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PROCEEDINGS AND DEBATES OF THE 93 CONGRESS

FIRST SESSION

VOLUME 119-PART 20

JULY 20, 1973 TO JULY 27, 1973

(PAGES 25051 TO 26424)

UNITED STATES GOVERNMENT PRINTING OFFICE, WASHINGTON, 1973

'25978 CONGR.ESSIONAL RECORD-SENATE July 25, 1?73

ate wUl resume consideration of the cam­paign reform bill, and yea-and-nay voteswill occur on amendments thereto.

FEDERAL ELECTION CAMPAIGN ACTAMENDMENTS OF 1973

The Senate continued with the con­sideration of the bill (S. 372) to amendthe Communications Act of 1934 to re­lieve broadcasters of the equal time re­quirement of section 315 with respect topresidential and vice presidential can­didates and to amend the CampaignCommunications Reform Act to providefurther limitation on expenditures inelection campaigns for Federal electiveoffice.

Mr. CANNON. Mr. President, I yieldmyself 1 minute.

Earlier today, in the heat of the debate,I suggested that some people were in­terested in some nongermane amend­ments in the hopes of not supporting ordefeating the campaign reform bill.

Mr. President, I want to make it clearthat I was not referring to the distin­guished Senator from Alabama who wasa sponsor of the amendment then pend­ing because he has been a consistent sup­porter in the committee, both on this billand on the bill In 1971, for a campaignreform bill. I want to make the recordclear on that point.

I ask unanimous consent that I mayyield 2 hours to the Senator from Cali­fornia (Mr. CRANSTON) SO that he maypaTticipate in a discussion of the ques­tion of public financing on the bill.

Mr. STEVENS. Mr. President, I havegreat respect for the Senator from Ala­bama. However, I would like to clarifyone matter. My amendment does not re­quire a pay increase. My amendment asa substitute for his amendment sets asa maximum for any increase for the ju­diciary branch, the executive branch, orthe congressional branch of the Govern­ment, the amount provided by the an­nual wage guidelines.

It does not mandate an increase. Itdoes not in any way affect the workingsof the Commission that is working onsalaries for the three branches of theGovernment. My amendment sets amaximum of whatever they might rec­ommend.

As such, I think we are treating our­selves in the same way that we are Will­ing to have the executive branch treated,and all segments of our economy. Andas I have said before, that is fair.

I would not want the record to indi­cate that it requires any wage increase.

Mr. GRIFFIN. Mr. President, is it un­derstood that during this 2-hour period,there will be no action taken and novotes?

Mr. CRANSTON. The Senator is cor­rect.

Mr. ROBERT C. BYRD. Mr. Presi­dent, it Is IllY understanding that the dis­tinguished Senator from Wisconsin (Mr.PROlUIURE) will shortly offer an amend­ment so as to make it the pending busi­ness and without any time being countedon the amendment tonight.

Mr. COOK..Mt. President, it Is also un-

derstood that under the unanimous-con­sent agreement the Senate will proceedto the consideration of the Proxmlreamendment at 12:30 tomorrow.

Mr. ROBERT C. BYRD. Mr. President,at no later than 12:30 tomorrow, andpossibly earlier.

The PRESIDING OFFICER. Is thereobjection to the request of the Senatorfrom Nevada? The Chair hears none, andit is so ordered.

Mr. PROXMIRE. Mr. President, I callup my amendment No. 389, not for con­sideration tonight, but so that it can bemade the pending business tomorrow.

I ask unanimous consent that myamendment be made .the pending busi­ness tomorrow and I ask unanimous con­sent that no time run against the amend­ment if it is debated tonight.

The PRESIDING OFFICER. Withoutobjection, it is so ordered.

The clerk will report the amendment.The legislative clerk read as follows:On page 56, llne 19, strike "$5,000" and

Insert "$100".On page 57, line 2, strike "$15,000" and

Insert "$100".On page 57, line 7, strike "$100,000" and

Insert "$1,000".

Mr. PROXMIRE. Mr. President, thisamendment provides a $100 limitationon any contributions by anyone personto anyone candidate and $1,000 thatanyone person can make to all candi-dates. .

Mr. President, I ask for the yeas andnays on the amendment.

The yeas and nays were ordered.Mr. PROXMIRE. Mr. President, I

thank the distinguished Senator fromCalifornia.

PRIVILEGE OF THE FLOORMr. CRANSTON. Mr. President, I ask

unanimous consent that throughout theconsideration of the matter we are aboutto discuss two members of my staff, JanMueller and Roy Greenaway may havethe privilege of the floor.

The PRESIDING OFFICER. Withoutobjection, it is so ordered.

Mr. HART. Mr. President, I ask unan­imous consent that during the consid­eration of this matter Burton Wides mayhave the privilege of the floor.

The PRESIDING OFFICER. Withoutobjection, it is so ordered.

PUBLIC FINANCING OF POLITICALCAMPAIGNS

Mr. CRANSTON. Mr. President, beforeI begin my remarks, I would like to in­dicate how delighted I am that the dis­tinguished chairman of the Rules Com­mittee, Mr. CANNON, has expanded theSenate's consideration of S. 372, to in­clude a general discussion of the generalconcept of public financing of campaigns.

Last week, I and a group of my col­leagues went to the chairman, SenatorCANNON, and to Senator PELL, chairmanof the Elections and Privileges Subcom­mittee, to ask that time be set aside forsuch a discussion and that hearings bescheduled on the various public financingproposals. We were pleased that the

chairmen agreed to holding hearings bythe Senate Rules Committee in Sep­tember.

In requesting hearings, the groupstated that they felt public financing wasthe logical next step to take in the areaof campaign reform, but agreed that con­sideration of any public financing planshould not come to the floor of the Sen­ate until after hearings had been com­pleted.

I strongly support this position. Theplace to design a workable public financ­ing plan is not on the floor of the Senatein the middle of debate on campaignreform amendments. Much as I believein public financing, I do not intend tosupport any effort to amend S. 372 witha public financing plan. If such anamendment is proposed for S. 372, I willvote against it.

I would not want a public finance pro­posal to interfere with or jeopardize thefinance reforms in the pending bill andany further reforms which might be inthe bill at the time we finish acting onit.

A number of Senators have indicatedthat they wish to participate in the col­loquy. A number of Senators are inter­ested in the concept of public financing.Due to the lateness of the hour when wefinish, some will be unable to participate.However, some Senators will be here.

A Senator who has been a pioneer instrongly advocating public financing isthe distinguished Senator from Michi­gan (Mr. HART). The Senator from Mich­igan (Mr. HART) will make the firstpresentation in this discussion of publicfinancing.

I am delighted to yield such time ashe may need to the Senator from Michi­gan.

Mr. HART. Mr. President, I am grate­ful to the Senator from California thathe would have undertaken to conductthis colloquy, and I am especially grate­ful to him for persuading the chairmanof the committee, the Senator fromNevada (Mr. CANNON), to permit a dis­cussion on the subject of public financingat this time.

Mr. President, today we start a de­bate on proposals to limit the size of pri­vate contributions made to and controlsof expenditures made by political cam­paigns.

As we begin, it would be well, I think,to note that problems associated with ourpresent system of financing election cam­paigns neither began with Watergate,1101' will they end there as long as office­seekers must compete for dollars to runcampaigns as well as for votes to winelections.

The reforms Congress is likely to ap­prove this year can be important stepsforward, but they will not address thequestion Congress must eventually face:

Whether to restructure rather than toreform, whether to provide a candidatewith public funds rather than forcinghim to rely on private contributions tofinance an election campaign.

Mr. President, as I am sure we will bereminded in the 2 hours set aside forthis discussion, this idea and this con­cept of public funding of political cam­paigns is not new, nor is it associated

Jury 25, 191'3 CONGRESSIONAL RECORD - SENATE 25979with just one of the political parties. It isan idea that was endorsed by formerPresidents Theodore Roosevelt andHarry Truman.

Neither is the idea without precedentin this country, for Congress approvedthe concept when it established the Pres­idential checkoff ,system which permits ataxpayer to designate that $1 of his taxreturn go to funds to be used by candi­dates in the next Presidential election.

It should be not secret to Members ofCongress that public confidence in poli­ticians is diminishing and that a politi­cal system which would be open and freecannot long exist in a sea of widespreadpublic distrust.

One source of that distrust whichplagues officeseekers even before they areelected is the need to raise money.

Also, it should be no secret to Membersof Congress that many persons of con­flicting political views often use the samerhetoric to express frustrations with thesystem and the feeling that no one islistening to their pleas.

One reason for that feeling is thatlarge contributions do indeed buy access,and access is an important ingredient ofpower.

Time limits the number of problems aSenator can deal with, the number ofpeople he can see. There are few Sena­tors, and I am not among them, who willnot find time to see the person who gave$1,000 or more to one of his campaigns.

Mr. MONDALE. Mr. President, will theSenator yield?

Mr. HART. Mr. President, I yield tothe Senator from Minnesota.

Mr. MONDALE. Mr. President, I havenow been in active politics for practicallymy entire adult life. And I think that istrue of every Member of this body.If there is one thing of which I am

certain, it is that we will never have allhonest politicians, men and women thatthe people have a right to respect. Wewill never be able to have the public havethe confidence in government that is thehope of every American until we ridAmerican politics of the corruption andthe compromising of our present systemof private funding of campaigns. Thatis the central issue. We can reform theexisting system of private funding asmuch as we like; we can improve the re­porting; we can regUlate the size of con­tributions; we can seek to regulate theamount that is spent; we can seek toregulate for what purposes the moneycan be spent. We have been in theprocess of trying to make that systemwork now for a hundred years, and Ijoin in that but even if we reform it inevery way we can think of, the systemis still corrupt, because it still tells thosewho run for public office, "You must firstmake your peace with those Who haveenough money to permit you to becomeelected." '

n increasingly costs more and more toget elected, which means that more andmore we must resort to that demeaning,compromising, and sometimes regret­tably corrupting process.

That is a secret that is out. Every pol­itician has known it from the momenthe first ran for public office, or helpedan~'one run for public office. But now,

with Watergate, everYbody knows thepresent financing system stinks, and isnot l"eformable. That is why it seems tome that the American public must under­stand that if, in the process of learningfrom Watergate, we do not include as ourmost essential objective a system of pub­lic funding of campaigns, so that it ispossible for a man or a woman to runfor office and, once elected, to be able toserve his or her constituency in consci­ence, rather than his or her major con­tributors-unless we do that, we will havefailed, and Watergate will be just thebeginning of what we will see in the fu­ture, except that it will be worse eachtime that it arises.

For that reason I am pleased to joinwith the Senator from Michigan, whohas been leading this fight for his wholepublic caleer, and my friends who arejoining in this colloquy this evening.

I ask unanimous consent that a state­ment which I made a few days ago whenthe Senator from Pennsylvania (Mr.SCHWEICKER) and I introduced a majorcampaign financing bill may appear inthe RECORD following the remarks of theSenator from Michigan.

The PHESIDING OFFICER. Withoutobjection, it is so ordered.

(See exhibit 1.)Mr. MONDALE. I thank the Senator.Mr. HART. I thank the Senator from

Minnesota very much. As always, in verybrief scope he has stated effectively, elo­quently, and I hope persuasively the basicreason that should persuade us promptlyto move away fro111 this private money topublic funding.

The presidential public funding pro­posal that he and Senator SCHWEIKERhave introduced is a logical basis onwhich we should proceed with respect tothe Presidential Office, and I share withthe Senator from California (Mr. CRAN­STON) the belief that while each of us hasa deep conviction that public funding ofcampaigns is the right way, any of uswho have spent any time at all attempt­ing to identifY the kinks in the problemand to unravel it, will understand thatthe subject matter should be specificallyaddressed by the Rules Committee, andthere should be thorough hearings, wherewe can see if we have missed some of thekinks and see if we cannot unravel someof the yet-to-be-unraveled problems. Butjust as soon as that can be done, I wouldhope we would move in the directionsuggested by the Senator from Minne­sota.

Mr. MONDALE. Will the Senator yieldfurther?

Mr. HART. I yield.Mr. MONDALE. I hope we act, because

the public Is now seeing, through theWatergate hearings, how awful this canbe, while that is fresh on everyone's mind,and I hope that the bill which SenatorSCHWElKER and I introduced, which wentto the Finance Committee, will receiveprompt hearings.

The Senator from Michigan has ledthe, fight for the dollar checkoff, andhas brought us to the point where wehave some hope, and I think the chair­man of the Finance Committee-I havetalked \\'ith him about this matter-willfind some time this fall to hold hearings,

so that we mig'ht strengthen what hasalready been done in this field, in thearea of tax incentives.

EXHIBIT 1PRESIDENTIAL CAMPAIGN FINANCING ACT

(Introductory Statement of Senator WALTEHF. MONDALE)

Mr. President, I am Introducing today to­gether with the Senator from Pennsylvania'(Mr. Schweiker) the Presidential CampaignFinancing Act of 1973.

This legislation, which provides for sub­stantial publlc financing of presidentialprimary and general elections wIllie severelyllmlting the size of private contributions, Isdesigned to free those electons from the cor­rosive and corrupting Influence of big moneyand return them to the American people.

In my jUdgment, the enactment of ourbill-or of one l1lee it-is the single most Im­portant election reform that can emergefrom Watergate. It Is absolutely essential Ifwe are ever to get money off the backs ofAmerican politicians and restore Integrityand confidence in our polltical system.

One of the great Ironies of watergate isthat some of those who have been among thestaunchest opponents of publlc financinghave, through theIr blatantly illegal activi­ties, made the strongest possible case forIts adoption.

The acceptance of corporate contributions,the Widespread use of secret funds, the"laundering" of contributions In foreigncountries, the sollcitation of funds frombusinesses with Important cases pending be­fore government agencies, the insistence ondeallng In cash, the ambassadorships forsale-these are symptoms of a system that Isfundamentally flawed.

Perhaps no Incident dramatizes the extentof the flaw as strikingly as that involvingAmerican Airllnes.

Herbert Kalmbach, one of President Nix­on's principal fund-raisers approachedAmerican board chairman George SpateI' ata time when American had pending beforethe Civil Aeronautics Board a plan for mergerwith Western Airlines and indicated that acontribution of $100,000 was "expected".

"I knew Mr. Kalmbach to be both thePresident's personal counsel and counsel forour major competitor (United Alrllnes) ," Mr.SpateI' said later. "I conclUded that a sub­stantial response was called for."

Tllat "substantial response" amounted toa total American Airllnes contribution tothe Nixon campaign of $75.000, of which$55,000 was in clearly illegal corporate funds.

In short, American Airlines was so deter­mined to advance and protect Its corporateinterests that It consciously decided to vio­late the law In order to submit to Mr. Kalm­bach's Intimidation.

Here's how Mr, SpateI' himself put It: "Un­der eXisting laws, a large part of the moneyraised from the business community for po­litical purposes is given in fear of what couldhappen If it were not given."

I cannot Imagine a 1110re severe Indictmentof our polltical fundl'aising process, uules'lit is the now familiar Vesco affair, That in­cident dramatized how an individual in ap­parent trouble with the SEC was solicitedfor a huge contribution, and how he gainedaccess to one of the highest officials in thegovernment to discuss bis dlfficuities onlytwo hours after dellvering the contribution­all in $100 bills.

And there is the ITT incident in Which ahuge contribution to help underwrite theGOP National Convention mysteriously co­incided with an anti-trust settlement be­tween ITT and the Justice Department-asettlement highly beneficial to ITT.

Then there is the Ashland Oil contribu­tion and WllO knows how many more sordidepisodes. When they are all revealed, theywill portray a story of government virtually

25980 CONGRESSIONAL RECORD- SENATE July 25, 1973up for sale. They will make a mockery of ourprinciples of free and open representativegovernment. They will make us trulyashamed of what we have allowed to hap­pen to our political process, the most pre­cious of all of our national possessions.

As a Democrat, I can take no comfort Inthese disclosures. My own party's record ofpolitical fund-raising-while never In thesame league as the Nixon campaign of1972-has not always been as open and asforthright as I would like It to have been.

The chief fault lies In the system Itself­a system which forces candidates to rely 011excessively large contributions If they hopeto compete effectively In a modern presiden­tial campaign.

This system, I am convinced, has a greatdeal to do with declining public confidencein government. People were asked in 1966 bythe Harris Poll, "How often can you trustthe government?" Two-thirds answered,"most of the time." Recently the questionwas asked again and less than half--only 45percent-said they could trust their govern­ment most of the time.

The same poll Indicated that only 27 per­cent of the people had "a great deal of con­fidence" in the executive branch of the gov­ernment-a drop from 41 percent In 1966.

If we are to eliminate the corrosive In­fluence of money on the political process andrestore pUblic trust In our government, wemust fundamentally change the system bywhich we finance our campaigns-especiallyour presidential campaigns. The only way todo this ell'ectively, In my jUdgment, Is byseverely limiting the amount any individualmay contribute to a candidate while at thesame time prOViding substantial public fundsto help finance the campaigns. Neither ofthese steps by itself will be sufficient; anyell'ectlve reform must embody them both.

The costs of running campaigns ,In thiscountry are rising so rapidly that this ques­tion cannot be put oil' any longer. It Is esti­mated that last year candidates for all officesspent an estimated total of $400,OOO,OOO-anIncrease of one-third over foul' years before.In short, the cost of campaigning Is rapidlyoutstripping the ability of most candidatesto raise the necessary funds responsibly.

The United States Is one of the few west­ern democracies which prOVide absolutely nopublic assistance to candidates In Its na­tional elections. As Watergate so vividly illus­trates, we cannot afford to postpone further1hls essential measure.

And if this kind of legislation Is not en­acted In the wake of Watergate, it may neverbe enacted. That Is why Senator Schwelkerand I-together with a bipartisan coalitionof Senators-intend to push this matterVigorously In the next few months.

John Gardner has called the way In whichour campaigns are financed a "national dis­grace", and I agree with him. In our commoneffort to remove that disgrace, I am gratefulto Mr. Gardner and Common Cause for theirconsiderable help In preparing the legisla­tion which we are Introducing today.

It Is not a perfect bm, and we are notirrevocably wedded to every detail In its pres­ent form. After cirCUlating It widely, we wltlmake whatever revisions are necessary tomake It the most ell'ective possible bllt.

We are committed, however, to the prin­ciples contained In this measure. And we be­lieve Its basic concepts are sound.

These, Mr. President, are the principal fea­tures of our b111:

No Individual Is allowed to contribute morethan $3,000 to anyone candidate during anentire presidential campaign;

Groups w11lch aggregate or "pool" fundsare limited to collecting Individual contribu­tions of $25 or less and may in turn con­tribute to anyone candidate no more than$25,000;

Cash contributions or transactions in ex­cess of $100 are barred;

The existing tax credit is doubled to makeIt one-half of any contribution up to $50 foran individual return and up to $100 for ajoint return; The present tax deduction forcontributions Is also doubled;

During the pre-nomination period, eachIndividual contribution up to $100 will bematclled by an equal amount from the Fed­eral Treasury; A candidate must raise$100,000 in matchable contributions In orderto qualify for Federal matching funds; Thematching funds "'ill be available beginning14 months before the date of the generalelection; There Is an overall spending limitof $15 million during the pre-nominationperiod; Matching funds must be spent duringthe pre-nomination period and cannot becarried over to the general election period;

The eXisting $1 check-oil' system Is re­tained and strengthened tor the generalelection; Each dollar checked oil' is matchedby another dollar from the Federal Treasury,and the checkoll' fund Is made self-appro­priating; For the general election periodthere Is a spending limit of $30 milllon,roughly two-thirds of which will come fromthe check-off fund and the balance fromprivate contributions under $3.000; Unllkethe present check-off law, there Is no In­centive not to take advantage of the publicfunds;

Still' criminal penalties are provided formisuse of the public funds and other viola­tions of the act.

I asl~ unanimous consent that a sectlon­by-section explanation giving more details,together with the text of the bill, be re­printed at the conclusion of my remarks.

If public financing legislation Is to ac­complish Its Intended purpose, It Is essen­tial that It apply to the presidential prl­lllary period as well as the general election.If Individuals and interests are permitted tocontribute huge amounts early In the cam­paign, It makes no dill'erence that they areprolllblted from doing so later; the obliga­tions will have been Incurred and the en­tire purpose of the reform will have beeneffectively undermined.

And yet, the primary period Is the mostdifficult part of the presidential electionprocess for which to provide publlc financ­Ing. We have concluded that the only wayto treat all candidates fairly Is by placing apremium on their abillty to raise small con­tributions. The combination of the $3,000limitation on Individual contributions andthe availability of matching funds for con­tributions of $100 or less and under forcescandidates, in ell'ect, to seek as wide a baseas possible In financing their campaigns.That, we believe, Is what candidates shouldhave to do In seeking nomination to thehlgllest office In the land. Whatever abilitythey demonstrate In raising small funds fromas many Individuals as possible Is rewardedin direct proportion to their success.

Candidates, In short, will be going to thepeople Instead of to the Interests for theirfinancial support. The impact this changewill have not only on our political processbut also on the executive branch of govern­ment will be enormous.

For the general election period, we have re­tained and tried to strengthen the $1 check­off systems, which we believe Is a sound andell'ective system which has not yet beenglven a fall' chance to prove itself. Everydollar which is designated by an individualfor the presidential campaign fund is match­ed by another dollar from the Treasury, cre­ating In ell'ect a $2 check-off which will en­sure sufficient funds for the general election.These funds would provide approximatelytwo-thirds of what a candidate would bepermitted to spend, the balance to be raisedIn Individual contributions of $3.000 andunder.

Public financing of campaIgns, I am con­Vinced, Is an Idea whose time has finally ar-

rived. But it Is by no means a new Idea. In amessage to Congress in 1907-nearly 70 yearsago-President Theodore Roosevelt proposedthis reform, saying:

"The need for collecting large campaignfunds would vanISh if Congress providedan appropriation for the proper and legiti­'mate expenses of each of the great nationalparties, an appropriation ample enough tomeet the necessity for thorough organizationand maChinery, which reqUires a large ex­penditure of money. Then the stipulationshould be made that no party receiving cam­paign funds from the Treasury should acceptlllore Ulan a fixed amount from any Individ­ual subscriber or donor; and the necessarypublicity for receipts and expenditures couldwithout diffiCUlty be prOVided,"

Public financing of campaigns Is the mostfundamental and important reform we canadopt in this decade. At stake Is nothing lessthan tlle integrity of our political system andthe kind and quallty of government we aregoing to have In this country.

This Is not a very complex issue. It can bereduced to one basic question: To whom dowe want the President of the United StatesIndebted after his election-powerful eco­nomic Interests capable of buying influencewith huge contributions, or the America]lpeople?

Nor Is It a partisan or IdeologIcal issue.It is designed to benefit neither Republlcansnor Democrats ..• neither liberals nor con­servatives. Rather, It Is designed to benefitour system of government and, througll it,the American people, by ensuring that thePresident of the United States is responsibleto them-and to them only.

Mr. EIDEN. Mr, President, will theSenator from Michigan yield at thatpoint?

Mr. HART. I yield.Mr. EIDEN. I do not think we can

stress too strong the need to act now 011this matter, for a very practical reason.I do not know of any Member ~of thisbody, even those who oppose public fi­nancing right now, who really would notprefer some sort of public financing,but they feel that somehow, as has beenconfided to me by some Senators andmentioned flat out in the press by othel·s.the public is not ready for this, that thepublic will thinl{ we are somehow I'aid­ing the till, that it is a raid on the Treas­ury, that we are feathering our own nests,or whatever it happens to be.

I think, to put it very candidly, thatwhile the public is very upset about theobvious improprieties that took place inthe last election, and while it is fresh intheir minds, something drastic has to bedone. I think that maybe now is the time,and perhaps the only time in the nearfuture, when we will be able to convincethe majority of our colleagues that it isnot a political risk to go along with someform of public financing. but just t<J thecontrary that it will inure to their polit­ical benefit to support some form of pub­lic financing.

Some Senators want to go fartherthan others in regard to public financ­ing, but I think it is essential that theSenate act this session on that question,because of the public sentiment whichhas been aroused. I am afraid if we wait,it might be another 10 years or, God for­bid, another Watergate would occur, be­fore we could get to the question again.

