1971. Although suggested improvements and alternative proposals have been many, they have had some combination of several familiar concepts in common: (1) the expansion of the base of political contributions to provide an additional source of funds, thereby reducing the reliance on the large contribution; (2) the implementation of realistic ceilings on expenditures; (3) prohibitions on contributions from certain sources that present a danger of conflicts of interest; (4) more accurate public disclosure of the source and application of funds; and (5) the effective enforcement of substantive provisions.

68

Many reform plans have involved innovative schemes for implementing the above concepts. In recent years, for example, the idea of public subsidization of federal elections has been strongly advocated. By many, the idea of public subsidization-with its central theme of expanding the base of contributions--has been deemed a cure-all for the ills presently affecting campaign finance. Differing motives may control a particular proponent of this kind of plan; i.e., the candidate seeks additional sources of money, and the reformer hopes to prevent the political pressure of potentially harmful special interests by decreasing the need to rely on the large contribution. But regardless of motive, the end result of public subsidization seems to be that the interests of both candidate and reformer will be satisfied. And if the subsidization provisions are joined with realistic spending restrictions, the politician's burden will be reduced to an even greater degree, entirely eliminating the reliance on the large contribution. In its purest form, public subsidization would involve the federal funding of congressional and presidential election campaigns from the Government's general funds. The more popular forms of subsidization, however, are the tax credit and the tax deduction." A tax credit would allow the voting taxpayer to take a certain amount of money from his final liability and earmark it for political contribution, while the tax deduction would allow the political contribution to be subtracted from taxable income. Several states have presently adopted some form of the tax credit or tax deduction for their respective state income taxes.70

On December 10, 1971 the President Election Campaign Fund Act "-signed into law as part of the Revenue Act of 1971-created a new plan of public subsidi and repeal of the equal-time provision in § 315(a) of the Federal Communications Act of 1934 [47 U.S.C. § 315(a) (70)]. The Committee for Economic Development, Financing a Better Election System 21-25 (1968).

The most recent reform program has come from the Twentieth Century Fund, a nonprofit and nonpartisan organization endowed by Edward A. Filene. The Fund has recommended several reform proposals, including: (1) full disclosure, requiring any committee raising or spending more than $1.000 a year to report; (2) creation of a Federal Elections Cominission to audit and publicize the financial reports; (3) repeal of all statutory spending limitations; (4) repeal of the limits on the size of individual contributions; (5) vigorous enforcement of section 610 of the Federal Corrupt Practices Act; and (6) centralization of finance under one official campaign committee. Twentieth Century Fund Report, supra note 20, at 15-21. While none of these programs has been translated into specific legislation, they have succeeded in stimulating public interest in the need for the reform of existing campaign finance laws, and some of the proposals contained therein are incorporated in reform legislation yet to be discussed.

It is interesting to note that most of these reform programs have come from individuals or organizations Isolated from political pressure. This further illustrates the belief that politicians are reluctant to police themselves. Congress, however, has at various times held hearings on campaign finance reform. See, e.g., Hearings on S. 219 Before the Special Sen. Comm. to Investigate Political Activities, Lobbying and Campaign Contributions, 84th Cong., 1st Sess. (1955); S. Rep. No. 176, 85th Cong., 1st Sess. (1957); S. Rep. No. 101, 79th Cong., 1st Sess. (1945); S. Rep. No. 47, 77th Cong., 1st Sess. (1941). See generally the programs referred to in note 67 supra.

Puerto Rico is the only American jurisdiction where elections are partially subsidized by the public. In Puerto Rico, each party may draw up to $75,000 in a nonelection year and $150,000 in an election year. For a complete examination of the system of public subsidization in Puerto Rico, see Wells, Government Financing of Political Parties in Puerto Rico, in Studies in Money in Politics 7 (H. Alexander ed. 1962).

One plan of public subsidization created by Senator Russell Long (D., La.) did catch congressional fancy for a short time. In late 1966, Congress enacted the Presidential Election Campaign Fund Act. 31 U.S.C. $971 (1970). Under this plan, each taxpayer could designate one dollar of his federal income tax to go into the fund. The money would have been split by the Democrats and Republicans. In 1967, however, the Act was amended to provide that funds be disbursed only after adoption by law of guidelines governing distribution. Act of June 13, 1967, Pub. L. No. 90-26, 81 Stat. 58. See generally 23 Cong. Q. Almanac 286 (1967). Guidelines were never promulgated and the operable provisions of the Act were recently repealed. Act of Dec. 10, 1971, Pub. L. No. 92-178, tit. VIII. § 802(b) (1), repealing Act of Nov. 13, 1966, Pub. L. No. 89-809, tit. III, $$ 303, 304, 305.

