How Watergate and Citizens United Shaped Campaign Finance Law

After five men with ties to the Nixon campaign were arrested for breaking into the Democratic National Headquarters at the Watergate Hotel in June 1972 to plant listening devices, other allegations against the Nixon campaign were investigated. This included the fact that tens of millions of dollars in illegal, secret, corporation donations had fueled President Richard M. Nixon’s sweeping victory in the 1972 election.

Nixon resigned; the donations and the attempts to cover them up led Congress to pass the Federal Election Campaign Act of 1974.

The law targeted the Nixon campaign’s financial abuses by strictly limiting how much an individual could give to a candidate, mandating tough reporting regulations, and banning corporate donations.

But every law has loopholes. By the 1988 presidential election, corporate money was flowing again – not to candidates, but to political parties, which were free to spend the donations in support of party candidates.

That was perfectly legal until public outrage rose again, and Congress passed the Bipartisan Campaign Reform Act in 2002, which outlawed these so-called “soft money” donations from corporations, unions and the individually wealthy.

Then came the U.S. Supreme Court decision in 2010 known as Citizens United. It and subsequent decisions meant that while there were still limits on giving directly to candidates and parties, individuals and corporations could now give unlimited money to outside political groups. Critics say it meant a return to the days before the Watergate scandal.