Mr. HART. I hope we can act this ses­sion. I share the concerns of the Senatorfrom Delaware. I think we can convince

July 25, 197:J CONGRESSIONAL RECORD-SENATE 25981the public that it is the best growth stockinvestment it can possibly make in: theinterests of its own freedom.

But I want to make clear that theproduct we finally present here shouldhave as few imperfections as a goodset of hearings could identify.

Mi". MUSKIE. Mr. Pl'esident, will theSenator yield for one of those long ques­tions that we have a habit of asking eachother on the Senate floor?

Mr. HART. I yield.Mr. MUSKIE. Mr. President, I am

pleased to join my colleagues this after­noon in discussing a question that goesto the heart of the American politicalprocess: campaign reform. For months,our newSpapelll, OUi' television reports,and our daily" convel'sations have beenfilled with discussions of the possibilitiesfor corruption in the campaign financ­ing process. We have been confrontedagain with the painful evidence thatmoney is much too important a factor inpolitics.

And the conclusion I have reachedfrom this eVidence, Mr. President, is thatthe pernicious influence of money in poli­tics can only be removed by adoptingpublic financing of all campaigns.

Before I expand on my own thoug'hts,I would like to express my appreciationto the Senator from California, the Sen­ator from Michigan, the Senator fromillinois, and others who have taken theinitiative t() bring this question of publicfinancing to the Senate floor this· after­noon. Their commitment to this issue isto be commended.

It is appropriate, Mr. Pl'esident, thatour discussion of public .flnancing todaytakes place at the beginning of Senateconsideration of S. 372, a bill that makesimportant campaign reforms. By amend­ing the communications laws, this billwill make available to major candidatesfor Federal o:flices free television time,thereby providing the American peopleadditional opportunities to decide forwhom they will vote. By limiting cam­paign expenditures, the bill would pro­hibit exorbitant spending beyond what isnecessar:v to bring the candidate's viewsto the voters. By limiting the amounts ofdirect campaign contributions, the billwould hopefully go far toward prevent­ing the worst fundraising abuses. Andby establishing the Federal ElectionCommission, the bill would create amechanism for more efficielltly enforcingFederal election laws, inclUding thoserequiling disclosul'e of campaign spend­ing al1d contributions.

DUTing the next few days, the Senatewill have the opportunity to pass judg­ment on the details of S. 372-and hope­fully to improve it.

I have some misgivings about the wis­dom of considering this legislation onthe Senate floor at this time, for tworeasons; First of all, the Ervin commit­tee ",as chu'ged with the mandate,among others. of recommending meas­ures to }'Cform our campaign practices,including campaign flnancing. TIlatcommittee is in the midst of its work. Asit proceeds. hopefully the public will focuseven more sb.arply upon the need forthorough campaign reform. But I am notsure that at this point in the Watergate

hearings public concern has yet focused011 this issue to the point where it hasgenerated maximum support for the bestreforms of which this body is capable.So I have some misgivings about thetiming.

Second, I am fearful, in the absenceof necessary support for public financingat this moment, that we may contentourselves with lesser reforms which,however commendable, may not be suffi­cient in the long !'till. In common withthe Senator from Minnesota, I believethat private funding of elections is cor­ruptible beyond the possibility of com­plete reform.

We must also adopt, in some form, amechanism which S. 372 does not in­clude: public campaign financing. Thus,I am worried that the Senate may pass acampaign reform bill that is less thor­ough than it should be.

But with this exercise having begun onthe Senate fioor, I think we should makethe most of it. So I am gratified that weshould be discussing public financing.

To put this discussion in perspective, Iwould like to refer to my own experience.I ran for Governor of my State in 1954,at a time when there was no Demo­cratic Party in Maine. at a time whenthere was almost no possibility of raisingmoney for such a venture. I recall that inthat year the Maine Democratic Partysupported candidates in five majorraces-the governorship, the U.S. Senate,and three congressional races. We fi~

nanced all five campaigns for a total of$18,000. That included television. Thatincluded newspaper advertising. That in­cluded getting out the vote. That in­cluded all the elements of a moderncampaign. '

We elected the Governor. We ran goodraces for the other offices. We built thebase for later victories by our party inthe State. And we did it all for $18.000.

The last time I ran for the Senate, in1970, for my race alone, we spent almosteight times that amount.

Campaign costs have grown and grownand grown. The days are gone when acandidate can present himself in personto most of the voters who will choose be­tween him and his opponent. The mecha­nisms which have been developed tobridge this communication gap-to pre­sent the candidate to the bulk of thevoters who cannot know him personally­all cost money. And money spent for thispurpose is not wasted, since it is spentto allow Americans to make a betterchoice on election day-through leafletspassed out Qn the streets, through grass­roots organization, through the trans­portation of the candidate to voters intheir hometowns, and through the prep­aration and purchase of advertisementsin the media.

The problem, Mr. President, is not justthat money is needed. The worst abusesarise in the process of collecting thatmoney,

In my political experience, I cannotrecall that I was ever asked to give a quidpro quo for a campaign contribution. Ican say that in all honesty. No one evercame to me and said. "Senator, in re­turn for :\,'our support on such and sucha proposition, we will contribute." And I

doubt that contributors approach otherpublic figures asking for a quid pro quo.But the absence of such instances by nomeans demonstrates that our politicalfinancing system is not corrupt.

Big contributions from individuals andpolitical groups to these campaigns leadinevitably to questions of private versuspublic interest. A surprising number ofthose contributors are not looking foranything in return for their gifts, but theeconomic stakes of public policy arehigh enough to raise clouds of suspicion.We do not have to unearth venal ar­rangements-the actual quid pro quo-­to uncover the real dangers in campaignfinance. Those who have stakes in publicpolicY choose to give financial support tocandidates whose known philosophiesand voting records reflect the contribu­tors views.

This financial support can influencethe ability of candidates to mount effec­tive campaigns. When the candidate theysupport is successful, he represents hiscontributors' views in public policy deci­sions-not because he was asked to doso, but because he honestly agrees withtheir views. Thus. the effect is that thosewith wealth to contribute may have dis­proportionate representation in the COUll­cils of government.

Or, as the Senator from Michigan haspointed out, contributors buy access toa Senator, a Govenl0r, or a Congress­man, taking away his time from con­sideration of other issues with which heshould be concerned.

Money is a factor, too, in the decIsionsof candidates about how they will spendtheir campaign time: Fundraising activ­ities distract the candidate from his mostimportant goal of presenting his viewsto the public.

And regardless of whether a contribu­tor has any influence at all the public ispresented with the appearance of cor­ruptibility. ThankfUlly, we ultimatelyenacted campaign disclosure laws. Oneresult has been, however, to intensifythe perception of the public that peoplewith money are buying us. The disclosurelaws have heightened public cynicism.

To remove the influence of money, andthe appearance of corruption, it is notenough merely to restrict the amountwhich individuals or groups can givedirectly to candidates to $5,000 for eachcongressional primary and general elec­tion or to $15,000 for each Presidentialprimary and general election, as S. 372does; or even to some lower fignres.

For candidates would still need cam­paign funds to bring their case beforethe public. Imposing contribution limitsat levels which would permit adequatecampaign financing would still preservethe unfair influence of contributing in­dividuals and groups upon public policy.Only public campaign financing canhave the result of creating public con~

fidence in the public that our system isresponsive to them, that it is honest, andthat those elected to public office are menof integrity.

The fact is that the reforms in S. 372do not have that reSUlt, as commendableas that bill or amendments to it may be.

Congress has already made a step to­ward public financing in creating the

25982· CONGRESSIONAL J{ECbRb~ SENATE'fL' .--. -.

July 25,·'973dollar checkoff, which gives Presidentialcandidates, once they have won thenomination of their party, the option ofaccepting public funds or relying on pri­vate contributions. But the dollar check­off has not yet proved to be a success,and we have only hopes that it will helprefonn campaign financing in the nextPresidential election. More comprehen­sive-and effective-public financingmeasures are needed.

Mr. President, I hope that our forth­coming consideration of S. 372 will pro­duce legislation that will contribute tocampaign reform. But I also hope thatCongress will not put aside the questionof campaign refonn until it has enacteda workable system of public financing totruly remove the influence of moneyfrom politics.

So I commend the Senator from Cali­fornia and the Senator from Michiganfor indulging me in this colloquy onpUblic financing. I join them in the ex­pectation that it will lead to serious con­sideration in committee of pul:>lic financ­ing proposals-including the thoughtfulones already proposed-from which wecan develop sound, thorough, public fi­nancing legislation.

Mr. President, in conclusion, let mesay to the distinguished Senator fromMichigan that he may have lost thethread of my questioning, but perhapsnot the development of my argument. Ithank the Senator for his patience.

Mr. HART. Mr. President, all of us aregrateful for the comments made by theSenator from Maine, who speaks froma very deep experience. I doubt whetheranyone in Maine views any vote he castsas a reaction or a response to any con­tribution he ever received. I doubt thatcould be said of many of us. I am surethat there are people in Michigan, gen­erally those who think that everyoneof my votes is dead wrong, who believethat they are in response to the moneyI have been given. Each of ·us likes tothink that is not true, but if so much asonly one person in Michigan believes thatof me, the strength of our society isweakened.

As the Senator says, it is the appear­ance which we must overcome, and publicfinancing will move us in that. direction.

Mr. STEVENSON. Mr. President, Iwant to be associated with words of theSenator from Maine, and I wish also tocommend the Senator from Californiaand the senator from Michigan for tak­ing this initiative. The Senator fromMichigan was the first Member of thisbody to introduce public financing re­form legislation in this session. Sincethen, he has been followed by others, in­clUding the Senator from Maryland (Mr.MATHIAS) and myself.

He recognizes, as do we all, that atthis late date, money is a curse uPonour politics, and money is a curse uponour country. By money, I meanbig cam­paign contributions. It diminishes us all.It diminishes the offices we hold. It di­minishes the public's trust.

The subject has been taken up in theSenate majority caucus, and in thatcaucus we unanimously supported the

principle of public financing of cam­paigns. By so doing, we recognized thatmoney, the big contribution, is the mostcorrupting infiuence in our politics, thatthere is only one way to eliminate thatcorruption in our politics, and that is byproviding for an alternative source offinancing of our campaigns, public fi­nancing.

Mr. President, some might contendthat this colloquy on public financingcomes too soon because hearings on pUb­lic financing have yet to be held in the93d Congress, and no public financing billis yet before this body.

But this colloquy comes too late­many payoffs too late, many campaignsolicitations too late, many tax evasionstoo late, many millions of disillusionedAmericans too late.

Those who support the principle ofpublic financing-as a majority of theMembers of this body do-may differabout one or another detail of the pub­lic financing system. But we can all agreethat big money is endemic in our politics,that we are all worse off because of it,that it is past time to get the big moneyout, and that the only way to do so isby adopting a public financing system atthe earliest possible date.

I share the sense of urgency expressedby my colleagues here this evening, butrealism compels me to state that the fiooris not the place to write a public financ­ing bill, at least until the appropriatecommittees have had a reasonable op­portunity to act on the question.

At the moment, the central issue facingthe proponents of public financing is aprocedural one: How best can we assurethat the appropriate committees and thefull Senate will have the opportunity tolegislate on the public financing ques­tion during this session of Congress? Iwould hope that we could agree on a pro­cedure under which orderly considerationof public financing and all the issues in­tertwined with public financing-includ­ing especially limits on individual con­tributions and candidate expenditures­could take place this year. In the mean­time Congress could act on equal time re­peal, the establishment of the FederalElections Commission, increased penal­ties for violations of existing law, andperhaps other less controversial, lesscomplex questions.

Mr. President, with less than 8 fullworking days left before the recess, weare teetering on the brink of a morass.More than 40 complicated amendmentsto a very complicated bill have alreadybeen submitted. More are in preparation.Further expansion of the scope of thedebate on S. 372 could push us over thebrink. We could find, after days of fren­zied activity, that we end UP with noth­ing or something unworkable.

I believe-and I have heard othersmake similar suggestions this evening­that we ought to try to set a deadline forconsideration of comprehensive cam­paign finance reform, including limits onexpenditures, limits on campaign con­tributions, and public financing by somepoint early in the fall, some point earlyenough to give us then a better chance

than I suspect web-ave now to adopt inthis ~ession comprehensiverefonns ofour campaign financing.

Mr. HART. I thank the Senator fromIllinois. .

I note that in a sense we have had per­haps conflicting expressions of concern:One, that the full effect of Watergatehas yet to be had, and that since wecommissioned the Ervin committee tomake recommendations, we might be welladvised to delay until we get thoserecommendations. Two, we have the con­cern just voiced by the Senator fromIllinois and the Senator from Delawarethat we attempt to fix the end of thissession of Congress as the time to reachfor and write public financing.

I think each concern is properly voicedhere. It will alert all of us to attempt toresolve what mayor may not be a con­fiict and, hopefully, to take the moreprudent of those two paths.

Mr. JOHNSTON. Mr. President, willthe Senator yield?

Mr. HART. I yield.Mr. JOHNSTON. Mr. President, I am

offering this statement on behalf of my­self and six of my Democratic freshmancolleagues. Each of us has just expe­rienced the manner in which our existingelectoral system works. We faced thatexperience as nonincumbents, and weemerged from that experience with thedeep belief that substantial improve­ments in the present system are needed.

As with any other group of seven Sena­tors from as many different States, wedo not share identical views on eitherthe bill before us today or on the matterof more comprehensive reform of ourelectoral system. We do, however, shareone fundamental viewpoint: We believethat the time has come for a considera­tion of the manner in which we havebeen financing Presidential and congres­sional elections in the past and the ap­propriate role, if any, of public financingin the future of the electoral process.

Mr. President, we recognize that thereare serious problems inherent in any sys­tem of financing elections. Public financ­ing, suggested by some as a solution forour financing trOUbles, raises questionsas to its effect on parties, on little-knownand nonparty candidates, on major in­terest groups, on the primary process,and on the Federal Treasury.

But, if anything is clear from the re­cent history of American political life,it is that our present system of financingelections has significant problems of itsown. That system has fostered a Wide­spread belief that politicians are for saleto the highest bidder. It has forced manycandidates to spend inordinate amountsof time and effort organizing politicalfundraising campaigns. It •has drivenscores of good men away from the polit­ical system. And it has placed the goodmen who remain in a position ofguar­anteed discomfort every .time legislationaffecting their financial backers comesbefore Congress.

Mr. President, the point we .seek tomake is this: The time has arrived for athorough examination .of .the financingof Presidential and congressional elec-

July 25, 1973 CONGRESSIONAL RECORD-' SENATE 25983

tions and. the alternatives reasonablyavailable to us. While we may differ bothon the role a.nd extent of public financ­ing in that electoral process, we feelsti'ongly and unanimously that Congressmust consider carefully and soon thepossible role of Federal funds as one al­ternative in the financing of theseelections

The very· fact that we are here todayconsidering important camp'aign reformlegislation indicates that this body, andthe very able members of the Rules andCommerce Committees,fully recognizethe urgency. of a reexamination of ourpresent methods of financing Federalelections. We are confident that the leg­islation we debate today will form a basisfor further consideration of the cruciallyimportant question of how Presidentialand congressional elections should befinanced. '

For the record, Mr. President, I shouldlike to state that Senators ABOUREZK,BIDEN, CLARK, HATHAWAY, HASKELL, andHUDDLESTON join me in offering thisstatement.

I might add one further point, as apersonal feeling, not on behalf of thesesix Senators.

I submit that any Federal financingplan ought to satisfy at .least four basicfactors.

First, it should reduce or eliminate, ifpossible, the influence of money onelected officials.

Second, it should restore the confi­dence which is so lacking-lacking evenbefore Watergate, but certainly afterWatergate.

Third, it should be neutral in its effecttoward parties,' philosophies, andcandidates.

Fourth, it should. preserve the abilityof the new face, as the Senator fromMaine, as the Senator from Louisiana,the unorganized candidate, the inde­pendent candidate, to get out, withinthe system, and put it together and getelected.

I suspect that the third and fourth al­ternatives I refer to are going to be themost difficult to achieve-to rema.in neu­tral on candidates, parties, and philoso­phies, and still inject Federal fundS intothe campaign.

I know that in my particular State,where the Republican Party has 2 ~'2 per­cent of the registered voters, it would bevery difficult to figure a way to get Fed­eral funds into the candidates' hands ina general election without being non­neutral toward that election. If ~'ou saidit is based on the number of registeredvoters, it certainly would not be fair tothe Republicans. If you said it is on a50-50 basis, it would not be fair to theDemocrats. If you said it is based on thesignatures you get on a petition, it is notfair to the unorganized candidates.

I am afraid particularly that whateverwe do is going to be interpreted as favor­ing the incumbent, and perhaps the bestthing that can happen to incumbents isto severely limit political money toshorten political campaigns and to makethem as sterile as we can.

We are already in office. We do nothave to get out there and do as the Sen-

ator from. Maine did and what I did, andthat is to put it together piece by piece,organizati'on by organization, and per­son by person; So I hope that as we studythis very p.ifficult and most challengingproblem f~r the political process in thisNation tllat. we can satisfy all four ofthese goals to get money out of politics,but to be neutral.

I thank the Senator from Michigan foryielding to m.e.

Mr. HART. I am grateful to the Sen­ator from Louisiana and those associatedwith him. who recently have beenthrough intense campaigns in manycases. I am almost unhappy that he con­cluded with the recital of the basic ob­jectives we have tried to retain in thisreform., because they are difficult toachieve; but it is well that he puts us onnotice early so we understand the needfor committee analysis, and for a prudentand prompt response. It is of overriding .importance that we do what we are pro­posing and that we do it right.

Mr. JOHNSTON. Mr. President, wouldthe Senator yield further?

Mr. HART. I yield.Mr. JOHNSTON. The thrust of my

statement was intended to be the needfor reform and not the overriding ob­jectives. I hope the Senator takes it inthat light.

Mr. HART. Indeed, yes.Mr. BIDEN. Mr. President, will the

Senator yield for a question?Mr. HART. I yield.Mr. BIDEN. I am glad that my fresh­

man colleague, along with myself, raisedan issue that I think we do not hearenough in this Chamber, and that is thepolitical situation of incumbents.

Everyone agrees that one of the thingswe are trying to achieve here is to regainthe confidence of the American people.One sure way to lose that confidence ofthe American people and lend furtherfuel to the fire that we are only afterour own self-interest, is not to makesome specific reference to the fact thatas incumbents we need less money thanchallengers.

I am sure the Senator from Mainelooks back to 1954 remembering how hardit was to get that money. This timearound they say, "Lots of luck. Comeback when you are 40. Maybe we can helpyou out."

I hope that what we do restores theconfidence of the American people. Noone is implying that our colleagues arebought off. I hope we put into whateverform that we work out a recognition ofthis fact. I see no way to do it unless weeither allow more money for the chal­lenger, which I think would be fair, orsome degree thereof, or that we give himor her the privilege of the frank. or tele­vision or radio time. If we do not I thinkwe would be hypocritical.

Mr. President. 60 :rears ago JusticeBrandeis wrote:

Publicity is justly commended asa remedyfor social and industrial disease. Sunlight issaid to be the best disinfectant and electricallight the most efficient policeman.

If Mr. Justice Brandeis were alive, Iam certain he would give his judicialblessing to our move today in the direc-

tion of placing the full glare of publicity'upon the campaign-financing structureof American politics.

Being a lawyer myself and one not un­acquainted with Mr.. Justice Brandeis'views, I would be willing to suggest thathe would support a concept of public fi­nancing of election campaigns for Fed­eral office. Certainly, I do..

I cannot match, of course, my col­leagues here in this Senate Chamber interms of wisdom distilled from years' ofexperience. But I have run more recentlythan anyone else in the Senate in a localelection-that for New Castle County.Del., councilman in 1970. I have most re­cently been a candidate for the Senateseat.

And I am brought to a conclusion thatthe existing system of campaign financ­ing contains within itself a time bombthat ticks for all of us, regardless of po­litical affiliation, regardless of whethereach of us has served less than 1 yearin the Senate-as I have-or 30 years, assome of my colleagues have. . '

The' existing system of campaign fi­nancing ensnares Democrats and Re­publicans, "conservatives" and "liberals,"organizational men and reformers, in atightening web of conflicting interestsand claims.

This is my conclusion based on my ex­perience-the only experience I can layclaim to. I am inclining to a view that,in politics. private money is funnymoney-at least in large amounts. Fur";thermore, I am inclining to a view thatthe cases of wrongdoing that come tolight from time to time in the aftermathof elections may not be ascribed to theinevitable "bad apple" or two or three. Itmay be that there are many more. badapples than that-or; perhaps, even thebarrel itself is rotting.

Mr. President, I hasten to add that Iimply no disrespect to anyone when Isay these things.

I want to compliment Senators CAN'"NON and PASTORE, both doughty warriorsin this cause of flushing out the existingsystem. Their handiwork. which is beforeus today, is particularly commendable ifonly because it relates to a sector ofpolitical life wherein there are enormouspressures to do nothing.

Therefore, I hope I have made it clearthat it is with no disrespect that I speakin favor of changing course-a changethat may more swiftly lead to the mutu­ally shared goal of all of us-competitive,open elections wherein merit, not wealth.dominates.

In furtherance of this objective, I sup­port the concept of public financing ofprimary and general election campaignsfor Federal office. .

Why do I support public financing?The answer lies not in our stars but

in our statistics.In reviewing the history of Federal

election campaigns in modern times, Iam impressed by several factors.

First. No candidate has ever been pros­ecuted for violation of the 1925 CorruptPractices Act, predecessor of the FederalCampaign Election Act of 1971.

Second. No more than 20 corporationsand a couple of trade unions have ever

25984 CONGRESSIONAL RECORD- SENATE July 25, 1973

been prosecuted for violating prohibitionscontained in this act.

Third. Total costs of all political cam­paigns in 1972 apparently exceeded $400million, a 25 percent increase from the1968 elections.

Fourth. The National Committee for anEffective Congress suggests that morethan half of political spending goes un­reported and that the expenditure pervoter in a Presidential campaign hasdoubled in 12 years to more than 60cents.

Fifth. Not unrelated, incumbents since1954 have won 9 of 10 races in the Houseand 4 of 5 races in the Senate, accordingto the Twentieth Century Fund-in 1972,I am pleased to report to myself I wasin that fifth race in which a nonincum­bent won a Senate seat.

I am pleased I won-so are my cam­paign contributors, but I do think thereis a condition in politics which is bestdescribed as a "tyranny of the incum­bency." Without disrespect to incum­bents, it is difticult for a challenger toget a fair-shake, as the statistics I havejust offered suggest.

I am now an incumbent myself. Never­theless, I do not believe the old ways ofcampaign financing are sufticient. In fact,they are deficient. The time has come forall good men of both major parties tocome to the aid of the system by chang­ing it.

These are sober times. Here in thisbuilding-on thiJ very floor-there is un­folding a disastrous chapter in the his­tory of American campaigns. There isreason to think that shoddy men, withaccess to great gobs of unreported money,have savaged our political system. Water­gate, like Pearl Harbor, is a name thatwill go down in history as an event ofinfamy.

I share with Americans a rising senseof dismay about the abuses in the elec­toral process. The unhappy events of the1972 Presidential campaign reinforcesthis dismay.

The outrageous cost· of getting electedto public oftice-that is, the influence ofmoney in politics-has been commentedon by Republican and Democratic Pres­idents alike-General Eisenhower, JohnKennedy, and Lyndon Johnson, amongothers.

The 1984 of Presidential elections willcome about when there are no candidatesavailable who can each raise the trilliondollars to finance the campaigns.

Even now, the rising cost of runningfor office is disqualifying many other­wise well-qualified persons, who cannotor are unwilling to rely heavily uponlarge contributors.

This is an unhealthy condition and,consequently, the American electoral sys­tem suffers-the American voters suffer.

Fortunately, the accumulation ofcampaign financing indiscretions-'-Orworse-have jarred us. American votersnow realize the scandalous grip moneyholds over the outcome of elections. Andtheir distrust is not being directed at Re­publicans-whose party organization, infact, is not involved in the Watergateaffair-or at Democrats.

The dangerous clue, that I discover inmy travels within and without my Stateof Delaware, is that the Watergate is

breeding distrust, even disgust, at bothpolitical parties and all politicians.