See generally the proposals of the Kennedy Commission, the Committee for Economic Development, and Philip Stern in note 67 supra. 70 See. e.g., Cal. Rev. & Tax. Code § 17234 (West 1968) (which allows a tax deduction of up to $100 a year for political contributions); Minn. Stat. Ann. § 290.21 (3) (e) (1) (1961) (which allows a personal deduction for contributions up to $100).

71 Act of Dec. 10. 1971. Pub. L. No. 92-178, §§ 9001-13. The plan is similar to the earlier plan devised by Senator Long which passed Congress in 1966, but was repealed in 1967. See note 68 supra.

zation for presidential elections to take effect in 1973. The new legislation, commonly known as Tax Checkoff, allows a taxpayer to designate one dollar of his yearly tax to be paid over to the Presidential Election Campaign Fund." From this fund, eligible candidates" from "major parties" "5 can receive payments equal to 15 cents multiplied by the number of U.S. residents over 18 on June 1st of the year preceding a presidential election year. A "minor party" candidate" would be entitled to receive a similar sum based on the number of votes received by the party's candidate in the last presidential election." In addition, new political parties and other parties that failed to receive enough votes to qualify as a minor party are eligible for certain payments."

76

Had Tax Checkoff been law in the 1968 election, and had the principal candidates opted to utilize public subsidization, the Democratic and Republican presidential candidates would have received $20.4 million each, and George Wallace would have received $6.3 million.80

72 Act of Dec. 10, 1971, Pub. L. No. 92-178, tit. VIII, § 9013. The Tax Checkoff plan will not apply to the 1972 presidential election, primarily because of political facts surrounding its introduction and passage. The idea arose from a Democratic party meeting on July 14, 1971. See The Plain Dealer (Cleveland, Ohio), Dec. 10, 1971, at 14, col. 1. The Democrats were still deep in debt from the 1968 election and were expected to have a problem raising campaign funds; whereas the Republicans already had a campaign surplus and, with an incumbent in the White House, a substantial advantage in attracting additional contributions. See The Washington Evening Star, Dec. 3, 1971, at A-6, col. 1. The application of Tax Checkoff to the 1972 election would allow the Democrats to erase the Republican advantage.

The Democrats tied Tax Checkoff to the Revenue Act of 1971, feeling that the President would not veto such an integral part of his economic program. Nevertheless, repeated veto threats forced a compromise and an effective date of January 1, 1973. Even then, the applicability of Tax Checkoff to the 1976 election is far from certain: sources indicate that President Nixon will attempt a repeal of the provision. See The Washington Post, Dec. 3, 1971, at 1, col. 8.

It seems ironic, albeit not surprising. that legislation designed to remove presidential campaign finance from the arena of politics should be motivated by such partisan desires. It does, however, point to the desperate need of candidates and political parties for funds. 78 Act of Dec. 10, 1971, Pub. L. No. 92-178, tit. VIII, § 9006.

74 Id. § 9002 (4).

75 Id. $9002 (6) (which defines a "major party" as "a political party whose candidate for the office of President in the preceding presidential election received. as the candidate of such party, 25 percent or more of the total number of popular votes recived by all candidates for such office").

76 Id. § 9004 (a) (1).

77 Id. $9002 (7) (which defines a "minor party" as "a political party whose candidate for the office of President in the preceding presidential election received, as the candidate of such party, 5 percent or more but less than 25 percent of the total number of popular votes received by all candidates for such office").

78 Id. $ 9004 (a) (2).

79 Id. $ 9004 (a) (3).

So These figures are taken from an article on the Tax Checkoff plan in The Plain Dealer (Cleveland, Ohio), Nov. 23, 1971, at 3. col. 1. Under section 9006(a), the Secretary of

In its present form, Tax Checkoff contains a number of problems which will limit its effectiveness as a comprehensive plan of campaign finance reform: (1) it is limited to the presidential election: (2) it is applicable only to expenditures incurred within a period commencing on the date a major party nominates its candidate at its national convention and ending 30 days after the election, and thus contains no restrictions on the amount of money a candidate may spend in attaining the nomination; and (3) its funding base, the designation of one dollar of yearly tax, is completely optional with the taxpayer.

