Campaign Financing

The first main attempt to regulate campaign financing occurred in 1971 with the Federal Election Campaign Act (FECA). The act set requirements for disclosure of contributions to federal campaigns, both presidential and congressional. The main regulation to financing occurred though after its amendment in 1974. After reports of big financial abuses in the 1972 presidential election and the Watergate scandal, people wanted more constraints on financing particularly those from special interest groups. The act required strict disclosure of campaign donations. Candidates had to name all contributors who donated more than $200 a year. They also set up contribution limits and expenditure limits. Individuals could not contribute more than $1,000 to a candidate and political action committees (PACs) could not contribute more than $5,000. There were also limits on expenditures from a candidate’s personal fund and on total campaign expenditures (The FEC, 2011).

For presidential elections, the FECA instituted a public financing system to level the playing field and limit the amount of money spent on campaigning. During the primaries, there is a matching program where the government will match up to $250 of each contribution made to eligible candidates. In return, they agree to limit their spending. The other program is during the general election; the president receives a lump sum of money and in return they do not accept any further private donations.

The major provision to the FECA that resulted from the misuse of money and Watergate scandal is the prohibition of donations directly from corporations, labor organizations, and national banks. There were also prohibitions against donations from government contractors, foreign nationals, ca...

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