As a result, we politicians are in deeptrouble both in Washington and in the"river cities" of America. The politicalsystem is in trouble because, as someonehas said for us, democracy is less a formof government than a system that assureswe shall be governed no better than wedeserve.

The hazard is not necessarily that thevoters will rise and vote us all out of of­fice within the next few years. A clearand present danger is that the votersmay turn away from the ballot box­after all the 1972 Presidential voter turn­out, percentagewise, was the lowest inthis century. -

The real danger, then, is that the dis­mayed American voter may act like MarkTwain's cat which sat down on a hotstove lid-the cat never w1ll sit on a hotstove lid again, but also the cat wID neversit down again.

The winds of change are already blow­ing through the Congress. Various stepshave been taken within the last coupleof years in both the Senate and theHouse to open the legislative process it­self to public scrutiny.

But these improvements in my judg­ment are largely quarantined by thescandalous grip of money on politics.

The rapid increase in the cost of cam­paigning is the most important elementin degrading both our politics and ourpoliticians.

The high cost of running, places eventhe most innocent candidate in the po­sition of being in the pocket of such con­tributors-or assumed to be by the con­tributor, and more importantly by thepublic.

Slowly I have become convinced thatefforts to place ceilings on overall cam­paign expenditures, to prohibit certaingroups from contributing funds, to re­strict the size of campaign contribu­tions-these and other devices, howeverwell-intentioned and well-designed, arenot fully effective.

Disclosure and ceilings have merit, butthe ingenuity of political operators out­ranks that of an Einstein in finding waysof funneling private funds of undis­closed, if not dUbious origins, into cam­paign coffers.

Public subsidy would allowcandi­dates - incumbents and challengersalike-to compete more on the basis ofmerit than on the size of the pocket­book-free from potentially corrodingdependence on personal or family fortuneor the gifts of special interest backers­be they those of business, organized laboror conservative or liberal interests.

Public subsidY has an honorableancestry. '

Theodore Roosevelt proposed this ap­proach in an effort to insulate politicparties from the influence of wealthycontributors and to permit candidates ofmodest means to seek elective oftice andto assure that opposing candidates andtheir parties will have more respectableresources.

In 1957, the Committee on Finance re­ported out a subsidy plan as title II of theHonest Elections Act, H.R. 4890, althoughthe bill was never discussed on the fioor.

As you know, Mr. President, we now

have In law a provision authorizing ataxpayer to assign $1 of his Federal in­dividUal income tax obligation to the1976 Presidential campaign fund.

The pOint I am making is that theconcept of public subsidy is not a star­tling new one. It has been discussed herein the Senate. The tax checkoff provisionis now law. I hope that we can now dis­cuss the possibility of taking larger steps.

Public subsidy is not without prob­lems, of course. Previous provisions, suchas that in the Honest Elections Act, didnot treat minor parties fairly.

And, if a public subsidy statute is en­acted that barred the use of private fundsin campaigns, then there should be a pro­vision to accommodate future minor par­ties that may develop.

But these problems surely could beresolved.

The issue remains that of money inpolitics, if money by itself does not winelections, absence of money guaranteesdefeat.

Senator HART'S pending bill addressesitself commendably to this problem, al­though I -plan to offer a differently tai­lored bill before the hearings that Sen­ator CANNON has so graciously consentedto have later this year on the concept ofpublic financing.

In my judgment, the ideal public sub­sidy program would combine public sub­sidy as the only source of campaign fi­nancing-combined with subsidized radioand television time.

The solution may appear stiff, but thepenalty, in the form of further erosionof voter confidence in the electoral sys­tem, is stiffer.

I suggest an additional benefit mayaccrue from adoption of public-subsidycampaign financing. I believe it wouldhasten the day when we in the Congressenact tax reform for the American peo­ple. Revision of the Federal Tax Code asto make it fairer is made more difticult,in my opinion, because those wealthywho benefit by existing tax shelters alsomake large campaign contributions.

I realize there are going to be a num­ber of difticult problems which will haveto be resolved if we go the public financ­ingroute:

First, how does one qualify' as a con­tender; second, when is one a "seriouscandidate"; third, what prOpOrtion ofpublic funds should gO into primaries;and, fourth, a number of other compli­cated questions which should first beanswered. '

But I submit that it. is a good dealeasier t.o resolve' these cumbersome andcomplicated issues than it is to try. tolegislate morality into the existing sys­tem whereby we, as elected public ofti­cials, .are required to seek our· fundsfrom private sources.

In my opinion, almost implicit in sucha system is an element of corruption, andvery few of us want to appear in thesecond editions of "Profiles in Courage."Very few of us, I believe, want to be putin the position where, although we knowif we take partiCUlar positions· during· acampaign on a particular issue, it willmean a campaign contribution for us,some of us, at least me, would be temptedto say, "Yes, I'll support SST."

Would I have supported the SST had

]ltZy 25, ·1978 <:ONGRE;SSlONAL RECOR,D - SENATE 25985

. I b¢eninCongress)ast time around"ifI knew that that organization, which hadasked me the question, is giving $5,000to those whom· they endorse? I am notparticularly. stupid, and it. is fairly easyfor us to determine what answers thepeople asking 'lis the questions want tohear.

I am not suggesting that anyone in theSenate now, or running for. the Presi­dency, is taking any money under thetable, or is being told: .

we wUl give you money if you will changeyour position. orwe.wmsupport your cam­paign ,if you, take such and such a position.

But there is temptation for a candidatewho sees he or she is a point behind' inthe polls of realiziIig a lifetime ambitionof being a U.S. Senator or Congressman,<ir President-it is difficult to ask of amanor woman in that position to not beat least considering prostituting theirintellect, at least.

And I think, as long as we have themajor portion~or quite possibly anyportion-of our campaign funding forFederal offices coming from the privatesector, we are not going to be able to getat that particular problem. And w1til weget at that particular problem, in myopinion, we are not going to be able torestore the faith and confidence of theAmerican people in their public institu­tions and in their elected public officials.We are not going to do that until we havemen and women in public office who aretotally unfettered, or, at least, the Amer­ican people have an impression of theirelected officials being significantly un­fettered by particular interest groups.

And I do not mean to imply that any­one here is in that position, necessarily.I am just saying the temptation is verygreat.

My wife, who was less of a politicianthan I, used to have an expression sheused. She said:

You should not burden your elected publicofficlals with too much responsibllity.

I think she is a true Jeffersonian.I happen to agree with her. I think

that when we ask men and women to goout and raise the hundreds of thousandsof dollars that is necessary to run forpublic office in this Nation, we are put­ting them in a position of being exposedto great temptation. Not personal fi­nancial gain, but great temptation tomaybe not say what they think all thetime, maybe not take the positions theysupport all the time, and maybe I feelthis way because I am weaker than mostof the Senators here, maybe I felt thatpressure because I do not have thestrength of character that many of themen had who have gone before me.

All I know is that I have felt thatpressure, and I am one young fellow at30 years of age who may not only be the;roungest Senator but the youngest 1­term Senator here. But the fact remainsI know Ihave felt it, and I think that itis in the public interest to see to it thatwe who are running for public office canget about the business of telling the peo­ple what we think and not have to worrythat if we take. a position that is in op­position to any major interest group,whether it be labor or big business, that

we are going ,to have campaign funds cutoff that we need to get our case beforethe public.. I think if there is nothing else that I

am able to do in one term-if there isnothing else I do to make some little im­pact on moving us toward the public fi­nancing of elections, I would consider myservice in the Senate a success.

My constituents probably would notfeel as I do-and maybe my colleagueswould not either-but I would feel it isthat important. I think it is the singlemost important issue to come before thisbody in a long, .long time.

In sunlmary, Mr. Chairman, I supportpublic subsidy but I discredit no othermethod.

I simply assert my judgment as an in­dividual Senator that adoption of publicsubsidy is the swiftest and surest way topurge our election system of the corrup­tion that, whatever the safeguards,money inevitably brings.

In an essay of Thomas Carlyle is founda statement:

"Our grand business is not to see what liesdimly in the distance but to do what clearlylies at hand."

It is the grand business of all goodmen and women, Republicans and Demo­crats alike, to come to the aid of theirparty.

Mr. LONG. Mr. President, will theSenator yield?

Mr. HART. I yield.Mr. LONG. I am glad the Senator has

raised thiS subject and made this col­loquy available for the RECORD.

The Senator, of course, is well awareof the fact that the senior Senator fromLouisiana took an interest in this mattermany years ago. It seems many yearsnow. I know that the Senator fromLouisiana is one of those who sufferedmany wounds during this struggle thatwent on down through the years.

As I recall, in 1965 or 1966 the Senatorfrom Louisiana introduced an amend­ment to a revenue measure that wouldhave provided for the checkoff system tofurnish campaign financing for the Pres­idential campaign. We ran into rathersevere opposition, as matters went along.The following year, Congress suspendedor made inoperative that proposal. Wehad a long fight and this Senator wasunwilling to yield. 'Ve had seven voteson the proposal. First one side would winand then the other side would win. Wetook turns winning, depending on whohad the most troops in town. The issuewas closely defeated.

Subsequent to that President Johnsontook the leadership in trying to bringsome of us together, particularly Demo­crats, and we conducted hearings andworked out a bill which we reported fromthe Committee on Finance. that didmore than just seek to finance the Presi­dential campaign.

If Senators would like to see how theycould finance congressional electionsthey would see in that bill and com­mittee report what would be made avail­able in each State depending on thenumber of people in the State and vari­ous other factors that could be con­sidered. That measure was not enactedbut it did make clear one or two points

which I am sure will be before the com.,.mittee. One point which became clear isthat it is that in a general election thereis no choice but to make available anequal amount of money to each of .themajor party candidates. Any procedureother than that cannot be justified. Themore one studies it the more one seeshow it would work. . .

The Senator from Delaware suggestedproviding more money for the challengerthan for the incumbent. The fact is thatunder the existing system the incumbentis usually better financed than the chal­lenger, in any event, so that when anequal amount of funds is provided geri­erally the challenger is given more helpthan he would ordinarily have availablein trying to unseat an incumbent.

However, it does free both candidatesfrom the need of going hat in hand toseek contributions, and in doing that ittends to protect the confidence of thepublic in the victor, and it tends to re­duce the pressure to respond to the en­treaties that are made to electe..: officialsby those who contribute to the cam­paigns.

I am convinced at the moment that thebest we can do is to improve on the check­off system we have enacted. If we try. todo that and make. it work in the nextPresidential election, I am satisfied thatthe public will approve of it and under­stand it. In addition, it will serve as aminimum action at best for extendingthe same principle into the primary thatleads up to the general election. If thatis accepted, it may very well create apublic acceptance of the idea and resultin public financing of senatorial and con­gressional campaigns. I doubt very muchthe public would understand it at thispoint.

Mr. HART. Mr. President, I state forthe RECORD that it was the senior Sena­tor from Louisiana who years ago gaveleadership, perhaps more than any of usis aware, in this matter.

Even though he cannot foresee asprompt a turn to public financing asthose of us offerir.g the bill, I think hemay be the chairman of one of thosecommittees because of his understandingof the matter.

Mr. LONG. In the last analysis thecheckoff proposal is public financing.

Mr. HART. Indeed, yes.Mr. LONG. And it is in the area where

the greatest stake is involved, the Presi­dencY of the United States. So the typethings the Senator favors, I believe, willbe tried with regard to the Presidencyof the United States, in the checkoffmeasure we have voted into law.

I am extremely pleased that in thisCongress we have been able to amendthe checkoff proposal to make it do whatwe intended-at least more nearly whatwe intended-by a margin of 2 to 1,and we were fortunate enough to haveRepublican help this time. It was a tre­mendous headway to obtain an almostunanimous Democratic vote, as well assubstantial help from the Republicanside of the aisle. So the thought thatthat is the direction in which we oughtto move definitely has picked up a lot ofsteam and a lot of acceptance.

It is my belief, particularly in the

25986 CONGRESSIONAL RECORD-SENATE July 25~ 1978

Presidential race, the public will becomeconvinced that that is the way it oughtto be done, and it may very well leadto others.

Mr. SCHWEIKER. Mr. President, willthe Senator yield?

Mr. HART. I yield.Mr. SCHWEIKER. Mr. President, I

would like to commend the Senator fromLouisiana. I was in the House when hisPl"oposal first came up in 1966. We hada whing-ding debate in the House overthis concept. I was one of the RepublicanMembers who supported it then. Wehave come a long way since then. I thinkthe Senator from Louisiana deserves agreat deal of credit for his leadership.

I think the significant thing in the billI have sponsored with theSenator fromMinnesota (Mr. MONDALE)-and thereare other bills-is that it builds on thisbase. I do not think we are going to havesentiment for change beyond what wehave now if we do not use the conceptof the checkoff system and the base thatthe Senator from Louisiana fathered.

I think the Senator is quite right whenhe says that his concept would have suc­ceeded this last time if it had been givenits rightful place in the income tax re­turn and if it had been made a matter ofa simple plus or minus item like everyother item in the income tax return,without having to leaf through and fill itout on another paper. So I do not thinkthere was enough good faith in regard tothe prospects.

I just want to say that the bill theSenator from Minnesota (Mr. MONDALE)and I are cosponsoring is also supportedby common cause. It really builds on thefoundation the Senator laid, and extendsit to the concept of supplying some ofthis money for Presidential primariesand really doing the job. We go furtherin limiting contributions to $3,000 foreach person, encouraging $100 deduc­tions and $25 tax credits, and also pick­ing up on the foundation.

I think it is very important to bear inmind that, no matter which bill weadopt-and I mighi. say there are manyother good proposals before us-we keepthis target in mind-that we run on thecourse of the foundation the Senator haslaid.

I think we should recognize how farwe have gone, because I can rememberin 1966 when this concept was considereda pretty far-out idea, and the House wasrather hostile to the concept at thattime. It took a lot of political battling toget it through. It took a long time, but ithas finally come of age.

I commend the Senator from Cali­fornia for his interest in getting this dis­cussion going, because I think it showsboth sides of the aisle have a strong de­sire for change. Watergate has broughtthis about. It has brought about a climatefor change and a climate for enlargingthe advances we have made.

I think with all of us working together,and also with volunteer groups workingtogether, it will result in taking the ini­tial concept of campaigns so we can getaway with special interest financing andspecial interests inordinately controllingtoo many of the funds of campaigning.

I would just like to associate myselfwith the remarks of my colleagues on

both sides of the aisle and· join in thiseffort today and say I am delighted tosee so much interest on everyone's partin picking up a good idea and carrying itto its ultimate conclusion.

Mr. CLARK. Mr. President, will theSenator yield?

Mr. HART. I yield.Mr. CLARK. Mr. President, I join in

commending the distinguished Senatorfrom Michigan for his years of leader­ship, and to acknowledge what the lastspeaker, the distinguished Senator fromPennsylvania (Mr. SCHWEIKER), saidabout the assistance given by the Sena­tor from Louisiana (Mr. LONG) with re­gard to leadership in connection with thecheckoff system. I certainly wish tothank the Senator from California (Mr.CRANSTON) for his work in providing thisdiscussion.

Mr. President, this is turning out tobe quite a week.

As the Senate Select Committee onPresidential Campaign Activities con­tinues its investigation of the most tragicand devastating political scandal in theNation's history, the Senate itself hastaken up new Federal campaign legIsla­tion. The opportunity for reform is un­precedented. And so is the need.

In the next few days, we will be talk­ing about S. 372, the Federal ElectionCampaign Act of 1973. There will be con­troversy and debate over many of itsprovisions and amendments. The dis­cussions will be in political terms--cam­paign spending limits, reporting require­ments, individual contribution ceilings.

All of this is very important, but wecannot simply pass this legislation andforget about the political process untilthe next scandal comes along. The realissue before us today is not spendinglimits or the equal time provision, thereal issue is the quality of governmentin this country-what it is now, andwhat it should be. At stake is nothingless than the future of the democraticpolitical process.

Just 2 days ago, an even more tellingpoint was made that offers an even morecompelling reason to put some common­sense back into the political process.It came during testimony before theErvin committee, and although thestatement did not get the attention thatthe President's statement did, we cannotafford to ignore it. Senator JOSEPH MON­TOYA was questioning Gordon Strachan,a young man who used to be the assistantto the President's chief of staff. In thewake of that has happened, SenatorMontoya wanted to know what adviceStrachan might have for other youngmen, like himself, considering a careerin Government. Strachan answered:

Well it may sound-it may not be the typeof advice that you could look back and wantto give, but my advice (for other youngmen) would be to stay away.

I am terribly afraid that unless wemove decisively, more and more youngpeople are going to take that advice;And if they do stay away, if they do de­cide that the political process is simplynot worth their effort, what is this coun­try going to be like 50 years from now?

The Constitution lists very .few re­quirements for holding public office inthis country. But the unwritten restric-

tions are staggering. As things standnow, it is Virtually impossible to run forpublic office in this country without be­ing wealthy or seeking the help ofpeople who have wealth to support yourcampaign. This bill (S. 372), and manyof the proposed amendments to it, at­tempt to limit the abuse in that systemby limiting the kinds and the amounts ofcontributions and expenditures.

I support that kind of reform. Thereshould be limits on individual contribu­tions. There is a .desperate need for atruly independent election commission.The campaign reporting requirementsshould be strengthened, and Congressshould remove the "equal time" provisionthat now prevents televised debate infederal campaigns.

But, Mr. President, however successfulwe are this week in reforming the cam­paign laws, we will not have gone farenough. However determined or well­motivated our efforts in drafting soundlegislation, there still will be loopho1es­and people willing to take advantage ofthose loopholes. More than any other rea­son, that is why I support public financ­ing of political campaigns. The presentsystem-if it can be called that-may bebeyond reform. The Congress tried toreform it in 1925 with the Corrupt Prac­tices Act. It tried again in 1971 with theCampaign Reform Act. And with eachattempt came more abuses. We are tryingagain this week.

I hope the Senate passes this bill withmany of the amendments, but if we donot begin to consider an alternative, allof this "reform" will come to very little.It can never be a substitute for publicfinancing.

This is not a time for half-way meas­ures. Too much is at stake for that. So,I am encouraged by the decision of thedistinguished Senator from Rhode Island(Mr. PELL) to hold hearings on publicfinancing in September. The subject ofpublic .financing is controversial andcomplex, but the need for it is over­whelming.

This colloquy and several public fi­nancing amendments that have beenoffered to S. 372 hopefully will focusattention on the concept' and lay thegroundwork for those hearing. Mr. G;:I.l­lup already has told us that more thanhalf of the people in this country favorsome form of public financing. With allthat has happened in the last 12 months,that sentiment is not very surprising.

In the last 15 months, people have seenpolitics at its worse. It's not a pleasantsight, but that sight alone makes a con­vincing case for public financing of polit.:.ical campaigns.

Watergate happened in part because asmall group of unprincipled men hadmoney to burn-money in safes and suit­cases, money that was "laundered" sothat no· one would know where it camefrom. Nothing is more C01Tupting thanunlimited money and secrecy, especiallyin government, and in that regard atleast, Watergate was only a symptom ofthe disease, not the disease itself.

If absolute power corrupts absolutely,uncontrolled money corrupts uncon­trollably. The higher the office, the moreit costs to win. And the more it costs towin, the more candidates have to relyon big contributors.

J'uly 25, 1.9'13 CONGRESSIONAL RECORD-. SENATE 25987In the last election, candidates across

the country'spentabout$400 million al­together..The top 10 contributors to justone campaign, the President's, gave $4million. There was hardly a single Fed­eral campaign that did not rely to someextent on "big" contributors. Most con­formed with the letter of the law. Butwe are only fooling ourselves if we thinkthat some of those people who wrote outchecks for $10,000 and $20,000 dollars ata time and more were doing it solely toimprove the quality of government.

Money and politics need not be insep­arable. Public financing of political cam­paigns would go a long way towardending the dominance of the private dol­lar in public affairs. The democraticprocess is too precious to allow it to beinfluenced by a relatively small numberof people with a large number of dollars.The process belongs to all of us, and Ithink all of us ought to be willing tomake a small contribution toward keep­ing it.

Public financing certainly is not a newor untested concept.

Pour Presidents have endorsed theidea. One included the proposal in hisstate of the Union message-TheodoreRoosevelt in 1907. His statement neatlysums up the argument for comprehen­sive public financing of political cam­paigns:

It Is well to provide that corporation shallnot contribute to Presidential or Nationalcampaigns, and furthermore to prOVide forthe publication of both contributions andexpenditures. There is, however, always dan­ger in laws of this kind, which from theirvery nature are difficult of enforcement; thedanger being lest they be obeyed only by thehonest, and disobeyed by the unscrupulous,so as to act only as a penalty upon honestmen. Moreover, no such law would hamperan unscrupulous nlan of unlimited meansfrom buying his own way Into office ... Theneed for collecting large campaign fundswould vanish If Congress prOVided an appro­priation for the proper and legitimate ex­penses of each of the great national par­ties •.• Then the stipUlation should bemade that no party receiving campaign fundsfrom the treasury should accept more than afixed amount from any Individual subscriberor donor; and the necessary publicity for re­ceipts and expenditures could without diffi­culty be provided.

More than 50 years later, PresidentKennedy suggested Federal financing ofPresidential campaigns so that candi­dates no longer would have to go around"with their hats in their hands," Candi­dates still have to go around with hatin hand, and we have not come very farsince 1907.

The concept of public financing is notuntried. It has worked and worked wellin other countries, and public financingis part of the political process in theCommonwealth of Puerto Rico. In eachof these cases, public financing has notbeen without its problems-and evenabuses-but the system has proved farsuperior to what this country has now.\Ve can learn from the experience ofothers-and improve upon it.

The public financi.'1g proposals thathave been offered so far differ in manyrespects, but they have common goals:to take the special interests out of poli­tics, to open it to everyone regardless ofwealth, to restore trust and confidencein the democratic process.

When Senator PELL'S Subcommittee onPrivileges and Elections takes up thequestion of public financing, it will haveto address itself to a number of complexSUbjects. They are worth going intobriefly today-both to give an idea ofwhat the legislation involves and whatit can do.

Which Federal offices should becovered by public financing? Some peoplefeel that it should apply only to thePresidential election, 01' only to congres­sional elections. But in this respect, thelegislation must be comprehensive. Itought to cover all Federal elected offices.In the past, corruption and scandal haverecognized no differences between cein­gnissional and Presidential elections­neither should a campaign financing billdesigned to correct those abuses.

Which Federal elections and cam­paigns should be included? Under someproposals, only the general election isincluded. Others take in both the gen­eral and the primary, and that wouldseem to be the far better course. In manycongressional districts, the election issettled in the primary-the general elec­tion is only a formality. In Presidentialcampaigns, where primaries have becomeindispensable to nomination, the needfor regulation and public financing is noless urgent.

Half a reform is no reform at all. Itdoes little good to try to prevent abusein the general election if it continuesunabated in a primary. People will stillwonder where the money is coming from,

Should private contributions be per­mitted? They should be, because of theconstitutional problems that would re­sult from an outright prohibition. It isessential that the maximum amount ofindividual contributions be limited toprevent the contribution from becoming,in effect, little more than a politicalbribe. Public financing can permit pri­vate financial support without permit­ting that support to alter the entirepolitical process.

Should there be a limit on over-allspending? Some have suggested that thebest approach is to have no ceiling, toprovide a bloc grant from public fundsand let candidates spend as much addi­tional money as they can raise from lim­ited private contributions. A better phi­losophy might be to set maximum cam­paign spending limits, high enough notto cripple the chances of challengers, andallow the candidate to use a set combi­nation of public funds and private dona­tions to meet it.

Should a distinction be made betweenmajor and minor parties? There does notseem to be much dispute on this ques­tion, but there is disagreement on thebest way to insure minor parties andcandidates access to the political proc­ess. They could be given a fiat percen­tage of the amount given to the majorpartieS-With a bonus given for per­formance in the last election, 01' retro­actively, for performance in the electionin question.

Who will pay for public financing ofpolitical campaigns? The taxpayer willpay for it, but the cost will be small, andby any standard, the return on the· in­vestment will be large. In the last elec­tion, candidates for Federal office spent

about $200 millioll altogether. Split thatup among the Nation's taxpayers, and itcomes to a few dollars apiece. That aver,.ages a dollar a citizen. That is a smallprice for us to pay to recover the politicalprocess.

