Post-Watergate Campaign-Finance Reforms

Updated August 5, 2020 | Infoplease Staff

Congress passes legislation to restore public confidence in government

by Beth Rowen
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In the aftermath of Watergate, public confidence in government reached a nadir and Congress passed "good government" laws to not only to reform political campaigns but also to restore faith in elected officials. Here are the major laws passed in the wake of Watergate.

Campaign Finance Law (1974)

The influence on wealthy individuals and corporations in politics and campaigns was not a new phenomenon in the early 1970s. In fact, President Theodore Roosevelt proposed reigning in campaign spending by corporations and called for transparency in campaign finances. However, it wasn't until 1971 that reform efforts were put into law with passage of the Federal Election Campaign Act (FECA). The law, signed by Nixon shortly before the 1972 Watergate break-in, instituted disclosure requirements for federal candidates, political parties, and political action committees. However, the law lacked teeth because there was no government-level body to enforce it.

Watergate brought an end to the leniency. In 1974, FECA was amended, limiting the amount of money an individual could contribute to a single campaign to $1,000 and a total of $25,000 to all federal candidates. It also mandated the disclosure of all contributions above $100, required candidates to file campaign finance reports, and implemented public financing of presidential elections. The 1974 law established the Federal Election Commission (FEC) to enforce the law and oversee the public funding of presidential elections. The law was challenged in court, and in 1976 the Supreme Court in Buckley v. Valeo upheld federal limits on contributions to candidates for federal office, but also said the government cannot limit spending by the candidates or their campaigns and that contributions to political candidates are protected by free speech.

Ethics in Government Law (1978)

In 1978, Congress, determined to find a way to restored the public's confidence in government and curb the powers of the president and other senior executive branch officials, passed the Ethics in Government Act.

The most prominent provision of the act was the Independent Counsel Act, which created the special prosecutor position that could be used by Congress or the Attorney General to investigate wrongdoing by some 50 senior members of the executive branch. Once appointed, the prosecutor could investigate allegations of any misconduct, with an unlimited budget and no deadline, and could only be dismissed by the Attorney General or a panel of three federal judges. The Independent Counsel Act was reauthorized in 1987 and 1994. It expired on June 30, 1999.

The Ethics in Government Law also required most federal-level public officials, members of their immediate family, and candidates for federal office to file detailed, annual financial disclosure forms. The forms must provide sources of income, investments, assets, and gifts. The ethics law also restricted former members of Congress and Congressional staffers from lobbying before an executive agency or officials on behalf of private interests for a two-year "cooling off" period.

Government officials and candidates have found loopholes to evade many of these provisions, and how far they went in restoring confidence in government is an ongoing source of debate.

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