $180,000 to run
for a job that pays $42,500 a year, the maintaining of two homes and
campaigning and the thousands of dollars that you have to give away
from the dunning letters you get, I just don't believe the people will
ever credit anybody with seeking office for an honest purpose when he
spends that kind of money. I can't believe when a man spends $300,000-
and-some for that kind of a job, I just can't believe it.
Mr. HAYS. I want to correct a statistic or impression. I am sure ycur
statistics are right, but I had my staff compile the 70 most expensive
races for the House and I just counted up here quickly and I might
have missed maybe 1 or 2, but out of those 70 races 37 nonincumbents
spent more than the incumbent did. So you know, in the 70 most ex-
pensive races somehow or another the nonincumbent was able to ge~
up the dough. I will be glad to give you a copy of it.
Mr. WERTHEIMER. Were these based on the figures you submitted
today?
Mr. HAYS. They are the ones from the Clerk's Office which I am sure
are the same ones you submitted. We didn't have your figures when this
was done last week, but we had the staff research the figures in the
Clerk's Office and I believe they are identical. We did it a week or 10
days ago. I just said, pick up the 60, 70, or 80 most expensive races.
I wanted to see how much money they did spend.
PAGENO="0453"
449
Mr. WERTHEIMER. I think the comment I made before holds true.
In the great majority of races in this country incumbents substantially
outspend `challengers. When there is no incumbent in the race, chal-
lengers of both parties are able to raise substantially more. It is very
interesting that when the incumbent drops out of a race, both chal-
lengers are able to raise the money for that race.
When an incumbent is in the race, challengers are not in a position
to raise money.
Mr. HAYS. Perhaps it is because the incumbent is satisfying the ma-
jority of the people in his district. Did you ever think about that?
Mr. W~RTHEIMER. That is a factor but another factor is the reason
campaign contributions are given today-the point Mr. Gardner made
before-the fact that the campaign contribution has become an un-
fortunate process by which a number of motives are satisfied, and that
money in campaign contributions naturally drifts and goes to
incumbents.
Another statistic we find: More than $2 out of every $3 given by the
political action committees were given to incumbents. In races where
there are incumbents and challengers, a great majority of the money
given by political action committees were given to incumbents, not to
challengers.
Mr. DENT. Isnt' that natural? Let's look at this. Here is a man who
is a Member of Congress. He wasn't born into Congress. He had to run
sometime for the office. He wasn't born into it. He goes there, pays
attention to his knitting; lie takes care of his people; he fees them;
he talks to them; he meets with them, and he has to cover the whole
area. You just don't cover one group. That is where a man makes a mis-
take, but in one district he has to vote 100 percent for the farmers.
Why? Because that isthe livelihood of the majority of his people.
In another area he has to vote not 100 percent on crucial legislation
in labor. Why? Because it is an industrial area.
In another area he can vote any darned way he pleases because it is
one of those independent areas `but he pleases them.
Up comes an election. You are one of his constituents. You see noth-
ing wrong-that is, fatally wrong-very seriously wrong with his rec-
ord. Would you contribute just to have somebody run against him?
Would you go and get an opponent of his to run when he couldn't give
you any better service, or take care of his job any better?
Why do you say because an incumbent gets contributions from people
in small amounts, like most of us do-that is the problem; the fellows
who get big contributions-why do you say you have to do something
to make him be at a disadvantage somewhere? Like the bill that is be-
fore this committee which says an incumbent will be allowed $125,000
but a nonincumbent allowed $140,000.
Can someone tell me what is base about being an incumbent? How
long have you been in the job you have been in with the Common
Cause?
Mr. WERTHETMER. Two years.
Mr. DENT. How did you get it?
Mr. WERTHEIMER. I worked for the House of Representatives for
4 years prior to that.
Mr. DENT. I know that. I know that. I know that.
Mr. WERTHEIMER. Then I applied for the job and I got it.
PAGENO="0454"
450
Mr. DENT. Were you voted on?
Mr. WERTHEIMER. Was I voted on?
Mr. DENT. They tell me you have 200,000 members. Did your name
go before 200,000 members? You have been in 2 years. You would be up
for reelection now.
Mr. WERTHEIMER. No; it did not.
Mr. DENT. Do you understand? I have always admired you because
you have been forthright, Mr. Gardner, but you do not really believe
that incumbency is so bad that we ought to put it at a disadvantage,
do you?
Mr. GARDNER. No; we certainly do not.
Mr. DENT. I have had about 42 years and I am about ready to shove
the whole thing.
Mr. GAimNER. Our statistics show such a remarkable financial advan-
tage for the incumbents, not counting such things as the franking priv-
ilege-by the way, on the size of gifts we found two out of three gifts
were over $100.
Mr. FRENZEL. That is not correct. It is $2 out of $3.
Mr. DENT. We are talking about an area where $100 reaches about
where $20 did 10 years ago. You can't measure in numbers. You meas-
ure in the value of the dollars. The thing that has caused all the trouble
is the TV and the high cost of TV. I have never used TV in my life. My
opponent spent $180,000 and I spent $12. I had an incumbency behind
me, but I had a record. That was the main thing, the record. And there
is nothing more dangerous to an incumbent than a bad record and if
he lives in one district and votes to please a district that is interested
in something that hurts his district, he will have a record, but he won't
have one next year because he won't be here.
I don't care how much money a man spends to be reelected.
Another thing with regard to the incumbent. We `have "reapportion-
ment." More members have lost because they have been reapportioned
out of office. That is what you ought to do to get incumbents out. Go
to the legislature and say "We want this fellow out." That is the way
of getting a new Congress.
Mr. WERTHEIMER. We are not talking about getting incumbents
out. In our view if you went to a public financing system incumbents
would hold up pretty well.
Mr. DENT. I am afraid they would. I don't believe in it. That is
where the advantage would be because we can vote to increase the
amount of money coming out of the Treasury. There isn't anything in
this legislation that says $90,000 this year "and forever," does it?
And so we have Members of Congress-I think that my good friend,
Mr. Frenzel, might agree to `this-who would like to see it $250,000
out of the Treasury for every Member.
Mr. FRENZEL. Oh no. No.' No. No. I don't want any out of the
Treasury.
Mr. DENT. But you want the $250,000?
* I will be glad to sit down with you and all of your friends at any
time and I wish you would come `and discuss it privately with us. You
can't do much in public hearings. You don't get to the depth of things.
You have to talk to people. I see here today many things we could
- agree on if we had a way of exposing each other to our i'deas.
PAGENO="0455"
451
Mr. FRENZEL. I thank the chairman for yielding. We normally
operate under the 5-minute rule, but the chairman of the subcommittee
and the chairman of the committee have allowed me to dominate many
other committee meetings and so this is the way we are proceeding.
First of all, I would like to assure our witnesses and the other
spectators in attendance that two members from our Republican side,
Mr. Ware and Mr. Harvey, are in hearings on the emergency energy
bill. They have followed this committee's work with great interest
and I apologize for `their `absence to our witnesses today.
Our interest, however, I think is evidenced by the fact that Mr.
Cleveland, who is not a member of the subcommittee, has sat in and
tried to follow the committee very closely.
Mr. Gardner and associates, first of all, I would like to `congratulate
you for the work you have done in the field `of election reform. I don't
know of any other organization or group which `has had the record
that you have had of assembling data, trying to analyze the data, and
put forth reasonable solutions to problems that you see.
In spite of some other good work your organization has done, I
think if its reputation were to stand on its work in elections, that you
will be rewarded by fat membership lists for many years to come.
And because of your good work I can tolerate some of the temporary
dementia which causes you to support public financing, but I would
like to start with the question of contributions, which you would like
to limit to $250 and $500.
I posed this to another of our witnesses who wanted to limit contri-
butions to $1,000 and it concerns me greatly. Here is the situation:
I have a person who works for me and he handles all my advertising
and he does it free and he is a highly paid advertising executive and
by the time my campaign is done his services to mc in terms of per-
sonal services on a volunteer basis rendered have a market value of
$5,000. I might also say the same for a lawyer managing my campaign,
a statistician or accounting doing the statistical work on my campaign.
How, you are allowing, under your suggestion, those people to con-
tribute $5,000 to my campaign, but you are not allowing somebody
else, a lady without a car who can't come work on my campaign, a guy
in a wheelchair, anybody else, you are saying he can contribute $250.
Now, how are you going to make that stand up under the Constitu-
tion, that kind of unequal free-speech situation?
Mr. GARDNER. We have talked to a good many constitutional lawyers
about this and the weight of the opinion is clearly on the side of its
being constitutional. We have lived, as you know, with limits for
many, many years. There has not been a test of it but the weight of
opinion we. get is that placing a limit is not limiting free speech.
Mr. FRENzEL. Have you heard of a court case called the A CL U-
New York Times case?
Mr. GARDNER. Yes, we have.
Mr. FRENzEL. Was it not a case in which some group external to a
candidate's committee put a $10,000 ad or at least some kind of an
ad in a newspaper in New York supporting a candidate, or perhaps
in opposition to a candidate's opponent, and under our current law,
which had a limitation in spending, or a limitation in approval of
media expense, a three-judge court-and I believe this was what, a
Federal District Court, ruled that the people who placed that ad had
PAGENO="0456"
452
a constitutional right to do so. Would that not fly in the face of the
opinion you have jUst given me?
Mr. WERTHEIMER. Our understanding of that case, Congressman,
is not that it stated individuals had a constitutional right to make un-
limited expenditures on behalf of the candidate, but rather that the
action being taken by the ACLU was not a situation that dealt with
support or opposition to candidates.
Our view that that decision does not prohibit you or eliminate the
opportunity to restrict individual expenditures on behalf of candidates,
we think the Supreme Court will uphold that kind of restriction as a
part of an overall approach dealing with protecting the integrity of the
electoral process through regulating campaign contributions.
Mr. FRENZEL. You think these groups can run ads like that under
that court decision?
Mr. GARDNER. The decision did not involve the amount of money
spent on the ad, as I understand it.
Mr. HAYS. I read the decision last night. I am not a lawyer but I had
a couple of lawyers sitting by and I gathered the decision hinged on
whether or not the Congress had the right to regulate whether these
people had to file and whether the newspaper had to get a statement
from them as to how much money they spent and the courts ruled the
newspaper had no such obligation, nor did they.
Mr. WERTHEIMER. The court ruled in our view that the people were
not making any political expenditure.
Mr. HAYS. But under the law we said this is a political expenditure,
under the old law.
Mr. WERTHEIMER. The court interpreted the law as stating that this
was not a political expenditure. That is our impression of what the
Ba~elon decision said.
Mr. FRENZEL. If I can follow that up, that means if the committee
to put more guns on the street can spend money on my behalf or in your
behalf in amounts such as that which was allowed in that case, that is
all right, but the poor little old lady can't spend a dime on me under
some of these Federal financing laws that you are backing, and under
your statement today she can only spend $250 contributing to my
campaign.
How do you reconcile that?
Mr. WERTHEIMER. We reconcile it, Congressman, by stating again
that it is our view that that opinion does not allow-
Mr. FRENZEL. Do you mean you think that court decision will be
overruled?
Mr. WERTHEIMER. In the manner you are interpreting it, first of all,
I think we disagree on the interpretation of it.
Mr. FRENZEL. Forget the interpretation. They allowed it to stand,
whatever that guy did in running the ad.
Mr. HAYS. I have the language right here.
"No person may make any charge for the use of or on behalf of any
legally qualified candidate for a Federal elective office or nomination
to such office, supply any newspaper, magazine or outdoor advertising
facility unless such candidate or a person specifically authorized by
such candidate in writing-", and this was one of your recommenda-
tions; it was in your substitute-"certifies in writing to the person
making such charge of the payment that such charge will not violate
PAGENO="0457"
4~3
paragraphs one, two, or three, subsection (a), whichever is applica-
ble-" and that gobbledegook simply says you can't do it-and the
court says that is unconstitutional. That is as simple as you can explain
it.
The court says, "The coupling of these first amendment impediments
with the act's ill-defined standards-" I didn't write the act-"leaves
the court no choice but to declare 104 (b) facially unconstitutional.
Accordingly, we permanently enjoin its enforcement."
Mr. WERTHIMMER. You want to know whether independent activity
on behalf of the candidate will not violate the first amendment?
Mr. FRENZEL. Putting it all together with what the court says the
law is today, you have restricted a contributor to a campaign to a
very modest amount and allowed somebody else to get around the law
in a very different way in sizable amounts.
Mr. WFAIiTHEIMER. We would say, Congressman, that you can restrict
both aspects of it; that they are constitutional and the Supreme Court
will so hold.
We understand questions have been raised about it. We would
imagine that this issue would be tested, and tested quickly, and we
believe it will be upheld.
Mr. FRENZEL. The trouble is, it wasn't tested quickly last time and
we thought that would happen, too.
I am going to be a little critical here and I hope you will remember
the first part of my speech rather than the last.
Your material you publish to us and to your members leads every-
body to believe this is very simple and all we have to do is pass a
couple of laws and spread some Federal money around and suddenly
the snow will be white and pure-driven.
You just can't send a letter to 200,000 members and tell them that
suddenly everything is going to be fair because if what the court said
applied and if the laws you are now asking us to pass were laid over
that court decision, you woudi have gross inequities in the ability of
individuals to contribute volunteer time, dollars, or anything.
I think we really have to be careful about this thing.
If I can add another bit of criticism, it goes to the material which
you have given us today and previously. It is wonderful stuff, but
you have accused us of being dilatory-and so have I. I guess I am
the only person around who has been as critical of this committee as
you have in terms of its speed, but your speed in producing the stuff
upon which we are to base our decisions has been about equal to the
committee's pace and it would have been more helpful-
Mr. WERTHETMER. We have done that, Congressman, on a voluntary
basis. As you know, it was not our responsibility to produce this in-
formation. That was the responsibility of others. We have, through the
use of rather extensive voluntary efforts by thousands of individuals,
produced it and it has taken some time.
Mr. FRENZEL. Surely, and we have had other avenues to get the ma-
terial and we have gotten it, as the chairman has and as I have, but `I
think there would have been more merit to your prodding had it been
produced sooner.
I would like to go on to a couple other questions on your testimony.
One of the statements that you ii11ake is that it would be cheap if, in
spending the taxpayers' money, we could develop a clean system, and
25-239 O-73------30
PAGENO="0458"
454
I have to agree with you wholeheartedly, and I feel the same way about
registration. If you get a good system, the expenditure of public money
does not frighten me. I guess it isn't the amount of the money; it is
the purpose of the money and how it is spent and what it does to the
election system that causes me to shy away from public financing.