Should there be an independent elec~

tion commission? Once again, the debateon this question will not be over thecommission itself but over the powers itis to have. Anything less than total in­vestigatory authority would cripple theimpact of the legislation. However itsconstituted, the commission must be to­tally independent of political pressureand poliical motivation to manipulatethe law to advantage of one or anotherparty or candidate.

What can be done about "frivolous"candidates who want access to publicfunds?

Requiring a security deposit is one sug­gestion. Without this kind of require­ment, there no doubt would be "frivol­ous" candidates bent more on exposurethan on election.

Any such deposit would have to beraised by public contributions, again lim­ited in individual amounts, that woulddemonstrate some public support for thecandidate.

In any discussion of public financingof political campaigns, the Senate willhave to struggle with these questions andmany more. Should straight cash con­tributions be restricted or should they beprohibited entirely? How will candidateshave to account for the use of pu~lic

funds? Even with public financing,should media expenditures be limited?

It will take time and study to answel;these critical questions on the aspects ofany public financing proposal. That iswhy Senator PELL'S hearings are so im­portant. But, on one point at least, thereshould be no dispute: Any public financ­ing plan must be thorough, complete, andcomprehensive. We have passed the timefor halfway solutions.

Mr. President, I shall take a momentfor a personal note. Although this is myfirst year in the U.S. Senate, I have beenactively involved in Government formore than 10 years. I have taken a handin congressional campaigns and Presi­dential campaigns-primaries and gen­eral elections, as a campaign manager,and as a candidate. This country's demo­cratic process means a great deal to meas it does to all of us. I have seen bothits strengths and weaknesses, felt itspressures and demands and, throughout,I have always felt that politics is anhonorable profession. Nothing haschanged that.

But the people's perception of GOi'ern­ment and public officials has changed.Simply put, they do not trust the menand women they elect to office. They donot hai'e confidence that the only inter­est of public officials is the public inter­est. Time and time again, I have heardthat sentiment expressed by peopleacross Iowa, and I know it is shared bypeople across the SOlmtry. Congress hasno greater challenge than to find waysto restore that confidence. And publicfinancing of political campaigns holdsOlle of the keys.

Long before today, people in Lllis CoUll- ,try recognized the problem of corruptionin the political system. Lincoln Steffens,

25988 CONGRESSIONAL RECORD- SENATE July 25, 1973a man who spent years exposing it, talkedabout the problem in his autobiography.He was at a meeting in Los Angeles andthe subject was the influence of businesson politics. Steffens recalled one conver­sation with an Episcopal bishop there.The bishop asked hi:n, "Who foundedthis system, who started it, not only inSan Francisco and Los Angeles, in thisor the last generation, but back, way backin the beginning?"

Steffens described his reply to the min­ister:

"Oh, I think I see," I said, "You want tofix the fault at the very start of things. May­be we can, Bishop. Most people, you know,say it was Adam. But Adam, you remember,he said that it was Eve, the woman; she didit. And Eve said no, no, it wasn't she, it wasthe serpent. And that's where you clergyhave stuck ever since. You blame that ser­pimt, Satan. Now I come and I am trying toshow you that it was, it is, the apple:'

It is not the men and women who runfor public office. It is not even the moneyalone, because money always will be nec­essary for political campaigns. It is theapple-the process which forces candi­dates to give away too much of them­selves, to get the money, to get elected.

I think we can replace the apple withsomething a bit more appetizing-publicfinancing. The next Presidential electionis in 1976, and if we are truly successful,it just may be the first truly honest elec­tion for the Presidency and all of theother Federal offices that this countryhas had in years'.

Mr. President, I ask unanimous con­sent to print in the RECORD a selectionof articles on the public financing of po­litical campaigns.

There being no objection, the articleswere ordered to be printed in the RECORD,as follows:[From the Washington Post, July 20, 1973]

DELAYING CAMPAIGN REFORM

(By Clayton Fritchey)In the light of Watergate's sordid revela­

tions about the degradation of the electoralprocess, it might be thought that Congresswould have made swift and radical reformof campaign financing its first order of busi­ness this year. Unfortunately, that's not theway it is working out.

Here it is, well into July, and nothing otthis nature has yet reached the floor of theHouse or Senate. Moreover, the Senate billthat will finally come to the floor in a weekor two is a pale reflection of the kind of leg­islation that members were talking so bravelyabout earller in tile year.

Some good men in both parties have triedto arouse their colleagues. Sen. Edward Ken­nedy (D-Mass.) told the senate Rules andAdministration Committee that "of all thelessons of Watergate perhaps the one that ismost obvious today is the lesson that moneyis a vastly corrosive power in American poli­tics."

The same committee was told by Mary­land's respected Republican senator, CharlesMcC. Mathias, and sen. Adlai Stevenson III(D-Il!.) that the only sure way of purifyingthe U.S. electoral system is the public financ­ing of political campaigns. They have sinceintroduced legislation to that end.

, Mr. Nixon, however, suggested somethingthat seems more palatable. He urged Con­gress to create a study commission to reviewcampaign practices and to put off tighteningthe Federal Election Act of 1971 until thestUdy was completed, presumably next yearsometime. Although the Democratic chair­man of the Senate Rules Committee hootedat this "delaying action," his committee has

so tar generated tew notable reforms ot itsown.

The rules committee, In tact, proposes toweaken the 1971 campaign law In at leasttwo respects. On the plus side, its blll limitsindividual contributions ($100,000 a year),establishes an independent body to prosecutecampaign law violations and centralizes fi·nancial accountability.

While some of these proposals are betterthan nothing, they are no substitute forpublic financing of presidential and con­gressional campaigns, which would restorepolitical control to the people and take itaway from big business and big labor andfrom the super-rich and countless pressuregroups who now exert so mucl1 influence overpublio officials.

"The distinction between a campaign con­tribution and a bribe is almost a hairline'sdifference," says Sen. Russell Long (D-La.),chairman of the Senate Finance Commit­tee. Such contributions, he adds, "can beviewed as monetary bread cast upon thewaters to be returned a thousand fold:'

Sen. Philip Hart (D-Mich.), one of themost respected men in Congress says,"Wouldn't it be great if you didn't have totalce a single dime from any human being?"And wouldn't it be even greater If the pUbliccould be sure that its representatives owedtheir first allegiance to their constituents?

The politicians pretend to worry about theexpense of public financing, but it is trifling.The annual cost of subsidizing all federalelections, including the run for the presi­dency, would be about 25 cents per person.Every opinion poll shows that a great major­ity of Americans would gladly bear this in­finitesimal burden.

So Why the foot-dragging, the stalling, thepassive resistance which has defeated everyeffort to get public financing? Largely, it canbe traced to the incumbents, especially theentrenched senior members of the House andSenate who simply cannot tolerate the ideaof the government "encouraging" oppositionto them through public campaign support.

It must be remembered that many, if notmost, of the powerful committee chairmenWho dominate Congress come from one-partystates or districts. Once in office, some havehad a free ride for the rest of their longlives. Until recently, some have not even hadserious opposition in the primaries, let alonethe general elections. All this, 'of course,would change overnight if potential oppo­nents could be assured of adequate publlccampaign support.

At the presidential level, campaign financ­ing at the taxpayers' expense would seem tobe a nonpartisan problem. In practice, how­ever, the Republicans, as 1972 proved, caneasily raise many more mUlions than theDemocrats. ThUS, even with Watergate, it isnot going to be easy to establish public cam­paign financing unless the people of theUnited States put the heat on their senatorsand representatives.

[From the New York Times, June 22, 1973]IVIoNEY YES, ETHICS No

(By Tom Wicker)In this space on June 8, a favorable report

appeared on a bill to finance Federal elec­tions partially with Federal funds. A modestnote from Senator Charles Mathias, Repub­llcan of Maryland, to whom authorship ofthe bIll was attributed, states that SenatorAdlai Stevenson, Democrat of Illinois, is infact primarily responsible for developing themeasure, of which Mr. Mathias is a co­sponsor.

But who ever wrote the bill, it or some­thing .like it is the first and most obviousneed arising from the Watergate disclosures.Aside from the deeper causes of the Water­gate activities in 1972, and regardless of whowas or was not responsible, it seems qUiteclear that they were possible only becauseof the huge amounts secretly contributed bybusinessmen and others apparently fearful

that a McGovern victory would have de­prived them,pt neelieli anli none-too-scr~pu­lous friends in the AdniInistration.

In fact, it now begins to appear that thereis considerable cause tor Investigation ofRepUblican tund-raising and spending asidefrom the bags full of greenbacks that wentto Gordon Liddy and the other convictedconspirators. There was, of course, the dirtylinen of the so-called "Mexican laundering"operation that Maurice Stans tried so hardto explain to the Ervin committee; and asfar back as the year before the campaign,the dairy industry was pouring in hundredsof thousands of dollars while the Nixon Ad­ministration was reversing its ground andraising milk support prices.

All the Administration's involvementswith I.T.T., including the famous $400,000of the Dita Beard memo, have yet to besorted out, much less "laundered:' Mr. Stansand former Attorney General Mitchell areunder indictment, and a chairman of theSecurities and Exchange Commission has re­signed, because of the irregUlarities sur­rounding $200,000 in cash delivered in abrown suitcase to the Committee for the Re­Election of the PresIdent by Robert L. Vesco,the fugitive financier.

The inadequacies of existing laws are wellUlustrated by the fact that when C.RE.P.was found- gUilty on three counts of mis­handling this gift--which even C.R.E.P. ulti­mately found too smelly to keep-the com­mittee could be fined only $1,000 on eachcount. Forfeiting $3,000 after receiving$200,000 is a pretty good exchange in any­body's league.

Now the Cox inquiry Is ordering a specialinvestlation into whether or not methods ofextortion were used by RepUblican fund­raisers in 1972, with corporations havinglegal problems with the Government as spe­cial targets. This investigation also will lookinto allegations that some big Republicancontributors were forced to hand over theirgifts in cash, rather than by check-a prac­'tice that clearly ought to be 1llegal, andwhich ought to have aroused the suspicionsof the contributors and of honest membersof the campaign committee who might havelearned of it.

There seems to be no end to the sugges­tions of shady practices haVing to do with1972 Republican campaign funds. What wasJohn W. Dean 3d doing with $14,000 incash from these funds last fall, and by whatstretch of ethical practice could he or anyonejustify his "borrowing" $4,000 to pay for hisown honey'moon, whether or not he laterrepaid it?

How could a certified public accountantlike Maurice Stans justify even to himself hishaVing had a $55,000 cash fund in lieu ofan official salary from C.R.E.P., or his w1lling­ness to turn over more thousands of con­tributors' cash to Herbert Kalmbach forunstated purposes, and with only Mr. Kalm­bach's verbal assurance that the WhiteHouse had authorized the transaction?

These are not dealings of men much con­cerned with the kind of niceties for whichthe law and the Internal Revenue Servicehold the rest of us accountable.

Until Mr. Dean's honeymoon financingcame to light, it had been generally supposedthat whatever else Watergate represented, itwas not the ordinary kind of graft scandalso frequent in American politics. But may­be it was after all; it is easy to believe thatwith so much cash lying around and so littlestrict accounting in evidence, somebody'spockets besides Gordon Liddy's might havebeen lined.

The Senate investigators now are turningto the question of the possible misuse ofcampaign funds in more .traditional .waysthan paying off, and hiring lawyers for. theWatergate burglars; no wonder, when it hascome to light also, that Fred LaRue, once aspecial assistant to John Mitchell, .rentedhis apartment toa busillessman for whom

<fJuly 25,1973 CONGRESSIONAL' RECORD - SENATE 25989"he "Interceded with the bepartment of Agri.culture and that Mr. LaRue and Mr: Mit­chell. ~hile the' latter was Attorney General,accepted rides on the same businessman'sprivate plane.

All too plainly, and whatever laws mayormay not have been broken. the' sense ofethics of too many highly placed men in theNixon Administration was sadly lacking.That fact. combined with too much moneytoo eagerly given by too many complaintpeople, made Watergate and the coverup pos­sible. and the need· for drastic change Inelection financing evident.

[From the Washington Post, May 5, 1973)PUBLIC FINANCING OF CAMPAIGNS: A DETER­

RENT TO CORRUPTION

(By Clayton Frltchey)Now is the time for all good men, Demo­

crats and Republicans alike, to come to theaid of th~lrparties-byenacting a campaignfinancing bill that will make It Impossiblefor there ever to be another Watergate case.

Now. while the scandal of Mr. Nixon'smultimillion dollar slush fund Is fresh andvivid In the public eye, It is the right mo­ment for the reformers In Congress to move,Who. at this point, would dare to vote againsta true cleanup of campaign financing? Noteven Mr. Nixon would dare veto It.

Several seemingly worthwhile steps weretaken last year by Congress to establishstronger barriers against the corruption andsubversion of the electoral process. but, asIt is all too horribly plain to see. the Nixonforces had no difficulty in circumventing anddebasing the Federal Election CampaIgn Actpassed with such high hopes In 1971.

The lesson of the great expose now goingon Is that the new act simply doesn't workin practice. even though a special agency wascreated to Implement It. This agency andthe General Accounting Office have perform­ed conscientiously.

They have uncovered numerous seriousviolations, and referred them to the JusticeDepartment for prosecution. But what goodIs this If Justice, being Mr. Nixon'S creature,refuses. as It has, to prosec\.lte vigorously?All It has done so far is accuse the Nixonfinance committee of a few derelections, butno .Individuals have been charged or pros­ecuted. The administration has made a trav­estyof the reform act.

Although the statute was supposed tomake everything aboveboard, the Nixon teamsucceeded in creating a record secret slushfund, exceeding $10 million, the full ramifi­cations of which are still not knoWn.

We do know, however, that all kinds ofvested and predatory interests were involv~d.

We know the money was "laundered" byslight-of-hand international transfers, bymoving it around in suitcases containinghundreds of thousands of dollars in $100bills, by illegally failing to report it andby using the hidden cash to finance Water­gate and other criminal actions.

As the American people can now see, theend of this path Is the utter degradation oftheir government. There Is only one certainway of stopping it, and tllat Is for the tax­payers, through outright congressional ap­propriations. to take over the priVilege (theword Is used advisedly) of financing all can­didates for President, Senate and House. Inthe process, private contributions shOUld beoutlawed.

The cost to the pUblic would be about 50cents per person. Surely the country is worththat. Every public opinion poll shows howmuch Americans are concerned over thepresent way of financing political campaigns.In the final analysis, what is the distinctionbetween a. campaign contribution and abribe? Even the.courts have trOUble definingthe difference.

Year after year, Congress holds hearingson campaign reforms, but in the end it al­ways shrinks from the ultimate step of put­ting the responsibility squarely on the tax-

payers, where it belongs. Last year, it experi­mented with what looked like a promising al­ternative-the $1 Checkoff plan-but that.too,like the new anticorruption law, has beena disappointment. There is no more realisticpolltician on Capitol Hill than Sen. RussellLong (D-La.), chairman of the Senate Fi­nance Committee. Foreseeing the loopholesin the 1971 reform act, he proposed publicfinancing of last year's presidential race byletting Americans check off $1 on their in­come taxes to be used for campaign expenses.

It was estimated tllat this would provide$20 million each for the major presidentialcandidates, and substantial sums for minor­ity ones.

This was not acceptable to Mr. Nixon, whorightly figured he could raise two or threetimes that amount from hIs wealthy backers.

The bill was finally passed only by post­poning its effective date to 1976. Since then,Mr. Nixon's Internal Revenue Service hassabotaged the plan by excluding the check­off from the regular income-tax form, andmaking the separate form hard to get. Thellpshot is that the checkoff is not working.

So it's time for congress to go back to thedrawing board. Complicated checkoffs andtax credits are not going to do the job. Theanswer is simple, straightforward appropria­tion of whatever amount Is needed to financefederal campaigns. At the maximum, thiswould be less than one-tenth of 1 per centof what Vietnam cost.

Mr. HART. Mr. President, so in a veryreal sense. from whom a politician raisesfunds during an election campaign candetermine a good part of his agenda dur­ing his term.

It should not be surprising then thatCongress spends more time dealing withthe Penn Central, Lockheed, or Coca­Coho than with trying to feed hungrychildren. And the public's skepticismabout disproportionate access, of course,is not the only evil seen in private financ­ing. We all know that many believe aSenator's votes themselves are deter­mined too often by his need to raise acampaign kitty. We like to tWnk we voteour consciences. But if one person in myState does not believe it for a second andis convinced my vote on a key issueturned on my source of campaign funds,then public faith and confidence in ourpolitical process is diminished,

Multiply that man by hundreds ofthousands of Americans, and we have agood picture of the task we face to re­store public confidence.

If my view is correct. we are left witha choice between trying to sell the pub­lic that public financing of election cam­paigns is a healthy iIi.vestment in ademocracy or trying to convince thehlmgry they would do better if they didmore of their eating at $100-a-platefundraisers.

The first hurdle, then, to any formof meaningful public financing is to con­vince the public that this is not merelya new raid on the Treasury by greedyofficeholders but is, in fact, about as wisean investment as the electorate in a de­mocracy can make.

Congress annually disposes of a Fed­eral budget in the hundreds of billionsof dollars and takes action with tremen­dous impact on a trillion-dollar economy,not to mention the inlpact of our actionson the· incalculable "alues of health,safety. and liberty. Surely in that con­text. public campaign subsidies would bea growth stock investment for everyone.

An equally fundamental· question.

whether in a democracy the ability toraise money should be a prerequisite forrunning for public office.

Ooes the ability to raise money reallyreflect how well a candidate will performhis public duties?

Should the public's choice of candi­dates be limited to those who can secureprivate financial backing?

The answer to both questions mustbe no.

n is time we recognized that when apolitician's success depends on a com­bination of dollars and votes. the Nationis less democratic than if victory de­pended on votes alone.

For these reasons then. I introduced inMarch a bill to provide adequate publicfinancing of Senate and House electioncampaigns.

Admittedly, it is much easier to em­brace this concept with rhetoric than toreduce it to legislative language.

There are many diffiCUlt problems tobe answered-how to screen out frivolouscandidates who seek only free publicity.whether to allow any private giving atall. whether to include primary as well asgeneral elections, and what to do aboutminor parties.

In drawing up my bill I introduced, S.1103, several policy choices were made.Whether others would agree with my res­olution of these issues they require care­ful study and deliberation before we canput forth a public finance bill whichwould best serve the int.erests of theelectorate.

First. First, my bill accepts the premisethat unless public financing is availablefor both primary and general elections,it will not be possible fUlly to free can­didates from the need to raise large sumsof money. I would be hard pressed toexplain to a constituent why I was votingmillions of dollars of public moneys forcampaign subsidies--on the ground thatthis would prevent undue influence onpoliticians-if the plan only extended tothe general elections. For .candidateswould still be faced with the prospect ofsignificant obligation to big contributorsin order to win their party's nominationin the first place. .

Second. Once the decision is reached tocover primaries. then one must wrestlewith the admittedly complex problemof screening out frivolous candidateswithout making it tmduly difficult for alegitimate candidate to qualify for publicfunds. Under my proposal candidatesmust file a security deposit and if theyfail to receive a certain percentage of thevote it is forfeited. Others have offeredproposals for alternative screeningmechanisms. All of these approachesshould be carefully weighed.

Third. Candidates may not wish togamble on receiving the required num­ber of votes. Under my bill they are freeto run a campaign financed entirely byprivate money, subject to whatever re­striction on expenditures or contribu­tions are imposed by other Federal lawsin force at that time.

Others have suggested that publicfinancing should be mandatory for allcandidates. This too is a policy choicewhich should be evaluated carefully bythe Senate.

Fourth. My bill is designed to provide asubsidy adequate to rWl a campaign

CONGRESSIONAL RECORD _.. SEN-An: 'i25990without any private financing at all: Butin order to permit some play for pnvateparticipation in the comp~i~n financeprocess, it would allow subsIdized candi­dates if they choose to raise a supple­ment amount of funds in carefully con­trolled amounts.

There are some proponents of publicfinance who would offer only a floor sub­sidY, with the intent that it not neces­sarily be adequate in itself to run an ef­fective campaign.

On the other side, some would pro­hibit a subsidized major party candidatefrom raising any private funds-exceptfor a marginal amount to pay for startupcosts of qualifying for the subsidy. Theywould permit minor party candidates toraise private funds in order to offset thelarge subsidy received by maj?r ~artycandidates. This is another major ISsuewhich should be explored thoroughly inhearings.

Fifth. My proposal covers only con­gressional elections. Others have intro­duced proposals dealing with the Presi­dential race, and some have offered com­prehensive proposals dealing with both.

In light of the public concern aboutabuses of private financing in connectionwith the 1972 Presidential contest, it maywell be desirable to report a comprehen­sive bill, rather than dealing first onlywith Congress.

Mr. President, since I introduced S.1103, several groups have begun a wide­ranging effort to make public financingof Federal elections a reality. CommonCause has contributed importantly inmany ways-both through public educa­tion and through legislative analysis andcommunication to Members of Congressby their own experts.

I am pleased to report the organizationof a new group, the Center for Public FI­nancing of Elections, dedicated specifical­ly to the goal of public financing of cam­paigns.

I am also pleased to note a number ofmy colleagues who have joined me as co­sponsors of S. 1103 and ask that theybe added to the bill at its next printing.

';I'he cosponsors are:The Senator from South Dakota (Mr.

ABOUREZK), the Senator from Indiana(Mr. BAYH) , the Senator from Delaware(Mr. BIDEN), the Senator from Iowa (Mr.CLARK) , the Senator from Colorado (Mr.HASKELL), the Senator from Maine (Mr.HATHAWAY), the Senator from Minnesota(Mr. HUMPHREY), the Senator fromMontana (Mr. MANSFIELD), the Senatorfrom Maryland (Mr. MATHIAS), the Sen­ator from South Dakota (Mr. Mc­GOVERN), the Senator from Minnesota(Mr. MONDALE), the Senator from Wis­consin (Mr. NELSON), and the Senatorfrom California (Mr. TuNNEY).·

For a full explanation of the bill, I askunanimous consent that a summary ofthe proposal be printed at this point inthe RECORD as if read.

I also ask unanimous consent that anexcellent analysis of some of the con-

stitutional questions raised by limitationson expenditures and contributions inFederal election campaigns be printed inthe RECORD at this point. It was preparedby the campaign reform staff at CommonCause.

In addition, Prof. Albert Rosenthal, ofColumbia Law School, one of the coun­try's leading scholars on the constitu­tional issues of campaign finance refonn,has examined and endorsed S. n03-atleast in its basic approach and operation.I ask consent that his letter be printedalso.

There being no objection, the mate­rial was ordered to be printed in theRECORD, as follows:

EX:HIBIT 2CONGRESSIONAL ELECTION FINANCE ACT OF

1972-SUMMARY OF THE ACTI. BASIC APPROACH

The major purpose is to permit "serious"candidates for Senator or Representative torun without reliance on private contribu­tions, if they so desire.

It is also hoped that. over time, the veryfact that one candidate runs on pUbllcmoney whlle his opponents is running onlarge private contributions wlll itself becomea campal:sn Issue. There should be graduallyincreasing pressure for candidates to taketIle public-funding route.

A secondary goal Is to show that campaignex:pendit\lIeS have spiraled out of hand; todemonstrate that informative, elfectlve cam­paigns can be run for less than Is oftenspent today.

Also, while the subsidy Is Intended to beadequate for a thrifty campaign, some play Isgiven to controlled private financing. Formajor party candidates this would amountto only one-fifth of their total allowable ex:­penditures. The size of the contributionswould be strictly Ilmlted. This "hybrid" ap­proach leaves room for the positive poIlticalInvolvement of fund raising. It also eases theproblem of giving minor party candidatesBmaller subsidies. The minor party candidatecan. be permitted to olIset this dilference byraising more private funds In such amountsthat the total expenditures permitted bothminor and major party candidates remainsequal. Here, the Act demonstrates a way ofeliminating the danger or appearance of un­due lnfiuence by limiting the amount of in­dividual contributions.

II. OPERATIONThe Act would operl;tte as follows:1. A separate fund IS estabIlshed in the

Treasury and a Board is created to admin­ister the Act and to dispense subsidies. Itwould be a seven-member, bipartisan one,with staggered terms.

