How Watergate and Citizens United Shaped Campaign Finance Law

TEXT ON SCREEN: June 17, 1972

ARCHIVAL (ABC, 6-19-72):
ANCHOR: Over the weekend, five men were nabbed in the Democratic National Headquarters here in Washington, seemingly preparing to tap or bug the place.

NARRATION: It was the scandal to end all political scandals and while it may have started as a burglary, it soon led to a secret money trail.

ARCHIVAL (NBC, 11-15-73):
GARRICK UTLEY: Illegal contributions to President Nixon’s reelection campaign..

ARCHIVAL (CBS, 2-27-73):
WALTER CRONKITE: The secret $200,000 contribution…

ARCHIVAL (NBC 9-18-73):
DAVID BRINKLEY: …putting the U.S. government on the block for sale, like a side of beef.

NARRATION: And a law that was to limit the influence of money in politics forever.

ARCHIVAL (NBC, 1-30-76):
GARDNER: We’re never, never, never going back to the old corrupt way of doing things.

NARRATION: But money found its way back in.

ARCHIVAL (CBS 10-21-88):
DAN RATHER: Soft money.

ARCHIVAL (NBC, 10-20-10):
MICHAEL ISSIKOFF: Secret money.

ARCHIVAL: (CNN 09-18-12):
AVLON: Dark money.

NARRATION: And decades later, there are record amounts of money flowing through the political system – a system some say is less accountable than ever.

LAWRENCE LESSIG: We can do legally everything Nixon had to do illegally.

ARCHIVAL (NBC, 8-11-72):
LIONEL HAMPTON (SINGING): Oh, President Nixon, comes marching in…

NARRATION: It was 1972. And President Richard Nixon was on his way to a landslide reelection, backed by one of the most successful fundraising efforts in history.

ARCHIVAL (NBC, 8-11-72):
ANCHOR: If it takes money and an organization to elect a president, the Republicans are ready with both.

NARRATION: But that victory would soon unravel after five men with ties to the Nixon campaign were arrested for breaking into the Democratic National Headquarters at the Watergate Hotel.

The ensuing cover-up and widespread abuse of power would eventually bring down Nixon’s presidency.

ARCHIVAL (NIXON LIBRARY, 8-8-74):
RICHARD NIXON: I shall resign the presidency effective at noon tomorrow.

NARRATION: But right after the break-in, the administration was concerned that campaign contributions had been tied to one of the burglars. John Dean, who was later implicated in the cover up, was White House Counsel.

JOHN DEAN (FORMER WHITE HOUSE COUNSEL): When Watergate occurs it’s immediately a problem for the White House. It raised the whole issue of what their campaign committee is doing, and the fact that they’ve raised a lot of money.

NARRATION: Watergate investigators learned that right before a disclosure deadline the Nixon campaign had received tens of millions in confidential donations.

JOHN DEAN: They had literally stacks and stacks of cash sitting around. They couldn’t count it as fast as it was coming in.

NARRATION: The source of the money was revealed when a watchdog group, Common Cause, sued the Nixon campaign and discovered a secret White House list of donors. It included corporations, which were legally barred from any political giving.

FRED WERTHEIMER (FORMER PRESIDENT, COMMON CAUSE): That list had the names of all these corporations and the amounts of money they had given. Some people were buying influence, and some people thought that if they didn’t put the money up, they would get punished.

ARCHIVAL (ABC, 7-6-73):
HOWARD K. SMITH: American Airlines has admitted it made illegal corporate contributions to President Nixon’s reelection campaign.

ARCHIVAL (NBC, 7-6-73):
GARRICK UTLEY: American has charged it was a victim of a shakedown.

ARCHIVAL (SENATE WATERGATE TESTIMONY 11-15-73):
AMERICAN AIRLINES CEO GEORGE SPATER: There are two aspects: would you get something if you gave it and would you be prevented from getting something if you didn’t give it?

FRED WERTHEIMER: But this money bought results. The President of the United States was exchanging government policy for money.

NARRATION: After the dairy industry pledged $2 million to his reelection campaign, Nixon approved an increase in the price of milk.

ARCHIVAL (NBC, 7-31-1974):
JOHN CHANCELLOR: The former head of the country’s biggest dairy cooperative pleaded guilty today to conspiring…

NARRATION: The scandals led to the convictions of some of America’s biggest corporations, and to an overhaul of the campaign finance system. The law would now limit how much individuals could give to candidates and how much they could spend in elections, while corporate contributions would remain illegal.