I notice in your testimony today, Mr. ~ardner, you said you're for
small gifts and yet I think yesterday I got a letter from you telling
me what a neat deal this Kennedy amendment was and it would seem
to me, at least in general elections, you are not for small gifts if you
are for the Kennedy bill.
Mr. WERTHETMER. We have supported a combination approach, a
matching approach for the primaries, a grant approach in the general
election. We would see no problem, as Mr. Gardner mentioned before.
This is, again, a question of choices; a matching approach for the
general election which would accomplish the same purpose would be
perfectly suitable for us.
Mr. FRENZEL. So you are for small gifts "sometimes."
Mr. WERTHEIMER. We are for the use of small contributions as a
means of judging viability in the primaries.
Mr. FRENZEIJ. I guess what I am trying to say to you is you have too
many recommendations floating around and you ought to be for
somebody that we can get our teeth into. If you are for the Kennedy
bill, you are for $3,000 limits in primaries and no public financing for
Congressmen, which means that, I guess, we can be bought in primaries
but we can't be bought in generals, because there you are for 100 per-
cent public financing.
You are for matching in public financing and I think you have to be
a little more discriminating in what you are for and what you are
against.
Mr. GARDNER. I would take issue with that, despite Mr. Hays' con-
sistently giving us credit for writing that earlier bill. We did not write
it. -~
Mr. FRENZEL. I gave you a lot of credit for helping get it passed and
you did good work on that.
Mr. GARDNER. I have consistently required of our stag that we come
up here with sufficient flexibility so that the Members df Congress can
argue the details out and arrive at something that is suitable and will
pass, and it would be wrong for us to come up with a fixed formula
and just say it is that or nothing.
Mr. HAYS. Do you deny paternity for this bill last year, Mr.
Gardner?
Mr. GARDNER. We were deeply involved in the discu~ssions.
Mr. HAYS. I just want to tell you the two men whose names ap-
peared on the bill. You know, some of the comments they made on the
floor were to the effect that this was a Common Cause bill, and forgive
me if I took that to mean that you wrote it.
I assumed that you had a big hand in it. Whatever defects are in it,
I don't want to be held responsible for it. Apparently, neither do you.
Mr. FRENZEL. I have modestly claimed some credit for the passage
of that bill last time. I will also take credit for some of the defects, and
there certainly were some.
In your testimony, you say that the Federal Elections Commission
is a prime priority of Common Cause. I notice, how-ever, that is not
PAGENO="0459"
455
included in the Kennedy amendment, and that the enforcement would
be-as I read the Kennedy bill-it would still be in the traditional
way, and that is one of the things that you have complained about.
Do you not see this as a major flaw then?
Mr. WERTHEIMER. Excuse me, Congressman. The Senate amend-
ment sent over here includes 5. 372, which includes an Independent
Elections Commission.
Mr. FRENZEL. I don't read it in the record. I think it assumes S.
372 will-
Mr. WERTHEThIER. S. 372 was attached as an amendment on the floor
in the Senate.
Mr. GARDNER. We think that is about the most important feature of
the whole thing.
Mr. FRENZEL. I think it is, too, and I see that goal fading from
sight, and I am very much concerned about it.
Also, the enforcement power. You still believe prosecution power is
necessary?
Mr. FRENZEL. That is right.
Mr. HAYS. You advocate the General Accounting Office being in-
volved to the degree of having the head of the Office a member of
the Commission.
Now, in view of the praise you give the General Accounting Office,
would you be satisfied if all election matters were turned over to the
General Accounting Office?
Mr. GARDNER. We would think it better to have an independent Elec-
tions Commission, but we would be satisfied if the General Accounting
Office were given powers of subpena and powers to initiate court action.
Mr. HAYS. Mr. Gardner, you may have missed this. The President
didn't make much of it, but one of my good friends in the Congress
came in with a bill that his administrative assistant, who is a former
newspaperman, had written, and he came before this committee and
advocated a Presidential commission. His Presidential commission was
to consist of the President and four members appointed by the Presi-
dent and confirmed by the Senate.
Now, I pointed out to him that that really didn't fly, that bird didn't
fly with me because I said what you would have probably had for the
1 972 election was a commission consisting of Mr. Nixon, Mr. Stans,
Mr. Mitchell, Mr. Haldeman, and Mr. Erlichman, and probably before
the election you could have gotten all four of them confirmed.
Now, I just am very leery and skeptical, and any other adjectives
you want to add t.o it, of having a commission that anybody appoints
for short terms. That is why I was able to effectuate the compromise
on the General Accounting Office on the Presidential thing in the bill
last year in the conference committee, because the head of the General
Accounting Office is appointed for 14 years, with confirmation from
the Senate, and most of them don't want to be reappointed, so they are
about as pressureproof as any outfit in this town.
Now, had the Commission I mentioned been appointed, do you think
Watergate would ever have been exposed?
Mr. GARDNER. We certainly never would have supported a commis-
sion so constituted. The characteristics of the Commission and how it
is appointed is of the essence.
PAGENO="0460"
456
When you speak of the GAO handling this, you envisage giving it
subpena powers and power to go to court?
Mr. HAYS. Well, Mr. Gardner, I have no qualms about subpena
powers. I want to be perfectly candid with you. I think there is a great
philosophical problem here, and I am openminded, really, on it, about
how many Attorneys General you have in the country, how many inde-
pendent or quasi-independent commissions you have who are able to
go into court on their own.
I think philosophically I would be happier if we could get the bill
through that somebody has introduced where you just elected the
Attorney General of the United States and held him accountable to
the people.
You know, we do that in Ohio, and if an Attorney General gets a
had reputation, as the one was had last time did, he doesn't get re-
elected. I mean maybe he deserved it, maybe he didn't, but at least
the word got around he wasn't doing his job very well and he didn't
get reelected.
There is a philosophical thing which I am willing to give and
take on.
I don't mean to take any more of your time, Mr. Frenzel, but those
are my thoughts on an independent commission having independent
power of the Justice Department without anyone to review their ac-
tions. To just take anybody willy-nilly into court. You know, under
that law-you and I had a little go-round about my first filing under
the new law. I was among those that my State was the first to have to
file under, and we filed timely and promptly with the Clerk of the
House, and inadvertently a copy to the Secretary of State didn't get
filed, but we filed timely and promptly under the Ohio law.
You made a big deal out of it, and presumably I could have been
hauled into court because that didn't get there until a day or two after
the deadline, but there was no intent and there was nothing wrong
with the filing, and there was no fraud or anything like that in it.
So this is the thing that gives me a little pause.
Mr. GARDNER. We certainly have never pressed for any action at all
on that kind of oversight, but you have to face the fact that back
through administration after administration, the Justice Department
has not-
Mr. HAYS. I am aware of that. I would think that we have got to
have some kind of a combination and remedy so that somebody does
happen, if there is glaring and visible evidence~ of fraud.
Mr. FRENZEL. Thank you, I think we all are pretty well positioned
on the Federal Elections Commission and we know how most of us
stand here. -
I would like to comment on your statement on the spending limita-
tion because I again credit your group for going beyond, in this case,
the conventional wisdom, and realizing tha.t challengers need to spend
a little more to beat incumbents and our intention-I think your in-
tention is the same as mine-we are not trying to elect incumbents
just for practice.
What we are trying to do is make a viable challenge in every dis-
trict where it is reasonably possible. And, while I would allow ex-
penditures a little more tha.n yours, I certainly think that you have
PAGENO="0461"
457
made all the same points and that your thoughts in this area are first
rate.
You also have some suggestions about single committees and cash
contributions, and so on, about which I don't find any argument any-
where. I think we are right on there.
However, for my colleague, Mr. Cleveland, who has introduced a
bill restricting cash contributions to $25, I would ask his question
and that is, would you support that? He feels the traditional $100,
which is in the Senate bill, or the $50 which you have suggested, is
over generous and he is wondering about your position on his $25
proposal.
Mr. GARDNER. I received a message from Mr. Cleveland on this. I
would say we will stay with our $50 recommendation that his $25
limit can be well defended and we welcome his voice in the argument on
this because we think that it has to be a low, low limit.
Mr. FRENZEL. His second question then would be that he would like
to have a bill passed with a low cash limitation right now and then
leave other reforms to the future, or whenever this committee might
bring it out. Would you answer his question as to your position on that?
Mr. GARDNER. I think we would prefer to see the whole thing done
together, or as much as possible done together.
Mr. FRENZEL. I must agree I would concur with your position rather
than his. If we pass all the good things, we will not be able to pass any
of the tough things.
Mr. HAYS. In the absence of the chairman of the subcommittee, I
assume I am presiding and before we go to the second or third member
on your side-we are now down to Mr. Cleveland whom you are acting
for. Would you mind if we give Mr. Jones 5 minutes if he wants it for
questions?
Mr. FRENZEL. I would like to continue later.
Mr. HAYS. Would you object-and many Members favor this-if we
get a comprehensive bill upon which most Members can agree, would
you object to preemption of State laws?
Mr. GARDNER. No.
Mr. HAYS. So there is one filing for everybody?
Mr. GARDNER. Almost essential.
Mr. JONES. Mr. Gardner, I want to thank you and your represent-
atives for being here today. I have enjoyed the testimony that has
been given and I have also enjoyed the remarks of the chairman of the
committee, Mr. Hays, and Mr. Frenzel.
I have no questions, but I want to associate myself with you, Mr.
Chairman, and other members of the committee, in what they generally
believe and have said as far as the elections law is concerned. My views
are the same as yours.
Mr. DENT. I noted during your remarks earlier-maybe I didn't
hear them right or read them wrong, one or the other-I noted in deal-
ing with the question of the independent commission, I thought you
felt that there was something wrong in the behavior of, or the admin-
istration of the Chief Clerk of the House, who is the chief supervisory
officer.
What did he do or not do that would cause him to be criticized for
the job he has done?
PAGENO="0462"
458
Mr. GARDNER. Well, I think another sentence in the testimony gave
our view of his performance. We feel that both the Clerk of the House
and the Secretary of the Senate went out of their way to be punctilious
about their efforts and our main concern-and it still is a deep one-is
that they are put in a position which is not a natural position for a
policing function; that you police the individuals who employ you.
But, as to their behavior, I have to give them full credit.
Mr. DENT. I know that we monitor the Chief Clerk on the elections
situation and I believe the score is now around 5,000 violations that he
has transmitted to the Justice Department and I think that is a pretty
good performance, don't you?
Mr. GARDNER. Yes; can you recall how many were acted on by
Justice? Three?
Mr. DENT. So there you go, that is your law. But if you don't have
people who believe in law-another thing: Why can't you believe that
we can do a better job than this Senate bill coming over on the eve of
adjournment and the Presidential election-and that is the only one I
understand they are going to pass now, is the Presidential financing-
the Presidential election doesn't come for 3 years. Do you know if you
ever take any money out of Treasury-I am talking about `the Presi-
dential elections, and that is what they are going to do-it will be
misread by the public and a lot of votes will be cast, because they don't
have time to explain to everybody the background of the bill and they
just voted for it and let it go.
But you still allow them to raise money. So the moment you allow
them to raise money for their campaign, or you allow the political
party to raise money for that campaign, haven't you just added a cost
over and above what they would normally do anyway? Do you under-
stand what I mean?
I am for Presidential campaign funding, but I am for it to the
point that every qualified person who qualifies under some kind of a
program-which I want you to see some day, that we are trying to
work out, to keep just the nuisance candidates out-would get the
same amount of money out of that Treasury but they could not be
permitted to raise one red cent in contributions, personal or otherwise.
Mr. GARDNER. Not even in the primary?
Mr. DENT. Not any time, because there is no primary for the Presi-
dential candidate.
They are only preferential. That is, if he chooses or doesn't choose to
run in the preferential. Everybody knows very seldom does a pref-
erential vote in a State carry over to the general election for the
same person.
I remember the preferential election of not too many years ago
when one candidate was swamped in a certain State and in the general
election he swamped the other fellow.
I don't believe in campaign expenditures coming out of the Treasury
of the United States if at the same time you allow all of the loopholes
that are in the law, when you allow contributions to be made to the
same party. If we are going to finance it-and they say your argument
is the people ought to have a voice in it-they ought to have the whole
voice if they have it at all. Do you agree that is an honest effort?
Mr. GARDNER. I agree that is an honest opinion, but-
PAGENO="0463"
459
Mr. DENT. You still want them to raise money from ITT and the
rest of them?
Mr. GARDNER. We believe a low contribution ceiling that would per-
mit participation cannot be damaging.
Mr. HAYS. Mr. Gardner, another thing occurred to me-Mr. Wer-
theimer especially made a big issue of the amount of money.
Are you aware in the British Parliamentary elections there is a
much higher percentage of turnover of incumbents than there is in
the United States?
Mr. Gardner. I have heard that.
Mr. hAYS. Do you know the limitations on Members of Parliament
on expenditures?
Mr. GARDNER. No.
Mr. HAYS. $1,500. Now, they have a smaller constituency. I want
tobe perfectly fair about this. Their constituency is one-seventh on the
average of an American constituency population-wise, but if you mul-
tiply $1,500 by 7, that is still $10,500, and they just can't understand
why we allow more than that. I have seen a great many Members of
Parliament and they say, "We don't see how you can do it."
Mr. GARDNER. Every time I visit England I am struck over again
by the fact it is a very small country. It just seems to me the conditions
under which you campaign are really strikingly different.
Mr. HAYS. $10,000 or $1,500 is strikingly limited from what we read
about where they spend over half a million.
Reasonable men can disagree about the amount, but some kind of
limitation ought to work over here.
Mr. FRENZEL. I have three questions that perhaps you can answer
for the record.
First, you stress a need to keep the occupation listing for contribu-
tors of over $100. I congratulate you for that. I think it is helpful. I am
wondering what your thought would be about expanding that? If
you are interested in my occupation, is it also not important that I
may have a lobbying interest; I may be head of the Anti-Abortion
League or the Pro-Abortion League, or my principal legislative in-
terest might be different from my occupational interest.
I presume the reason you want occupational interests is to find out
the contributor's special interest, but his special interest might be
quite different from his occupation.
I would like you to consider that.
Mr. GARDNER. We urge consideration of disclosure laws which re-
quire contributions to list their principal legislative interests, us well
as their name, address, occupation and principal place of business. We
consider such requirements to be useful in enabling the public to better
evaluate the nature of support enjoyed by various candidates.