2. The Board is given general powers todevelop reporting methods and implementtile Act with more detailed regUlations. Tothe greatest extent possible, the Board Is to\ltlIize the reporting, filing and accountingprocedures and the information required bythe 1971 Campaign Reform Act, in order toeliminate duplication and minimize paperwork.

3. The Board has SUbpoena power, can con­duct investigations of possible violations andcan seek court injunctive relief. A candidateaggrieved by Board action can seek a prompthearing and Court review.

4. Candidates "qualify" for subsidieS byfiling a sworn undertaking to comply withthe Act and to pay· a penalty if they faU to

Win 10% of the-voj;e in the election for Whichthe subsidy IS recelv~--.that Js, 10% of allthe votes in. their p!U'tY's primary if It Is aprimary sUbsl~y,~d 10% of the vote for allcandidates, If they receive a subsidy for thegeneral election. I:C they faUto. win even5% they are liable to repay the full.subsidy.These two provisions would deter frivolousor crank candidates Without substantialsupport.

second, they file a security deposit whichIs forfeitable for the payment of this penalty.This security deposit is in the .amount ofone-fifth of the subsidy they are eligible toreceive, with a minimum of $3,000. (See No.8!for limitations pn how this deposit can beraised). However, a successful primary win­ner can roll over his security and use it forhis security In the general election 'I'I1thoutIncreasing the amount, even though the gen­eral election subsidy is somewhat larger.

Third, they submit proof they have quali­fied for the ballot under state law.

Fourth, they supply information on con­tributions and expenditures in connectionwith their candidacy made prior to that date.Expenditures made in the 18-month periodpreceding the date of the general election, orbefore then for goods or services used in thatperiod, and contributions used or still avail­able for such expenditures are covered. Thisprovides a cut-olf for determining how farback, before he files. II candidate's privateexpenditures and contributions will becounted In applying the contribution limitsand InclUded in his overall spending limits.'

5. The Board notifies eligible candidates.It deposits subsidy installments monthly ina separate account which candidates mustset up. The Board may pay the money in un­even amounts upon a reasonable showing bythe candidate for such request.

6. The candidate must open a single Cam­paign Account for the deposit of. the sub­sidy and of all private monies .ralsed. TheBoard Is given periodic reports on all depositsand Withdrawals Ineludlng the source andamount of each contribution. Withdrawalscan only be made by the candidate or any ofup to three individUals he designates, whoalso share legal responsibility with him forcompliance with all provisions of the Act.

7. For calculating subsidies, the Act rec­ognizes three categories of candidates: "ma­jor party," "minor party" and all others.

In Senate races, major party candidatesget a SUbsidy of 10¢ per capita (votlngl).gepopUlation) In the primary ari4 15¢ in thegeneral election. In addition they Jnay raiseprivately 2¢ per capita for the. primary and3¢ !for the general election.

In Michigan, that primary subsidy wouldamount to $587.500; total primary ex:pendi­ture would be limited to $705,000. In thegeneral election the subsidy would be $880,­000; the total ex:penditure permitted wouldbe $1,050,250.

For House races, the subsidy. would be 14¢per capita In the primary and 20¢ per capitaIn the general election.• lnaddltion, candi­dates could raise 3¢ per capita for the pri­mary and 5¢ per .cap~ta .lor the generalelection.. .

In a "typical" DistrIct. (wIth 300,000 votingage population)thll;woul(1 mean a subsidyof $42,000 in the primary with total expendi­ture of $51,000. In the general election, thesubsidy would be $60,000; and the total ex­pendIture permitted would be $75,00.N.B. Any candidate who qualifies to ru111nthe primary ofa major party is enti~led tothese levels of subsIdy In the primary.

Footnotes at end of article.

July 25,:1973' CONGRESSIONAL RECORD- SENATE 25991to the extent he has outstanding campaigndebts.

Third, the candidate can invoke anyoneof several "determining elections" to estab- .lish major party status. A House candidatecould rely upon whichever was his party'sbest Showing among the last H0l.1se race inthat District, or the statewide vote In thelast gUbernatorial campaIgn or the nation­wide vote In the last presidential campaign.A Senate candidate could 'lISe either of thelast two.

14. Participation is all or nothing. If some~one receives subsidies in a primary, he mustremain under the 'Act: and is limited in theamount of private funds he can 'lIse In thegeneral election. Conversely, if he has oper~

ated outside of this Act ill the prlml\ry, he isineligible for subsidies in the general election.

15. There are various safeguardS to pro­mote compliance. Prior to receiving his sec­ond and subsequent SUbsidy illstallriients,the candidate must make available., to theBoard an account of his contributions andexpenditures since the previous report~ (Butremember the Board shall utillze, to the ex­tent possible, information in the form sup­plied under the 1971 Act). In addition, theBoard requires keeping records available anddoes a complete audit of each. candidate'scampaign financing after the election. Pun­ishment for violation in four instances­Willful Violation of the expenditure or thecontribution limits, willful misuse of SUbsidyfunds, or· willful falsification of informa­tion--can be a fine up to the full amount ofthe SUbsidy received and up to five years in 'jail. Other violations could receive a finenot to exceed $10,000 and a jail sentence ofno more than three years,

FOOTNOTES

1 For a November, 1974 election, the periodruns back to May 6, 1973. If a Senate can­didate files for subsidies on January, 1974, helists, expenditures made slncf3 May 6, 1973,or more before then for goods or servicesto be used in connection with the campaignafter May 6. He also must list' contributionsmade since May 6, 1973, and contributionsmade before then which were used or arestlllavallable for such expenditures.

'. A broadcast to the general public put onor paid for by a business organization orunion would not be exempt.

"The bill was prepared with First Amend­ment consideration In mind. Nonetheless, toprohibit a direct contribution for a $60,000T.V. spot because of the danger of undue in­fluence, but then to permit the s'lipporterto decide on its own to purchase the timeand put no such an ad is to exalt form oversubstance. Putting limits on the amount ofindependent activity anyone may undertake,but not including that expenditure in thecandidate's limit on private financing in hiscampaign seems the best compromise tomeet competing considerations. It controlsthe Influence of any group or person. Ita voids the dilemma of either giving the can­didate a veto power over such independentactivity (as is the case under the currentelection law) or putting the candidate atthe mercy of whomever carries on such Inde­pendent activity, even if he would ratheruse the amount of private financing he ispermitted in other, ways. Thus, it preservesto everyone some right of political expres­sion which they can undertake independ­ently, regardless of Whether the candidatehas already used the amount of prh'ate fundshe is permitted and regardless of whetherthe expression they wish to make on thecandidate's behalf "fits in" with his campaignplans.

'All of these provisions apply only to partyfinancing of candidates subsidized underthis bill.

WOUld, in effect, permit the organization toswing the same clout as if it had collected'voluntary' payments and then purchased a.$60,000 spot advertisement as Its own inde­pendent activity."

10. In addition to limitations on privateindividuals and organizations, there is aspecial provision for fund-raising by polit­ical par tics. In their case, the premise Isthat because they are a part of the essentialpoli tical process itself, they may serve as a

,pooling mechanism for private resourceswithout our worrying r.bout their havingundue influence on their party's candidate.This provision is limited to campaign as-

: sistance In the general election only. Na­tional and state party committees must eachset up a single bank account for this pur­pose, which shall be audited by the Board,as are the candidates' campaign accounts.

. No funds can be transferred to it from gen­eral party coffers. The party may only de­

,posit In this account contributions fromindividuals or other organizations in an

,amount not exceeding $100 per person ororganization. From this account the na­tional or state level party committee may,in their discretion, contribute to their nom­inees, for the House or Senate in varyingamounts for each, up to the total of privatefunds each candidate is permitted to use inthat election. Such funds are included In hisover-all expenditures.-

In other words, in the case of parties, thelimit is put 011 the intake side; no one cancontribute more than $250 to these specialparty Congressional campaign accounts.Hence, they cannot be used as a funnel fora wealthy individual nor can the contribu­tions be earmarked for l\ partiCUlar candi­date. On the other end, the party can givethe candidate more than the individualcontribution limits placed on direct givers.Senator Hart could get the entire $200,000permitted him in private funds from theMichigan or National Democratic parties; Inthe case of other organizations, this bill im­poses no limit on the amount which mem­bers may give to the org\lonization's politicalfund, but that organization, in turn, mayonly make the amount of contribution to l\

candidate permitted any indiVidual con­tributor.

11. A "major party" candidate is one whoseparty won 25 % of the vote in a "determining"election (the election uscd by the Act for ,theparty's track record).

12. A minor party is one which won be­tween 10% and 25% of the vote in any "de­termining" election. A minor party candidateis entitled to a minimum ~ubSidyof one-fifththe SUbsidy given a major party candidate.He can receive a greater SUbsidy based on theratio of the vote his party received in thelast general election for that omce to thevotes received by the major party candidatewith the lowest vote in that election.

13. Any candidate not qualifying as eithera major or a minor party candidate wouldreceive a minimum subsidy equal to 1/10thof the subsidy given a major party candidate.He too could receIve a greater amount basedon a ratio of his party's vote in the last gen­eral election for that omce to the votes ob­tained by the major party candidate withthe lowest vote in that general election.

14. However, the difference In the SUbsidygiven to major party candidates and othercandidates is mitigated by three provIsions:

First, minor party candidates may raiseproportionately more private funds, as indi­cated above, so that the total resources eachmay expend remains equal.

Second, if the minor party candidate'sshowing In the election in question is ofmajor party proportions-25% of the vote­then he is entitled to a post-election supple­ment increasing his subsidy after-the-fact

8. The stat\1~makesexplicU that the to­tal eicpenditures a 'candidate makes In con­nection .with his campaign may not exceedthe stirn of (Ii) the subsidy for which he is'eligible, and (b) the amount of private fundshe is permitted to raise.

9. The following limitations are piaced onthe amount of, any individual contributionor independent activity undertaken to in­fluence the outcome of an election:

A. A "person" Includes any individual, cor­poration, partnership, or association, etc; Itsdefinition would include unions.

B. "Contribution" is broadly defined to in­clllde (1) any gift, loan or guarantee ofmoney or anything of vallie, (2) payment ofcompensation for personal services which arerendered to the. candidate or payment forgoods used by the candidate, (3) furnishinggoods or services. wIthout charge or at lessthan the usual rate, or (4) expendituresmade In any other activity undertaken in­dependently of. the candidate's campaign topromote, his candidacy or oppose other can­didates. The definition of "contribution doesnot include: (1) personal services providedwithol.l.t compensation by individual volun­teers, (2) Internal communications by an or­ganization solely. to its membership andtheir families, (3) communications to thegeneral pUblic by an organization which issolely an issue-oriented group, where thecommunication .neither endorses nor op­poses partiCUlar candidates, and (4) normalbUUng credit not exceeding 30 days.

C. For purposes of the limit imposed on theamo'llnt of contribution from any singlesource, 'allcontributlons-and also the can­didate's use of his own and his immediatefamily personal resources-are treated thesame. No "pe1"!10n," whether an individual ororganization can contribute in any way, andno candidate or his agent can accept amountswhich, in the aggregate exceed $250. Contri­butions made fot use hi posting the securitydeposit, for use in' the primary or the gen­eral election campaign, and "contrIbutions"in the form of expenditures undertaken in­dependently 'of the candidate's campaign arecumulative; No person can give, In any of ,these. forms combined, more than $250 to acandidate.

D. Similarly, a candidate's own resourcesand those of his immediate family cannotin the aggregate (that is, combining amountsfrom the candidate's own funds, from hischildren or a sibling, etc.) exceed $250 forhis primary and general election campaignscombined, However, he Is allowed to use anadditional $250 for the security deposit.

E. However, .for purposes of the limit onthe total private funding, a candidate mayuse, two types of contributions are not count­ed. First, the amount posted for security­since it camiot be used in the campaign-isnot included,

Second, "contributions" In the form of ex­penditures for independent activity on be­half of a candidate (as opposed to resourcesin some form or other put at the campaign'sdisposal) which are not undertaken at thesuggestion or request of the candidate arealso excluded. (Although as just noted above,they are covered by the limit on individualcontributions, a'nd for that purpose are cum­ulative with amounts turned over to thecampaign.)

There is an anti-pooling provision, so thatan organization which itself is limited to$250 worth of independent activity, could notalso arrange for all lUi members to expendthe $300 permitted each of them for inde­pendent activity as a fra~tlonal payment ofsay, an expensive broadcast. To permit that

'25992

State

Alabama c c C_"_C_C __ "Alaska _Arizona _Arkansas ._California . __Colorado _Conneclicut ._Delaware . _District 01 Columbia _Florida : _

~:Ow':it:========= ======== ====Idaho • _Illinois • _Indiana _. • _lowa. • _Kansas • _

t:~i's~~~~:-====================Maine . _Maryland_._ c • _Massachuselts. • __. _Michigan • • _Minnesola ._ . . _Mississippi . ._. __MissourL _

CONGRESSIONAL· RECORD D SENATE'} July <25; '1973EXHIBIT 4

AMOUNTS AVAILABLE TO SENATE CANDIDATES UNDER CEfAt

Primary General election Primary General election

Tolal General Tolal general Total General Total generalPrimary primary election election Primary primary election eleclionSUbsid) expendilures subSid) expenditures subsidy expenditures SUbSidr expenditures

(10 cenls (12 cents) (15 cents (18 cents) Stale (10 cents) (12 cents) (15 cenls (18 cenls)

227,000 273,000 341,000 409,000 Montana _____________________ 0 46,000 55,000 69, 000 83, COO20,000 24,000 30,000 36,000 Nebraska ____________________" 102,000 123,000 153,000 184.000

124,000 149,000 186,000 223,000 Nevada ____ •_________________0 35, 000 42,000 52, 000 63,000131,000 157,000 197,000 236,000 New Hampshire_______________~ 52,000 63,000 78, 000 94, 000

1,400,000 1,680, 000 2, lOa, 000 2, 5eO, 000 New Jersey___________ . _______ ~ 503, 000 603, 000 754, 000 '05,000156,000 187, 000 234,000 280, 000 New Mexico__________________ ~ 64, 000 76,000 95, 000 114, 000211, 000 .253,000 316,000 379,000 New York ______________ . ______ 1,280, 000 1,536,000 1,920,000 '2,304, 000

37,OCO 45,OOG 56,000 67,000 North Carohna_________________ 346,000 416,000 519,000 623,00052,000 62, 000 78,000 93,000 Norlh Dakota__________________ 40,000 48,000 60, 000 72,000

511,000 613,000 756,000 919, 000 Dhio __________________________ 719, 000 862, 000 I, 078, 000 1,293, 000310, 000 372, COO 466,000 595,000 Oklahoma _____________________ 181, 000 217, 000 272,000 326, 000

53, 000 64,000 80,000 96, 000 Oregon_______________________ ~ ISO, 000 180,000 225, 000 270, 00048,000 57,000 72,000 86,000 Pennsylvania _________________~ 816, 000 979, 000 1,244, 000 1,469, 000

755,000 906,000 1,132, 000 1,350,000 Rhode IsJand ____________ ._. __ ~ 67,000 81,000 101,000 121, 000360,000 421, 000 526,000 632,000 South Carolina_________________· 171, 000 205, 000 256,000 307, 000190,000 229, 000 285, 000 342, 000 Soulh Dakota_________________~ 43,000 52, 000 65,000 78, 000154, 000 185,000 231, 000 277, 000 Tennessee___________ .:. ________ ~ 271, 000 326, 000 407,000 488, 000221, 000 265, 000 331, 000 397,000 Texas_____________________•__ " 786, 000 922, 000 1,152, 000 1,383,000234, 000 281,000 351, 000 421, 000 Utah_________________________ " 69, 000 83, 000 103, 000 124, 00067,000 80,000 99, 000 120, 000 Vermonl________________ . _____" 31,000 37, 000 46,000 56,000

269, 000 323, 000 403, 000 484, 000 Virginia_____________________ ." 320,000 384, 000 480, 000 575,000396, 000 475,000 593, 000 712, 000 Washington________ •__ •_______ " 237, 000 285, 000 356,000 427,000588,COO 705, 000 880,000 1,050,000 Wesl Virginia. ________________" 118, 000 142, 000 177, 000 213, 000256, 000 307,000 384, 000 461,000 Wisconsin• ., .. _________________ ..: 296, 000 355,000 443, 000 532,000140, 000 168,000 210,000 253, 000 Wyomi ng _____________________ " 23, 000 27, 000 34, 000 41,000327, 000 392,000 490,000 588, 000

'. Every ~andidate would be .eligible 10 receiv~ a minimum 01 $75,000 in Ihe primary and $150,000 in the general election, as subsidy Irom Ihe lund. In addition, every candidale would be eligibleio' raIse a m'OImum 01 $25,000 '" pmale lunds '" the pllmary and $50,000 '" ihe general election. Thus, regardless ollhe ligures on Ihe ahove chart every candidale would have available at least~IOO,OOO to spend," the pllmary and $200,000 to spend in the general election, whatever Ihe size 01 his State. .

COMMON CAUSE MEMORANDUM: ON THE CON­STITUTIONALITY OF CONTRIBUTION AND Ex­PENDITURE LIMITATIONS

Until the enactment of the Federal Elec­tion Campaign Act of 1971, federal law hadcontained contribution and expenditure lim­itations for apprOXimately 60 years, and 29Gtates now have some form of these celllngsIn their corrupt practices acts.' These lawshad as their primary function the dual goalsof (1) reducing the corrupting inliuence otlarge campaign contributions and (2) re­ducing the costs of campaigns thus reducingthe pressures to secretly' evade the llmlt oncontributions.

Enactment of contribution and expendi­ture celllngs poses a number of constitu­tional questions, relating primarlly to thepossible infringement of the First Amend­ment's freedom-ot-speech and freedom-of­association guarantees." Due to virtual non­enforcement in the past of laws containingcontribution and spending cellings, there Isno federal case ruUng indirectly on the con­stitutionallty of such limits, and there isonly one state case construing the valldltyof such celllngs, state v. Kohler, 200 Wis. 518,228 N.W. 895 (1930), in which the WisconsinSupreme Court upheld against constitu­tional attack a statute limiting the amountwhich might be spent by candidates andtheir personal campaign commlttees.- AI­though these constitutional questions meritserious discussion and careful analysis, webeUevethat contribution and expenditurelimits clearly pass constitutional muster un­der existing precedents.

In fact, ceillngs on contributions and ex­penditures foster and protect the exercise ofFirst Amendment freedoms in three ways:(1) they protect the rights of the less afflu­entto express themselves by running foroffice: (2) they help prevent the drowningout of all other poUtical viewpoints by wellfinanced candidates and interest groups; and(3) they enSuretheequal1tyof the votingrights of each citizen by limiting the inliu­encll. on. c~ndidatesof .the large contribu­

.tions..J. . Despite certain Communicative As­

pects, Contributions 01 Money to and Ex­Jienditures of Money by, Political Candidatesl'artake More of Action Than of Speech and

Footnotes at end of article.

May Be Reasonably Regulated Under thePolice Power of the Federal Government.

The proposition that only "speech" andnot "action" Is protected by the First Amend­ment Is now discredited, and it is clear thatthe Amendment at times covers more thansheer verbal communications, See e.g., WestVirginia Board of Education v, Barnette,319 U.S. 624 (1943) (right to refuse to salutenag); Stromberg v. California, 283 U.S. 359(1931) (right to display a red nag); NAACPv. Button, 371 U.S. 415 (1963) (right to so­licit legal business). It is stlli true, how­ever, that the permissibility of regulatingFirst Amendment rights varies with theirmode of expression, and that usually thenonverbal exercise of such rights, particu­larly when joined with acts which are notnecessarlly communicative, is more suscepti­ble to regUlation than Is pure speech. Givingand spending money does not constitute actsof verbal communication. In the words ofProfessor Freund. "We are deallng here notso much with the right of personal expres­sion or even association, but with dollars anddecibels. And just as the volume of soundmay be llmlted by law, so the volume ofdollars may be llmlted without violating theFirst Amendment." •

For First Amendment purposes, givingand spending money is communicative ac­tion with a potential for disrupting normalpolitical processes; in this respect, it is anal­ogous to picketing or demonstrating. In Coxv. Louisiana, 379 U.S. 536, 555 (1965), theSupreme Court "emphatically" rejected thenotion that the First Amendment affordedthe same kind of freedom to those who"communicate Ideas by patrolllng, march­ing, and picketing on streets and highways"as it offers those "who communicate ideasby p\lre speech."The Court upheld the facialconstitutionallty of a Mississippi statutewhich banned picketing In such. a .manneras to obstruct or Interfere with free en­trance to and exit from pUbllc buildings inCameron v, Johnson, 390 U.S. 611 (1968), ItdeClared that such communicative activitywas sufficiently "intertwined" with action tobe regUlatable, and it emphasized that such astatute was "a valid law dealing with con­duct subject to regulation so as to Vindicateimportant interests of society[; I . , . thefact that free speech Is Intermingled withsuch conduct does not bring it within con-

stitutional protection." 390 U.S. at 617. Ina second Cox v. Louisiana case, 379 U.S. 559(1965), the Court upheld against FirstAmendment attack the convictions of de­fendants for Violating state statutes pro­hibiting breach of the peace, obstructingpubllc passages, and picketing near a courthouse: "The conduct which Is the SUbject ofthis statute-piCketing and parading­is subject to regUlation even though inter­twined with expression and association." 379U.S. at 563. The Court's explanation of itsrationale in this case is applicable to thequestion of the permissibility of' limitingcampaign contributions and expendi.tures:"We are not concerned here with such a pureform of expression as newspaper commentor a telegram by a citizen to a publlcofficial. We deal in this case not with freespeech alone, but with expression mixedwith partiCUlar conduct."379 U.S. at 564.See also .Central Hardware Co, v. NationalLabor Relations Board, 407 U.S. 539 (1972);Lloyd Corp. v. Tanner, 407 U.S, 551 (1972).

That not all communicative conduct Isprotected by the First Amendment is clearfrom the Supreme Court's decision in UnitedStates v. O'Brien, 391 U.S. 367 (1968), up­holding the constitutionality of.a provisionof the Selective Service Act which made ita crime to knowingly destroy a SelectiveService registration certificate. The Courtheld that draft card burning was not"symbollc speech'" protected by the FirstAmendment: "We cannot accept the viewthat an apparently limitless variety of con­duct can be labeled 'speech'whenevertheperson engaging in conduct intends therebyto express an idea." 391 U.S. at 376. Campaigncontributions and expenditures are commun­icative only In the sense that burning a draftcard 1s communicative; . all such acts aresubject .to regulation because, .In the wordsof the O'Brien Court, "'speech' and 'non­speech' elements are .comblned In the samecourse of conduct." 391 U.S. a.t 37. The Courtrecently held that a state's prohibition ofvarious forms of explicit sexual entertain­ment· by llve performers in. establis:hmentselling liquor did not Violate the FirstAmendment: .

"[Als the mode of expression·moves fromthe prInted page to the commission of publicacts which may themselves violate validpenal statutes, the scope of permissible state

':.]uly25, 19.73 CONGRESSIONAL; RECORD ..... :. SENA'fE 25993regulationssignlficantlr . increases.· statesmay somet1D\e proscribe expression which isdirected to the accomplishment of an elidwhich •the State haS declared to be megalwhen· such expression CQnsists. iIi part, of·conduct·- or ·action·... California v.· LaRue,41 U.S.L.W. 4039; 4042 (1972).

Many kinds of "communications." such asdeceptive advertising," certain kinds of llbels,the false activation of a burglar alarm, theshouting of "fire" ina crowded theatre (cj.Schenck v. United States, 249 U.s. 47. 61(1919) (Holmes J.») may be cr1D\inalizedwithout violating the FirSt Amendment be­-cause they cause directly or embody them­selves evlls' which·· the· government is au­thorized to prevent. That a reasonable 11D\lta­tlon oncampa1gn contributions and expendi­.tures is not barred by the First Amendmentis indicated by the constitutionality of thefederal anti-bribery law, 18 U.S.C. § 20l(e).OJ. United States v. Brewster, 409 U.S. 601-(1972) (upholding the constitutionality ofthe iIidictment of a senator for soliciting andreceiving a bribe) •. A bribe is certainly a-form of direct and unequivocal "communi­cation." but. no one has seriously suggestedthat the First Amendment protects it. Anti­bribery statutes are constitutional becausethey are aimed at action which. though com­municative. violates notions of public policy.Campaign contributions are all too often as1D\ilar form of buying favors: the donationof money communicates to the candidate theinformation that the donor seeks either adirect qUid pro quo (such as favorable actionby an· administrative agency) or. moreusually. an indirect form of Influence (suchas access or consUltation when certain deci­sions are pending).

