As a result of our work, Common Cause now has comprehensive data on campaign financing for the 1972 elections. This includes copies of every report filed by candidates and committees with the Clerk of the House and Secretary of the Senate both of whose offices, incidentally, were extremely cooperative with us throughout the year. We have lists of all itemized presidential donors for the period April 7 through October 23 and preliminary summaries for most House and Senate races and for most interest groups that make heavy contributions.

An example of the kind of information now available is the relative financial support of incumbents and challengers.

In a survey covering 275 House candidates and their major party challengers where both had all their reports in up to October 26, we have found that the average of contributions raised by an incumbent was approximately $54,600, while the average raised by a major party challenger was approximately $27,900.

Similarly, on the Senate side, in a survey covering 25 Senate incumbents and their major party opponents where both have filed reports through October 26, we found the average amount raised by an incumbent was $403,000 and the average raised by a challenger was $195,000. In both cases, incumbents raised roughly twice as much as challengers. I will say by way of caution, the above data are offered only as an example. They are incomplete in that they do not include the January 31 reports, have not been completely rechecked, and leave out races in which complete information was simply not filed.

Senator PASTORE. I would say, though, that even an exaggerated amount of money sometimes does not do you any good. Because you cannot buy an election anyway, even if you try. It is votes that count. But it is this idea that sometimes in this competitive race that too much money is spent. Have you any breakdown on who won and who lost, even in spite of the money? There were many, many upsets, were there not?

Mr. WERTHEIMER. Mr. Chairman, we do not have the final answer necessary yet.

Mr. GARDNER. This is Mr. Wertheimer who ran our whole campaign. Senator PASTORE. I was wondering if you can get that.

Mr. WERTHEIMER. We are working on trying to get those final figures the final tabulations in comparison of who won and who lost.

Senator PASTORE. The point I am making is that it is not the fellow who usually spends the most money who wins the election. Because the ultimate judge is the public, and the ballot box. All we are trying to do is bring this within reason. The idea is that the more money that comes in, I think the more you become beholden to the giver for some reason. And that is inescapable. It is a human trait.

And I do not think we have to talk about that, but it would be interesting.

You brought out the fact that the incumbent-it is understandable-would recive more money. First of all, he occupies the office. I suppose more people would feel that he has a better chance of remaining there, and maybe make the contribution more worthy in that regard.

But in order to get this in proper context, I was wondering if we could get those figures if we have them.

Mr. WERTHEIMER. Yes, we can. We do know already very, very few incumbents in the House of Representatives were defeated in 1973.

Senator PASTORE. Quite a few in the Senate were defeated. And there were some surprises.

The CHAIRMAN. Well, Mr. Chairman, I have observed one or two elections personally where the vast expenditure of money reacted against the person that was running. It became so obvious that the people voted against them. And it hurt in the long run.

Now, that seems an unusual case, but that happens.

Senator BAKER. One other point occurs to me. The observation that incumbents obviously raise more money than challengers is paralleled by another observation with which I believe you would agree; that is, generally speaking incumbents have a higher name recognition than challengers.

Mr. GARDNER. Right.

Senator BAKER. And that in trying to limit the amount that can be spent on campaigns, we have to be very careful to make sure we do not convert it into a shelter for incumbents. We don't want to place an expenditure limitation of such a type or in such amount that it becomes practically impossible for a challenger to make a successful challenge against an incumbent.

I do not have a solution but would you agree that is a matter we have to keep our eyes on?

Mr. GARDNER. It is a fair comment, yes.

Senator PASTORE. I agree with that statement.

Mr. GARDNER. Mr. Chairman, I apologize for not having introduced my colleagues, Fred Wertheimer who ran the campaign monitoring, and Ken Guido, our attorney who worked with him on it. I have just a few more paragraphs.

We believe that the record of 1972 makes clear the need to end the present system of financing elections. We also recognize that this is an issue that will be hard fought from beginning to end. In the interim, the Federal Election Campaign Act of 1971 remains an extremely important piece of legislation. We have urged that a full scale congressional review of this act be conducted based on the experiences of 1972.