Mr. FRENZEL. The second thing is that you would prefer to keep
chapters 610 and 611 with respect to pool contributions of government
contractors like they are. I suspect that won't work because they are
eliminated in 372 and such a bill passed the House, but I think it is a
good idea.
I am wondering if here you wouldn't go a step further, as our Repub-
lican Task Force did, `and say pooi contributions of all kinds except
those coming out of parties are prc~bably not consistent with individ-
ual participation in elections, and I would like to have you comment on
that.
PAGENO="0464"
460
Mr. GARDNER. We support as part of a comprehensive public financ-
ing ban or severe `organized interest group giving and pooling of con-
tributions, while specifically exempting political parties from such
restrictions.
Mr. FRENZEL. The final one is that your statistics show what happens
or how much money is spent out of State for local elections. We worry
a lot about the large contributors, or sophisticated contributors being
able to make their money work double time for them by picking se-
lected races around the country.
Have you considered geographical limitation-and there is a con-
stitutional problem here, of course, but maybe a percentage limitation
on these kinds `of contributions.
Mr. GARDNER. We do not favor imposition of geographical limita-
tions on contributors in order to prevent out-of-State money from in-
fluencing local elections. There are clear constitutional problems with
such `an approach. We feel, moreover, that the size `of a contribution
is far `more significant than its geographical origin in determining
whether it might have a corrupting or distorting effect. Therefore,
while we favor imposition of strict limits on the amount which any in-
dividual may give to a candidate, we w'ould not advocate setting geo-
graphic limits on who may contribute.
Mr. FRENZEL. Mr. Chairman, I thank you for your indulgence.
Mr. DENT. Mr. Gardner, I want to thank you for your patience and
the help you have given us.
The door is always open for any suggestion you may have.
Mr. HAYS. I just had a call from Mr. Biemiller, director of the
department of legislation, AFL-CIO. In the literature you say the
AFL supports Federal campaign financing for all offices. He says that
is not their position. Perhaps you could revise your literature accord-
ingly. I don't know. Your quote is of Mr. Biemiller himself and he
just called and said this isn't it.
I thought that ought to be in the record.
Mr. DENT. We thank you very kindly. If you don't feel you have
had enough time before the committee, we will be glad to set up
another date. We don't expect to have a bill before the House before
March 15.
Mr. HAYS. I have an earlier date in mind than that. Let's say Febru-
ary 15 and then if we miss it we will be better off.
Mr. DENT. Very well. February 15, March 15.
I don't think if the law is obeyed that is on the books today that you
will ever have another Watergate. It happened, as you well know,
~ no one paid attention to it, if you will remember. No one paid
attention to it.
At this time I will call Robert Nelson, director, legislative depart-
ment, United Mineworkers of America.
Mr. DENT. Could you file your statement and summarize it for us?
STATEMENT OP ROBERT R. NELSON, DIRECTOR, LEGISLATIVE
DEPARTMENT, UNITED MINEWORKERS OP AMERICA
Mr. NELSON. Mr. Chairman and members of the subcommittee, my
-~-name is Robert Nelson, director of the legislative department of the
United Mineworkers of America.
PAGENO="0465"
461
On behalf of UMWA president, Arnold Miller, and the 200,000
members of the United Mineworkers, I appreciate very much this
opportunity to present testimony on the subject of public financing of
elections, an issue of timely importance and of far-reaching impact-
as well it should be.
It is quite clear for those who want to see that prompt reform of
campaign financing is crucial to the very survival of our Govern-
ment. Not just in the way we learned about democracy in our high
school civics class, but the very real sense of what this country and our
Government was all about the first time we went to vote and were con-
fronted by some political operative who actually wanted to buy our
vote. Can you imagine that-buying votes. What a come-down from
the noble teachings of America's glorious experiment in participatory
government.
From the initial experience things have gone downhill. Not `only is
vote buying, office buying, and law buying stitched almost indelibly in
our S~ate and National election process, it is actually condoned and
encouraged in many quarters. So permeated with money is our present
system of electing public officials and their subsequent special favoring
of those who plunk down generous amounts of campaign funds that we
can no longer afford to talk about public financing of elections; we
must do it. We cannot wait any longer, not even beyond this session of
Congress, to take the necessary steps to provide for a comprehensive
system of public financing of elections at the State and Federal levels-
in both primary and general election's. Such course offers a solution to
the endless evils of special interest financing of State and Federal
election campaigns, and the influence of campaign contributors, large
and small, in the election of public officials and on Government deci-
sions.
With total public financing of elections must come total election re-
form. No longer must we tolerate the mockery of rigid elections,
padded voter registration rolls, and all the other abuses that turn the
American voter away from the polls and gives this Nation one of the
worst records of any free coimtry for citizen voting and participating
in the election process.
Such apathy on the part of citizens leads to indifference and little or
no interest in providing representative government. As a result, special
interests and moneyed interests gain control of elections and the candi-
dates. By controlling elections and determining who will be elected,
these interests greatly influence the passage of legislation and the en-
forcement of laws. At the heart of such system is the generous and
imlimited use of money to effect the outcome. As studies by Common
Cause in the 1972 elections point out, money especially lots of it in an
election campaign, can and does make a difference, and more times than
not, is the difference.
Such system is especially hard on the working class, those who barely
earn enough to live. They cannot afford to donate large sums to candi-
dates for public office and as a result are often the victims of special
interest legislation that falls disproportionately on them, whether it be'
taxes, minimum wages, or in the case of coal miners, little or no pro:tec-
tion from the hazards of the Nation's most dangerous occupation.
Miners don't have the financial means, individually or collectively, to
put together strength to elect public officials who will represent them in
PAGENO="0466"
462
the best public interest. Too often they are victims of a system very
much in vogue that allows the election of individuals by the authority
of money.
I'm sure there are many honorable and conscientious public officials
somewhere who oppose such a system. Yet it is not difficult to see how
public officials, however slight, may be influenced where financial in-
terests lie, particularly when those interests are readily available,
proffered and used in one of those "barn burner" elections where funds
are short and where every campaign dollar begets $1 more. And those
contributors who give the most campaign dollars can never go un-
noticed or unappreciated, despite the candidate's word to himself that
the contributor in no way ingratiates himself or purchases a special
standing with the candidate.
Nevertheless, there is always the next election with a war chest to
be raised, and election costs most always beyond available funds. So it
becomes, even with the most honorable intentions, difficult to ignore
a generous campaign contributor.
For example, as an incumbent facing a challenge in your bid for
reelection, you check with your office one day for messages during a
short pause in a committee markup session. Your office tells you that
you've received three telephone calls, all of whom want you to return
their calls promptly. Two calls are from constituents who must talk
with you about social security claims, while the third caller says it
is important that he talk with you and who, incidentally, contributed
$1,000 in your last election campaign. You only have time to return one
call before the markup session resumes. Which telephone call do you
return?
Even to the most honorable public servant suc.h a situation must
present a moral dilemma. Why place such temptation on a public
officer sworn to uphold the public trust? The answer is, of course, that
we shouldn't. But that is precisely what is occurring under the present
system of financing elections where private contributions are involved.
Total public financing of elections would eliminate the need for such
situations, and do much more to free the public officer to perform his
duties in a fair, honest, and objective manner.
Mr. Chairman, the proposals on public financing of elections now
pending before this subcommittee are many and varied, but I hope
that will not deter the subcommittee in getting a bill to the full com-
mittee and onto the floor as soon as possible. It may be that, because
of the number of bills introduced on this subject, the~various sponsors
should be encouraged to get together and develop a consensus pro-
posal that they all could agree on and support, much like a number
of Senators did last week in adding a public financing of elections
amendment to the Debt Ceiling Act.
As I stated earlier, the IJMWA favors total public financing of elec-
tions at the State and Federal level, coupled with strong election re-
form provisions that go beyond financing of elections and touch upon
the conduct of elections, voter registration and education, tough elec-
tion law enforcement and administration, and strong penalties for vio-
lations. We realize that such a sweeping change in election financing
and reform at all levels of Government entails a great deal of time and
effort, but will be well worth it to restore confidence in Government
and to insure honest and meaningful elections.
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463
We must not be content to provide only for public financing and
monitoring of Federal elections. That is only a partial solution. Many
abuses of the elections process take place at the State and local levels
where adequate enforcement is lacking. To leave a portion of the elec-
tion process open to the same problems that are being removed for
Federal candidates allows the potential for even greater abuse in State
and local elections.
Beyond calling for total public financing of all primary and general
elections coupled with strong election reform and modernizing of State
and Federal election laws, the TJMWA supports inclusion of the fol-
lowing provisions in a public financing bill:
Establishment of a strong, independent compliance agency armed
with subpena power, authority to require testimony under oath, and
legal staff to initiate prosecutions where warranted. Such function
should not be placed in the respective House Clerk and Senate Secre-
tary. No other Federal agency, except independent agencies such as
the General Accounting Office, should be given compliance authority.
Private or individual contributions should be strictly limited and
made only to the respective major political party national organiza-
tion. All other contributions in the form of taxpayer checkoff (unless
vetoed by taxpayer) should be placed in the Treasury to support public
financing. Encouragement should be given to taxpayer checkoff and
small contribution to national political party of choice on which a tax
deduction or credit may be taken.
Congressional and State campaign committee contributions should
be prohibited.
Primaries should be supported perhaps entirely by the political
organization.
Reasonable and maximum limits should be placed on amount spent
in each race, as well as limitation on amount interest groups give to
national political parties.
Provisions for availability of ample television and radio time to
adequately identify candidates and issues. Encourage newspapers to
grant candidates base rate on political advertising, and to provide
space for candidate to answer when newspaper editorially adopts posi-
tion opposite to candidate on public issue or attacks candidate by name
for position on public issue.
Provision of ample Federal or State funds for the conduct of elec-
tion campaigns by eligible candidates.
Thank you, Mr. Chairman and members of the subcommittee, for
allowing the United Mine Workers to present its views on legislation
pertaining to public financing of elections.
Mr. Chairman, I appreciate this opportunity to state for the record
the TJMWA has gone through a painful elections process and has had
its share of election problems, but hopefully is on a straight and good
path, as we hope to demonstrate in Pittsburgh Monday when the
miners themselves write a new constitution for their union.
Election reform and monitoring and open and aboveboard partici-
pation is the answer to the kind of Government this country wants and
needs. I am convinced and I think the people of this country are con-
vinced that the present system has fallen short of the American ex-
perience and that we should experiment with the total public financing
concept. Not just a partial beginning.
PAGENO="0468"
464
I appreciate your earlier remarks about private fundraising and
private contributions. I share your belief if we are going to do this
it should be totally publicly financed.
Mr. DENT. Thank you, Mr. Nelson.
Mr. HAYS. I want to thank you for coming, Mr. Nelson, but a good
deal of your comments were directed to State and local elections. I
am sure you are aware that we have absolutely no jurisdiction over
them. The Constitution prohibits us and specifically reserves to the
States the authority to make rules about State and local elections.
Mr. NELSON. There is, Mr. Hays, a flexibility where Federal elec-
tions are involved at the State level where Congress has exercised
authority as to certain qualifications and standards-
Mr. HAYS. We can exercise authority, Mr. Nelson, on any Federal
office which would be Congress, Senate, and Presidency, but we have
no authority to regulate elections from Governor on down.
Mr. NELSON. I realize that but in most States these same elections
often coincide with State and local elections and the standard and
the minimum enforcement and administration, conduct of elections,
as exemplified by Federal law and monitoring, could certainly extend
and give encouragement and initiative to the States to do likewise.
Mr. HAYS. I don't argue that it could extend, but I want to make
clear we can't enforce it.
I will say in my own State of Ohio, the present secretary of state,
who administered the election laws, in my judgment, is not going to be
very much influenced by anything we do here. He runs it to suit him-
self. He forces registration in the Democratic counties where your
members are then by a vot&-because the election board is two to two
and when the law-when there is a tie, the law says he can break it,
and in the Republican counties where there is no labor, there is no
registration because he breaks the tie the other way.
All I want to caution you about is, don't be too optimistic about
some of these State Secretaries of State.
Mr. NELSON. I am not convinced that that narrow and complete
prohibition against Federal participation and even supervision of
State elections is all that inclusive.
I think there is an ability for the Federal Government to act if they
want to initiate it.
Mr. DENT. Only if there is a Federal office at stake. We get Federal
overseers to come in where there is a question.
Mr. NELSON. That is right. I am saying if the Congress wanted to
go into that State territory in terms of the authority to do it, I think
they might be on some ground.
Mr. HAYS. Now, Mr. Nelson, you are a smart young lawyer and
you certainly are aware of the composition of the present Supreme
Court and you have surely read the Constitution on what it says about
the jurisdiction the Federal Government has and what is reserved for
the States.
Now, you don't believe, I am sure, as I don't believe, that the present
Supreme Court is going to tolerate any interference by the Congress in
State elections, do you?
Mr. NELsON. Mr. Hays, that was the same thought that was kicked
around back in the early sixties when the thuses in the State elections
process was very much in evidence, and without the kind of congres-
PAGENO="0469"
465
sional action, some of those abuses and some of those wrongs would
not have been corrected. I think there is flexibility if the Congress
wants to go into State election statutes and provisions.
Mr. H~xs. I am interested in that and if you will point out to me
any language that says we have jurisdiction, I am not one who is
adverse to-in my State it would be very delightful for me to be able
to do something about the way the election laws are enforced, but I
can't find that language, nor can my legal staff, and we just think we
would be kicked right out of court.
Mr. NELSON. I must admit this concept came up yesterday in the
drafting of this and within our legal department there is some infor-
mation that we will be glad to provide the committee.
Mr. HAYS. I would be delighted to have it.
Mr. NELSON. I am not saying it is crystal clear, but it is the inherent
and implied powers of the Congress and the Government and some-
times where abuses are so obvious,, simply because the Constitution
says you can or cannot do it or is silent doesn't mean you simply let
it lie and fester and all I am saying is there is a possibility here that
you could push into this area.
It might very well be sustained in any litigation depending on how
deeply you go in or your approach.
Mr. DENT. Last year you will remember when Mr. Hays warned
the Congress about setting up a certain type of limitation on one part
of a campaign-the media limitation-it is interesting to note that
that whole section has been thrown out now by the Supreme Court. It
violated the first amendment. That was on the limitation of $50,000
for the primary and $50,000 for the general on media expenses. We
still have to look pretty much to the narrow view of what the Supreme
Court says is right and wrong.
Mr. NELSON. I heard the discussion with Mr. Gardner on that.