II.. There Is ~o Constitutional Right ToMake Unlimited Contributions to a PoliticalCampaign or for a Candidate to Expend asMuch Money as He Chooses iIi an Effort ToBe Elected or Reelected.

In order to foster .. [e]ffectlve advocacy ofboth public and private points of view, par­ticularly controversial ones." NAACP v. Ala­bama, 367 U.s. 449, 460 (1958). the SupremeCourt has recognized an independent con­stitutionality protected right of association.see e.g.,. Louisiana ex rel. Gremillion v.NAAOP, 366 U.S. 293 (1961). In order toa.rgue that a limitation on campaign contri­butions/expenditures is unconstitutionalbecause it infringes this right of associationor violates the. right. to freedom of speechan individual IS directly guaranteed by theFirst Amendment, however, it is necessary todemonstrate that an individual possesses anabsolute discretion to make as large a po­litical campaign contribution or expenditureas he wishes. A number of Supreme Courtholdings establish the power of Congress tolimit, In certain circumstances. the associ­ational rights and the abl11ty to participateIn the political process of certain individualsand groups.

Where the governmental interest Is com­pelllng, the Court has upheld registrationstatutes which require the disclosure of iden­tity of certain Individuals or the disclosureof membership in certain organizations eventhough such disclosure wl1l limit and 1D\pairthe ability of such Individuals and organiza­tions to exercise their political and civilrights. See e.g., Oommunist Party oj theUnited States v. Subversive Activities Con­trol Board, 367 U.S. 1 (1961) (registrationof Communist Party officials and members);

. Viereck v. United States, 318 U.S. 236 (1943)Rabinowit<l v. Kennedy, 376 U.S. 605 (1964)(registration of foreign agents and of activi­ties engaged in on behalf of a foreign prin­clpal); New York ex rei. Bryant v. Zimmer­man, 278 U.S. 63 (1929) (registration of KuKlux Klan members). cases. striking downstate attempts at compelling disclosure ofNAACPmembership lISts (e.g., NAACP v. Ala­bama, 367 U.S. 499 (1958); LOUisiana ex rei.

Footnotes at end of article.

CXIX--I639-Part 20

Gremillion v. NAAOP, 366 U.S. 293 (1961»may be dlstmgulshed on tbe ground that insuch cases,' no valid state interest in dls­clOSUre was evident: In the context of South­ern hostility to civil rights organizations.the true purpose of such laws was the de­struction Of the NAACP.

The compelllng state Interest which cam­paign contribution/expenditure limitationsfoster. was described by. the Court in Bur­Toughs and Cannon v. United StatlJS, 290U.S. 534 (1934). a case which held constltu­'tlonal the disclosure-of-contributors require­ments of the 1925 Corrupt PractiCes Act:"Congress reached the conclusion that pub­lic disclosure. of political contributions. to­gether with the names of contributors andother details, would tend t& prevent the cor­rupt use of money to aJIect elections. Theverity of this conclusion reasonably cannotbe doubted." 290 U.S. at 648. The Court ad­verted to this same rationale when it upheldthe constitutionality of a statute requiringthe registration of lobbyists In United Statesv. Harriss, 347 U.S. 612 (1964): "Congresshas . • • merely prOVided for a modicum ofinformation from those who for hire attemptto influence legislation .•• It wants onlyto know who is being hired, who is puttingup the money. and how much.

"It acted iIi the same sp1rit and for a simi­lar purpose In passing the Federal COrruptPractices Act--to. maintain the integrity ofa basic governmental process." 347 U.S. at625. Although these two cases deal with dis­closure requirements, their rationale is ap­plicable to a law. establishing a ceiling onpol1tical campaign contributions and expend­Itures because the government is aiming atthe same serious evils (corruption, undueinfluence of special Interest groups) and be~

cause the incidental effect of limiting politi­cal participation is also the same. althoughin the former cases it stems simply from theelects of disclosure rather than direct gov­ernmental restraint.

Another line of precedent indicates thatthere Is no constitutional right to quantita­tively unl1D\lted participation in the financ­ing of federal elections. The Supreme Courtbas thrice upheld the validity of the 1925Corrupt Practices Act's flat prohibition ofunion contributions and expenditures In con­nection with political campaign. 18 U.S.C.§ 610, although It has avoided passing uponthe constitutional questions raised by sucha prohibition. United States v. 010. 335 U.S.160 (1948); United States v. UAW, 352 U.S.567 (1967); Pipejitters' Local 562 v. UnitedStates, 407 U.S. 385 (1972). There have beenno Supreme Court cases dealing with § 610'sban on corporate political contributions orexpenditures, but a lower court has upheldthe predecessor of § 610 against constitu­tional attack, United States v. United StatesBrewers' Assn.• 239 F. 163 (W.D. Po.. 1916);but cj., United States v. First National Bankoj Cincinnati, 329 F. Supp. 1251 (S.D. Ohio1971). and Its valldity as applied has alsobeen sustained, although the constitutionalquestion was avoided. United States v. LewisFood 00., 366 F. 2d 710 (CA9 1966). See alsoEgan v. United States, 137 F. 2d 369 (CAS1943) _(upholding constitutionality of Pub­lic Utility Holding Company Act's ban onpolitical contributions by registered publicutility companies) . If an absolute ban on thepolitical activities of groups of individualsorganized into unions and corporations ispermissible. It would seem a fortiori accept­able to set a ceiling on contributions andexpenditures by individuals. It may, ofcourse, be argued that the concentration offunds in organizations makes their contribu­tions and expenditures more susceptible toregUlation than those of individuals. Thereare two answers to thIs argument. however:organizations are themselves entitled to as­sert First Amendment rights. Grosjean v.American Press Co., 297 U.S. 233 (1936);New York Times Co. v. SUllivan, 376 U.S. 254

(196"'), and the assoclatlonal rights protect­ed by the First Amendment have been heldto reach contributors .to oganizatlons, Batesv. City oj Little Rock, 361 U.S. 616 (1961);United States v. Rumely, 345 U.S. 41 (1953).The cases which have risen under § 610 do,therefore, support the constitutional validity.of the proposed contribution/expenditurelimitations because they arise' out of a con­text in which all the First Amendment rightsapplicable to individuals could be asserted.

III. Ceilings on Political Campaign' Con­tributions and Expenditures Are Constitu­tional Because They Are a Reasonable Regu­lation of the Manner in Which First Amend­-ment Rights May Be Exercised.

Campaign finance limitations on contribu­tions and expenditures would not prohibitthe making of political contributions andexpenditures but would instead s1D\ply im­pose limitations on the overall amountswhich could be contributed and spent. Thislegislation would thus be far lesS drastic thanthe fiat prohibition against a union or cor­poration making any campaign contributionsor expenditures contained In 18 U.S.C. § 610."[A]lthough the rights of free speech andassembly are fundamental, they are not intheir nature absolute," Whitney v. California,274 U.S. 357. 373 (1927) (BrandeiS. J •. concur­ring). The Supreme COurt has frequentlyheld that First Amendment rights may bereasonably regulated according to the time,place, and manner of their exercise. Oameron11. Johnson, 390 U.S. 611, 617 (1968); Adderleyv. Florida, 385 U.S: 39,48 (1966); Oox v. NewHampshire, 312 U.S. 569, 574-576 (1941); Coxv. Louisiana, 379 U.S. 636,555 (1965). Theproposed contribution/expenditure· celllngsmay be regarded as simply a nondiscrimina­tory regulation of the manner in which FirstAmendment rights are exercised.

Such limitations are neutral with respectto the content of political expression. Theydo not operate censorially to suppress un­popUlar views. and they do not single outpersons who advocate partiCUlar politiCal be­liefs, or penalize anyone for association withpersons or organizations oriented to suchadvocacy. See e.g., United States v. Robel, 389U.S. 258, 278 (1967); Keyishian v. Board ojRegents, 385 U.S. 589. 604 (1967). Like the"Fairness" and "Equal T1D\e" doctrines en­forced by the Federal Communications Com­mission, the contribution/expenditure lim­itations apply in exactly the same way re­gardless of the viewpoInt sought to be advo­cated or the beliefs of the person making thecontribution or expenditure. See Red LionBroadcasting Co. v. Federal CommunicationsOommission, 395 U.S. 367. 392 (1969). Finally,these celIlngs do not represent a sweepingprohibition of all political expression throughcontributions and expenditures, but insteadmodulate the level of political discourse sothat more voices may participate and so thatweak voices may not be drowned out. Thesecelllngs are unlike the state corrupt practiceslegislation which the Supreme Court unani­mously held unconstitutional in Mills v.Alabama, 384 U.S. 214 (1966). In that case,an Alabama law had made It a crime "to doany electioneering or to solicit any votes ...in support of or in opposition to any proposi­tion that Is being voted on on the day onwhich the election affecting such candidatesor propositions is being held." The statutehad been applied to convict a newspaper edl.tor for writing an editorial on election dayregarding a question on the ballot. The Courtasserted, "no test of reasonableness can savea state law from invalidation as a Violationof the First Amendment when that lawmakes it a crime for a newspaper editor to dono more than urge people to vote one way oranother in a publicly held election." 384 U.s.at 219-220.

It is clearly established that differences inthe media of communication justify differ­ences in the First Amendment standards 'ap­plied to them. Red Lion Broadcasting Co. v.

25994 CONGRESSIONAL RECORD~SENATE July 25, 1973Federa% Communication, supra, at 386;JosepltBuTstyn, Inc. v. Wi%son, 343 U.s. 495,503 (1952). In campaign finance, the mediumof expression is money, and for large con­tributors, the medium is, indeed, the mes­sage. The proposed ceilings on campaign con­tributions and expenditures resemble themunicipal ordinances, regulating soundtrucks upheld in Kovacs v. cooper, 336 U.S.77 (1948) (opinion of Reed J.). see also Oali­fornia v. LaRue, 41 U.S.L.W. 4039, 4042, n. 4(1972). Although there was no majorityopinion in Kovacs, the case was approvedand explicated by a Court majority in RedLion Broadcasting Co. v. Federal Communi­cations Commission, supra, at 387 in lan­guage which might well apply to limitationson private campaign financing:

"[T]he ability of new technology to pro­duce sounds more raucous than those of thehuman, voice justifies restrictions on thesound level, and on the hours and places ofuse, of sound trucks so long as the restric­,tions are reasonable and applied withoutdiscrimination.•.. (T]he Government maylimit the, use of sound-amplifying equip­ment potentially so noisy that It drowns outcivilized private speech.•.. The right offree speech of a broadcaster, the user of asound truck, or any other individual doesnot embrace a right to snllff out the freespeech of others."

See also Associated Press v. United states,326 U.s. I, 20 (1945).

IV. Any Restriction Upon the Exercise ofFirst Amendment Rights Imposed by Limita­tions Upon campaign Contributions and Ex­penditures is Justified by the Compelllng andOverriding Governmental Interest in Preserv­ing the Integrity of the Eiectoral Process andin Preventing the Improper Influence ofMoney on the Decision-Making of Public Of­ficials.

The First Amendment freedoms of speech,,association, press, religion, assembly, andpetition have traditionally been given spe­cial protection because they are the indis­pensable preconditions for the exercise andprotection of all other rights and freedoms.C1trtis Publishing Co. v. Butts, 388 U.S. 130,145 (1967). Although the proposition thatFirst Amendment rights, occupy a "pre­ferred"pOsltlon, see Thomas v. Collins, 323U.S. 516, 530 (1945), has been criticized, see](ovacs v. Cooper, 336 U.S. 77, 00 (1949)(Frankfurter, J. concurring), a number ofconstitutional doctrines indicate the ele­vated and specially protected status of suchrights. Cf., e.g., the "clear and present dan­ger" rule, Brandenburg v.Ohio, 395 U.S. 444,447 (1969); Dennis v. United states, 341 U.S.494, 510 (1950); the overbreadth doctrine,United States v. Robel, 389 U.S. 258, 265-266(1967); negative presumptions, Speiser v.Randall, 357 U.S. 513,526 (1958); the alter­native means test, Aptheker v. Secretary ojState, 378 U.S. 500, 512 (1964). First Amend­ment rights are said to need "breathingspace" to survive, Thomas v. Collins, 323 U.S.,516, 530 (1945), because they are "dellcateand VUlnerable," NAACP v. Button, 371 U.S.415, 433 (1963), and because their exercise,Is easily deterred or "chllled" by governmen­tal action. Dombrowksi v.Pfister, 380 U.S.479, 486-487 (1965).

Therefore the Supreme Court has ruledthat the exercise of First Amendment rightsmay be limited only if the government dem­onstrates . reasons or interests Which are"compel1lng,"NAACP v. Button, supra at438 (1963) ,"sllbstantial," NAAOP v. Alabama,357 U.S. 449, :464. (1958), "subordinating,"Bates V. City of Little Rocl., 361 U.S. 516,524 (1960), .• "paramount," Thomas v. Col­lins, slLpra at 530 (1945), "cogent," Bates v.City of Little Rock, supra, at 524, "strong,"Sherbert v. Verner; 374 U.S. 398, 408 (1963),or "overriding and compelling," Gibson v.Florida State Investigating Oomm., 372 U.S.539, 546 (1963). The Court also requires thatthe means chosen to limit the exercise of

First Amendment rights be. "precise," Key­ishian v. Board Of Regents, 385 U.s. 589, 603(1967), have as narrow an impact as pos­sible, NAACP v. Button, supra, at 430, and notbe vague, overbroad, or indiscriminate intheir sweep, EZForandt v. Russell, 384 U.S. 11,18 (1965); Aptheker v. secretary Of state,supra, at 512. Finally, It must be establishedby the government that no "less drasticmeans" exist which might be alternativelyused to implement the state's interest with­out infringing First Amendment rights.Shelton v. Tucker, 364 U.S. 479, 488 (1960);United States v. Robel, supra, at 265.

Whatever the adjectival test chosen todescribe the nature of the interest which thegovernment must demonstrate in order tolimit the exercise of First Amendment rights,it Is clear from the Court's own language innumerous cases that the preservation of theintegrity of the electoral process from thecorrupting effect of money is a "compe1l1ngand overriding" state interest. There havebeen no Supreme Court holdings dealing di­rectly with the constitutionality of cam­paign contribution/expenditure limitations,but the Court has often asserted that Con­gress has broad authority to protect Ameri­can political institutions against .. the cor­roding effect of money employed in elec­tions by aggregated power": "Speaking broad­ly, what is involved here is the integrity ofour electoral process, and, not less, the re­sponsibility of the Individual citizen for thesuccessful functioning of that process. [Acase involving 18 U.S.C. § 610, banning unionpolitical contributions and expenditures]thus raises issues not less than basic to ademocratic society." United states v. UAW,332 U.S. 567, 582, 570 (1957). The follOWingquotations indicate the high priority andpresumptive constitutionality the Court hasaccorded to laws aimed at preventing fraudand corruption in the electoral process:

"That a government whose essential char­acter is republican, whose executive head andlegislative body are both elective, whose most'numerous and powerful branch of the legis­lature is elected by the people directly, hasno power by appropriate laws to secure thiselection [of the President] from the in­fluence of violence, Of corruption, and ofJraud, is a proposition so startUng to arrest,attention and demand the gravest consider­ation.

"If this government is anything more thana mere aggregation of delegated agents ofother states and governments, each of whichIs superior to the general government, it musthave the power to protect the elections onwhich its existence depends from violenceand corruption.

"If It has not this power it is left help­less before the two great natural and his­torical enemies of all republlcs, open violenceand insidious corruption." '

Ex parte Yarbrough, 110 U.S. 651, 657-658(1884) (emphasis added).

"The Congressional act under review seeksto preserve the purity of presidential andvice presidential elections,

"... ,The President is vested with theexecutive power of the nation. The impor­tanceof his election and the vital characterof its relationship to and effect upon thewelfare and safety of the whole people can­not be too strongly stated. To say that Con~

gress is without power 'to pass appropriatelegislation to safeguard such an election fromthe improper use of money to influence theresult is to deny to the nation in a vital par­ticular the power of self protection. Congress,undoubtediy, possesses that power, as it pos­sesses every other power essential to pre­serve the departments and instit1Ltions ofthe general government from impairment ordestruction, whether threatened by force orby corruption."

Burroughs & Cannon v. United States, 290U.S. 534, 545-548 (1934) (emphasis added)

"It cannot be doubted that these compre­hensive words [of Article I of the Constitu­tion which grant Congress power to regulatethe "times. Places. and manner" of holdingCongressional elections] embrace authorityto provide a complete code for congressionalelections, not only as to times and places,but in relation to notices, registration, super­vision· of voting, protection of voters, pre­vention Of fraud and corrupt practices,counting of votes, duties of inspectors andcanvassers, and making and pubUcation ofelection returns; in short, to enact the nu­merous requirements as to procedure andsafeguards which experience shows are nec­essary in order to enforce the fundamentalright involved."

Smiley v. Holm, 285 U.S. 355, 366 (1932)(emphasis added). See also Ex parte Siebold,100 U.S. 371, 387 (1880) .

It seems clear that ceilings on campaigncontributions and expenditures are not vagueor imprecise. Nor are such prohibitions over·broad because they Indiscriminately suppressactivity Which can be constitutionally for­bidden and that which cannot, cf. UnitedStates v. Robel, supra at 265, althougll ad­mittedly the overbreadth analysis neces­sitates a jUdgment as to the size of contribu­tions which are likely to have a corruptingeffect on tp.e political process. This is anarea in which the Court should properly de­fer to the expertise of Congress, however, asit has done in cases involving other electionlaws. In United States v. Classic, 313 U.S. 299,320 (1941), the Court declared:

.. 'Let the end be legitimate; let it be with­in the scope of the Constitution, and alln1eans which are appropriate, which .areplainly adapted to that end, which are notprohIbited,' but consist with [sic] the letterand spirit of the Constitution, are constitu­tional.' McCulloch v. Maryland, 4 Wheat. 316,421. That principle has been consistently ad­pered to an.d lil,lerally applied, and extends. tothe congressional power byappropi'1ate legis~

lation to safeguard the right of choice by thepeople of representatives in Congress." ,

Finally, there are no alternative meansavailable to accomplish .. the. task of suchcell1ngs, since the very evil which Congressis seeking to extirpate Is the corrupting ef­fect of money. DisclosUre laws alone are notadequate because even if enforced, they willnot prevent large contributors from seekingto influence candidates through their con­tributions. The judgment of Congress thatno alternative means .exist to protect. theelectorial process wlll be given great defer­ence by the Court, particularly in light ofCongress' long experience with ineffectivedisclosure reqnirements:

"The power of congress to protect the elec.tion of President and Vice President fromcorruption being clear, tile choice. of meansto that end presents a question primarily ad­dressedto the judgment of Congress. If it canbe seen that the means adopte<i .are reallycalculated to attain the end, the degree oftheir necesSity, the extent to which they con­duce to the end, the closeness of the relation­ship of the mcansadopted and the end to beattained, are matters for congressional de­termli1ation alone."

BurroughS & Cannon v. United States,supra at 547-548. .. ,

V. Any Restriction Upon the Exercise ofFirst Amendment Rights Imposed by Limi­tations. Upon Campaign Contributions andExpenditures. Is Justifi~dby a Goyernmen­tal Interest In Effectuating the First Amend­ment Rights of Less Affiuent Citizens (1) byProtectil.1g thl) Ability ,of Ev~n Poor Candi­dates to Run for. OJllc~, (2) by Preventing .theprown1ng out of Other Political Viewpointsby tile "Bl)st .Financed Voices, and (3) by En­suring the Equality of the Voting Rights ofLess AJIluent Citizens by Limiting the Influ­ence on Candidates ofAJIluent Contributors.

In. previous sections, the ceUings on cam-

July 25, '1973-1i/

C()NGRESSIONAL'RECORn~">SENATE '25995palgn .contributions and expenditures havebeen defended negatively, In the sense thatthe evils at which such legislation is aimedliave been demonstrated to justify the incl­dental infringement of the First Amendmentrights of contributol'S or. candidates whowanted to give 'or spend more than the cell­Ings allowed. But the campaign finance lim­itations involved here also have an Impor­tant positive impact on the exercise of theFirst Amendment, rights, of' many •citizenswho are not prevented from effectively par­ticipating In the political process. Many lackfinancial reso~cesand this handicaps boththeir ablllty to run for office and their abllityto communicate their views to their electedrepresentatives on an 'equal basis with thoseproviding large contributions. The contribU­tion/expenditure llmltatlons Implement truedemocratic self-government by opening thepolitical, process. to all citizens, regardlessof their personal, wealtIl. As John stuartMlll wrote:

"We need not suppose that when powerresides in an exclusive class, that class, wlllknoWingly and deliberatelY sacrifice the otherclasses to themselves; It s11ffices that, in theabsence of its natural defenders, the Interestof the excluded is always in, danger of beingoverlooked; and, when looked at is seen withdifferent eyes from those of the person whomIt directly concerns."

J. S. Mlll. Consideration on RePresentativeGovernment, 67 (1875).

The proposed campaign finance legislationfosters and protects the exercise of FIrstAmendment freedoms in three ways: (1) Itprotects the rights of the less affiuent to ex­press themselves by running for office; (2)It helps prevent the drowning out of all otherpolitical viewpoints by well financed candi­dates and Interest groups; and (3) It ensuresthe equality of the voting rights of eachcitizen by limiting the influence on candi­dates of the large contributor.

As the costs of campaigning have sky­rocketed, it has become almost an unwrittenamendment to the Constitution that onlythose Americans With money or access to Itmay participate in governing. The questionIs not whether wealthy political representa­tives can provide dedicated and compassion­ate leadership. The point is rather that eachcitizen should have an equal opportunity toparticipate In the electoral process. As theSupreme Court declared In Kramer v. UnionSchooZ District, 395 U.s. 621, 626 (1969),"Any unjustifleddlscrlmlnation in determin­ing who may participate in political affairs. . , undermines the legitimacy of represent­ative government." The government's in­terest in protecting the openness of the pollt­ical process against racial discrimination Iswell established, see 'e.g., Terry v. Adams, 345U.S. 461' (1953); Smith v. Allwrigltt, 321 U.S.649 (1944), and this rationale extends to tlieprevention of other invidious and irrationalextends to the prevention of other invidiousand' Irrational barriers to participation Indemocratic self government. As the Court re­marked In Invalidating the poll tax, "Wealth,like race, creed, or color, is not germane toone's abll1ty to participate intelligently In theelectoral process." Harper v. Virginia B(Xlrcl0/ Elections, 383 U.S. 663, 668 (1966).

As the sound truck case, Kovacs v. Cooper,336 U.S. 77 (1948) (opinion of Reed J.)makes clear, the First Amendment does notguarantee the right of the loudest voice todrown out all others. One authority hasnoted that "the most important effect ofmoney in a political campaign is not that thecandidate With the most money wlll win, butthat the candidate with the lesser amount ofmoney will not be able to present his caseto undecided voters." Lobel, "Federal Con­trol of Campaign Contributions," 61 Minn.L. Rev. 1, 3 (1966). "It is now well estab­lished that the First Amendment protectsthe right to receive Information lind ideas."Stanley v. Georgia, 394 U.S. 557, 564 (1969),

Spending, ceUlngs:help" !lisure" a: balancedfiow of d11ferlng points of, view to t~e public;by keeping any person or group from fiood­ing the media with material advocating asingle point of view,' the 'Umlts prevent acandidate from destroying. by sheer volumeInstead of reason, the effectiveness or thecommunications of other candidates. In or­der to protect the information fiow to the'public, the Government is authorized to actaffirmatively to insure that the First Amend­ment rights of all citizens to receive a varietyof viewpoints are respected. In a medium oftechnological scarCity, such as radio or tele­vision, the government has been allowed toenforce such regUlations as the Fairness andEqual Time doctrines on the ground thatthe publlc has a right "to receive suitableaccess to social, political, esthetic, moral andother ideas and experiences." Red LionBroadcasting Co. v. FCC, 895 U.S. 367, 390(1969). One of the justifications for applyingthe antitrust laws to newspapers has been toprevent a single source from controlling allthe channels of newspaper communicationwith the public:

"It would be strange indeed, however, ifthe grave concern for freedom of the presswhich prompted adoption of the FirstAmendment should be read as a commandthat the government was without power toprotect that freedom. The First Amendment,far from providing an argument against ap­plication of the Sherman Act, here providespowerful reasons, to the contrary. ThatAmendment rests on the assumption thatthe widest possible dissemination of infor­mation from diverse and antagonistic sourcesis essential to the welfare of the public, thata free press Is a condition of a free society,Surely a command that the government it­self shall not Impede the free fiow of ideasdoes not afford nongovernment combina­tions a refuge If they impose restraints uponthe constitutionally guaranteed freedom.Freedom to publish means freedom for alland not for some. Freedom to publish isguaranteed by the Constitution, but free­dom to combine. to keep others from pub­lishing Is not. Freedom of the press fromgovernmental interference under the FirstAmendment does not sanction repression ofthat freedom by private interests. The FirstAmendment affords not the slightest sup­port for the contention that a combinationto restrain trade in news and views has anyconstitutional Immunity."

