Back to top Jump to featured resources
filed under General

Campaign Finance Reform

| Written by ILSR Admin | 1 Comment | Updated on Nov 25, 2008 The content that follows was originally published on the Institute for Local Self-Reliance website at

In the United States, candidates for public office have always needed money to run for public office. To get it they have often depended on wealthy contributors expecting favors in return. In 1971, the federal government passed the Federal Election Campaign Act (FECA), in an attempt to combat this phenomenon. The FECA (which was amended several times until 1979) put a cap on the amount a single donor could contribute to a campaign for federal government, and required public disclosure of these contributions.

But the landmark 1976 Supreme Court ruling, Buckley v. Valeo undid a portion of these reforms. The most controversial aspect of the ruling was that spending limits (as opposed to contribution limits) for candidates for public office were a violation of free speech. (However campaign contribution limits were acceptable as long as they were not so low as to prevent a candidate from geting his message across.)

Despite these reforms, and, in part due to the Buckely v. Valeo decision, wealthy donors have been able to indirectly contribute vast sums of money to the candidate of their choice. For instance, unlimited contributions can be made to the parties for "party-building activities", but often end up bolstering individual campaigns. The 1996 and 1998 elections for Congress and the presidency broke all previous campaign fundraising records, but Congress has failed repeatedly to act on even modest reform proposals to obstruct the flow of "soft-money".

Meanwhile,the states have been plagued by the same problems afflicting campaigns for federal office. As the costs of campaigning for statewide office and state legislative seats skyrocketed over the last few decades, legislators have begun to place greater emphasis on fundraising. PACs and large donors have played an increasing role as sources of campaign revenue, and incumbents have been outspending challengers by larger and larger sums.

States Enact Campaign Finance Reforms

The states began to respond to these developments in the 1990s by enacting a variety of different reforms. The most popular reform has been the adoption or revision of contribution limits. For instance, Missouri, Oregon, Montana, and the District of Columbia have limited campaign contributions from an individual to no more than $100. All of these laws were overturned by federal courts. In 1996 Oregon passed a law allowing candidates for state office to raise no more than 10 percent of their campaign funds from contributors who live outside the electoral district. But this, too, was ruled unconstitutional. Alaska’s cap on out-of-state contributions was also struck down on First Amendment grounds.

Themost far-reaching campaign finance reform law was enacted by Maine in 1996, and by three other states (Vermont, Massachusetts and Arizona)that have followed Maine’s example.

The main sources for the overrulings of many state campaign finance reform laws is, again, the landmark 1976 Supreme Court ruling, Buckley v. Valeo. Although the court ruled that campaign contribution limits were acceptable, it indicated that they must not be so low as to prevent a candidate from geting his message across.

The Buckley Valeo decision has proven an obstacle to enacting effective campaign finance reform, and many activists are pushing to get it reconsidered, but the Supreme Court has repeatedly turned down cases that would allow it to reconsider its 1976 decision.

A Supreme Court decison in Jaunuary 2000, Nixon v. Shrink Missouri Government PAC, was the court’s first ruling on campaign contributions and free speech since Buckley v. Valeo. In it the court essentially reaffirmed Buckley vs. Valeo, by allowing state limits to campaign contributions, but not spending, so long as the contribution limit was not "so radical…as to…drive the sound of a candidate’s voice below the level of notice, and render contributions pointless." However, the decision did counter a trend whereby federal courts have recently been striking down contribution limits even above the $1,000 (per individual) permitted in Buckley v. Valeo.

As of 2008, five states have passed "clean election" laws, laws that provide public money for state election campaigns if a candidate agrees to strict spending limits.

Maine was the first state to enact such a law, by voter referendum, in 1996.

InJune 1997, Vermont became the first state to pass a bill modeled after the Maine law through its legislature. Both laws served as models for the clean election initiatives passed by Arizona and Massachusetts voters in November, 1998. The Massachusetts law, however, was repealed by the legislature in 2003. Connecticut’s legislature passed a clean election bill in 2005, and it was amended in 2006 to remove an unnecessary step for third party candidates.

NewMexico expanded the program to include candidates for judgeships on the Court of Appeals and Supreme Court of New Mexico in 2007.

NewJersey’s legislature passed a clean elections pilot project in 2004, which put into place two legislative districts for the November 2005 election. Following its success, three more districts were selected to be part of the 2007 Fair and Clean Elections Pilot Project.

Out of State Contributions

Out-of-state or out-of-district campaign contributions corrupt the political process because an elected official may become more beholden to these contributors than to the community she represents. Alaska and Oregon have adopted limits on out-of-state or out-of-district contributors. Both have been overruled by federal courts as violations of the First Amendment. While the Oregon law has been repealed, the Alaska law has been suspended and is on appeal in the Alaska Supreme Court.

Because these laws so well embody the principles of localism and republicanism, the New Rules Project offers them here as models that should be reinstated.

More Information:



About ILSR Admin

Contact ILSR   |   View all articles by ILSR Admin