Mr. HAYS. You were out of the room at the time. I think the court
decision which we read here is narrower than we were led to believe.
I only obtained a copy of it this morning. It narrows it to attaching
any responsibility by us on the press to report or to refuse ads or to
demand a certificate. Of course, who can predict what the Supreme
Court will do?
Mr. NELSON. That is true, and I think also there was some reference
to the language of the statute itself, and the way it was written that
left some doubt as to what the intent was.
Mr. DENT. You must understand another thing, Bob, that there is
still a grave constitutional question to be answered on how you can
give to every citizen who qualifies, the equal right under a campaign
contribution bill. WTho decides that only the two major parties will get
the bulk of the money? How do we-especially going down to the level
of membership in Congress-there are times when 15 fellows run
for 15 candidates in the primaries for congressional. The incumbent
has been beat many times by such a combination.
I don't think personally that that is-we hope that, after the Sn-
preme Court decision when this thing passes, today or tomorrow, I
imagine somebody will challenge it immediately, at least to get it
straightened out at least to what extent we can go.
I doubt if the language in that bill gives an equal opportunity to
every citizen to participate in an election.
25-239 0 - 73 - 31
PAGENO="0470"
46.6
Mr. NELSON. I think you will find that in many statutes that the
intent for equality is always intended, but the fact is sometimes-
Mr. HAYS. You know, Mr. Nelson, if we applied this thing across
the board, and, as I understand you advocate at the primaries, and
then took Mr. Gardner's figures of $90,000-
Mr. NELSON. I did not give figures.
Mr. HAYS. I say if we combine your ideas plus his figure, the coal
production in my district would drop sharply because half your mem-
bers would be running in the primaries for Congress.
All you have to do in Ohio to run is put down $50 and 100 sig-
natures. If you can get $90,000 for doing that-you knowS some of
these things are a little bit unrealistic. I would say it would be impos-
sible to write a law in the primary in which you could say, "Wayne
Hays :and two other people can get $90000 in the Democratic primary
and three people in the Republican primary." I think on the face of
that that is out and out discrimination and the court wouldn't stand
for it.
The alternative is that you let everybody who has the ability to rake
up a $50 bill qualify and get $90,000. You know somewhere between
realism and fairyland is where we have to come up with a bill and
that is our problem.
Mr. NELSON. I realize it is a tough situation to deal with and there
are several options that might be considered, but I think it would be
wrong to set the qualifying standard so high that you prohibit people
from running. I think it might be healthy to have some wide-open
opportunities because after this experience you might have emerge a
pattern where the serious candidates and those who really follow
through on this will be candidates who file because simply filing and
running in an election, as you gentlemen know, is just a very small part
of the whole process.
Mr. HAYS. Mr. Nelson, I have a fellow who has run against me in
the primary now for about 10 years and he never does anything but
file and put his name on the ballot. Several times the press has said,
"Why do you run? You don't expect to beat Hays, do you?"
He says, "No. No way."
"Well, why do you run
"Well, he rides in airplanes a lot and if he doesn't ride in airplanes
he drives back and forth and there's 90 days in there where he could
get killed and, if he does, I am the nominee."
So he gambles $50. It is a long shot, but I have known racetrack
people to hit longer shots than that.
Mr. NELSON. And I think that is what makes this country what it
is. There are all kinds of people.
Mr. DENT. It is very difficult for us to even think of writing some
kind of limitation because, as you well know, the States have their
own laws setting the criteria for ca..ndidacy.
In my State you have to get 200 names and $35. That is a heck of
a good investment for getting on a ballot. There is no way you can
stop them either, in my opinion.
I ,may be wi-ong. The Supreme Court may say I am crazy, but I
don t think you can, in any way, write a law that doesn't in some way
discriminate against ~ potential candidate.
PAGENO="0471"
467
Mr. NELSON. I would simply respond by saying if there is a poten-
tial for discrimination and you see it-and you point out where this
occurs-then I would come down on the side against discrimination.
Even if it means maybe some frivolous candidates or a period when
people get their name on the ballot just for a little exposure.
Mr. DENT. Like a lawyer?
Mr. NELSON. Yes; that happens frequently.
Mr. DENT. Anyway, the one thing we are trying to do is to get some
kind of an answer to resolve the problems that have always been with
us, only they haven't been highlighted by Watergate. We have had a
great many election scandals over the years and I think there is a great
deal of difference in the behavior of elections `today than when I started
out some 40 years ago. There has been a great deal of reform made. It is
not a process you can handle overnight really. It is a process that comes
from `the people themselves who revolt. In the end that is where the
reform must come from.
These same people who are saving we should grab the ball now
immediately, with 3 years to go before the Presidential campaign, grab
that and go with it. They have no idea of the problems they are creat-
ing with that financing because they haven't gone into it. They are the
same people who put the law on the books now. The one that is on the
books, not this committee.
If our bill will be accented instead of substituted for, Watergate
couldn't have happened. Under no conditions could it have happened.
You watch tomorrow's paper and see how many times Mr. Dent was
taken over the coals because we were dragging our feet on campaign
reform. We are not. We are not trying to pu't out something where
everybody can get $15 apiece.
Mr. NELSON. I think, Mr. Chairman, that the proof is in the pudding.
I think the public has spoken, not just particular interest groups, but I
think there is a great breakdown of confidence in the election process
and the Government.
Mr. DENT. Certainly there is.
Mr. NELSON. It is precisely at that time that a strong and responsive
Government `acts and in the fact of Watergate and the revelations of
that. terrible-
Mr. DENT. Just a minute. Is there any more criticism against the elec-
tion process than what there is against the legal process in the Water-
gate situation? I don't see any hue and cry coming into Congress to go
into the Justice end of this situation.
Mr. NELSON. I am inclined to agree with you. I think `there is `ample
justification for review of our whole legal process and system. it is just
a shame that the profession which prides itself as a closed shop in
maintaining its own house has shown very little interest in trying to
reestablish a very tarnished image.
Mr. DENT. I want to take and pick up every one of the bills in our
committee offered by various Members-and we have had practically
all of them before us in private or public-and you will find there are
two men outside of Anderson and Udall-of course, they are just the
sponsors of a bill handed to them-not two of the sponsors outside of
those two that have agreed on any one thing in any one section of any
of the bills. And each one thinks they have written the ultimate. One
PAGENO="0472"
468
has the best, the nicest, that says that anybody that can get 3,000 names
on a petition would be given $40,000 in a primary election.
If he ran-this is Congress and that is a year's salary-if he ran
into a runoff he would get $20,000 more, and if he ran in the general
election he would get $60,000. I disbelieve that there is a hue and cry
amongst your Members or amongst the ordinary citizens to hand out
$120,000 to anybody who can get 3,000 names on a petition.
Do you think there is?
Mr. NELSON. I agree the mechanics of how you establish such a sys-
tem are difficult.
Mr. DENT. That is right. They do not want us to perform it. If we
go to the floor with the bill we have drafted which reaches the nub
of the whole works and that is to put a limitation on how much any-
body can spend or how much anybody can give-cut out all the com-
mittees and name one committee for which the candidate himself is
responsible for with a jail sentence at the end of it-then you start
to clean it up. They want $180,000, half of it out of the public treasury
to run for Congress. I cannot believe that the people want it. If they
want it, they will get it because they will pass it.
Mr. NELSON. I think you could cut off all contributions and make it
a complete Federal contribution.
Mr. DENT. That has no chance and if you want to know why, I will
give you a copy of all the contributions made last year. You take a
look at contributions and expenditures and take a look and see where a
person without opposition of any kind in a primary or general election
and collects $90,000 and claims he spent $89,000, can you tell me why?
Will you tell me what law would change that?
Mr. NELSON. It is a monster out of control that we have created.
Mr. DENT. We have not created; the people have created. Most of
the Members of the Congress spend under $50,000. The great majority
of the Members spend under $40,000.
Mr. NELSON. One of the provisions we recommend is the Congress
setting an example by prohibiting its own fundraising committees as
one means of getting back to reality. The other is to allow a very lim-
ited private contribution to the political parties and let the party be the
sponsor in the primary-after all, these are party primaries, and not
national or Federal primaries-and limit it to that, give them a tax
credit to that, encourage them to give to the party of their choice.
Mr. DENT. You are coming along with the thinking lines of the
situation, except then you again say what about the man who is an in-
dependent and has no party. Where does he get his money?
Mr. NELSON. He has to qualify as we require now.
Mr. FRENZEL. Mr. Chairman, I want to thank the witness for ex-
cellent testimony. For those who have participated in an election con-
test we congratulate the winners and we congratulate the people that
you represent on what seems to be an attitude of progressive reform
in your own organization before you come to us, which is wonderful.
We appreciate your testimony. Thank you.
Mr. NELSON. Thank you, sir.
Mr. DENT. I will probably be speaking to your convention Monday,
I understand. So I will see von up there.
Mr. NELSON. Thank you, Mr. Chairman.
Mr. DENT. Thank you for coming.
PAGENO="0473"
469
We have one more witness, Mrs. Jane Planck of Washington, D.C.,
who represents just people.
Mrs. PLANCK. rfhat is right.
Mr. DENT. It will be refreshing.
I like your special interest in people.
Mrs. PLANCK. I have enjoyed every moment of the hearing, I might
say.
Mr. DENT. Please proceed.
Mrs. PLANOK. I would like to say first I am sorry I did not have
enough copies here with me.
Mr. DENT. I might say something. You heard of the great drive
that has been made about having everything open in Congress-
executive meetings, markup meetings, hearings, and I have been con-
demned by Mr. Gardner-I forgot to mention that to him-because
he said I have often had a conference in my office, which I do to get
things done.
Mrs. PLANOK. Naturally.
Mr. DENT. You know they cry for public hearings but only to hear
their spokesman. As soon as their man left, they all got out of the
room. That is their weakness, they get a cause, they call it Common
Cause, but it is their common cause. I like yours better.
Proceed.
Mrs. PLANCK. I would like to finish to say that I am sorry I do not
have sufficient copies for the press but if anyone is interested, I shall
be happy to provide them with a copy.
Mr. DENT. Thank you.
[Mrs. Planck began reading the following statement:]
STATEMENT OF MRS. JANE PLANCK
Mrs. PLANCK. Thank you for the privilege of submitting a state-
ment of total public financing to this committee. I am here as a private
citizen.
I first want to make it very clear that in my opinion public financing as it is
being presented in Congress, and by others submitting plans, is actually federal
financing. It is government assuming responsibility for an obligation rightfully
in the domain of citizens. To continue to call it public financing is to delude the
public further.
This proposal is designed to finance the full electoral process for State offices
as well as Federal. It can raise a minimum of 114 billion dollars every four
years-if that is what is needed.
I do not maintain that this is the ultimate solution to solve our current prob-
lems, but I do maintain it is the most practical and logical, the most easily
administered, and the one plan offered that meets the need for broader public
participation in our electoral process. This plan involves every eligible voter,
and I am finding increasingly that within this proposal there are satisfactory
answers to the many questions and objections in regard to public financing raised
on television panels and in news articles. It is also so thoroughly checked and
cross checked at every step that it would not be worth anyone's time to attempt
misappropriation in any form.
Insofar as money is concerned:
No one actively involved in the campaign ever seescash. Oandidates operate
on a budget.
Campaign funds are automatically checked and cross-checked a total of 24
times as they move through the system.
Candidates are personally liable for exceeding budget limits but may not
solicit the difference, or have it solicited for them.
It would be a criminal offense to offer, accept, solicit, or to use private, or
any other kind of financing for election campaigns.
PAGENO="0474"
470
The management and administration of this system is appended to the end of
this statement so I shall not give it here but will make a few comments on it
later. The multiple precautions built into this system and their fortification by
instant computer information should go far towards meeting our need for a
fail-proof method.
This plan proposes that Congress shall make it mandatory for every eligible
voter to contribute annually to election campaigns through the purchase of a
campaign finance stamp, the amount of which would be determined by individual
states according to their need for adequate financing of congressional and state
offices in no instance would the payment exceed $2 and a lesser amount would
be adequate in many states. A fine of $50 would be levied for failure to pay.
This is not excessive but it is sufficient to encourage compliance because it
involves the man on the street and the man-on-the-street does not lightly sacri-
fice $50.
The nominal amount of this proposal has the great advantage of giving every
voter in every economic bracket, including those on welfare, equal status-even
with the wealthiest. It also has the possibility of accomplishing what politicians
have despaired of: It could stimulate more active participation both in cam-
paigns and the workings of govermnent by a broader segment of the population.
Whenever anyone invests in something, even so small an amount, it is his
money-and his interest is thereby sparked.
Further e-idence that total public financing is an idea whose time can come
now is confirmed by the new general awareness of the workings of government
and campaigns through the televised hearings, through proliferating consumer
programs, and especially by the encouragement of strong citizen groups to edu-
cate the public to realize how forceful their individual voices can be when they
communicate with the people they elect. The public has learned that campaigns
are not simply a matter of a candidate presenting himself before a camera. They
know now that it took much stress and strain by many people to put him there,
because campaigns demand devotion, effort and money. The priority of the latter
was put into perspective long ago by an ancient sage when he wrote in Ecclesi-
astes: "A feast is made for laughter, and wine maketh merry: but money answer-
eth all things." It takes an enormous amount of money to produce successful
campaigns but when the effort is spread among the total voting population it is
not a burden to anyone.
The financing of approximately 7,500 state offices has been a part of this plan
since its inception several years ago.
I would like to say here that an article a week or two ago in the New York
Times referred to 500,000 state offices, and that the total amount spent last year
was approximately $200 million. That must have been a typographical error
because I took my figures from the book of states and I am assuming that they
were accurate.
It is too involved to give a breakdown here of amounts available for these cam-
paigns but an attached schedule (app. D, p. 477) indicates-very roughly-how
Governors and State legislators could be financed with total public funds. The
figures used are not eligible voters but rather the actual voting record of the elec-
tions immediately preceding the time this schedule was prepared.
The most poignant testimony I ever heard on the need for finance reform was
at a hearing in the Senate-and this remark equates with the plea of a Watergate
witness to "give me back my good name"-was the statement by a former
Senator, a man highly honored on both sides of the aisle, and he still is, that it
is not right to have to "seek loopholes in the law. . . to be less than frank and to
resort to surreptitious methods to carry out the legitimate and honorable business
of making democracy work. . ." It was not poignant later on but very shoektng
to lear that a would-be Senator spent 4 million dollars trying to win a primary
election.