82

81

The plan also will probably encourage splinter parties and an increase in the number of presidential candidates. Whether this is a desired effect depends on one's political philosophy, but Tax Checkoff certainly provides a better opportunity for a candidate with limited financial support to campaign for the presidency. In addition, because Tax Checkoff provides the candidate with a new source of funds, it might reduce his reliance on the large contribution. But such an effect is less than certain because the candidate or party must still be able to absorb all the campaign costs incurred prior to the commencement of the period when he begins to benefit from Tax Checkoff.

If a candidate is to benefit under the plan, he and his authorized committees must certify to the Comptroller General that they will not incur qualified campaign expenses in excess of the aggregate payments he is entitled to, and that no contribution to defray qualified expenses will be accepted, unless the Checkoff fund is insufficient to cover them. This provision thus places a ceiling on campaign expenditures during the period when the candidate receives the Tax Checkoff funds-a period when a candidate's media expenses are at their peak. It is unlikely, however, that this limitation would significantly impede a candidate since it is at least high enough to permit continued spending at present levels.

Tax Checkoff also provides for a comprehensive system of financial disclosure administered by the Comptroller General's office. The eligible candidates must submit to the Comptroller General periodic, detailed statements as to the qualified expenses incurred by them and their authorized committees.84 At a reasonable time after the election, the Comptroller General must submit a full report to the Senate and House of Representatives. In addition, he is authorized to prescribe such rules and regulations, to conduct such examinations and audits, to conduct such investigations, and to require the keeping and submission of such books, records and information as are necessary to carry out his function. In vesting the Comptroller General with the administration of the plan's substantive provisions, Congress has alleviated many of the problems associated with the selfpolicing mechanisms of prior legislation.

86

Another major attribute of the plan lies in its enforcement mechanism, especially with respect to those who have standing to allege a violation. The Comptroller General, the national committee of any political party, and individuals eligible to vote in presidential elections are authorized to institute actions in the district courts to implement any provision of the law. This broad grant of standing goes a long way towards creating effective enforcement and obviating the problems of partisanship which existed under previous legislation that authorized the Treasury is to establish a separate account for each political party and make payments into these accounts after certification by the Comptroller General under section 9005(a). Prior to certification, the Comptroller General must examine the records furnished by the candidates who are seeking Tax Checkoff funds. In addition, after each presidential election, the Comptroller General is required by section 9007 to make a thorough audit of each candidate to ensure that the party: (1) did not incur expenses in excess of the allotment allowed by section 9004; (2) did not accept contributions in addition to Tax Checkoff and (3) did not use the payments for other than campaign expenses. If violations are found, the Comptroller General must demand appropriate repayments. Act of Dec. 10. 1971. Pub. L. No. 92-178, tit. VIII, § 9007 (b).

81 Id. § 9002 (12).

A small party could not receive payments from the fund and then not use the money for campaign expenses, because the Comptroller General must audit the expenses after each presidential election and demand repayment if the money is not used for campaign expenses. Id. § 9007 (a)-(b).

Id. § 9003 (b)-(c).

84 Id. & 9008.

Id. § 9009 (a).

80 Id. § 9009 (b).

Id. § 9011(b) (1) (which states: "[t]he Comptroller General, the national committee of any political party, and individuals eligible to vote for President are authorized to institute such actions, including actions for declaratory judgment or injunctive relief, as may be appropriate to implement or construe any provision of this chapter.") It appears from this that any individual bringing suit would have available a broad scope of remedies, possibly including damages or even an injunction to prevent an elected official from taking office.

only the Justice Department to bring suit. Regarding any certification. determination or other action by the Comptroller General, any interested person has the right to the judicial review of such action in the Court of Appeals for the District of Columbia. The act also provides criminal sanctions for violations of various substative provisions. The important point, however, is that the enforcement provisions are no longer mere placebo.

89

The Tax Checkoff plan is undoubtedly a major step towards reforming the entire area of campaign finance legislation. Nonetheless, it was never intended to be a comprehensive overhaul of existing legislation, and in fact, most likely owes its existence to the need of the Democrats to work out some means to facilitate their campaign financing and their tactical ploy of tieing the proposal to legislation which the President would not veto.