Associated Press v. United States, 326 U.8.I, 20 (1945). See also Citizen Publishing Co•v. United States, 894 U.S. 131, 139 (1969).

Even the assoclatlonal rights of organiza­tions must give way when necessary to pro­tect the First Amendment rights of free ex­pression of their members. Railtoay Em­ployees' Department v. Hanson, 351 U.S. 225(1956); International Association 0/ Machin­ists v, Street, 367 U.S. 740 (1961); Lathropv. Donohue, 367 U.S. 820 (1961).

Finally, contribution and expenditureceilings will ensure the quality of votes castin primary and general elections, an interestthe Supreme Court has recognized not onlyIn the reapportionment cases, see e,g., Bakerv.Carr, 369 U,S. 186 (1962); Reynolds V.Sims, 377 U.S. 533 (1964), but In cases over­turning state laws that Imposed ~nanclal

burdens (see Harper v. Virginia Board OfElections, 383 U.S. 663 (1966» and propertyqualifications (see City 0/ Phoenix v.Kolodziejski, 399 U.S. 205 (1970); Cipriano v.City of Houma, 395 U,S. 701 (1969» on theright to vote. The Court has asserted that"The right to vote freely for the candidateof one's choice is of the essence of a demo­cratic society, and any restrictions on thatright strike at the heart of representativegovernment," Reynolds v. Sims, supra, at 543,and that "No right is more precious In a freecountry than that of having voice in theelection of those who make the laws underWhich, as good citizens, we must live. Other

rights, even the most basic, aie'musory ifthe right to vote is undermined," Wesberryv, Sanders, 376 US, 1; 17 (1964). Limitationson contributions and expenditures helpequallze the weight of each ballot cast Inmuch the same way as does redistricting toensure that legislative districts have eque,lnumber of voters. Dollars magnify the votingpower of the big contributor. Large dona­tions invariablY buy increased Influenceover and access to candidates, decreasingproportionately the power of smaller contrib­utors to have a candidate meaningfUlly con­sider their views. In addition to effectuatingthe. principle of "one man, one vote," thefinancial realities of campaigning make Itnecessary also to enforce the principle of"$250, (or $500), one person," in order, toassure that some voters are not "more equal"than others in the eyes of candidates orelected officials.

VI. The Proposed Ceilings on Contributionsand Expenditures Do. Not UnconstitutionallyDiscriminate Against Non-Incumbents.

Neither the Constitution nor state statutesanctifies the status of incumbency In thiscountry, and incumbents have no inherentlegal right to a speCially protected position Inany system of. financing campaigns. In dis­cussing the related question of the status ofminor parties the Supreme Court stated: "Alipolitical ideas cannot and' should not bechanneled into the programs of our two ma­jor parties. History has amply proved the vir­tue of political activity by minority, dissidentgroups, who Innumerable times have been inthe vanguard of democratic thought andwhose programs were ultimately accepted .•.The absence of such voices would be a sys­tem of grave lllness In our society." Any ceil­Ings on contributions and expenditures mustbe absolutely neutral vis-a-vis incumbentsand nonincumbents. This does not mean,however, that ceilings are absolutely uncon­stitutional, but it does mean that ceilingsmust be drafted so as not to contribute tothe entrenchment of Incumbents or placespecial obstacles In the path of nonlncum­bents who seek to displace the Incumbents ofthe moment.

The principles of government neutralityare illustrated by two recent Supreme Courtcases, Williams v. Rhodes, 393 U.S. 23 (1968),In which state laws regUlating political par­ties were struck down, and Jenness v. Fort­son, 403 U.S. 431 (1971), In which they wereupheld. In Williams v. Rhodes, supra, theAmerican Independent Party and the Socia­list Labor Party challenged the constitution­ality of certain Ohio laws which required aparty other than the Democrats or the Re­publicans to obtain petitions signed by quali­fied electors totaling 15% of the votes castin the preceding gubernatorial election inorder to win a place on the Presidential bal­lot. Numerous other burdens were Imposed onthe establishment of new parties. In orderto be recognized on a ballot, a party had toelect a county central committee for eachcounty in Ohio and elect a state central com­mittee consisting of two members from eachCongressional district, It had to elect dele­gates to a national convention, and its can­didates for nomination in the primary had tofile petitions signed by qualified electors.Technicalities of state law which disquali­fied persons who had voted in another party'sprimary In the last four years from servingas convention delegates and from signing pri­mary Dominating petitions made the selec­tion of delegates and the collection of peti­tions made the selection of delegates and thecollection of petition signatures extremelydiffiCUlt, The Democrats and the Republicansfaced substantially smaller burdens, sincethey were allowed to retain their ballot posi­tion simply by obtaining 10% of the vote inthe last gubernatorial election and did notneed to obtain any signature petitions to ap'pear on the Presidential ballot.

The Supreme Court held that these restric-

25996 CONGRESSIONAL RECORD-SENATE July 25, 1973tions on minority parties unconstitutionallydenied Equal Protection of the laws to per­sons who wanted to organize themselves intominority parties and to persons who wishedto vote for minority party candidates, be­cause the Ohio laws made it "virtually im­possible," 393 U.s. at 24, 25, for a new politi­cal party, even though it might have hun­dreds of thousands of members, to get itscandidates placed on the Presidential ballot.The Court stated that "the Ohio laws beforeus give the two old, established parties adecided advantage over any new partiesstruggling for existence and thus place sub­stantially unequai burdens on both the rightto vote and the right to associate." 393 U.S.at 31. The rationale of the Court's decisionis contained in the following passage:

"[Ohio] claims that the State may validiypromote a two-party system in order to en­courage compromise and political stability.The fact is, however, that the Ohio systemdoes not merely favor a 'two-party system'; itfavors two particUlar parties-the Republi­cans and the Democrats-and in effect tendsto give them a complete monopoly. Thereis, of course, no reason· why two partiesshould retain a permanent monopoly on theright to have people vote for or against them.Competition in ideas and governmentai poli­cies is at the core of our electoral processand of the First Amendment freedoms."393 U.S. at 31-32. A valid state interestin the prevention of "multitudinous frag­mentary groups" on the ballot was recog­nized but the Court stated that this dangerwas in the instant case no more than "the­oretically imaginable." 393 U.S. at 23.

Jenness v. Fortson, supra, concerned a chal­lenge by the Socialist Workers Party to aGeorgia law which provided that a candidatefor elective public office who did not enterand win a political party's primary (a "po­litical party" was defined as an organizationwhose candidate received 20% or more of thevote at the most recent gubernatorial or pres­idential election) could have his nameprinted on the ballot at the general electiononly if he has fiied a nominating petitionsigned by at least 5 % of the number of regis­tered voters at the last general election forthe office in question. The Court unani­

.mously upheld the Georgia statute, distin­guishing (With less than total clarity) Wil-liams v. Rhodes primarily on the basis thatthe Ohio qualifications were significantlymore restrictive and comprehensive:

"But the Williams case, it is clear, pre­sented a statutory scheme vastly differentfrom the one before us here. Unlike Ohio,Georgia freely provides for write-in votes.Unlike Ohio, Georgia does not require everycandidate to be the nominee of a politicalparty, but fully recognizes independent can­didacies. Unlike Ohio, Georgia does not fixan unreasonably early filing deadline for can­didates not endorsed by established parties.Unlike Ohio, Georgia does not impose upon asmall party or a new party the Proscruteanrequirement of establishing elaborate pri­mary election machinery. Finally, and in sum,Georgia's election laws, unlike Ohio's do notoperate to freeze the political status quo."403 U.S. at 438.

The dispositive factors for the Court wereapparently the fact that the impact of theoverall Georgia scheme did 110t weigh as heav­ily upon the organizational abilities of minor

·parties or independent candidates as did the·Ohio requirements. Also, the Court empha­sized that the major party candidates werenot especiallY favored, since a major partycandidate would have to win a difficult andperhaps costly primary battle to get his nameon the ballot, a barrier which could beroughly approximated to the difficulty of col­lecting the signatures of 5 % of the elector­ate. The Court closed Its opinion with astatement of principle which should be borne

in mind in considering the treatment of non­incumbents in a system of financing cam­paigns which imposes contribution and ex­penditure ceilings.

"The fact is that there are obvious differ­ences in kind between the needs and poten­tials of a. political party with historicallyestablished broad support, on the one hand,and a new or small political organization onthe other. Georgia has not been guilty ofinvidious discrimination in recognizing thesedifferences and providing different routes tothe printed ballot. Sometimes the grossestdiscrimination can lie in treating things thatare different as though they were exactlyalike.

"There is surely an important state inter­est in requiring some preliminary showing ofa significant modicum of support beforeprinting the name of a political organiza­tion's candidate on the ballot-the interest, itno other, in avoiding confusion, deception,and even frustration of the democratic proc­ess at the general election." 403 U.S. at 441­442.

Ceilings on contributions and expendituresdo not in themselves discriminate invidiouslyagainst minority party, independent, or non­incumbent candidates. It is clear that somereasonable balance must be made betweenimposing ceilings which will reduce the cor­rupting influence of money and allowingnonincumbents to raise enough money toeffectiveiy challenge incumbents. If properlydrawn, no special barriers are thrown in thepath of nonincumbents and the standard ofRhodes and Jenness is satisfied.

FOOTNOTES1 Fleishman, "Freedom of Speech and

Equality of Political Opportunity: The Con­stitutionality of the Federal Election Cam­paign Act of 1971," 51 N.C.L. Rev. 389, 450(1974) .

• For a discussion of the constitutional is­sues involved in the regUlation of electioncampaign practices, see Lobei, "Federal Con­trol of Campaign Contributions," 51 Minn.L. Rev. 1 (1966): Fieishman, "Freedom 01Speech and Equality of Political Opportu­nity: The Constitutionality of the FederalElection Campaign Act of 1971," 51 N.CL.Rev. 389 (1973): Rosenthal, Federal Regula­tion oj Campaign Finance: Some Constitu­tional Questions (1971); Redish, "CampaignSpending Laws and the First Amendment,"46 N.Y.U .L. Rev. 900 (1971); Court & Harris,"Free Speech Implications of Campaign Ex­penditure Ceiling," 7 Harv. Civ. R.-Oiv. Lib.Rev. 214 (1972). See also Court & Harris,"Campaign Spending RegUlation: Failure ofthe First Step," 8 lIarv. J. Leg. 640 (1971);Berry & Goldman, "Congress and PublicPolicy: A Study of the Federal ElectionCampaign Act of 1971," 10 Harv. J. Leg. 331(1973); Roady, "Ten Years of Florida's 'WhoGave It-Who Got It' Law," 27 Law & Con­temp. Prob. 434 (1962): Note, "Statutory Reg­ulatlon of Political Campaign Funds," 66Harv. L. Rev. 1259 (1953).

3 Wisconsin Supreme Court declared: "Itis a matter of common knowledge that menof limited financial resources aspire to pub­lic office. It is equally well known that suc­cessfui candidacy often requires them to putthemselves under obligation to those whocontribute financial support. If such a can­didate is successfUl, these obligations may becarried over so that they color and sometimescontrol official action. The evident purpose ofthe act is to free the candidates from thetemptation to accept support on such termsand to place candidates during this periodupon a basis of equality so far as their per­sonal ambitions are concerned, permittingthem, howeYllr, to make an appeal on behalfof the principles for which they stand,' sothat such support as may voluntarily betendered to the candidacy of a person willbe a snpport of principle rather than a per-

sonal Claim upon the candidate's considera­tion shoUld he. be elected. • • • It may bereplied that the act seeks to throw democ­racy back upon itself, and so induce spon­taneous pOlItical action in place of that whichis produced by powerfUl political and grouporganizations." State ex rel. La Follette v.Kohler, 200 Wis. 518, 228 N.W. 895, 912 (1930).

• Commentary of Pro!. PaUl A. Freund, theHarvard Law School, in Rosenthal, FederalRegUlation oj Campaign Finance: Some Con­stitutional Questions, 72 (1971).

• The Court has held that "purely com­mercial advertising" is SUbject to muchgreater regulation than communicationwhich is not inspired by a profit motive, Val­entine v. Chrestensen, 316 U.S. 52, 54 (1942);Breard v. City oj Alexandria, 341 U.S. 622,642, 643 (1951), although the fact that thedissemination of a communication takesplace under commercial auspices does not re­move it from all First Amendment protec­tion. Smith v. California, 361 U.s. 147, 150(1959); New York Times Co. v. SUllit'an, 376U.S. 254, 265-266 (1964). The power of theFCC to ban cigarette advertising from tele­vision has. been upheld, Banzhaf v. FCC, 405F. 2d 1082 (CA DC 1968), cert. denied, 396U.S. 842 (1969). These cases imply that thefederal government has power to require thatpolitical advertising on television and radiObe for certain minimum periods (e.g., 30 sec­onds) , on the theory that very short "spot"ads are (like commercial advertising) in­tended simply to condition rather than in­form and are likely to be somewhat deceptivebecause they convey a simplistic "image" ofa candidate.

COLUMBIA UNIVERSITY,New York, N.Y., May 3, 1973.

BURTON V. WIDES, Esq.,St.aIJ Counsel to Senator Hart, U.S. Senate,

Washington, D.C.DEAR MR. WIDES: I have finally had the time

to read S. 1103, the Congressional ElectionFinance Act of 1973, along with the explana­tory material accompanying' it. It seems tome to be a remarkably successful attempt toeliminate or reduce abuses in the financingof Congressional elections while avoidingor significantly reducing the gravity of theConstitutional qifliculties that. had plaguedprevious proposals intended to deal withthe problem. The ingenuity employedthroughout was most impressive.

Differential funding for minor parties andothers has generally been thought to giverise to serious equal protection issues; never­theless, permitting a candidate to bypassthe subsidy procedure, and also according theoption to obtain a subsidy but supplement itby private contributions up to prescribedlimits, seem in combination so reasonableand fair as to be likely to withstand Consti­tutionalchallenges-especially in the lightof the very serious evils the legislation Isintended to correct..

Similarly, the restrictions on individualcontributions appear justified from tIlestandpoint of eliminating the evil, or atleast the appearance of evil, inherent in de­pendence of candidates upon large contribu­tors. Moreover,. the limit on .contributionsalso offers a creative solution to the apparentdilemma of having to choose among allowingunrestricted "independent" a<:tivity in sup­port. of a. candidate, charging.unwelcomeexpe'nditures to acandidate's Pllrmitted total,or permitting the candidate to assert a vetoon efforts of stich supporters to spend moneyin his behalf.

Finally, the provisions for. posting of asecudtydeposit, and forfeiture thereOf if acertain vote is not obtained,while servingas a deterrent to unknown candidates, canprobably be justified as the only practicablescreening device to distingitlsh, for pur­poses of· subsidy. frivolous from serious

July 25,1978 CONGRESSIONAL,' RECORD-SENATE 25997;candidates--patllcularly at. the primarystage.

It seems to me also that secMon 18(c) ofthe bill adequately disposes of any self­incrimination problems that might haveotherwise arisen out of the conjunction ofreporting requirements and a criminal sanc­tion.

The foregoing, of course, are extremelygeneral observations, and there may be somespecific matterJ that will stlll prove trOUble­some. In general, however, I believe thatSenator Hart and his staff should be con­gratUlated 011 having produced, what ap­pears to me to ,be far and away the mostsuccessful attempt to cleanse the proceduresfor financing elections whlle minimizing thelikelihood of serious Constitutional difficul­ties.

As matters proceed, if there should be anyfurther thoughts that you would like tohave from me, or questions on which I mightbe able to be of assiStance to you, pleasedo not hesitate to call upon me.

Sincerely yours,ALBERT J. ROSENTHAL,

prOfessor Of Law.

Mr. HART. Mr, President, I am grate­ful to the Senator from Iowa. He hasstated correctly the need of an intelli­gent response. I hope we shall be able toachieve it, I close as I opened by thank­ing the Senator from California, not justfor organizing the floor discussion whichis tedious, but also for the great workwhich the Senator has done. He hasgiven very careful study to the variousproposals. Most of all, I think he isable to describe in language that is freeof either traditional expressions of poli­ticians or technical expressions of polit­ical science, language understandable tothe citizens of this country, the value tothem of doing what some may say is per­mitting us as politicians to put our handsinto the treasury and obtain the meansto run for office.

The Senator from California was able,I think very effectively, to make clearthat until treasury funds are used notevery citizen can be conscious that weare his Senator.

Mr. CRANSTON. Mr. President, Ithank the Senator from Michigan forhis very generous remarks.

I thank the Senator for his pioneerwork in this field and for the labor hehas performed this afternoon in carry­ing out much of this discussion. His con­tributions have been tremendous.

Everyone who knows the Senator fromMichigan knows his great integrity.That fact alone will lend great creditto the discussion we have had this after­noon.

Mr. President, I yield now to the Sen­ator from Maryland (Mr. MATHIAS) whohas also done a great deal of work inthis field.

PUBLIC FINANCING IS 'NEEDED NOW

Mr. MATHIAS. Mr. President, I thankthe Senator from California.

Mr. President, novelty is usually con­sidered a dangerous quality in politicalissues, and for some the idea of publicfinancing of elections is a novelty. Infact, it is a well seasoned and carefullyconsidered concept proposed to the Con­gress 66 years ago in the followingstatement:

It is well to provide that corporations shallnot contribute to presidential or national

campaigns and furthermore to provide forthe publication of both contributions andexpenditures. There is however, always dan­ger in laws of this kind, Which from theirV\lry nature are difficult of enforcement: Thedanger being lest they be obeyed only by thehonest, and disobeyed by the unscrupulous,so as to act only asa penalty upon honestmen..There is a very radical measure whichwould, I believe, work a substanltal improve­ment in our system of conducting a cam­paign.

The proposed "radical mea-ure" is pub­lic financing of the major political par­ties. The speaker is President TheodoreRoosevelt delivering his state of theUnion address in 1907,

Like President Roosevelt I have sup­ported the public disclosure of contribu­tions and expenditures in election cam­paigns. I was a sponsor of the bill whichbecame the Federal Elections CampaignAct of 1971, requiring such disclosure forcampaigns for Federal office.

But also like President Roosevelt, Ihave become convinced that such dis­closure has only limited effectiveness,and that the only way to truly reformour system of election campaigns is toprovide for public financing of them,coupled with strict limits on the amountof total expenditures for campaigns andon the amount of individual and groupcontributions.

I believe the public has two interestsat stake to which the issue of publicfinancing relates. First, the public hasan interest in a clean, honest system ofFederal elections. In this regard we wouldwant to remove the corrosive effect ofbig money from our campaigns, thusmaking our elected officials less depend­ent on special interest groups and moreable to respond to the needs and desiresof all of the people they represent. Fur­ther, we would want to control the in­credible growth in campaign expendi­tures, to ensure that elections cannot bepurchased by the candidate who amassesthe largest war chest.

Second, the public has an interest inpromoting vigorous, open electoral con­tests in which all sides have adequate re­sources to put their contrasting viewsand positions before the electorate, inorder that the voters may make an in­formed choice among the alternativespresented.

It might be possible to satisfy one ofthese two interests by means other thanpublic financing. It is my view, however,that public financing is the only way toaccommodate both of these interestsconcurrently.

We would probably be able to controlthe influence of big money and the ag­gregate amounts of campaign expendi­tures by enacting a system of contribu­tion and expenditure limits. Indeed, sucha system is proposed in S. 372, the billbefore us now. If, however, the contribu­tion limits are set low enough to bemeaningful-and, I believe, they shouldbe lower than proposed in the bill-thereis the very real danger that they mayturn out to be an "incumbent protectionsystem." We all know what tremendousadvantages incumbents have already­widespread name recognition, the frank,substantial staff resources, et cetera. If

we placeoJ:l ~top'ot' tlieseadvantagesaset of low contribution limitations, it maybe nearly impossible for a. challenger toraise enough funds to get an adequatehearing for his views.".

The real issue, it se\!ffiS to me" is theequalization of. access to the politicalarena. This Is one of the principles whichwas of great concern to' our FoundingFathers. This ideal was imperfectly metat the birthof our republicand it is im­perfectly met today, but we have madegreat strides toward meeting it duringour history. The great extensions of thefranchise-to blacks, to. women,', andmost recently to our younger, citizens:-;­the abolition of the poll tax, the, directelection of Senators-all of these weredesigned to remove barriers to the par­ticipation of our people in the selectionof their leaders and to equalize controlover political outcomes.

Yet what is the situation with regardto financing of campaigns. Certain indi­viduals and special interest grouPS areable to contribute enormous sums tocandidates for office. Certainly the viewsof these individuals and groups are morelikely to teceive a hearing by the govern­ment than those of people who can con­tribute little or nothing. In effect therich have more votes than the poor, andequality of access to politics and govern­ment is restricted.

Furthermore, incumbent officials byvirtue of their wider recognition 'andtheir already being in office, have a mucheasier time raising funds than do chal­lengers. This larger amount of moneycoupled with the other advantages of in­cumbency, permit such candidates toput their views before the electorate.more often and more effectively thantheir opponents. Again, equality of ac­cess to the political arena is restricted.

Public financing of election campaignswould rectify these imbalances. If can­didates received their campaign fundsfrom the pUblic, elected officials couldrelate to all indiViduals and groupswithin their constituency on an approxi­mately equal footing. If all major candi­dates had approximately the same re­sources at their disposal, all ideas andviews could receive a fair hearing in themarketplace.

I have not spoken of any speciflc pro­posals for a system of public financing.I am cosponsor of two bills, one intro­duced by Senator HART and the other in­troduced by Senator STEVENSON and my­self. Both of these bills, I think, containfeatures which shOUld be included in apublic financing law. The chairman ofthe Rules Committee, Senator CANNON,has promised to hold hearings on theseproposals in September. Such a complexsubject needs full hearings and reflectiveconsideration by the appropriate com­mittees of the Congress.

I hope, however, that once hearings areconclUded, the committee will promptlyreport a proposal to the Senate. The pollsshow that the public favors public fi­nancing of elections by a 2-to-l mar­gin. I hope that the Congress will heedthe wishes of the people and enact.a sys­tem of pUblic financing of all Federalelections before the close of the 93d Con-

25998 CONGRESSIONAL RECORD.7 $~~~'fE J.uly2~, 1973gress.This is an idea \..-hose time hascome.

Mr. CRANSTON. Mr. President, a re­curring problem in our society is the needto scrap and replace historical institu­tions and practices which have becomeoutmoded. And one of the best examplesof an Anlerican way whose time haspassed is our method of paying for polit­ical campaigns.

It may have been all right in the free­swinging, underpopulated, largely agrar­ian democracy of the 19th century tohave our political candidates raise cam­paign money as they saw fit. At worst,the rich got richer and the poor got poor­er and the consequences of corruptiondid not touch the soul of the Americanpeople.

But we are living in a totally differentworld in this the final third of the 20thcentury. Social and economic power hasmushroomed prodigiously. We have theability to destroy the world again andagain. An incipient American dictatorwould find in our Government right nowthe tools for surveillance, for manipu­lation, for control, and for retribution,which exceed even George Orwell's pre­dictions. We have developed corporateconglomerates whose assets dwarf thewealth of nations. Our very Governmenthas grown into an unwieldy behemoth­a power unto itself with no certainty thatanyone is really in charge.