If we have any hope at all of solving the problems of unhealthy pressures
we must free our candidates from the indignity of going out with hat-in-hand to
solicit contributions from wherever they can before they can help "made democ-
racy work." We pay a greater price than we can possibly know by failing to tap
the vast resources of talent in this country because that talent is unable or
unwilling to risk the hazards attendant on expensive campaigns.
If we fail to convert wholly to total piiblic financing we have no right to drag
human beings through the ordeal of an investigation, especially one under the
merciless eye of television. The spectacle of guillotine parties rushing into head-
lines daily with fresh victims has gone far enough. We need to turn the spotlight
PAGENO="0475"
471
on ourselves and realize it is more than apathy than lets us sell elections to
willing and anxious bidders-it is deliberate rejection of every principle this
Nation stands for. In this regard, a visiting prime minister was recently goaded
by a television panel into finally commenting on Watergate. His answer shocked
them into no further comment: "When you put your elected leaders to the test,
you turn the spotlight on yourselves."
Two campaigns in recent years have proved there is a willingness in the Nation
to give general public support to financing campaigns and this support will be
forthcoming if the public is offered a sound, realistic plan they can believe in.
For maximum benefit to both the Government and to individuals it must involve
all eligible voters. It is in the latter area that bills now under consideration seem
most deficient. The rejection of the Bentsen amendment to S. 372, last summer
carried a strong message that there is still a lingering reluctance to relinquish
private financing totally. Whether the rejection was from pressure, reluctance, or
an anticipated failure of public financing to provide adequately we have no way
of knowing.
I was not aware until rather late that the bill had passed in the Senate yester-
day, and this amounts to me to a hi-jacking of the debt ceiling.
It is beneath the dignity of the Senate body and any sliding scale of allowable
contributions is open to loopholes.
I regret the passing of this bill and I hope something can be done to counteract
It.
The voluntary check-off plan will never produce a sufficient fund and Congress
should realize this now. It is a figment of dreams and shadows to believe
that citizens will ever voluntarily go down the line for a check-off system of any
kind-even one that costs them nothing. As proposed, this plan only means that
the Government is transferring from one pocket to another a dollar they had to
pay anyhow. But even if it did work, how would the Government then refill
the empty pocket except by either deleting some programs, or by adding another
tax? Everyone knows this would have to be done anyhow, and when it is that
tax would cost the taxpayer far more than one or two dollars. Furthermore, if
the Federal Government should settle on the subsidizing route either in part or
w'holly as some Congressmen have suggested. this too, would boost the cost far
in excess of one or two dollars, besides unleashing a host of other ills. Subsidizing
would very definitely "exchange one evil for another," as Senator Baker sug-
gested in a June 6, telecast last summer.
Mr. DENT. I have just been notified that we are working on the rule
that is to be passed on the very problem you talked about, that is the
debt limit bill is on the floor at the moment and they have asked us
to come over since we have to discuss the part dealing with election
reform. I am sorry we have to leave. Your complete testimony will ap-
pear in the record at this point and we will have an opportunity to read
it.
[The remainder of the statement was submitted for the record.]
Total public financing bears none of these problems nor does this particular
plan involve the creation of multiple new agencies and commissions. For the
most part it utilizes facilities already established, and the administrative
mechanics of this fund are reduced to a minimum.
Campaign stamps are purchased annually at local post offices on days specified
by Congress, post offices are a logical medium and a precedent for their use was
set by their handling of postal savings.
The physical effort involved in purchasing the stamp is important to the suc-
cess of total public financing. Anything that increases voter participation in
Government is all to the good. After purchasing the stamp the voter must then
l)1Otect it until time to present it to the precinct registrar to be credited to his
record. These are small things, but important: They guarantee that the voter is
aware of increased paricipation in Government, even though briefly. Who can
tell how much more this attention could generate?
Receipts from stamp sales go directly to each State comptroller who in turn
forwards 25ç~ of each payment to the Comptroller General for Presidential pri-
maries, the maintenance of national headquarters and for the general election.
The State's share of the fund remains in designated State depositories. By rotat-
ing depositories on a two to four year schedule banks within States can be given
a healthy assist. Another benefit from total public financing.
PAGENO="0476"
472
The following is over simplified for brevity's sake but for a State to arrive at
the total annual payment required of each eligible voter, a census record of the
total number of eligible voters for the next election is divided into a summary of
previous election expenses covering the full range of State elections. In this
way each State supports Presidential elections and is self-sufficient for its State
offices, including congressional Senators and Representatives. A shared time
formula is worked out with national committees for Presidential years.
Funds and projected budgets are handled by the GAO under the supervision
of the Comptroller General for Presidential elections and by their counterparts
in each State. Specific budgets are structured by State and national parties in
cooperation with candic~ates, who are then free to direct their own campaigns.
If they use their budget wisely they should win: If unwisely, they should lose.
In either case, we all benefit. Funds are divided equally between competing
parties and candidates, except for a reasonable addition to the challenger's
fund. The equal allotment also solves the problem of one party areas. However,
there is no logical way to ever compensate fully for the incumbent's advantage
but he is entitled to some advantage if he has performed well in office.
The itinerary of campaign stamps and serialized check forms along with an
outline of overall management is attached in appendixes, A, B, and C.
The division of the fund between Federal and State elections, and the benefit
of adequate `budgets for all candidates provides freedom at last from the onus
of `begging support money from groups or individuals, or from their friends.
To many it is humfliation of the worst sort. Senator Humphrey confirmed this
fervently recently when he looked straight into the television camera and said
it was "the most disgusting, debilitating, disenchanting experience of my life."
Here again is a man who has worked long and hard to "make democracy work."
The purpose of the program was to raise funds and also to encourage the concept
of public financing for election campaigns, which concept should really be as
natural to us as breathing-but without the necessity of entertainment extrava-
ganzas to "make democracy work." Such programs fill the coffers of the net-
works as generously as the party's, whereas with mandatory total public financing
all of it goes to "make democracy work" and even losing candidates benefit
since they have a pre-paid campaign.
In regard to television, it is being suggested with greater frequency that this
medium should make its its facilities available free to candidates. This would be
punitive for the industry and if this new system is to be right, it must be equit-
able for all. A downward adjustment in rates, however, would be very much in
order.
A computer maintains a running account of expenses through regular monthly
reports early in campaigns and through weekly reports as the campaigns intensify
The single post-election audit by Federal and State authorities assures full
disclosure of fund use and this one audit should be sufficient. Periodic audit
during campaigns as one plan suggests, would only seem to compound their
ever present problems and harrass staffs even further.
With the many communication systems so easily available to everyone an
educational program needs to be developed to help the public understand tjiat
between the choice of a mandatory system of funding and the pressures brought
on by vested interests, the former is by far the more desirable solution. However,
it is not true that large contributors are necessarily self-serving-not even
million dollar ones. Realistically, though, the pressure is there whether it is
intended or not. The candidate receiving large private funds cannot help but
feel an obligation. We all would. When a neighbor does us a favor we want to
reciprocate with some token of gratitude. This natural inclination prevails
equally when the favor affects elections.
Additionally, the support of young people for public financing should be
encouraged. Even the ten year old today is far more knowledgeable and mature
than his father was at twenty, and in no time at all he will be eighteen and
representing the largest single voting bloc we have. Young voters have not yet
found their strength but the recent elections of teenage to twenty year old council
members and mayors around the country should be warning enough that if
we do not offer an all-out practical reform and regain their respect as well
as that of the rest of the public, the young alone will have the clout to vote into
office however many they wish.
The purpose of this system is to cancel the burden of personal obligation to
private contributors and to obligate the candidate instead to his natural consti-
tuents. There is no question of our ability to pay so small an amount to accom-
PAGENO="0477"
473
push so large a goal. And few other acts by Congress will ever do more to
restore public confidence in our Government.
I wish to emphasize however, that this proposal is in no way a poll tax. It
never prohibits an individual from voting. But whether he votes or not he is
obligated to provide the amount set by his State for total public campaign
financing.
We have had exposure of human frailty ad nauseum this past year. As a
Nation we need now to meet the challenge of this moment, to prove our moral
strength and courage. We can do it.
Originally, John Adams said of our Constitution that it was "the greatest
single effort of national deliberation that the world has even seen." * We must
protect their effort with equal national deliberation now.
If we continue to allow private financing in any form the general public will
continue to lean on it, to excuse their obligatioa to help keep our system alive
and well, whether deliberately or unintentionally. The price of liberty is
vigiliance but it is not right for two hundred and eleven million, five hundred
fifty two thousand, eight hundred fifty nine people (as of eight o'clock this
morning, official Census time) to ride on the coat-tails of the few in every genera-
tion who spend themselves selflessly to protect our liberty.
Admittedly we are a nation of normal human beings which makes it neces-
sary to require us by law to support our Government financially. We now need an
equal law to provide support for our free electoral system and not one bill
before either House has this kind of strength, in spite of the many sincere
efforts that have gone into them.
Foremost above all these considerations we need to guarantee legislators and
officeholders that they can retain their "good name" while serving their Gov-
ernment; that they can live with themselves peacefully, untroubled by un-
natural, unhealthy compromises.
Thank you again for the privilege of presenting my proposal to this committee.
APPENDIX A
TOTAL PUBLIC CAMPAIGN FINANCE MANAGEMENT
STAMP PURCHASE AND USE
Congress shall establish an annual mandatory campaign fund payment by
every eligible voter, but keep the payment separate from the Income Tax. The
total amount is determined by individual states according to their estimated
needs. Twenty-five cents of each payment goes directly to the U.S. Treasury
for use in Presidential campaigns and produces a minimum $140 million every
four years.
Payment is in the form of a Campaign Finance Stamp purchased at local
Post Offices.
Congress shall establish designated days for the purchase of the stamps well
in advance of the earliest "final registration date" in the nation. (The scramble
on this one should further emphasize the need for more uniform registration
regulations throughout the nation.)
Payment is confirmed when the stamp is presented to precinct registrars along
with a photo identification card and the individual's Social Security number.
Registrars indicate non-payments on their records and this list is forwarded
to those responsible for processing the resulting fine. Nonpayment does not
prohibit the right to vote, but it does incur a fine, one heavy enough to encourage
compliance. $50 is suggested. Use of the resulting fund is set by Congress.
In years without elections, precinct registrars along with party volunteers
can be available at local libraries or Post Office lobbies to accept current stamps.
A system of verifying the number of stamps presented in each precinct shall
be established and the total sent to the proper Federal and State authorities
for balancing the stamp sales w-ith the deposit records.
Final distribution of the Fund is made by dividing the total collection equally
between the two major parties, and with a qualified minor party whose share
would be pro rata. This makes campaigns as financially equitable as is possible
between incumbents and new candidates. (An adjustment upward is granted
challengers.)
*~Ijracle at Philadelphia by Catherine Drinker Bowen, p. 267.
PAGENO="0478"
474
MINOR I~ARTIES
Congress shall establish reasonable standards for qualifying minor parties
for Fund participation.
LUITEBS OF AUTHORIZATION
The GAO and its State counterpart plans and distributes to National and
State Party headquarters serialized check forms for use in payment of election
services and supplies. They are issued to suppliers by individuals responsible
for their safekeeping.
No candidate, or committee, is in possession of cash at any time.
BUDGETING AND ALLOCATING PRESIDENTIAL AND OTHER ELECTION FUNDS
The GAO and State Treasury offices estimate total available income for a
two, four, and six year period, including an estimate of maturing and deceased
voters. This projected income record is forwarded to candidates early enough
to facilitate pre-campaign planning.
The cost records of preceding elections furnish the figures necessary to estimate
budgets for the next elective office campaign, and for the year to which they
will be assigned.
Each committee and candidate is later advised of actual amounts to be made
available to their campaigns.
A formula is established for the equitable distribution of fines collected for
failure to submit a stamp on the appointed days.
Candidates are free to program their own campaigns TVithin the Limits of
Their Assigned Budgets.
Set up the available Fund and the final election costs on a computer system
with the cost of this assumed by the Federal government and each state re-
spectively, if necessary. The cost of processing the Fund is borne by these depart-
ments until such time as it is determined that the Fund can also defray this
expense. It would be minor compared to the suggested partial or total Federal
subsidizing of campaigns.
Include a cost-of-living provision to cover population growth, inflation (future,
that is) reapportionment and the like, giving some consideration to increasing
the basic cost to the citizen. The possibilty of this should be minimal for when
the committees and candidates find themselves operating on a strict budget many
wasteful practices now indulged in by both parties will become a thing of the past.
Establish a method of contracting for campaign expenses that precludes sub-
rosa financing.
Make it a criminal offense to offer, accept, solicit, or to use private, or any
other kind of financing for election campaigns.
Congress shall set the penalty for any violation.
DISTRIBUTION
Each Presidential and Vice Presidential candidate operates on a letter-of-credit
system within a budget assembled by the GAO and sent to them and to their
National Party Headquarters.
U.S. Senators and Representatives along with in-state candidates receive their
budgets through the same comparable channels in each state. This method of
operating campaigns without cash and within the limits of a budget was hypo-
thetically suggested twice by Senator Baker and once by Senator Inouye during
the hearings. It has always been the foundational strength of this plan and is
one of the strongest reasons for its adoption.
Serialized check forms are used for payment of services, and they may be
cashed at local banks, cleared through designated depositories and returned
to State Comptrollers or the Comptroller General as the check designates.
PAGENO="0479"
475
The Federal Fund pays only for Presidential and Vice Presidential campaigns.
U.S. Senators and Representatives involved concurrently with such campaigns
arrange for shared-time use.
AUDITS
The GAO prepares post election audits for publication by the Superintendent
of Documents for Presidential Elections. Each state prepares corresponding audits
for Congressional and State elections. Audits are available publicly on a cost-
of-printing basis after initial publication in major dailies in the states.
EDUCATIONAL PROGRAM
Plan a clear and persuasive advertising program to reinforce the urgent need
to the public for geiieral public financing. Use all media of communication: TV,
Radio, Moving Pictures, Slide Shows with scripts, Posters (but no billboards),
Cartoons, Music, Newspapers and Periodicals. Funds for this program could be
provided by the many foundations in this country on a shared basis.
Provide for an interested professional staff to disseminate this program to
Service Clubs, Church Groups, Auxiliaries, Industrial Plants, the Military serv-
ices, Universities, Public Schools, Social Welfare Workers, State and Federal
Legislators (the latter two to be advised ahead of the public program), head-
quarters of established churches, and Labor Unions.
