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The Broken Scandal-Reform Cycle

by Robert E. Mutch on Oct 21, 1999

Ever since Watergate, campaign finance reformers have come to expect great legislative victories in the wake of presidential funding scandals. After all, most federal campaign finance laws on the books today were enacted in response to just two scandals: Watergate in the 1970s and an earlier scandal in Theodore Roosevelt’s 1904 campaign.

Yet three years after the fund-raising scandal in Bill Clinton’s 1996 reelection campaign, the McCain-Feingold reform bill, which would ban soft money, has once again gone down in defeat. When earlier scandals erupted, an outraged public demanded reform and got it. Today’s reformers clearly expected the scandal-reform cycle to repeat itself after 1996. Why hasn’t it? 

Because the disclosure requirement in the post-Watergate reforms eliminated the crucial factor in the scandal-reform cycle: secrecy. For 25 years, parties, candidates, and other political committees have had to report their campaign contributions and expenditures to an agency — the Federal Election Commission — that was established to publicize that information. 

Scandal, by contrast, is bred in secrecy: Scandal is the sudden revelation that prominent politicians have been engaging in, and concealing, widely disapproved practices. All three elements must be present: the practice — corporate contributions to Theodore Roosevelt in 1904, large personal gifts to Richard Nixon in 1972 — must be one the public finds improper, whether or not illegal; those engaged in it therefore conceal their involvement; that involvement is nonetheless revealed. The expose causes public outrage and legislatures appease voters by passing reform laws. 

This pattern can be seen as far back as the 1880s. After the 1888 presidential election, when it was revealed that the parties spent huge sums of money — reportedly from business corporations — to bribe voters in key states, state legislatures enacted the secret ballot laws that we now take for granted. By making it more difficult to bribe voters, the secret ballot was supposed to remove the incentive to solicit, and to give, large campaign contributions. 

The same pattern appeared after revelations that Theodore Roosevelt had financed his 1904 presidential campaign largely with corporation money. This was the first proof of the long-held suspicion that corporations had become the chief sources of political funds, and it sparked the formation of a national reform movement. Congress responded by prohibiting corporate contributions.

In both cases, the reforms soothed the public’s anger and restored its trust. In both cases, the old financial practices soon reappeared in new guises devised to fit the new laws. Without effective disclosure laws, the old methods could continue without disturbing the popular quiescence the reforms had created. After Congress created the Federal Election Commission, this was no longer possible.

The post-Watergate reforms also restored public trust. But the disclosure component of those reforms focused the bright light of publicity on campaign funding for the first time. That meant that the rest of the familiar pattern — the resurgence of old practices in new guises — unfolded in full view of the public. It was this development that put an end to the scandal-reform cycle.

The elements of past scandals were present in Bill Clinton’s (and, to a lesser extent, Bob Dole’s) 1996 campaign. Huge sums of money were collected in ways that violated the spirit, and often the letter, of the law. (Foreign contributions to the Democrats were the most highly publicized example, but both parties raised three times more soft money in 1996 than in 1992.) Much of this money was then spent in ways that skirted, but did not quite break, the law. (Both parties used “issue” ads that supported their presidential candidates without triggering disclosure requirements).

Why didn’t these practices provoke the popular outrage that erupted after previous scandals? Because, thanks to disclosure, they were already old news by 1996. Unwelcome news, to be sure, but drearily familiar. Although disclosure gives us the same kind of dismaying news that was at the heart of past scandals, it does so in a steady stream, week after week, year after year, and so produces chronic, low-level dissatisfaction instead of an explosion of popular anger. 

Partisan reform bills may still squeak through the House or the Senate under such circumstances. What we don’t see are bills backed by the bipartisan majorities that propelled earlier reform bills into law. Far from compelling legislatures to pass appeasing legislation, persistent, low-level discontent actually provides excellent cover for legislators who don’t want to act. Because public cynicism arises from the assumption that new laws would be no more effective than the old, anti-reform legislators can oppose new legislation on the plausible ground that there is no great popular demand for it. And, compared with past scandals, there isn’t.

Robert E. Mutch, an independent historian in Washington, D.C., writes for the History News Service.