Certainly no campaign finance legislation should be considered on the floor of the House or Senate until such a broad review has occurred. We have not addressed ourselves here to specific amendments to the 1971 act such as proposals to improve and strengthen the reporting requirements and we will save our comments on that subject until general hearings have been scheduled by the Senate Rules Committee.

We would note, however, our belief that the single greatest need is for the creation of an independent elections commission with powers of enforcement and subpoena. In this regard, we strongly endorse the efforts on behalf of such a commission initiated yesterday by Senators Hugh Scott, Charles Mathias, and Adlai Stevenson.

Senator BAKER. Mr. Chairman, could I interrupt for a moment to say I have here the statement Senator Scott made and the statements of Senator Mathias and Senator Stevenson. I wonder if, at an appropriate point in the record, these might be included for the purposes of these proceedings.

Senator PASTORE. All right, I think this would be an appropriate. part of the record. Without objection, so ordered. It will be inserted at this point.

(The statements follow :)

STATEMENT OF HON. HUGH SCOTT, U.S. SENATOR FROM PENNSYLVANIA

Mr. President, the 1972 elections were held four months ago and it is appropriate to ask ourselves now whether we know as much about them as we should. After all, the Federal Election Campaign Act of 1971 was supposed to tell us who gave how much to whom and when. If I were a professional critic, I would have to give the new law mixed reviews, citing its bold structure but spotty performance.

I introduced a very strong and effective campaign reform bill two years ago. If it had been enacted, the entire aura of the presidential campaign would have been strikingly different. I can say this because had my original proposal for an independent Federal Elections Commission been a part of the law, there would be no question as to the legality of certain campaign contributions and there certainly would not have been continuous haggling over various campaign practices and procedures. Many of the problems we encountered in 1972 were created because of a split between the administrators and the enforcers of the law, in addition to the three-way split among the repositories for the various federal offices being sought. I said it two years ago, and I will say it again-what we need is an independent Federal Elections Commission to regulate campaign spending.

I am today introducing, along with the distinguished senior Senator from Maryland (Mr. Mathias), four bills to correct some of the deficiencies in the existing campaign disclosure law-the greatest of which is the absence of a federal commission.

The first bill deals principally with the reporting and disclosure of campaign contributors. We propose to create a six-member Federal Elections Commission, appointed by the President and confirmed by the Senate. Each member would serve a six-year term. The Commission would have full legal powers, including the subpoena of witnesses and evidence. Furthermore, it would be empowered to "initiate, prosecute, defend, or appeal any court action *** through its own legal representative". To avoid an overly large, year-around staff, the Commission would be able to use, at peak periods, the personnel and the facilities of the Department of Justice and the General Accounting Office. The Commission would submit its budget directly to Congress along with any recommendations it may have for legislation. Those functions now maintained in the GAO, the Secretary of the Senate and the Clerk of the House would be given an orderly transfer to the new commission.

It would be helpful, at this point, to recall that the Senate previously supported the creation of a Federal Elections Commission by a vote of 89 to 2. Unfortunately, the House did not agree, and the conference committee had to compromise. But we are already on record in support of a very significant reform proposal. Perhaps the House might now be willing to go along with us.

There are a number of new features in our bill aimed at reducing the volume of paper work and eliminating the temptation to obfuscate the law. First, every candidate would be required to utilize the concept of a central campaign committee, through which all of his reports must pass. Regardless of the number of committees supporting his election, each must submit its report to the parent committee. The parent committee would, in turn, file its report with the Commission. Second, reports would include each amount contributed of $100 or more. Current law requires only amounts in excess of $100. Obviously, there is a substantial gap in the law here and we hope to close it. Third, we would require that cash contributions of $2,500 or more be reported within 24 hours. Current law stipulates that contributions of $5,000 or more be filed within 48 hours. We hope to pick up on the public record more large contributions in a shorter period of time. Fourth, we would eliminate the two reports now filed fifteen and five days before an election and replace them with one report filed 10 days before an election. It is a small change, but it would mean greater public disclosure through a more simplified filing procedure.