PROPOSALS
The campaign period must be shortened. This will not only reduce expenses
but eliminate campaign fatigue and boredom as well. England seems to function
very well on its three week system. We should be able to cut our campaigns
back at least to five weeks-for a starter.
Put voter registration on a computer system. This should eliminate voting
empty lots and the like, when it is tied in with the personal signatures and
photo identification cards at the time of registration and voting. It will also
identify delinquent payments.
More uniformity is needed in registration practices. We are such a mobile
nation that thousands miss the opportunity to vote and this is often discussed
but it has yet to be corrected. No one should ever be deprived of his right to
vote for a President and Vice President. Whether we live in Hawaii or Florida,
we all live under the same administration so it should not matter where we vote
for them. Residence requirements are logical for local, state, or Congressional
candidates, but not for President.
A procedure film is needed to show the actual registration and voting process
for use by local political clubs, and public service programs. It remains a
fact that in spite of all efforts in this respect many people still find it difficult
to understand the system.
Produce a series of TV films to be aired at government expense on public
financing.
SERrALIZED CAMPAIGN STAMP PROCEDURES
First Record:
1. Campaign stamps are printed and serialized under the direction of the
State Comptroller and the Comptroller General.
2. Stamps are issued to Post Offices along with ledger forms for entry of
purchaser, name and Social Security number.
second Record:
3. Records of issues are held by the Comptroller General, State Comptroller
and Federal Election Commission.
4. The Post Office records the name and Social Security number of each
purchaser.
PAGENO="0480"
476
Third Record:
5. The Post Office forwards a total sales record to the Postmaster General, the
State Comptroller, Comptroller General, the Federal Election Commission, State
and National Party headquarters.
6. The voter presents the stamp to Precinct Registrar.
7. The stamp payment record is entered on the registration form along with
the accompanying Social Security number.
Fourth Record:
8. The total stamp record is forwarded to the State Comptroller by Registrars.
9. Non-payment records are sent to the State Comptroller and a local court.
Fifth Record:
10. The State Comptroller cross-balances the final computer record with the
Postmaster General, the Comptroller General and the Federal Election Com-
mission.
11. The final Campaign Stamp Sale total is published along with a final cam-
paign audit by each state for each election and by the Comptroller General
for Presidential Elections.
~iccth Record:
12. Each eligible voter is issued an identification card with his photograph
and Social Security number entered on it. Cards are renewable every ten years.
APPENDIX C
SERIALIZED CHECK FORM PROCEDURE
First Record:
1. Checks are printed in serialized form and computerized under the direction
of the State Comptroller for states and the Comptroller General for Presidential
elections.
second Record:
2. Records of issues are sent to Comptroller General, and the Federal Election
Commission.
Third Record:
3. Party headquarters issue checks to candidates, maintaining an assignment
ledger.
Fourth Record:
4. Party headquarters immediately forward the candidate's name and series
numbers to State Comptroller, Comptroller General and Federal Election Com-
mission, retaining two copies to be stored at separate locations.
5. Candidates issue checks in lieu of cash for payment of services.
6. Checks are payable at local banks.
Fifth Record:
7. Checks are cleared and their serial numbers recorded at designated state
depositories for State Campaigns, and at a Federal depository for Presidential
campaigns.
,~iceth Record:
8. Cleared checks are returned to State Comptroller and Comptroller General
for final balancing and audit.
9. Final published audit-copies are available at cost of printing prices.
PAGENO="0481"
APPENDIX D
Dollar breakdown $0.25 $0.20
Alaska 158,181
2 $34, 968
Arizona 1, 302, 161 1 480, 770 468, 801
2 $480, 770 $284, 280
Arkansas 1,786,272 560,426 312,880
$560,426 $187,728
California 15, 717, 204 7, 057, 586 7, 041, 821
$7,067,586 $4,225,032
Colorado 1, 753, 947 776, 986 608, 241
$776,986 $364,944
Connecticut 2, 535, 234 1, 218, 578 1, 208, 163
$1, 218, 578 $724, 896
Delaware 446, 292 201, 320 200, 703
$201, 320 $170, 420
Florida 4,951,560 1,854,481 1,569,337
$1, 854,481 $936, 202
Georgia 3,943,116 1,139,335 306,250
$1, 139,335 $183, 750
Illinois 10,081,158 4,702,841 3,709,209
$4, 702, 841 $2, 225, 526
Indiana 4,662,498 2,091,606 2,076,963
$2,091,606 $4,246, 176
Kansas 2, 178, 611 857, 801 653, 309
$857,801 $394,980
Kentucky 3, 038, 156 1, 046, 105 820,688
$1, 046, 105 $294, 048
Louisiana 3,257,022 886,293 421,904
$886,293 $253,142
Maine 969, 265 380, 965 319, 535
$380,965 $491,724
Missouri 4,319,813 1,817,879 1,783,043
$1,817,879 $1,069,825
Montana 674, 767 278, 628 280, 975
$278,628 $468,588
See footnotes at end of table.
$0.25 $0.5
$29,090 1 167,259 4 20
2 $13, 452
78,134 3 473,502 2 2
$47,350
39,440 4 592,113 2 35
$59, 211
92,642 38 5,853,270 4 40
$1,171,056
76,030 4 616,481 4 35
$123, 296
100, 680 6 1, 031, 902 4 36
2 $206, 380
100,352 1 200,174 4 18
$40, 036
65,014 12 1,663,481 4 44
$332, 696
15,313 10 311,691 4 54
$62,340
72,276 24 4,657,500 4 58
$931, 500
94,408 11 2,072,915 4 50
$414, 583
65,320 5 850,414 2 40
$85, 011
58, 578 7 886, 047 4 38
$177, 209
26,369 8 773,340 4 39
$454,668
39,942 2 292,725 4 34
$58,544
89,152 10 1,832,562 4 84
$366,512
70,244 2 280,010 4 56
$56, 000
TABLE 10.-A PRELIMINARY STUDY OF PUBLIC CAMPAIGN FINANCING POTENTIAL
Presidential
vote and fund
State vote
and fund
1960
Campaigns population
Presidential
2 U.S.
Senators
U.S.
Congressmen
Number
each Term
State Governors years
Number
of State
senators
of State
representa-
tives
Annual
total
per each
Other
State
offices
$0.25
40 $280
80 1,096 7
100 1,096 5
80 12,198 5
65 1,541
294 782 3 ~
35 944 4
112 2,666 4
205 301 6
177 4,955 7
100 3,455 5
125 1,289 5
100 1,605 6
103 1,362 9
81 636
163 2,326 4
94 467 5
PAGENO="0482"
A PRELIMINARY STUDY OF PUBLIC CAMPAIGN FINANCING POTENTIAL-Continued
TABLE 10.-A PRELIMINARY STUDY OF PUBLIC CAMPAIGN FINANCING POTENTIAL-Continued
Presidential
vote and fund
State vote
and fund
1960
Campaigns population
Presidential
2 U.S.
Senators
U.S.
Congressmen
Number
each Term
State Governors years
Number
of State
senators
Number
of State
representa-
tives
Annual
total
per each
Other
State
offices
Nebraska
New Mexico
New York
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
Tennessee
Texas
Utah
Wisconsin
Wyoming
1,411,330
951, 023
16, 782, 304
632,446
9, 706, 397
2, 328, 284
1, 768, 687
11, 319, 366
859, 488
3, 567, 089
9, 579, 677
890,627
3, 954, 777
330,066
`584,159
2 $538, 159
328, 645
$325, 645
7, 166, 275
$7, 166, 275
258,389
$258,389
3, 969, 196
$3, 969, 196
932, 499
786, 305
$786,305
4, 822,693
$4, 822, 690
390, 091
$390,091
1, 444, 0t6
$1,444,046
2, 626, 811
$2,626,811
401,443
1, 691, 815
$1,694,815
142,716
$142, 716
1563,401
3 $338,040
325, 774
$195, 462
7, 151, 686
$4, 291, 014
258,945
$455,370
2, 298, 234
$2, 298, 234
912, 474
$517, 302
636, 558
$381,936
4,8)3,835
$2, 882, 301
386, 322
$231,792
1, 064, 018
$638,412
2, 603, 856
$1,562,346
397,384
$238, 428
1, 673, 776
$1,004,268
111,670
$85, 002
93,566
81, 444
87, 166
64,736
79, 800
67, 682
79, 570
88, 980
96, 581
59, 112
56, 606
99,346
83, 688
70,836
3
2
41
2
24
6
4
27
2
9
23
2
10
1
1578,090
3 $115,620
318, 042
$31, 861
5, 805, 631
$1 161 126
262,661
$52,532
3, 446, 711
$155, 836
709, 763
$35,488
637, 407
$31,879
4, 378, 042
$218, 902
391, 638
$19,583
621, 064
$31,053
544, 753
$27,238
398,256
$19, 913
1, 694, 889
$84,744
449,268
$5, 964
4
2
4
4
4
4
4
4
2
4
2
4
2
4
49
32
165
49
32
48
30
50
46
33
31
27
33
25
77
65
109
137
89
60
209
100
89
150
69
100
61
$2,949
729
6 310
416
4, 614
1, 295
1 771
4, 226
671
1, 273
752
4,037
2, 434
347
5
4
2
9
4
8
2
2
3
1
5
4
4
8
`.`~
1 The top figure is the total registered vote from the most recent election. Note: The election campaign fund as illustrated in the above chart is figured on the basis of $1 per
2 This figure represents the total available fund accumulated annually during the interim between year per voting citizen to be paid biannually to coincide with vnter registration for general elections.
elections, for the offices under which they are listed. These figures show how much would have been raised under this plan in each State illustrated.
3 Includes Representatives.
PAGENO="0483"
479
Mr. DENT. I regret that I cannot stay any longer. I must leave for
the Floor. I really apologize to you but there is not much I can do
about it.
Mrs. PLANCK. I understand.
Mr. DENT. You heard the criticism that this committee did not give
enough hearings or time, yet they are asking me to vote for a bill that
came over, as you said, that only had one single hearing with four
people there in its entire history. Last year we voted for a bill spon-
sored by my friends in Common Cause that did not have any hearings
and up until 10 minutes before we went to the floor there was not even
a call for me as chairman of the Subcommittee on Elections. So some-
times we should look behind to see if (people are guilty of what people
say they are. We are trying to get a very good bill.
Mrs. PLANCK. I regret very much the passage of that bill. To me it
lowers the dignity of the Senate. It amounts to a hijacking.
Mr. DENT. Thank you very much.
Mr. PLANCK. Thank you, Mr. Chairman.
Mr. DENT. If you have anything further, the record will be open for
the next 30 days.
[Whereupon, atl2 :20 p.m., the subcommittee adjourned.]
[The following information was subsequently filed for the record.]
STATEMENT OF EVERETT H. ERLICH, SENIOR VICE PRESIDENT AND GENERAL
COUNSEL, AMERICAN BROADCASTING CoS., INC.
American Broadcasting Companies, Inc. is pleased to submit its comments on
certain election reform measures now pending before the Subcommittee on Elec-
tions of the Committee on House Adrninistration. It is our understanding that
among the measures presently being considered by the Subcommittee are the
"Clean Elections Act of 1073" (H.R. 7612 introduced by Congressmen Anderson
and Udall) and the "Federal Election Campaign Act Amendments of 1073"
(passed by the Senate as 5. 372 and pending in the House as H.R. 10041).
COMMENTS ON H.R. 7612
The first four titles of HR. `7612-which, in our judgment, constitute the heart
of this comprehensive legislative proposal-deal with such matters as the crea-
tion of a Federal Elections Commission, regulating the methods and standards
governing campaign donations and expenditures, and providing for public financ-
ing of campaigns. Basically, we view the foregoing subjects as uniquely within
the cognizance and experience of members of Congress. Title V, however, is dif-
ferent. It contains a separate and distinct feature called "Voter's Time" which is
directed specifically to the use of the broadcast media by political candidates.
The "Voter's Time" provision in H.R. 7612 would mandate that every commer-
cial television station in the nation (in certain instances, each television net-
work) make available a fixed amount of broadcast time to candidates for federal
elective office. This time would consist of five 30-minute blocks of programming
for each candidate of a major party for the Presidency and Vice Presidency,
three such 30-minute blocks for each major party candidate for the U.S. Senate,
and two 30-minute blocks of program time for each major party candidate for the
House of Representatives. The bill also provides for lesser time allotments for
third and minor party candidates.
All broadcast appearances under this "Voter's Time" concept would be sched-
uled in television's so-called "prime time" (undefined in the bill) during a 35-day
period preceding the Monday before a general election. The charges for "Voter's
Time" would be limited to "the prevailing unit charge of the station for the same
amount of program time in the same time period." This would then be paid for
out of public funds from the U.S. Treasury.
Eligibility to use "Voter's Time" by candidates for federal elective office is
conditioned so as to require that the broadcasts must include (1) a "substan-
tial line appearance" by the candidate, and (2) be presented in "formats intended
PAGENO="0484"
480
to promote rational political discussion, to illuminate campaign issues, and to give
the audience insights into the abilities and personal qualities of the candidates".
It is not clear from the language of the bill as to precisely how these determina-
tions of eligibility would be made.
It is clear, however, that the Federal Communications Commission would
be charged with substantial responsibilities for making certain judgments re-
garding the utilization of "Voter's Time". Of particular relevance, the FCC
would be assigned the task of allocating "Voter's Time" broadcasts among
television stations and House candidates in the various jigsaw possibilities aris-
ing from multiple Congressional districts in areas served by sever4l local tele-
vision stations. For instance, in the case of the "large metropolitan areas" (not
defined) containing a large number of House districts, the FCC is given the
option of deciding when and if to divide responsibilities for "Voter's Time"
appearances "evenly among the stations serving such markets".
In ABC's view, one of the most disturbing features of the "Voter's Time"
concept is the requirement that all broadcasts by candidates for federal office
using this publicly funded allocation must be aired on a simultaneous basis.
For example, "Voter's Time" appearances by Presidential and Vice Presidential
candidates must be carried simultaneously by all networks and all television
stations, apparently regardless of whether they are affiliated with a network
or not. For "Voter's Time" broadcasts by candidates for the ITS. Senate, all
television stations within the affected state must broadcast such appearances
simultaneously. Finally, the use of "Voter's Time" by House candidates would
require each station providing substantial service to the district in question to
simultaneously broadcast the appearance.
The key ingredients of the "Voter's Time" proposal add up to the following
concoction: a predetermined carving out of television time for federal candi-
dates (without a demonstrated need) at public expense and by means of an
almost complete usurpation of viewer choice. Since there has never been any
requirement that broadcasters make precise time available to specified candidates
for political purposes, this would represent the first time Congress has directed
a specific use of broadcast facilities.
