The Cost of Campaigns

The Watergate campaign finance scandals led to a landmark law designed to limit the influence of money in politics. Forty years later, some say the scandal isn’t what’s illegal, it’s what’s legal.

By Clyde Haberman
An image from RetroReport

Beyond its durable imprint on American civic life, the Watergate scandal of four decades ago left its mark on political language. For one thing, that suffix will not go away. Commit a major folly, and you can count on some headline writer describing it as Whatever-gate. Forty years later, investigations into wrongdoing by public officials still routinely yield the Watergate-era chestnut: What did so-and-so know, and when did he know it? Americans are well aware, too, that they would be wise to “follow the money,” abiding words bequeathed by the shadowy figure Deep Throat in “All the President's Men,” the 1976 Watergate-themed film.

“Follow the money” was sound advice in the 1970s. It is even more sensible these days, when cash courses through American politics like a flash flood.

“Watergate” was a catchword for a multitude of government and political sins. At its core were secret, and illicit, contributions to the 1972 re-election campaign of President Richard M. Nixon. Some Nixon retainers went to prison. Also, more than a dozen American corporations were found guilty of criminal behavior, typically for having showered barrels of dollars on the campaign in the hope — no, expectation — that their largess would translate into favors from the administration. As can be seen in the latest video documentary from Retro Report, tracing the money side of life from Watergate to today, much has changed. Oh, the cash still flows, and a fair amount of it continues to be secret. But what was deemed ill-gotten loot 40 years ago is now legally accessible, countenanced by no less than the United States Supreme Court. And the money no longer rains down on presidential and congressional campaigns by the barrelful. By the truckload is more like it.

Big political scandals have often inspired laws to address whatever went wrong. Watergate was no exception. The same went for lesser situations that were eyebrow-raising all the same; the trading of campaign contributions for sleepovers in the Clinton White House was one example. With almost every cycle of wrongdoing and attempted reform, Americans have had to absorb a sometimes-bewildering array of political terms, like “soft money” versus “hard money,” or PAC — it stands for political action committee, in case you forgot — versus “super PAC.” They have also had to come to grips with Supreme Court rulings that do not always seem consistent, one with another, on what sort of behavior is kosher.

The prevailing spirit now is embodied in Citizens United v. Federal Election Commission. That 5-to-4 decision by the Supreme Court in 2010 tossed aside decades of legislative restrictions, freeing corporations and unions to spend as much as they wished. Bans on direct contributions to candidates' campaigns remained in force, and, of course, anything that smacked of a blatant bribe was taboo. But companies and unions wishing to make their political druthers known, and to encourage others to share their views, were suddenly empowered to open their wallets as wide as they could. That allowed new independent-expenditure-only committees, better known as super PACs, to spend vast sums. Their influence is immense. Though super PACs are supposed to keep at arm's length from candidates' campaigns, the relationship in many instances seems more fingernail length.

Six months ago, the Supreme Court took its Citizens United decision further by opening the gates to yet more campaign cash. In McCutcheon v. Federal Election Commission, it struck down longstanding caps on what an individual may contribute to all federal candidates, collectively, in any two-year election cycle. Under the guidance of Chief Justice John G. Roberts Jr., the court has tended to move incrementally on divisive social and political issues. This was evidenced in the Citizens United and McCutcheon rulings, and it raises questions of whether campaign restrictions that still survive, including limits on how much may be donated directly to a given candidate, may someday be swept aside as well.

With conservative justices dominant, the court expanded the concept that money is equivalent to speech, protected by the First Amendment. Corporations, it said, enjoy the same political rights as individuals. The concept of corporate anthropomorphism was crisply summed up by Mitt Romney during his most recent run for president, when he told a heckler in 2011 that “corporations are people, my friend.” (An arch rejoinder was offered during the 2011 Occupy Wall Street protests, in a sign held by a demonstrator in Lower Manhattan: “I’ll believe corporations are people when Texas executes one.”)

Dissenters from the court’s liberal wing warned that cascades of cash would create corrupting potential, and would give the wealthiest outsize access to, and influence on, those in government. The echoes of Watergate days were unmistakable. “Where enough money calls the tune,” Justice Stephen G. Breyer wrote in the McCutcheon case, “the general public will not be heard.” Some conservatives expressed their own concerns, among them Senator John McCain of Arizona, who has long preached the need to rein in political spending. “If money is free speech,” Mr. McCain told Retro Report, “then the wealthiest people in America are those that get to speak the most freely.”

That they are. In 2012, campaign filings show, a total of $6.3 billion was spent on the races for president and for Congress. Both major parties swam in cash, but Republicans commanded a distinct advantage. When it came to giving, the richest were the sturdiest. A study by the Sunlight Foundation, an advocate for government transparency, found that 31,385 people — that is 1 percent of 1 percent of the United States population — accounted for 28 percent of all disclosed contributions in the 2012 elections. They included some of the best-known, and most widely attacked, among the politically active elite, billionaires like Sheldon Adelson, George Soros, Michael R. Bloomberg, and David and Charles Koch.

The chase for dollars is practically a full-time job for some officeholders. President Obama is no stranger to that reality. In 2010, he deplored the Citizens United ruling and the “new stampede of special interest money” that he predicted would result. But he was not about to disarm unilaterally. He has been so busy corralling cash for fellow Democrats this year, The Washington Post reported last month, that he averaged a fund-raising event every five days.

As if the billions already being collected and spent were not enough, there has been a rapid expansion of so-called dark money. That sinister-sounding term describes secret contributions to social welfare organizations covered by Section 501(c)(4) of the Internal Revenue Service code; they are tax exempt. Many of those groups are thoroughly immersed in political campaigns. But as long as they can demonstrate that their primary activity is social policy and not politics, they are under no obligation to identify their donors. According to, which follows the money for the nonpartisan Center for Responsive Politics, political spending by these social welfare outfits soared from 2006 to 2012. From slightly over $5 million a year, it climbed to more than $300 million.

This year, an analysis by The New York Times shows, more than half of broadcast advertising in the midterm elections has been paid for by groups that reveal little or nothing about their donors. Overwhelmingly, the main beneficiaries have been conservative organizations.

Who, specifically, gave what to whom? Who knows? But sometimes a knothole develops, enabling people to glimpse what lies behind the fence. One such knothole — a computer error, really — provided access several weeks ago to the files of the Republican Governors Public Policy Committee, a tax-exempt and secretive 501(c)(4) arm of the Republican Governors Association. Documents showed that some of the country’s biggest corporations had poured millions into the campaigns of Republican governors, companies like Coca-Cola, Exxon Mobil, Microsoft, Pfizer, Walmart and the lobbying arm of Koch Industries, to name a few.

Some in Congress, Democrats in the main, have called for a constitutional amendment to undo the Citizens United ruling, a proposal that would seem to be a nonstarter in the current political climate. Others are left yearning for another Watergate — a juicy scandal to shake things up and perhaps, as in the past, become a catalyst for change. Martin T. Meehan, chancellor of the University of Massachusetts at Lowell and a former Democratic congressman from that state, spoke to Politico in August about the ways of Washington. “It always takes a scandal in order to get Congress to reform itself,” he said.

CLYDE HABERMAN, a regular contributor to Retro Report, has been a reporter, columnist and editorial writer for The New York Times, where he spent nearly 13 years based in Tokyo, Rome and Jerusalem. Subscribe to our newsletter here and follow us on Twitter @RetroReport.

This article first appeared in The New York Times.