Pursuant to an amendment I successfully offered in 1971, several federal regulatory agencies have issued rules restricting the extension of unsecured credit to candidates who use regulated businesses such as airlines, telephones and telegraph. The campaign of 1968 simply spawned too many debtors. The bill we are offering today would move a step further. When any debt is compromised, that is, settled for less than full value, the candidate must file "a statement as to the consideration for which any such debt is extinguished or a statement as to the circumstances and conditions under which any such debt is cancelled."

The second bill we are offering would exempt the equal time requirements in the broadcasting law for all federal offices-President and Vice President, Senator, and Representative. This is the only fair way since each office should be given the fullest possible exposure through the medium of broadcasting. Once again, I would remind the Senate that this proposal was previously adopted by a vote of 71 to 21. The House of Representatives did not support our action and the entire matter was dropped in the conference committee.

I believe it is terribly important to give the broadcaster an opportunity to present the candidates' views to the public without giving time to every marginal candidate in an election. The public is the real loser if we don't do something to make free broadcast time available to legitimate candidates.

Our bill would also expand the definition of a legally qualified candidate to include persons who have publicly announced for office or have knowledge that contributions and expenditures have been made in their behalf. This new definition would cover those candidates who sometimes fly under false colors as "noncandidates".

The bill would also direct the Federal Communications Commission to study the effect of the equal time suspension on both the Congressional and presidential campaigns. Congress would receive reports at the end of 1974 and 1976.

The third bill we are offering is substantially similar to a proposal we submitted two years ago dealing with compaign mail. We now propose to offer all candidate is eligible for office. In other words, if he is a Representative, he could pieces of political mail at rates currently paid by non-profit organizations.

Generally speaking, a candidate would be permitted to have two mailings, equal to the voting age population, prior to any election. Minor party candidates would be allowed a similar mailing, but only half the number of pieces. This bill stipulates that mail can ony be addressed to persons in the area in which the candidate is eigible for office. In other words, if he is a Representative, he could not take "soundings" with reduced-rate mail if he was only interested in a Senate seat. He would have to qualify first.

I feel that all candidates, both incumbents and challengers, ought to be given the opportunity to communicate with the electorate in this unique way. Only through the fullest presentation of different political points of view can the public make the best choice.

The fourth bill we are submitting deals with the tax treatment of cash contributions to a political campaign. Current law now subjects contributions in excess of $3,000 to a federal gift tax. What this had done is to encourage donors and donees to route many contributions of this size through numerous "committees of evasion". To encourage full reporting and disclosure, and to simplify the filing requirements for candidates and political committees, the bill exempts all cash contributions from the gift tax. The revenue loss here is minimal, perhaps even nonexistent. However, the benefits of this new bill would far outweigh any loss in revenue to the Treasury.

Mr. President, the current compaign finance law is beginning to take hold, but changes are necessary and there is room for improvement. Hearings will soon be held on some pending legislation in the Senate Commerce Committee. My own Rules Committee will probably hold some hearings a little later. I hope that through this process we will be able to improve upon the present law without undermining it.

STATEMENT OF HON. CHARLES MCC. MATHIAS, JR., U.S. SENATOR FROM MARYLAND

Mr. President, January 16, Senator Stevenson and I introduced the full disclosure bill, a bill which attempts to change some of the prevailing public attitudes about federally elected officials which have become so dominant in the last decade attitudes, which were particularly evident during the 1972 campaigns. Senate bill 397 provides for complete disclosure of the financial activities of Members of Congress. If enacted, we are confident it will assist the public in making realistic political judgments and contribute to restoring the needed confidence in the American political process.