The requirement that all television stations carry the same political program
at the same time, apparently in the hope that a "captive audience" will be exposed
to the political broadcast, is alien to our American tradition. While ABC recog-
nizes the importance of an informed electorate to our form of government,
the elimination of programming alternatives and the prescription as to the
manner in which "Voter's Time" will be used strikes us as most ill-advised.
Accordingly, the tendency reflected in H.R. 7012 to dictate what is best for
everyone-and to force feed the electorate-should be vigorously resisted.
Aside from the serious social and Constitutional questions raised by the
"Voter's Time" proposal, acute practical impediments would bar any fair and
effective implementation of this scheme. For instance, even though the bill as
drafted gives the FCC an option to attempt to equitably divide "Voter's Time"
responsibilities for House candidates among various stations serving major
metropolitan areas, a simple recognition of the inherently limited number of
"prime time" hours during the concentrated 35-day period in question and the
scores of Congressional districts that comprise such areas make the task of
distributing responsibilities for "Voter's Time" highly unworkable. Thus, in
New York City where there are approximately 40 Congressional districts in
the surrounding three state geographical area, the use of available "prime
time" hours during the designated 35-day period by multiple candidates (at
least two per each of the 40 districts representing the two major parties) would
amount to a virtual transformation of regular programming to a steady stream
of political messages.
Accordingly, in major population centers such as the ones in which ABC
owns te'evision stations, the burdens which the "Voter's Time" provision of
H.R. 7012 would impose are staggering. If \VABG-~TV in New York had to
make two half-hour blocks of "prime time" available during the five weeks
immediately preceding the election to each candidate for the House of Repre-
sentatives in the 40 Congressional districts in its coverage area, that would
mean 80 hours out of a total of 123 hours of `~prime time" devoted to House
candidates alone. In addition, of course. the station would be required to
broadcast, during this brief period, a minimum of five hours presenting Presi-
dential and Vice Presidential candidates and three hours presenting Senatorial
candidates. Finally, even after this emasculation of its schedule, the station
PAGENO="0485"
481
would have to accommodate gubernatorial and other statewide candidates, city-
wide campaigns and local ballot propositions.
For the station, it would mean an end to regular programming during that
five week period. The loss of so much time in so many major population centers
would, moreover, jeopardize programming for the networks themselves and
possibly deny programs to the rest of the country.
But for the viewer of WABC-TV, it would mean an unending stream of
political messages that would be calculated to turn off television sets as effec-
tively as a power failure in the New York area. All candidates for public office
would be poorly served by an audience that has turned away from the TV set
and become belligerent toward those it blames for denying the availability of
regular programming.
COMMENTS ON S. 372
S. 372, which passed the Senate earlier this year and is before the Subcom-
mittee as H.R. 10041, contains a number of provisions modifying the Federal
Election Campaign Act of 1971. It also contains several entirely new provisions,
two of which we wish to address.
The first of these is the proposed repeal of the "equal time" requirements of
Section 315 of the Communications Act as to federal elective offices.
ABC has often stated and long favored the permanent suspension of Section
315 for Presidential and Vice Presidetnial candidates both in primary and general
elections. In our view, the greater freedom and flexibility afforded the broad-
caster in campaign coverage would significantly benefit the public by permitting
the most effective presentation of the major party candidates and the most com-
prehensive exploration of important issues.
As noted, S. 372 extends the repeal of Section 315 further than the offices of
the Presidency and Vice Presidency by the inclusion of other federal elective
offices, namely the Senate and House of Representatives. Moreover, it does so
by attaching a condition which, in effect, states that if a broadcast licensee seeks
to take advantage of the flexibility in programming made possible by an exemp-
tion from the equal time requirements covering Senate and House campaigns, it
must first offer a certain amount of free time to each and every candidate for
the particular race in question, including purely fringe candidates. We believe
this particular provision is unnecessary and undesirable.
If there is a positive benefit to be served by authorizing broadcast stations
to cover major political contests without the constrictions of the `equal time"
provision, it is counterproductive to this purpose to dictate that before this
process can begin a certain amount of free broadcast time must be artificially
created for all House and Senate candidates regardless of the scope and serious-
ness of their campaigns.
We would emphasize that our objection to this provision in 5. 372 relates only
to the idea of mandating coverage and the extension of free time to any fringe
candidate regardless of the nature of his or her campaign. We do not suggest
that third party or certain fringe candidates in such contests will necessarily
be excluded from representative coverage as circumstances dictate under the
Commission's fairness doctrine.
In sum, while ABC does not oppose the general proposition of a Section 315
repeal which may extend to all federal elective offices, we do object to the con-
ditions that have been attached to this repeal in 5. 372. Moreover, our position
has long been that a reasonable and modest beginning in this area would be a
simple and unencumbered repeal of Section 315 as it applies to the Presidential
and Vice Presidential campaigns only.
CONCLUSION
We are actually aware of the escalating costs associated with campaigning for
public office. ABC has indicated its awareness of the difficulties entailed in
financing a political campaign by the adoption of a number of discount policies
for its stations and networks which facilitate the availability of the broadcast
media to candidates in various local, state and federal campaigns.
Voluntary action by broadcasters in the area of rates and programming
availabilities-with possible Congressional action in the important areas inde-
pendent of media usage-could be the most effective way to solve this national
problem. In our judgment this approach is far preferable to the imposition of
mandatory and complex laws and regulations that will be discriminatory in im-
pact and unworkable in operation.
25-239 0 - 73 - 32
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STATEMENT OF THE NATIONAL BROADCASTING Co.
NBC appreciates this opportunity to comment on the various election reform
bills now before this Subcommittee. We will limit ourselves to those provisions
of the pending bills that would affect broadcasting-S. 372, which has already
passed the Senate, and Title V of the Anderson-Udall bill, H.R. 7612.
Each of these two bills has a laudable purpose-to hold down the cost of
television in political campaigns while assuring that candidates still receive
television exposure. To reach that purpose, the bills take a variety of approaches.
Under the Anderson-Udall bill, broadcasters would be forced to sell time to
most candidates for federal office. We oppose this requirement because we be-
lieve that forcing broadcasters to make such time available, even though it is
paid for, will be impractical to administer and counterproductive.
Each of NBC's five television stations serve many different Congressional
Districts. Its Chicago and Los Angeles stations each serve over 25 Congres-
sional Districts. Its New York station serves over 400 districts in 3 different states.
Using New York as an example, if HR. 7612 were in effect in 1976-when there
will be Presidential, Senate and House elections, as well as State and local
elections-our station might have to make available to as many as 110 possible
candidates as much as 114 prime time hours, all within a five week period. Our
station in Los Angeles might have to make available to as many as 72 possible
candidates as much as 65 prime time hours. There are only about 123 prime time
hours available during that period. And these estimates do not include the time
that would be used by state and local candidates, the additional announcements
that some candidates would continue to buy and the free time that would be
given to the candidates in these stations' news and public affairs programs. In
1972 alone, our New York station sold and gave away over 22 hours of time to
political candidates and our Los Angeles station over 17 hours, not counting
their coverage of the campaigns in their regular news programs.
Since the bill requires simultaneous coverage, other stations in the same
market would be similarly programmed. The result would be an enormous
amount of political broadcasting concentrated over a few weeks. Most of the
candidates would be addressing constituencies that make up a tiny fraction of
the people living in the station's broadcast area. Viewers would be deprived of
any programming choice. The cumulative effect of eliminating programming
choices and over-saturating the airwaves with political programming would
dilute the effectiveness of all of the "voter's time" broadcasts and lead to public
resentment, boredom or both. This would not help our political system one bit.
Because of differences in the distribution of Congressional Districts, the bill
would have widely differing effects in different situations. While stations in large
metropolitan areas would be presenting a great many political broadcasts, sta-
tions in scarcely-populated areas would be carrying relatively fewer political
broadcasts. This would disrupt network scheduling. Preemption of network pro-
gramming would be so disproportionately large in the bigger markets, that it
might be impractical to maintain a network schedule for stations in less-popu-
lated areas.
We do not believe that the discretion given to the Federal Communications
Commission to "pool" certain of the "voter's time" broadcasts will effectively
solve these problems. Stations in metropolitan areas will still be required to
carry a large amount of political broadcasts. There will still be a disproportion-
ate amount of preemptions. In the fact of inevitable claims of inequitable treat-
ment and competitive disadvantage by both candidates and stations, adminis-
tering the "pooling" will be most time-consuming and difficult. In short, the basic
problems of "voter's time" will not disappear.
We see other problems as well. The definition of "major, third and minor"
parties might work to the disadvantage of many significant candidates. If
George Wallace, for example, were to run in 1976 as a third-party candidate, he
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would receive 80% less time than the "major" party candidates and would not
even be considered a "third party" candidate. The bill does not specify any proce-
dures to determine when a "simultaneous" political broadcast on two or more
stations must begin. Agreement among all stations and all candidates on that
matter will not be easy to secure. Time will be available for candidates who might
prefer not to use television in their campaigns. The bill might create pressures
that force them to do so. Finally, there is a question about who will determine
whether the candidate has satisfied the programming "format" which the bill
requires. We question whether the government has the right to make that
determination.
NBC has long believed that there is a simpler and more effective way for
Congress to deal with the problem of raising campaign costs and the need for
television exposure and that way is to repeal without condition the equal time
rule of Section 315. We therefore support the provisions of 5. 372 that would
repeal the rule in Presidential and Vice Presidential elections.
The equal time rule has tended to restrict the amount of time that broadcasters
can give to significant candidates and to limit broadcast coverage of political
campaigns. As this Subcommittee knows, Presidential campaigns in particular
always seem to produce a dozen or more candidates-from Probibitionists to
Theocrats to professional comedians. The present law penalizes broadcast appear-
ances of the significant candidates by requiring broadcasters to give the same
amount of time to all the others. The result is a reduction in the amount of
candidate coverage that would otherwise be possible and desirable. The elimina-
tion of the equal time rule would enable the broadcasting industry to increase the
television exposure of the significant candidates and, in this manner, help reduce
their need for large television budgets. In 1960, when Section 315 was suspended
for the Presidential campaign, NBC made 14'/2 hours of free broadcast time
available to the Presidential candidates, excluding the coverage they received in
news programs. In 1964, when there was no suspension of Section 315, the amount
of free time that could be given dropped substantially.
In 1968, and again in 1972, NBC pledged that if Section 315 were repealed, it
would make available without charge a total of four prime-time half hours for
the significant Presidential and Vice Presidential candidates to use as they saw
fit. In addition, NBC pledged to continue to devote a substantial amount of time
to the campaign in news and public affairs programs. We renew that offer today
for the 1976 campaign and again urge Congress to give us the means to carry
it out.
While passage of Section 2 of 5. 372 would ease the burden in Presidential
campaigns, it would not have an appreciable effect in other federal elections. The
equal time rule would still apply in such elections, unless the broadcaster was
willing to give 15 minutes of free time to every candidate. We do not believe that
this condition is a proper price to pay for relief from the equal time burden. On
its face, 15 minutes of time may not seem excessive. However, if S. 372 were in
effect in 1972, stations in New York would have to give away to as many as 150
different candidates over 37 hours of free broadcast time. Stations in Los Angeles
would have to give away to as many as 72 different candidates approximately
18 hours of free broadcast time. This would be confiscatory. We would prefer
to see the rule repealed in its entirety.
There are other provisions in the pending bills that warrant comment.
5. 372 adopts the existing requirement that broadcasters sell time to candidates
at their lowest prevailing rates, while leaving their competitors in other media
free to sell at their customary or even higher rates. We continue to oppose this
requirement.
We believe that Congress should recognize the difference between television as a
news medium and television as an advertising medium. Buying political time on
television is the same as buying space in a newspaper or magazine, or on a bill-
board, except that most broadcasters normally charge lower rates for political
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484
ads rather than premium rates, as some newspapers do.1 Television is a very
effective advertising medium-perhaps the most effective. Its effectiveness, how-
ever, does not warrant legislative discrimination against it.
We support over the provisions of existing law, the provisions of both S. 372
and H.R. 7612 that would impose limitations on campaign expenditures on an
overall basis, and not simply on media advertising. Restricting media advertising
expenditures unnecessarily interferes with the candidate's freedom to spend
his money where he determines it would have the greatest impact and encourages
him to spend it in other ways that may not be as effective or necessary. It also
singles out media advertising for discriminatory and unfair treatmetnt. If
limitations are to be imposed, they should be applied on an overall basis to all
expenditures.
Finally, we continue to support the provisions in the proposed legislation
that would authorize the public financing of federal political campaigns through
limited income tax credits and matching or direct assistance procedures.
In summary, we believe that as far as broadcasting is concerned, repeal of the
equal time rule will more effectively achieve the objectives of election reform
than any of the other measures in the legislation before you. We support the
concept that any limitation on campaign expenditures should apply to all expendi-
tures, not just advertising. We support the various measures proposed for the
public financing of federal political campaigns.
We oppose, however, any legislation that would require broadcasters to give
free time or to sell time to many, many candidates under widely varying situa-
tions. We have attempted to do voluntarily what these provisions would force us
to do and therefore believe that they are unnecessary. Finally, we oppose the
discrimination in existing law between broadcasters and other advertising
media and urge that it be changed.
STATEMENT OF THE NATIONAL ASSOCIATION OF MANUFACTURERS
The National Association of Manufacturers, speaking for American industry,
welcomes the opportunity to express its views about pending legislation on the
financing of campaigns for federal office.
Industry, as one of the many social institutions directly affected by the
American political process, believes a strong and equitable system of elections
is a prerequisite for the preservation of our American democratic form of
government. It is in this spirit that we offer general support to Congress' efforts
to reform existing campaign finance laws.
A number of proposals are pending before the House Administration Committee.
While we do not favor one particular bill over another, we are in general accord
with the thrust of S. 372. We do wish to direct specific remarks, though, to the
provision of S. 372 that would amend Section 611 of Title 18, of the United
States Code.
The Federal Election Campaign Act of 1971 amended Section 610 of Title 18,
U.S. Code, thereby reinforcing the existing prohibition against corporations
and labor organizations making any form of political contribution. The new
law did clearly establish, however, the permissibility of three types of activities:
1 NBC, for example, prices each political announcement purchased on its network at
50% of the established rate. Its owned stations also price political announcements at a sub-
stantial discount from established rates. Comparable plans and rates are not offered to
commercial advertisers.