91

10

Almost buried by the controversy over Tx Checkoff is a significant improvement in campaign finance legislation. Title VIII of the Revenue Act of 1971 provides for limited tax credits and deductions. An individual taxpayer is allowed a credit against his tax of up to $12.50 " or, in the alternaitve, a deduction of up to $50.00.* These provisions, applicable to the 1972 elections," have the potential to expand the contribution base by providing an incentive to the small contributor. In practice, however, the effect of these tax incentives will be minimal unless they receive more media coverage, because the taxpayer will be unaware of the various options available to him.

IV. THE CAMPAIGN ACT OF 1971

Finally, after considerable legislative manipulation, President Nixon signed into law the Federal Election Campaign Act of 1971, which-in addition to

88 Id. § 9011(a).

So Id. § 9012.

See note 72 supra.

21 Act of Dec. 10, 1971, Pub. L. No. 92-178. tit. VII, §§ 41(a), (b) (1).

02 Id. § 218.

d. § 703.

84 Act of Feb. 7, 1972, Pub. L. No. 92-225. The legislative path of the Federal Election Campaign Act of 1971 took well over a year from introduction to enactment. The actual beginning of Senate Bill 382 stems from the veto of Senate Bill 3637 by President Nixon on October 12, 1970, 6 Weekly Comp. Pres. Documents 1367. Senate Bill 3637 permanently suspended the equal time requirement of section 315(a) of the Federal Communications Act of 1934 [47 U.S.C. § 315(a) (1970) (originally enacted as Act of June 19, 1934, ch. 652, tit. III, § 313, 48 Stat. 1088)] which, for presidential campaigns required broadcast stations to charge candidates at their own established lowest unit rate for comparable commercial time; and placed a ceiling on the amount of money candidates for federal elective office, the offices of governor or neutenant governor, or anyone on their behalf could spend for radio and television time. President Nixon vetoed this bill, calling for more comprehensive reform in the area of campaign finance, rather than a bill dealing only with media advertising.

Early in January 1971, several campaign reform bills were introduced in the Senate. During the March hearings, the major controversies concerned the possibility of repealing the equal time requirement of the Federal Communications Act of 1934, the need for a spending limitation, and the proper mechanism for public disclosure. On August 5, 1971, the Senate passed Senate Bill 382 by a vote of 88 to 2 which repealed the equal time requirement with respect to presidential and vice presidential candidates in both primary and general elections, and set a spending limitation of five cents times the number of potential votes for broadcast advertising and an equal amount for nonbroadcast advertising. Senate Bill 382 also delegated enforcement of the disclosure requirements to an independent Federal Elections Commission, composed of members appointed by the President, with the advice and consent of the Senate for relatively long terms. Just as the House was to take up this campaign reform bill, the bitter partisan controversy surrounding Tax Checkoff forced its postponement, thus precluding enactment until December when the House passed a bill significantly different from the Senatepassed bill. The House-passed bill failed to include any repeal of the equal time requirement and divided the disclosure duties with the Clerk of the House, the Secretary of the Senate, and the Comptroller General rather than the Federal Elections Commission. In the Senate-House conference, the Senate receded on both of these major provisions, indicating that the Federal Election Campaign Act would be substantially weaker than the Senate-passed bill.

The major reason for the failure to repeal section 315(a) was that President Nixon threatened a veto unless the repeal was extended to all candidates for federal office, rather than just President and Vice President. Congress, probably unwilling to give free air time to their lesser known opponents, decided that the best course was to leave section 315(a) intact.

The Federal Elections Commission. originally a component of the administrationsupported Scott-Mathias bill, was included by the Senate despite Democratic opposition. As administration support for the independent commission waned, however, the supervisory function was embodied in more traditional organs; the Secretary of the Senate. the Clerk of the House and the Comptroller General.