In addition to taking the political pulse of the Nation, the 1972 elections witnessed the operation of a new comprehensive law aimed at regulating Federal elections. On February 7, 1972, the President signed into law the Campaign Reform Act of 1971. In this act, Congress for the first time in its history attempted to provide an effective means by which the public can adequately judge a candidate's campaign practices as opposed to the past practice of hiding the can

didate's financial ties behind the officialdom of phoney committees and deceptive practices. The act provided, among other things, a systematic means for the candidate to disclose to the public the amount of political contributions and expenditures made during particular periods of the campaign.

My interest in creating an effective means to regulate Federal campaigns is well known in the Congress. Senator Scott and I on February 25, 1971, introduced Senate bill 956, a most comprehensive bill dealing with campaign practices. The majority of that bill is now contained in the present Campaign Reform Act along with 13 amendments which I offered to that bill when it was considered on the floor of the Senate. I was most happy to contribute to passage on this legislation and it is with this same sincere interest that today, along with my distinguished colleagues, Senator Scott of Pennsylvania and Senator Stevenson, I introduce the 1973 campaign reform amendments. These amendments reflect our collective judgment of the application of the existing act in the 1972 elections as well as the reintroduction of concepts which have previously been the subject of extensive congressional and public debate, but are felt once again to be important enough to warrant consideration.

It should be noted that for the sake of convenient committee assignments, we have introduced four separate bills. The major bill entitled "The Federal Campaign Election Act Amendments of 1973" with its nine categories and seven sections, deals exclusively with amendments to title III of the Federal Election Reform Act of 1971, while the other three bills deal with the separate subjects of: Amendments to the Internal Revenue Code; mailing privileges; and amendments to the Communications Act of 1934. I will now discuss each of the four bills.

I. THE FEDERAL CAMPAIGN ELECTION ACT AMENDMENTS OF 1973

Section 2. The establishment of an independent elections commission and a central campaign committee.

During the debate on the current Campaign Reform Act, a key issue was the manner in which the act was to be monitored and enforced. More fundamentally, the issue centered around the independence of the enforcement effort apart from the influence and control of Congress and the political process. Recognizing the critical need for effective and impartial enforcement, I supported an amendment which established an independent commission as a substitute to the committee's proposed and the now present arrangement of dividing the monitoring of the act between the Justice Department and the three supervisory offices— the General Accounting Office, the Clerk of the House, and the Secretary of the Senate.

Under the existing law, all candidates for the Senate transmit their campaign reports directly to the Secretary of the Senate. In the case of Delegate or House races, all candidates are responsible to the Clerk of the House for filing reports. In Presidential races, this reporting responsibility is overseen by the General Accounting Office. The GAO also acts as a national clearing house for information with respect to the administration of all Federal elections. The Justice Department is charged by the law with the responsibility of prosecuting any violation brought to its attention by any one of the three supervisory offices. Section 308 (d) (1) of the law states in clear terms that the Justice Department "shall" institute a civil action in these cases. In other words, the Justice Department should have no opportunity to exercise its discretion in the case of providing civil remedies. However, in the case of criminal sanctions, it appears from section 308(a) (12) that the Justice Department has complete autonomy to decide whether or not it wants to prosecute. I am aware of one civil action commenced by Justice, and it is well documented that the Department has proceeded criminally on only a few violations in response to literally thousands of complaints from the three supervisory offices.

The problem of this tripartite arrangement was aptly summarized in testimony by Sam Hughes of GAO when testifying on December 5 before an Ad Hoc Committee on Congressional Reform chaired by Senator STEVENSON and I, when ho said, with regard to the role of the Justice Department:

"The question . . . is whether any Attorney General of any party is in a position to go after the finance chairman of his boss' campaign committee, or for that matter whether he is really free to go after the finance chairman of the opposition party. He is not an unencumbered enforcement official, at least as I perceive it. I think that would be true no matter which party were majority party in the Congress and which party were represented in the White House." Mr. John Gardner of Common Cause went on to say: