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The Long, Stormy Marriage Of Money And Politics
… or why in America campaign-finance reform never succeeds
November 1998 | Volume 49, Issue 7
Now the law of unintended consequences, the only constant mechanism in the story of campaign-finance reform, eased into gear. National politicians, with their access to government workers stymied by the Pendleton Act, turned to corporations and found there the immense wealth generated in the Industrial Revolution by Vanderbilts, Astors, and the like. Boies Penrose, the Pennsylvania Republican boss who succeeded Cameron, summed up the prevailing philosophy when he remarked, “You can’t run a party on nothing and when you need money the place to get it is from them that have it.” Henry Adams saw the result in starker terms: “The moral law has expired.”
A climax of sorts came in the 1896 presidential campaign. Behind the blandly orthodox Republican image of William McKinley stood Marcus Alonzo Hanna, the first authentic genius of campaign finance. His genius was assisted not a little by the radical pyrotechnics of the Democratic candidate, William Jennings Bryan, who attacked the two pillars of Republican prosperity, the gold standard and the protective tariff.
Hanna raised an estimated $7 million from alarmed businessmen to put McKinley in the White House. He levied assessments on companies of all sizes based on his judgment of their “stake in the general prosperity.” With a shrewdness that anticipated the fundraisers of our own nineties, Hanna refused to promise any specific favor or service; rather, he sold the glittering concept of “access” and a government that smiled on corporations.
McKinley beat Bryan and then repeated the performance in 1900 at only about a third of the cost. He even returned $50,000 of a reputed $250,000 contribution to Standard Oil because it exceeded what he considered the company’s fair share of the national effort. His fundraising tactics soon generated a backlash. The outspent Democrats denounced them as proof that America was going from democracy to plutocracy, and they were joined by muckraking reporters who began writing of corporations buying up entire state legislatures to guarantee their immunity from investigation and control. To Hanna’s dismay, the critics were joined by none other than the Republican politician who became President when McKinley was assassinated in 1901.
The 1907 Tillman Act banned contributions by corporations; now wealthy individuals gave money instead.
Like Benjamin Franklin, Theodore Roosevelt had adeep respect for the spirit of the average American, and he sensed that revelations about unchecked corporate power were in danger of making many people cynical toward their country. When he ran for re-election in 1904, he piously returned a $10,000 check from Standard Oil and said he wished he could raise money from average citizens but found the idea unworkable. So he turned to wealthy individuals to fund his campaign. Although their identities remained unknown at the time, four big givers—J. P. Morgan, John Archbold of Standard Oil, George Gould, and Chauncey Depew (spokesman for the Vanderbilts, which means the New York Central Railroad)—covered a fourth of his 1904 expenses.
A year later Republican progressives joinedthe battle against corporate money in politics. A New York legislative committee under Charles Evans Hughes discovered that the state’s giant insurance companies had paid hundreds of thousands of dollars to state and national politicians, often disguised as legal expenses. Hughes summoned to the witness chair Thomas Platt, boss of the New York Republicans, and asked him if candidates felt a moral obligation to big givers. “That is naturally what would be involved,” Platt replied.
Among the many large contributions made to the Repub lican party, Hughes’s investigators found one check for nearly $50,000 paid by New York Life to Theodore Roosevelt’s 1904 campaign. That revelation made headlines across the country. In his next message to Congress an embarrassed Roosevelt recommended a law banning all corporate contributions. The bill that finally emerged, in 1907, was the result of agitation by the populist senator Benjamin Tillman, of South Carolina. “Pitchfork Ben,” a race-baiting demagogue, wanted nothing less than to cripple the Republican party. Nevertheless, public indignation at corporate influence had grown so feverish that even such a law from such a source had a wide appeal. “It is impossible to make a case against the Tillman bill on any other grounds than that boodle has become an indispensable factor in our elections,” wrote the Washington Post.
Roosevelt had proposed to ban all contributions to political parties and have elections funded by the government. The Tillman Act was much narrower: It proscribed contributions to federal elections by corporations and national banks. The Republican Senate excised the part that barred business money from state and local elections.
Tillman’s success led progressives to browbeat a reluctant Congress into other reforms. In 1910 a Democratic-funded entity known as the National Publicity Bill Organization (NPBO) fathered a law that required federal candidates to disclose the sources of their campaign funds. The next year an amended version barred House candidates from spending more than $5,000 in each election. Senators were limited to $10,000, or a lesser amount established by state laws. None of these reforms was adopted without months of angry debate. Spending limits, in particular, aroused furious objections from many politicians.