Has Money Always Been Important in American Politics?





Originally published 8-28-05

Mr. Fleming is the author of more than forty books including, most recently, The New Dealer's War. He is a member of the board of directors of History News Network.

Know when money first helped elect a president? It was in 1800. Want to know more? Read this. It's eye-opening.

In the beginning was Aaron Burr, America's first professional politician, who in 1800 taught a chowder and marching society named Tammany Hall how to assemble lists of voters and canvass them, asking, with special urgency, if they were willing to give money. It worked so well, Burr took New York City away from a stunned Alexander Hamilton, the man who maintained that the rich had to have a voice in government. That meant New York state's electoral votes and the presidency went to Thomas Jefferson, hater of moneyed men and their fondness for banks, stock markets and speculation.

Thirty years later, history's penchant for irony became even more apparent. The politics of mass democracy under the aegis of Andrew Jackson made money crucial. Parties needed cash to fund newspapers, pamphlets, parades, conventions. The slogan of a New York Jacksonian, William Larned Marcy,"To the victor belongs the spoils" put public offices up for auction in every election. It seemed logical to expect the office holders to kick in a percentage of their salaries to the party of their choice.

By the time Democrat James Buchanan ran for president in 1856, money had become important enough to prompt the Republican boss, Thurlow Weed of New York, to remark that the difference between winner Buchanan and the loser, John C. Fremont, was $50,000. When Abraham Lincoln ran for president in 1860, midwest Republicans welcomed money from Weed's ample New York coffers. Lincoln himself is on the record as saying:"In a political contest, some use of money is both right and indispensable." He paid out of his own pocket to help one friend go to Chicago and push his candidacy in 1860.

In the 1880s, troubled reformers prodded the Pendleton Act through Congress, making some government jobs winnable (and keepable) on merit and banning the solicitation of funds from federal office holders. But the cost of campaigns kept rising, and the law of unintended consequences, the only guaranteed mechanism in the history of campaign finance reform, creaked into gear. With access to government workers denied to them, politicians turned to the corporations and the U.S.A entered what one historian has called"the golden age of boodle."

Boise Penrose, the Pennsylvania Republican boss, summed up the prevailing philosophy when he remarked:"You can't run a party on nothing and when you need money the place to get it is from them that have it." Despairing reformers such as Henry Adams were soon lamenting:"The moral law has expired."

A climax of sorts was reached in the 1896 presidential campaign. Behind the bland orthodox Republican image of William McKinley stood the Svengali-like figure of Marcus Alonzo Hanna, the first authentic genius of campaign finance. Hanna raised an estimated $7 million (in today's money $700,000,000) from tycoons spooked by the populist rhetoric of William Jennings Bryan and put McKinley in the White House.

With a shrewdness that anticipated the fundraisers of our own negligent nineties, Hanna refused to promise any favor or service in return for this gush of cash. Basically, Hanna sold that glittering word,"access" and the continuance of a government that smiled on corporations no matter what they did to their workers or their stockholders.

The history of campaign finance reform for the first two thirds of the 20th century can be summed up by a question as old as Cicero: cui bono? Attempts to limit donations by corporations or unions or government employees were invariably made by Democrats in the hope of sabotaging Republicans or Republicans in the hope of upending Democrats. Not until 1976 did the Supreme Court, ruling on yet another reform bill, inject something resembling a principle into the brawl.

In oral arguments Justice Stewart Potter declared:"Money is speech and speech is money, whether it is buying television or radio time or newspaper advertising, or even buying pencils and paper and microphones." That seemed to say there should be no limits on campaign contributions. But the justices paradoxically ruled there could be a limitation on direct contributions to a candidate, because that money passed out of the giver's hands and hence no longer belonged to him as speech. They also expressed a pious but maddeningly vague concern about the need to limit such contributions to avoid the appearance of corruption.

The dolorous distinction between"hard" money -- contributions to candidates -- and"soft" money -- contributions to build a political party or expound an issue -- was born here. Subsequent decisions have widened the soft money playing field to virtually continental proportions. In 1978, the court ruled that corporations have First Amendment rights, not much different from individuals. Welcome to the 19th Century! Public employee unions, lurching in the same retrograde direction, commandeer the pockets of their members to support the Democratic Party in a style not much different from Tammany's heyday.

As Lenin might well say if he were around, what is to be done? This historian recommends junking the entire soft/hard system which has hypocrisy and deceit built into it. Instead, let's have a law banning all politicians from raising money as individuals. Fundraising would be unlimited in amount, but confined to political parties, who would be obligated to disclose names and affiliations of the givers.

The parties would hand out the cash to the candidates, in amounts based on what they and the nominee think he/she needs to win. No longer would candidates (and campaign finance critics) moan about spending too much time raising money. The political parties would be reinvigorated -- giving new stability to our system. Rich political wannabes and third parties backed by significant gelt could also flourish.

It's worth a try. Almost anything is better than the present system -- or the paternalistic nightmares the campaign finance purists are proposing.

 


This piece was first published in 2003 on TomPaine.com.



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Greg Piper - 2/14/2002

My professor at Seattle Pacific University has made nearly the same argument about the frivolity of the system and how attempts to stop the flow of money have made it vastly more important than the parties. I wish Chris Shays, Marty Meehan, John McCain and Russ Feingold had heard something like this before they went on their religious crusade.

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