Finally, on February 7, 1972, President Nixon signed the Federal Election Campaign Act of 1971 (Pub. L. No. 92-225) into law. The law took effect on April 7. 1972, thus exempting the New Hampshire, Florida. Illinois and Wisconsin primaries from its pro

visions.

establishing new substantive provisions-repealed the Federal Corrupt Practices Act and repealed or amended certain sections of the Election and Political Activities Laws. The act is unique in that it is the first piece of legislation attempting a comprehensive overhaul of the campaign finance laws. While it contains numerous provisions, the Campaign Act is primarily directed at campaign expenditures, especially those involving the various communications media. The act is structured in four parts: Title I requires that broadcast stations give reduced rates to legally qualified candidates and establishes an aggregate ceiling on a candidate's expenditures; Title II is a series of amendments to the Election and Political Activities Laws, including limitations on expenditures from the candidates' personal funds, a repeal of the maximum contribution and expenditure restrictions, and a strengthening of the prohibition on contributions by national banks, corporations and labor unions; Title III is original legislation establishing a detailed system of disclosure of federal campaign funds; and Title IV is basically a repeal of the Federal Corrupt Practices Act."

A. Title I

Title I of the Campaign Act strives to halt the spiraling cost of political campaigning by requiring broadcast stations, during the 45 days preceding the primary and the 60 days preceding the general election, to charge the lowest unit rate that the station would otherwise charge for the same class and time of advertising." But this will not really diminish broadcast expenditures as much as anticipated because most stations already give discounts to political candidates.98

Originally, the Campaign Act was drafted to include, as well, an amendment to the Communications Act of 1934 that would repeal the equal time provision "—which requires that, if a broadcast station gives free time to one candidate, it must given an equal amount of free time to each of the other candidates, including those of minor parties.100 The purpose of the amendment, in addition to aiding the reduction of broadcasting expenditures, was to give candidates for public office greater access to the media so that they could better explain their stand on the issues and more completely inform the voters." 101

The repeal of the equal time provision most likely would have achieved these results, and Congress apparently missed an opportunity to significantly lower political broadcast expenditures when it dropped the repeal amendment from the final version of the act.102 While Congress' failure to act is primarily attributable

Communications media include "broadcasting stations, newspapers, magazines, outdoor advertising facilities and telephones." Act of Feb. 7, 1972, Pub. L. No. 92-225, tit. I. § 102 (1).

§ 405.

2 U.S.C. §§ 241-56 (1970), repealed by Act of Feb. 7, 1972, Pub. L. No. 92-225, tit. IV, 7 Act of Feb. 7, 1972, Pub. L. No. 92-225. tit. I, 103. This is an amendment to the Communications Act of 1934 [47 U.S.C. § 315(b) (1970)] which stated that "the charges made for the use of any broadcast station for any of the purposes set forth in section 315 may not exceed the charges made for comparable use of the station for other purposes." Under section 315(b), political candidates were often charged more for the same amount of space or time than were major advertisers. Thus, the amendment ensures that the lowest advertising rate will always be charged.

98 CBS network stations already charge the lowest net rate. 1971 Hearings on S. 382, supra note 4, at 328 (letter from Frank Stanton. President of CBS, to Senator Hugh Scott, Feb. 12, 1971). ABC gives a 33 percent discount. Id. at 329 (letter from Everett Erlich of ABC to Senator Scott, Feb. 12, 1971). NBC gives a 50 percent discount. Id. at 408 (testimony of Julian Goodman, President of NBC).

These discounts also exist on a non-network basis. A survey of stations in the Cleveland area (compilzed by the author from conversations with advertising managers at Cleveland radio stations WKYC, WJW and WEWS) found discounts ranging from 25 to 50 percent for political candidates.

2047 U.S.C. § 815 (a) (1970).

100 S. 382, 92d Cong., 1st Sess. § 101 (a) (1) (1971).

101 Section 315(a) of the Federal Communications Act of 1934-the "equal time" provision-was suspended in 1960 for presidential candidates to allow the Nixon-Kennedy debates. S.J. Res. 207. 86th Cong., 2d Sess., 106 Cong. Rec. 17739 (1960). Without such suspension the networks would have had to give all the minor party candidates equal time. As the table below illustrates, little free time is presently being offered to political candidates.

Year:

19561960. 1964

1968

Free Time to All Candidates on TV

H. Alexander, supra note 6, at 102.

Hours and Minutes

29:38

39:22

4:28

3:01

102 If the equal time provision had been repealed, CBS would have offered 8 hours of free network time to each party. NBC pledged an additional 4 hours to each party. 1971 Hearings on S. 382, supra note 4, at 388, 408.