NBC thus does not oppose the principle of making time available for political broadcasts
at reduced rates. There is a fundamental difference, however, between our voluntary
practices and legislation that requires it, particularly where other advertising media are
not similarly affected.
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(1) communications by a corporation with its stockholders and by a union
with its members; (2) the conducting of nonpartisan registration and get-out-
the-vote campaigns; and (3) the establishment, administration, and solicitation
of contributions by employees or stockholders of a corporation or by members
of a union to a separate segregated fund to be utilized for political purposes.
However, even though Section 611 of Title 18 was amended to strengthen the
prohibition against government contractors making political contributions, the
new language when construed with Section 610, resulted in inadvertently creating
an inequitable situation: what Section 610 permits corporations and labor unions
to do, Section 611 prohibits for corporations and labor unions holding government
contracts.
S. 372 as passed by the Senate, includes a further amendment to Section 611
to nullify this inequity by permitting the aforementioned limited activities to be
carried on by a corporation or labor union regardless of whether it holds a
government contract. The sole purpose of the amendment is to clarify an ambig-
uous situation and permit equal treatment for employees and stockholders of all
companies and for members of all unions.
The amendment, appearing in Section 19 of the bill as passed by the Senate
and referred to the Committee on House Administration, would add to Section 611
the following new paragraph:
"It shall not constitute a violation of the provisions of this section for a cor-
poration or a labor organization to establish, administer, or solicit contributions
to a separate segregated fund to be utilized for political purposes by that cor-
poration or labor organization if the establishment and administration of, and
solicitation of contributions to, such fund do not constitute a violation of section
610."
The three categories of permissible activities now set forth in Section 610
were incorporated in the Federal Election Campaign Act of 1971 in an amend-
ment offered by Rep. Hansen of Idaho. A review of the debate surrounding the
amendment (Nov. 30, 1971 Cong. Record, H. 11476) in no way suggests there
was an intent to exclude corporations and labor organizations holding govern-
inent contracts from the cited activities. At all times, the discussion mentioned
all corporations and labor organizations, without limitation. The logical presump-
tion must be that the failure of the Congress to clarify its intent was an over-
sight; undoubtedly, it was not felt necessary.
Contrary to what some have charged, the proposed amendment to Section 611
will not permit or facilitate corporate or union political contributions. Both
Sections 610 and 611 of Title 18 clearly prohibit any corporation or labor orga-
nization from making any type of direct or indirect campaign contribution.
To amend Section 611 at this point would not, as some have suggested, lead to
a system of corruption. On the contrary, by clearly permitting a corporation to
establish for employees or a labor organization to establish for members, a
voluntary political committee with a separate segregated fund to be utilized for
political purposes, all activities of which must be publicly disclosed, citizen
participation in political financing would be extensively broadened and the op-
portunities for corruption lessened. Because of the ambiguity of the existing
language of Section 611, few companies established employee funds pursuant to
Section 610. However, a review of the reports filed with the House Clerk during
last year's campaign by the funds that did exist clearly indicates that the majority
of aggregate yearly contributions made to such funds were less than $100 per em-
ployee. In other words, political committees organized pursuant to Section 610
tend to attract smaller contributions. Certainly this trend should be encouraged.
The proposed amendment to Section 611, as embodied in S. 372, would
strengthen, not undermine, the voluntary contributions system used to finance
political campaigns in this country. NAM believes this amendment is clearly
within the spirit of the various campaign finance reforms now pending before the
Congress and is worthy of adoption.
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Statement of the
CHAMBER OF COMMERCE OF THE
UNITED STATES OF AMERICA
Ofl:
Election Law Reform
(S. 372 et al)
to:
Subcommittee on
Elections, House
Administration
Committee
by:
Joseph J. Fanelli
date
December 7, 1973
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0/(I1t~
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~h~sb~~s ~f dtd~~d ~ i~t ~ ~-~d~-Iy-
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STATEMENT
On
ELECTION LAW REFORM (S. 372 et al)
for submission to the
SUBCOMMITTEE ON ELECTIONS
of the
HOUSE ADMINISTRATION COMMITTEE
for the
CHAMBER OF COMMERCE OF THE UNITED STATES
by
JOSEPH J. FANELLI*
December 7, 1973
Election law reform is a National Chamber concern of long standing. Our
spokesmen since 1966 have appeared frequently before House and Senate committees
advocating changes in election laws including campaign financing, electoral
college reform and the granting of absentee registration and voting rights to
overseas Americans.
This statement is centered on the proposition of public vs. private
funding of campaigns for federal office and on the provisions of Senate-passed
5. 372 now before this Subcommittee.
The National Chamber's membership supports many of the provisions of
5. 372 and is strongly opposed to the mandatory use of general tax revenues for
political campaigns.
In taking this position, the Chamber is representing its federated mem-
bers -- more than 2,550 local, state and regional chambers of commerce, over
1,000 trade and professional associations, and more than 46,000 firms, corporations
and individuals. Our underlying membership exceeds 5,000,000.
Our position is clear and well established. We believe that maintenance
of individual freedom and our political institutions necessitates broad-scale
participation by all citizens in the selection, nomination, and election of
public officeholders. The values of our free society and of American citizenship
can best be preserved through effective functioning of a multiparty system in
which all parties are free from domination of any vested interest, through volun~g~y
action on the part of individual citizens in supporting the party of their choice
*Manager, Public Affairs Department, Chamber of Commerce of the United States
PAGENO="0492"
488
with both time and money, and through continued reliance on the Federal-state con-
cept of governmental organization.
The words `broad-scale", "individual', and "voluntary" merit emphasis. They
are the key to our political system -- a system based on broad-scale~pprticjpation
by citizens on a voluntary basis to support the party and the candidate of their
choice with both time and money. These words are likewise the key to overcoming
many of the election campaign problems with which the nation is confronted.
We recognize and appreciate the seriousness of these problems. Campaign
costs and expenditures are becoming excessive. Many able men and women are deterred
from running for federal office because of the increasing difficulty in raising,
from the electorate, the funds needed to finance even a limited campaign in a
congressional district or state. Voter apathy is at an all-time high. Serious
abuses of our political system have occurred--particularly in the category of cam-
paign financing. Constructive solutions to these campaign problems are required.
A drive is on now to prohibit voluntary, private funding of political
campaigns and to establish a system of public subsidies.
Is the use of general tax revenues for financing of campaign expenses
of political parties and candidates an appropriate answer to the problem? We
think not. Indeed, we believe this approach would be ~g, unfair, and dangerous.
~ because it is not compatible with our democratic system which is based on
voluntarism. Unfair, because incumbents would have the advantage of public financing
of their campaigns on top of free mailing privileges, offices, staffs, phone and
travel allowances, to the detriment of challengers. Dangerous, because it may pave
the way to profound and unwelcome changes in our democratic system and an undue
influence of government bureaucracy in our political process.
Federal funds applied to Presidential campaigns, and perhaps later to
Congressional state and local campaigns, would widen the gap between the electorate
and the political process. Personal participation in politics would diminish.
Apathy would deepen. Moreover, it stands to reason that once the campaign finance
door is opened to public funding, no matter how slight the crack, ways will be
found to open it even wider.
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This nation's political system is predicated on the proposition that
citizens are free to group together to pursue legitimate political objectives
through a voluntary contribution of time, effort and money. To sharply diminish
that proposition would imply that Congress has lost faith in the voluntary demo-
cratic process. More importantly, to eliminate a citizen's right voluntarily
to contribute to candidates, political parties or other causes in which he
believes may infringe upon his Constitutional rights.
For a revealing discussion of the Constitutionality question, we
recommend to the Committee a recent report of the American Enterprise Institute
for Public Policy Research of Washington, D. C., "Campaign Financing and
Political Freedod' by Ralph K. Winter, Jr.
To offer federal subsidies as the cure-all for our political illnesses
might well be compared to the hastily conceived remedy, based on improper
diagnosis, that killed the patient it was intended to help.
As spokesman for the business community, the National Chamber deplores
the illegal practices of certain business executives revealed during recent
investigations into the 1972 presidential campaign. We were shocked to learn
of these violations. Those proven guilty of election law violations must be
penalized appropriately. Further, we support the enactment of new laws that
will act as deterrents in the future.
We believe that abuses in our voluntary political system can be corrected
by limitations on contributions. Adequate campaign funds can be raised through
promotion of broad-scale giving in moderate amounts by the electorate.
As proof of the potential for small contributions, the Democratic National
Committee in a nationwide 8-hour telethon in September of this year raised $5.4
million in pledges.
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490
The Republican National Committee reported in October of this year that
857, of the National Committee's funds so far in 1973 have come from people whose
contributions have averaged $22. Close to $5.5 million has been raised this year
in this manner.
These instances illustrate that the cost of campaigning can be spread,
that sufficient political campaign funds can be raised through small contributions,
and that contributions need not be confined to 11% of the voters as in past years.
A major current fault of our political system is the shortage of "people
participation." Too few of our eligible citizens vote. In 1972, 48 million
potential voters stayed away from the polls. This number exceeded the votes
cast for any candidate. Too few work in political campaigns, and too few support
financially the party or candidate of their choice. Here in the world's greatest
democracy, such lack of political involvement is deplorable. The point we wish
to make is that public financing would only widen the gap between the electorate
and the political process.
Our greatest need is to develop a sense of obligation and responsibility
on the part of more Americans to participate fully in the electoral process --
in short, to broaden the popular base of political activity and political giving.
To broaden the base of political activity, the National Chamber and other
business organizations and firms are providing political education courses,
seminars and other programs to educate citizens on the political systam and to
motivate them to become active in the party of their choice. Many corporations,
chambers of commerce and trade associations, on a non-partisan basis, are
motivating citizens to become active politically and to make contributions to the
party and candidates of their choice.
To broaden the base of political giving, the Chamber supports reasonable
tax deductions and tax credits as a further incentive to smaller contributors,
pursuant to the provisions of the Revenue Act of 1971.
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491
A nationwide education program on the availability of tax credits
or deductions for modest political contributions can serve to motivate more
people to give $10, $25, $50 or $100 and thereby spread the cost of political
campaigning among the entire electorate. The Chamber intends to do its part
in informing its members about existing tax incentives.
The Chamber also supports the $1 tax checkoff for Presidential camoaifns
now provided under law. Greater publicity should be given to the right of each
individual taxpayer to direct the IRS to set aside $1 of his taxes each year for
use in the Presidential Campaigns.
We support the present $1 tax checkoff law because it retains the element
of voluntarism. The taxpayer has the ~ of designating one dollar of his tax
monies to be included in a presidential campaign fund. And the presidential
candidate has the ~ of using the tax fund in lieu of private funds.
Some of the past weaknesses of our political system were cured or
ameliorated by the Federal Election Campaign Act of 1971. Still others will
be alleviated through such corrective legislation as 5. 372.
We support many provisions of Senate-passed 5. 372. Unlike public
funding bills, 5. 372 preserves voluntarism in the political process --
including voluntary funding. 5. 372 does this while setting limits on
voluntary contributions and ceilings on expenditures which the Chamber endorses.
The tendency of some individuals to circumvent the law will probably
never be entirely eliminated because of inherent human weaknesses that would
prevail under any system that could be devised. Morality can never be legislated.
However, penalties provided by a law that is properly enforced can act as a
major deterrent to illegal campaign practices.
- If campaign practices under a new election act still need improvement,
the law can be further tightened and penalties can be increased.
The fact is that Congress has not exhausted ways to perfect the present
system. Enactment of 5. 372, as passed by the Senate, would help significantly
to correct abuses.
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492
We support the provisions of S. 372 which would establish strict limits
on campaign contributions and expenditures. The recommended ceilings are reason-
able.
In addition, the crush of TV expenditures by major party candidates would
be substantially eased by the proposed repeal of Sec. 315 of the Communications
Act. The Chamber supports this and other provisions of 5. 372, including the
establishment of a single agency to administer and enforce the law, and the
requirement that each candidate have one central committee to receive, consolidate
and file all reports, and one or more designated depositories for the deposit
and disbursement of all funds. These provisions should tighten up political
campaign operations and prevent abuses.
In addition, we support strict enforcement of the proposed disclosure
requirements by committees, organizations and candidates, of political campaign
contributions and expenditures. Moreover, we believe that cash contributions
and cash expenditures should be held to the barest minimum. We favor reduction
in the frequency (but not the content) of presently burdensome reports.
We support, too, the clarification in S. 372 of the Sec. 610-611 conflict
in the Federal Election Campaign Act of 1971 so that all corporations, all labor
unions and all other organizations may have equal privileges in the political
process. But a further amendment to Section 610 would be in order. Appropriate
language should be inserted to make explicit what is already implicit -- that
corporations and associations have the right to communicate with employees, as
well as with stockholders, and their families on political matters.
We urge the Congress to put teeth into the enforcement provisions of
the election law, with appropriate penalties for all civil and criminal violations.
We favor the establishment of an independent, quasi-judicial agency to
receive all required reports detailing contributions and expenditures, and to
administer and enforce the election laws with power to bring legal action against
all violators.
We urge enactment of Senate-passed 5. 343 to shorten political campaigns
and thereby substantially reduce campaign costs.
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493
We urge that campaign legislation enacted by the Congress and regulations
promulgated thereunder, supersede and preempt any provisions of state law
relating to campaigns for federal office.
And finally, we urge the House to join with the Senate in the enactaent
of S. J. Res. 110 establishing a 16-member Non-partisan Commission on Federal
Election Reform to study all facets of election campaigns and procedures and to
make recommendations concerning future practices.
CONCLUSION
Business and professional people are very much interested in electoral
reforms. In a recent poll of our members, we found that
* 937, favor overall election reform
* 947, support public disclosure of contributions to, and expenditures
by, all candidates for federal office
* 747, believe the election campaign law should be administered and
enforced by an
* 887, favor shorter campaigns
* 92% would require each candidate to have one central committee for
reporting and record-keeping purposes
* 83% oppose the granting of free or reduced postal rates to any
federal candidate
* 83% oppose the present practice of permitting labor and business
related political action groups to contribute unlimited amounts
to candidates or parties, and
* 76% favor the continued voluntary f~g~44~g of political campaigns.
We, therefore, urge the House Subcommittee on Elections to table all
bills calling for public financing of federal election campaigns, and instead,
to approve 5. 372 as passed by the Senate, which would institute needed reforms,
preserve and protect the voluntary nature of our political system and promote
greater interest and participation in the electoral processes at all levels of
government.
0
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