ARCHIVAL (NBC, 10-15-74):
DOUGLAS KIKER: The federal campaign act of 1974 is going to change American politics forever, and hopefully for the better.

FRED WERTHEIMER: We thought that we got what we needed. I felt we had achieved a very, very historic reform.

ARCHIVAL (CBS, 10-21-88):
MICHAEL DUKAKIS: Thank you for your generosity.

ARCHIVAL (CBS, 10-21-88):
GEORGE H. W. BUSH: Thank you very, very much.

NARRATION: But by the 1988 presidential campaign, it was clear there was a major loophole. While donations to candidates were limited to $1,000, individuals and corporations could give any amount to political parties.

ARCHIVAL (CBS, 10-21-88):
DAN RATHER: The campaign handlers like to call it “soft money.”

ARCHIVAL: (ABC 9-29-88):
BARRY SERAFIN: Soft money can be raised in any amount.

ARCHIVAL: (CBS 10-21-88):
BOB FAW: All perfectly legal, the campaigns insist, since they don’t spend the money directly.

ARCHIVAL (CBS, 10-21-88):
ROBERT FARMER: You’ve already done $25,000, so if you could do another 10.

ROBERT FARMER (1938-2017, FORMER POLITICAL FUNDRAISER): I’ve always believed that campaign finance reform creates a blueprint for how to game the system.

NARRATION: Robert Farmer broke fundraising records for Democratic nominee Michael Dukakis – by being the first to capitalize on soft money.

ROBERT FARMER: It can’t be coordinated with the campaign but it certainly, it’s going to be spent to help the candidate. That’s well known.

NARRATION: Farmer convinced big donors and their friends to become “Trustees,” by asking them to each donate $100,000 to the Democratic Party. It was a strategy his opponents quickly adopted.

ROBERT FARMER: We took such abuse from the Republicans for this program. That went on for about 45 days and they instituted the exact mirror image of our Trustee Program. Any campaign is a competition. If you don’t have the resources to wage a credible campaign, you’re out of it.

ARCHIVAL (PBS FRONTLINE, 10-2-92):
BILL CLINTON: You can’t imagine how important you are to this campaign.

NARRATION: When president Bill Clinton needed money for his 1996 reelection campaign, he invited supporters and some of his party’s biggest soft money donors for coffee – and sleepovers at the White House.

ARCHIVAL (CBS, 2-25-97):
DAN RATHER: It’s called the Lincoln Bedroom. And while Lincoln never actually slept there, a lot of other people did, including big-money contributors to the Democratic Party.

ARCHIVAL (CBS, 2-25-97):
RITA BRAVER: The president’s overnight guests contributed at least $ 7 million to the Democrats.

ARCHIVAL (CBS, 12-16-99):
JOHN MCCAIN: The president of the United States rented out the Lincoln Bedroom, treated it like Motel 6 and he was the bellhop.

NARRATION: Senator John McCain, who was criticized years earlier for his role in the Keating 5 campaign finance scandal, went on to introduce legislation to close the soft money loophole.

JOHN MCCAIN (1936-2018, FORMER REPUBLICAN SENATOR): There was too much money that was washing around unattributed and unaccounted for. The system had become corrupted. It took an enormous amount of public pressure to bring about the passage of the legislation.

ARCHIVAL (NBC 3-20-02):
TOM BROKAW: Tonight, the first significant reform since Watergate is headed to the President’s desk.

NARRATION: It took seven years, but in 2002, Congress passed the McCain-Feingold Bipartisan Campaign Reform Act.

ARCHIVAL (NBC, 9-17-02):
REPORTER: Congress finally cleaned up the system, outlawing huge unlimited contributions from business, labor unions and the wealthy known as soft money.

JOHN MCCAIN: We felt very good. We knew there were going to be challenges, we knew they were out there, but I was very surprised and deeply disappointed when the United States Supreme Court made fundamental decisions such as corporations are the same as people.

ARCHIVAL (ABC, 1-21-10):
DIANE SAWYER: A blockbuster decision from the Supreme Court today.

NARRATION: Just eight years after Congress passed those major reforms, the Supreme Court ruled that putting campaign spending limits on corporations and labor unions was unconstitutional.

ARCHIVAL (ABC, 1-21-10):
TERRY MORAN: The sharply divided justices declared that the law violates the First Amendment’s guarantee of free speech for all, even corporations.

NARRATION: In a case known as Citizens United v. Federal Election Commission, the court said that political donations were a form of free speech and that corporations and unions had the same First Amendment rights as people.

JAMES BOPP (ATTORNEY): The First Amendment says, “Congress shall make no law abridging speech.” It doesn’t give the right to speak to certain people – it gives it to everyone.

NARRATION: Attorney James Bopp brought the Citizens United case and has since brought others in pursuit of his goal: more money and more speech in elections.

JAMES BOPP: We need a lot more money spent because people are woefully uninformed. Most people can’t even name their congressman.

NARRATION: The rulings in Citizens United and other recent cases mean that individuals, corporations and unions can now give unlimited money to outside political groups.

ARCHIVAL (NBC, 2-7-12):
CHUCK TODD: Nonstop negative TV ads from super PACs, big money groups outside the campaigns.

NARRATION: And w hile Super PACS have to disclose their donors, other outside groups, known as 501c’s, can accept what critics call “dark money…” contributions from donors who don’t have to disclose who they are.

All this means is that in the decade after Citizens United, record amounts of cash flowed into U.S. elections. Outside groups spent $7.3 billion, with the bulk of the money coming from a few big donors from both parties.

LAWRENCE LESSIG: I don’t think the problem is the speech. I think the problem is the fundraising.

NARRATION: Harvard Law professor Lawrence Lessig has written about the influence of the super-rich in politics.

LAWRENCE LESSIG (PROFESSOR, HARVARD LAW SCHOOL): We’ve given this tiny, tiny fraction the power to do, effectively, the nominating. They choose who can have the money to be able to run in the elections to be able to compete effectively against the other side. And it’s absolutely clear that candidates bend themselves, contort themselves, to keep those funders happy.

JOHN MCCAIN: If money is free speech, then the wealthiest people in America are those that get to speak the most freely.

NARRATION: And it’s not just high-profile, national elections – big outside money is also pouring into state and local contests, even judicial races.

ARCHIVAL (YOUTUBE, JUSTICE FOR ALL, HUDSONCHILD MOLESTER AD):
NARRATOR: We want judges to protect us.

NARRATION: And funding attack ads like this, which ran during the primary race for the North Carolina Supreme Court.

TEXT ON SCREEN: 2014

ARCHIVAL (YOUTUBE, JUSTICE FOR ALL, HUDSONCHILD MOLESTER AD):
NARRATOR: Justice Robin Hudson – not tough on child molesters – not fair to victims.

ROBIN HUDSON (ASSOCIATE JUSTICE, NORTH CAROLINA SUPREME COURT): I was horrified when I saw it – the very idea that I or anyone else on the court would quote “side” with child molesters is just completely ridiculous. If they were coming in here spending money to actually educate voters that would be one thing. But that’s not what they’re doing.

NARRATION: The ad was paid for by “Justice for All NC,” a SuperPAC whose address was a P.O. Box at this Raleigh UPS Store. Most of its money came from The Republican State Leadership Committee, an outside political group based in Washington.

MATTHEW WALTER (FORMER PRESIDENT, REPUBLICAN STATE LEADERSHIP COMMITTEE): We look to find the best return our investment for our dollars in the most effective way, to convey a message to the general public.

NARRATION: The Committee takes donations from corporations and other contributors and funnels them into state-level organizations. Those groups then spend that money to influence elections from the courts to state houses.

MATTHEW WALTER: The money is a means to convey a message about which direction you want the country to go. Anybody that thinks that there should be less money in politics is essentially at odds with the United States Supreme Court that said that this is one of our fundamental freedoms.

JIM BOPP: I think we’re well on the way to see all of the major legal justifications for campaign finance laws to be overturned.

NARRATION: For years, secretive dark money overwhelmingly flowed to republican candidates and causes. But by 2020, democrats took the lead, as liberal groups outspent conservative ones by over two to one, in the most expensive election ever.

LAWRENCE LESSIG: Nobody looks at this political system and likes it. This is overwhelmingly despised by the American public. There’s no reason for them to worry about politics because they don’t matter. They don’t count. They don’t have the dollars that have a role.

FRED WERTHEIMER: What was at the core of the Watergate campaign finance scandals? Corporate money, secret money, unlimited contributions from individuals. What do we have today? Corporate money, secret money, unlimited contributions from individuals.

JOHN MCCAIN: We are full circle to the days prior to Watergate. There are not people walking around the streets of Washington, DC with briefcases full of money, but we are very close to that.

(END)