Money and Political Campaigns: The 1996 Debacle

Abstract

The year 1996 saw the U.S. public exposed to the most expensive political campaign in our history. Four billion dollars were spent on all the campaigns (national, state, and local). This high cost and the questionable ways in which the money was sometimes raised and spent, as the post-election analyses and investigations reveal, suggest a major crisis in party and candidate finance practices. How irregular, how illegal, and how scandalous the 1996 campaign finance operations were has yet to be finally determined. But we are clearly in the throes of a controversy over what happened, why and how it happened, and how the system should again be reformed. As one scholar put it, “1996 saw the final collapse of campaign finance regulation … and, as if on schedule, another scandal began to unfold, causing another embarrassed president to call for yet another round of reform.”¹ The former president of Common Cause confirmed this assessment, calling the 1996 campaign “the dirtiest ever” and saying that “campaign finance laws have been replaced by the law of the jungle.”² Corporations contributed millions directly to parties and candidates in 1996, although we thought they were forbidden by law to do so. The AFL-CIO spent millions on the campaigns from the union treasury, although we thought they were forbidden by law to do so. The presidential candidates, Clinton and Dole, were each given $61.8 million in public funds under the law, but spent more than double that amount despite the understanding they would keep within these funding limits. Foreign contributors gave millions to both parties, a practice prohibited by law. The “soft money” spent in presidential elections alone (funds raised outside the federal limits) was over $100 million.³ In 1997 the new Task Force on Campaign Finance Reform, including nine scholars expert on the question and chaired by Herbert Alexander, issued a report making many recommendations for change. They said we are now “experiencing a much more dynamic diffuse funding system” in which new political actors “spend money in campaigns that candidates neither raise nor control.” These “new realities,” they say, raise serious questions about accountability, competitiveness, sources of funds, and enforcement.⁴ These and other excesses document “the new reality in the world of campaign finance” that emerged in 1996.