In the struggle to control these vastpower resources, our institutions for gov­erning ourselves-our elected officials­become major targets for those who seekto dominate the system. If we are goingto be successful in keeping our elected of­ficials responsive to the people, we mustbegin with the understanding that gain­ing control of power and not petty thiev­ery is what political corruption meansin the 1970's. And if there was any ques­tion about this before the ruthless misuseof power which the Watergate witnessesare daily testifying to, there should benone now.

The Watergate affair was a gross per­version of our democracy. But it was notan improbable consequence of the waycampaign contributions in the huge sumswe have seen in recent campaigns inevi­tably corrupt the political environment.

When we discuss public financing ofcampaigns, we must begin with the cen­tral and absolute necessity that we endthe pervasively· insidious influence bigmoney has on the democratic process.That is the problem, and other concernslike convenience, cost, and enforcementof various reform proposals are of sec­ondary importance. If the role of the bigcontribution continues to escalate in poli­tics, Watergate will be only the firstchapter in the deterioration of demo­cratic government in the United states.

So when a California taxpayer writesto me about public financing of cam­paigns saying, "Senator CRANSTON, is itnot enough that my taxes go to pay yoursalary? Why should I have to pay foryour election, too?" I respond by saying,"It is not my election, it is your elec­tion. If you want to control it, if you wantthe man you elect to be responsive to youalld your problems, you wlll not mind

paying the couple of dollars a year pub­lic financing will cost you.

"But if you do not care, if you want tocontinue turning our elective process overto the highest bidder, of allowing somefat cat to carve out his piece of yourSenator or Congressman, then you havegot to suffer the consequences, like highertaxes, because wealthy contributors aregetting preferential tax treatment, or likehigher prices because corporate manipu­lation of the econom~' is administrativelyoverlooked or legislatively exempted fromlaws whic:l are supposed to protect theconsumer-in ather words, you.

"Mister taxpayer. you would get that$2 back a hundred times if it was usedto limit the amount of influence anyoneman could acquire with his Senator orCongressman-if it could give the mid­dle-income wage earners and even poorfolks an equal footing in politics with thewealthy."

When I say this to my constituents. Ifully realize that I am conceding that Ifeel the pressures of the system just likeevery other elected official. Some of usyield and succumb to those pressuresmore, some of us less. We all feel them.

The costs of today's political cam­paigning forces a candidate to seekhundreds of thousands and sometimesmillions of dollars from private interests.They may come to you, the candidate, ifyou look like a good bet to win. Butwhether you look like a winner or not,yoU the candidate and your campaignfund raisers must seek them out.

Running for statewide office in Cali­fornia is an extreme illustration of themagnitude of such a fund-raising effort.A Senator from California serves thelargest constituency ever to be repre­sented by a legislator in the history of theworld. Its 21 million people constitute alegislative district where political cam­paigning is big business requiring mil­lions of dollars in a contest between twostrong candidates.

As much as I-along with many ofmy colleagues-would prefer to keep con­tributions small and broadly based, somereliance on the big giver is made politi­cally inescapable for me because of thehuge amount of money needed for a suc­cessful campaign in California. So I entera campaign knowing that I'm going tohave to spend a substantial amount ofmy campaign time seeking out large con­tributors-time that would be more prop­erly spent studying and speaking out onthe issues and seeing and meeting asmany constituents as possible regardlessof their financial status.

It is a fact of life I and other success­ful candidates will have to live with untilwe adopt a rational, healthy system ofelection financing. Such a· system mustinclude support from the public treasuryso that private individual contributionscan be limited sufficiently to end the ad­vantage a wealthy contributor can pres­ently gain-and still provide enoughfunding to insure that the voters will bereached.

The bill befoi'e us, S. 372, is commend­able in its efforts to set limits on privatecontributions. But a $100,000 annual con­tribution or $5,000 to one candidate is

still big money. The average man withhis $12.000 average income can not makea $5,000 contrihution. Even with the pas­sage of S. 372, even as it may be amended.the big contributor will surely still havea substantial advantage over the man inthe street.

The effect of such contributions on thevictorious incumbent is sometimes bla­tant, but usually subtle.

He knows his victory was won in partby the generosity of those individualswho made large donations. He knows whothey are. He remembers their names andthe names of their companies.

If he is an honest man, the incumbentwill not let· big contlibutors determinehow he is going to vote-one way oranother.

But even the honest man finds that hemust give something of himself-his timeand attention to the big giver's COnCe111S,his sympathetic ear, his willingness tointervene when he can do so legitimately.

The officeholder recognizes that whilesome big givers contribute solely for thesake of good government and a belief inthe candidate and his principles, they arein the minority. He knows that the ma­jority of the big givers expect their con­tributions to give them access to anofficeholder. At the least, this access isseen as the ability to drop into his officeanytime for informal visits, as well asthe ability to present their views to theofficeholder before he acts on an issue.

A busy office holder can only see alimited, finite number of people in anyday. He will always do his very best tofit into his schedule someone who was amajor contributor to his campaign. Thismay squeeze out someone who has amuch-perhaps more--to say, but whowas not a big contributor. Thus the con­tributor has a better chance to have ac­cess than the non-contributor. I submitthat this is inevitable-but utterly unfair.

Thus political big money imperceptiblybut inevitably erodes the impartHtlity ofour best men and our best institutions. Ina world where we've suddenly achievedsuch enormous powers to control, to cor­rupt, and to destroy, we must not allowthis erosion to continue.

It seems to me that public financingof campaigns is the only workable alter­native which will permit a low-enoughlimit on private contributions to assureequity for the average American. I willshortly discuss one approach. to publicfinancing which I believe.can achieve theobjectives of campaign finance reform.But before I do, I would like to make ageneral comment on Congress responsi­bility in this area.

I believe that as elected Members ofCongress, we all have a Aloral responsi­bility to tell theAAlerican people. thatthe present system of. campaign, financeimpairs the hlla!th of our democratic in­stitutions.. We are clearlyin the best posi­tion to know the effects of big money inpolitics,y!'e !>hould.ha'Ve the courage totell ~he American peopleho\V. big moneyaffect§l.ls:~. , ... ... .. . : ....'. .

If.. w~. a~ree that. public financing isnecessary, we. have a responslgHity tomake tl;J..at argUlnept, .tothe Americanpeople.• We .. should explain· why publicsupport must jnclude the primary as well

July 25, 1913 CONGRESSIONAL RECORD---SENATE 25999as thegeneral'election. We should ex­plain that if· private contributions areadequately limited,the only alternativesto public finance must inevitably includerestrictions on the candidate's freedomto make his case before the voters.

I think the American people are in themood for honesty. I know they will acceptchange in our method of financing elec­tions if we, who are the products of elec­tions, talk to them honestly about theproblem.

I would now like to tum to the discus­sion of my proposal for public financing,stressing as I do so that the proposal isnot intended to be an amendment to S.372. My discussion is only to comment onthe feasibility of such a financing system.

I propose a public financing programwhich combines limited private contribu­tions with a system of Federal matchingfunds. Under this program, an individ­ual's contributions to anyone candidatefor Federal office would be limited to $250.

In order to participate in the Federalmatching program, a candidate wouldhave to be a legally announced candi­date. Subsequently, he would have toraIse an initial minimum campaign fundthrough private contributions. For sena­torial and congressional candidates, thisinitial fund would be $10,000 and $2,500respectively. Presidential candidateswould have to raise a substantially largerfund of $100,000.

Having met these requirements, a can­didate would be eligible for the Federalmatching 'subsidy where each contribu­tion of $50 or less would be matched byFederal funds.

I propose that all private contributionsas well as the Federal funds under thissystem be deposited in a trust account ina State or National bank. Administrationof the account, which would also includeissuing checks for all campaign expendi­tures, would rest with a bank trust officerappointed by some element of the Fed­eral judiciary.

The great problem with any publicfinancing plan is assuring total account­ability in the disbursement of Federalfunds. One way to do this is by using animpartial trust officer-'-chosen not by thecandidate or by some official in the ex­ecutive branch which can be so politicallymotivated as we have seen in Watergate,but chosen by the judicial branch.

The matching program would workas follows:

The trust officer would submit infor­mation about each contribution and itscontributor to the Federal ElectionsCommission for certification. The com­mission would withhold certification ofthe contribution if the total contributionby the individual in a single year to thecandidate exceeds $50. If the contribu­tion is certified, Federal matching fundsin the ratio of 2 to 1 for the primary, or4 to 1 for the general and special elec­tions, would be sent to the candidate'strust account. That is, for each $50 con­tlibution, the Federal government wouldprovide $100 in matching funds for a pri­mary contest, or $200 for a general elec­tion.

Each candidate would be limited in theamount of Federal subsidy he could ob­tain. Presidential and senatorial candi-

dates could expend up tolO cents perperson ·of voting age per State in a pri­mary and 15 cents per person of votingage in the general election.

Federal matching funds would thus belimited to 6% cents per person of votingage in the primary and 12 cents per per­son of voting age in the general election.

Congressional candidates'entitlementwould be no more than $90,000 for thosefrom States with more than one congres­sional district or $125,000 for those fromStates with a single congressional dis­trict.

Under the matching. program, candi­dates could accept some private contri­butions: those in excess of $50 but lessthan $250 which would not qualify forthe matching program. However, suchcontributions would be severely limited toa total of $5,000 for a congressional can­didate, $20,000 for a senatorial candidate,and $200,000 for a Presidential candidate.

With such tight limits on nonmatchingprivate contributions added to the incen­tives of matching funds, a candidate isencouraged to seek out the small con­tributor, the average workingman. Po­litical infiuence no longer will require thekind of contributions made by AshlandOil or American Airlines, which we haverecently been reading about. It no longerwill require the $2 million contribution ofa Clement Stone. The American workingman and woman will be put on a parwith the executives of the largest corpo­rations, because their $50 contributionbolstered by the Federal matching fundsbecome just as important as what theexecutive can give.

Unlike other public financing propo­sals, my matching program makes nodistinction between the subsidies whichmajor and minor party candidates re­ceive.

The artificial limits which are imposedby other proposals severely hamper theability of minor party candidates. Thoseproposals fail to recognize that in someStates or districts a minor party may be,in fact, the major party, or that somecandidates are able to run successfully asindependents with widespread support.With artificial limits, these candidateswould find it impossible to run a winningcampaign.

My proposal places no restrictions onthe minor party or independent candi­date. He can participate in the matchingprogram as fully as he has a base ofsupport.

Mr. President, we Incumbents have atotally understandable desire to protectourselves. We would be less than humanif we did not.

But we also know that equal opportu­nity is the very essence of democracy­and that the protection of equal oppor­tunity for all Americans supersedes theimportance of protecting ourselves assuccessful incumbents.

I say this to my fellow incumbents:We have overwhelming advantages al­ready, quite apart from the rnatter ofmoney. Some of these advantages-suchas the name recognition that comes frompublic service-cannot be affected by anyform of legislation. But if we insistupon maintalning-or expanding andstrengthening-the money-raising ad-

vantages. we already possess, we will, inthe light of the overwhelming and obvi­ous need for reform, betray. our trust.And, actually, I am convinced we wouldonly be postponing the inevitable-forreform will come in respOnse to whatwill become an unyielding demand for itfrom the people we represent and I pre­dict that more than one of those. incum­bents who stands in its path will be sweptaside-and out.

What have our careers in public lifemeant if we permit self-interest to domi­nate our actions on this most crucial ofissues?

And make no mistake-ending ourelectoral system's dependence on largeprivate donations may be the most cru­cial issue of our time since it will be thedetermining factor in how we resolve allof the other problems we face as a Na­tion. The issue goes to the very heart ofhow our democracy works and to whetherour freedoms will survive.

The Constitution is silent on politicalparties and on how campaigns are con­ducted-creating what has become anexposed, vital gap in our protections tothe functioning of our democratic proc­ess. We must fill that gap with safe­guards comparable to those we providefor other aspects of the democraticprocess.

In the early days of the Republic, therewere no such vast sums for campaigning.

When Abraham Lincoln ran for Con­gress in 1846, his supporters raised $200for his campaign.

He won-and gave back $199.25, say­ing:

I did not need the money. I made the can­vass on my own horse; my entertainment,being at the houses of friends, cost me noth­ing; and my only outlay was 75 cents for abarrel of cider, which some farmhands in­sisted I shOUld treat to.

Lincoln's concern with the barrel ofcider is enviable. He did not have toworry about TV spots, computerized massmailings, whistle stopping by jet, $1,000a plate dinners, or the other superchromeparaphernalia of today's campaigns.And, as President, Lincoln did not haveto be concerned with instant nuclearstrike, multinational corporations, so­phisticated surveillance devices, a mediapotential for infiuencing if not control­ling the minds of m111ions of Americans,nor even the income tax.

Mr. President, public financing of elec­tive campaigns is made necessary by to­day's circumstances in today's world.

Mr. HASKELL. Mr. President, briefiyI wish to associate myself with the re­marks on this important matter by mydistinguished colleague. .

I would make an additional point-inmy opinion public financing would helpthe challenger rather than the incum­bent.

I say this from personal experience. Itis far more difficult for the challengerto raise money for a campaign and pub­lic financing clearly removes this dis­advantage, and then makes the electionfairer.

Mr. BIDEN. Mr. President, on behalfof the distinguished Senator from SouthDakota (Mr. ABOUREZK), who is absenton official business, I ask unanimous con-

26000 CONGRESSIONAL RECORD -,SENATE 'July ~5, t978sent that a statement by him I'elating toi;ampaign spending limitations be printedjnthe RECORD.

The PRESIDING OFFICER. Withoutobjection, it is so ordered.

STATEMENT BY SENATOR ABouREZKI regret very much that I am unable to

take part personally In thls colloquy on asubject which I feel Is as 1mportant as anyfacing this Congress, and I appreciate verymuch Senator Biden's courtesy In introduc­ing this statement into the Record on mybehalf.

Rather than repeating all of tile pointsWhich I know will be discussed thoroughlYby the distinguished participants in this col·loquy, I would like to look briefly I\t thequestion of overall campaign spending ceil­ings as they relate to the public financingof Federal elections.

As Senators know S. 372, which is beforethe Senate today, proposes an overall cellingon campaign expenditures. This question ofsupposedly excessive campaign spending, andthe llmitatlon of such spending, has becomealmost the keystone of reform nllnded con·sideratlon of the campaign flnancing prob­lem.

I feel very strongly that excessive spending1s not the heart of the problem, Myopic con­cern with this one area creates a false illusionof reform. Simple enactment of a celling lsnot an adequate response to the problems weface. It may, in fact, be a step backwardsif not coupled with other Important re­forms.

In order to see why a spending ceiling alonecannot, do the job, we need only keep oureye on the real problem with our present sys­tem of campaign financing. That problemis that the ablllty to ralse needed campaignmoney on the one hand, and to give moneyon the other hand, is possessed by candidates,individuals, and Interest groups in no ration­al relation to their abillty, or to their num­ber.

Becal1se incumbents are better able toralse funds than nonincumbents, becausewealthy individuals are better able to givemoney than POOl' individuals, and becauserich or tightly organized groups are betterable to raise and direct contributions thanal'e pOOl' or disorganized groups, campaigncontributions become a serious distortingfactor working against tho one man on6vote model on which our system l·ests.

In addition to this distortion of influence,the present system creates the certain ap­pearance, and too frequent reality, that bigcontributors are buying influence with theircontributions.

By clamping a ceillng on campaign spend­ing we may limit somewhat the amounts ofmoney that a candidate must raise. But thislimitation wlll do nothing to change thefact that what money is raised must comefrom the same private sources that have al­ways contributed. It wlll do nothing tochange the fact that incumbents are farbetter able to raise money f1'0111 thesesmlrces than are non-incumbents. It wllJ donothing to change the fact that politicianswlll still be beholden to the men and groupsthat give them their money. And it will donothlllg to change the fact that scores ofcapable men and women stay out of electivepolitics precisely because they cannot, or arenot willing to, engage in fund mising underthe present system.

Other portions of S. 372, and the amend­ments that wlll be offered to S. 372, go alittle more directly toward the problem ofmoney in politics. But these provisions, deal­ing with limits on the size of indiddual andgroup contributions, still seem to me to skirtthe real problem.

So long as paUtical fundraising remainsUttie more than a system of organized beg­ging, we are going to have problems. Beg­gal'S are always beholden to those who sup-

port them. They live poorly, on the edge ofpoverty, and In constant fear that theirbenefactor may cut them off.

Unlike a simple ceillng, pUblic financingwould replace politically charged private con·trlbutions with politically neuter pUbllcmoney. It would eliminate the temptationto corruption. It would insure that aU seriouscandidates are able to run at least a decentrace. It would save incumbents the demean­Ing. time consuming, and sometimes com­promising task of touching their friends forcampaign funds while at the same t1me per­mitting challengers a fair opportunity tostate their case.

Without publiC financing a spending cell­ing is dangerously open to the charge thatit is nothing more than an incumbent's re­election bill. It eliminates the possiblllty ofthe occasional heaVily financed glamourchalienge to an Incumbent while preservingthe more normal incumbent's advantage infund raising and also increasing the realvalue of the incumbent's ollicial privlleges.

I am sure I value my office as much asmost others. But I also share what I think Isa Widespread concern In thls body for thereputation and effectiveness of the office wehold.

For this Congress to enact an Incumbent'sre-election blll as its only response to thewatergate would be dlsastrous. It would re­duce the credibll1ty of all pollticians fromlittle to absolutely nothing. It would weakenus In everyone of our important and legiti­mate contests with this or any future execu­tive. It would, In short, assure us of win­ning back the prize of office only at the ex­pense of grossly devaluating the office itself.

On the other hand, a spending cellingcoupled with public finanCing makes emin­ent good sense.

The spending celllng would be an assur­ance to the public that their tax dollarswould not be added to unllmited privatecontributions and result In nothing morethan costller campaigns. It would also bean assurance to incumbents that a mlllion­aire challenger could not try to buy theiroffice out from under them.

The public financing would be an assur­ance to the public that their elected officialshave not been bought by special Interests.It would also assure Incumbents and chal­lengers alUte that they will have modest.but adequate amounts of money availableto state their case to the voters.

For a per person charge of about the costof a couple of McDonald's hamburgers thevoting public can buy back into electivepolitics. For the psychic cost of perhaps thetiniest increase in the posslbUlty of futuredefeat each of us can Increase immenselythe influence and the Integrity of hls ownoffice. I think It is a good deal. I urge thatwe back up our support for the celllngs ofS. 372 with support for public financing atthe very earliest possible date.

Mr. KENNEDY. Mr. President, I ampleased to join in this colloquy on publicfinancing. Senator HUGH SCOTT and Ihave offered an amendment to the pend­ing legislation to provide pulbic financingfor Senate and House elections. and toprohibit private fmancing for majorparty candidiates in all Federal elec­tions, presidential as well as congres­sional.

Under terms of the amendment, pUb­lic funds will be available to candidatesof major parties in Senate and Houseelections, based on a formula allocating20 cents for each voter in the jurisdic­tion in which the election is to be held.in accord with the spending ceiling pro­visions of S. 372. Candidates of ininorparties will be entitled to public ftindsunder two approaches-either in propor-

tion .t{) the party's showing in the pastelection. or·,. retroactively, on the basisof its showing in current election.. .

The provision prohibiting private fi­nancing by major party candidates al­lo\\'s minor party candidates to use pri­vate funds to reach the level of spendingof major party candidates. In addition,the amendment applies only to generaland special elections, not to primariesand runoffs, which will continue to be fi­nanced by private funds.

Under existing law, future Presiden­tial election campaigns will be financedby public funds through the so-called"dollar checkof," by which taxpayers in­dicate on their tax forms that $1 oftheir tax liability, or $2 on a joint re­tUTI1, is to go into a general fund forfinancing Presidential campaigns. Theamendment I have introduced with thedistinguished Senator from Pennsyl­vania does not involve the tax form, butin other respects, our proposal for Senateand House elections closely follows thelaw already applicable to Presidentialelections.

Mr. President, the most obvious lessonof Watergate is the corrosive power ofmoney in politics. At a single stroke, byenacting a program of public financingfor Fede!'al elections, we can shut offthe underground rivers of private moneythat pollute politics at every level of theFederal Government. If Watergate hastaught us anything, it is that disclosureis not enough. that sunlight jg not anadequate disinfectant for the infectiouspower of money in political campaigns.

As everyone knows, the United Stateshas the best political system that moneycan buy, and it is a disgrace to the prin­ciples on which our Republic stands.Congress has already gone part way. Al­ready, public funds will be available un­der existing law to finance the Presi­dential election campaign in 1976. Thetime has come to take the next greatstep toward open and honest govern­ment.

The time is now ripe-indeed over­ripe-to eliminate private financing inour national elections and to apply theclear, simple principle of PUblic financ­ing to all Federal elections. Only in thatmanner can we drive the money chang­ers from the temple of Federal politics.

I am honored and delighted to workwith Senator HUGH SCOTT in a biparti­san effort to reach this goal. The Sena­tor from Pennsylvania has been an out­standing leader of legislation in manyareas of election reform. I am pleasedto join with him on this new effort, whichoffers such enormous benefit to Amer­icans concerned about the quality of ourGovernment, and I urge the Senate toaccept the amendment. we have intro­duced.

Mr. President, I ask unanimous con­sent that ,a detailed summary of ouramendment may be printed in the REC­ORD.

There being no objection, the sum­mary was ordered to be printed in theRECORD, !lsfollows:PUBLIC FINANCING FOR FEDERAL ELECTIONS,

PRINCIPAL PROVISIONS

1. The amendment adds a new title, the"Congressional Election Call1paign Fund Act,"to tile Federal EJection Code. The new Act

July 25, ·1973 CONGRESSIONAV RECORD,........ SENATE 26001provIdes publlc'1inanclng. for Senate andHouse electIons, and Is modeled closely onSenator .Russell Long's Presidential ElectIonCampaign Fund Act•. passed by Congress In1971 and atn.ended.ln 1973, which providespubliC financing for Presidential. electionsunder existing law,·

2. It provides publlc funds for generalandspecIal elections for the senate and House,but not for primariesor run-off elections.

3. It makes public financing m~ndatory forsenate and House eiections. Thus. it bars theoption Of private fipanciIig by major candi­dates. However,a candidate of a major partymay \lse privatefllnds to make up a. deficitIn hIs entitlement of pUbllc funds. A candi~

date of a minor party or a new party may useprivate funds only· to reach the level of en­titlement of major party candidates.

4. It also bars. the option of private finan­clng for Presld~ntialelectlons.This Is theonly change made by the amendment in theoperation of the dollar check~off in existinglaw.- which .offerspubllc financing as analternative to private financing for Presi­dential elections;

5. Constitutional and parliamentary con­siderations indicate that specific amend~

ments to the Internal Revenue Code may notbe In order on sena.te-orlglnated bllls suchas S. 372. Therefore, the. amendment simplyapplies the basic principles of the provi­slon13 of thedollar.cbeck-off to Senate andHouse eiections. Except as provided In tbissummary, the provisions afthe amendmentlor Congressional elections are essentiallyIdentical to.· ~he.. provisions of the. dollarcheck-off applicable to Presidentiai elections.

6. The amendment establishes a Congres­sional Election Campaign Fund on the booksof the Treasury, to be funded out of generalappropriation acts· of Congress; and fromwhich public funds will be made avallable toeligible candidates.

7. Unlike the dollar check~off, the fundfor CongressIonal elections does not Involvethe tax form. However. amendments to thecheck-off on the Debt Celling Act of July 1.1973. have now eliminated tbe so-called "spe­cial" accounts. and have left only a "general"account to be allocated by formula amongPresidential candidates. As a reSUlt. the Pres­Idential· Election Campaign Fund In presentlaw Is now closely slmllar to the Congres­sional Election Campaign Fund to be estab­lISbed by the amendment.

8. The amendment follows tbe basic for­mula In the dollar check-off for allocatingpublic funds among candidates of major andminor parties. but cbangesthe entitlementto 201' a voter, In accord with the spendingcelllngs in S. 372.

9. A candidll.te of a "major party"-a partythat received 25% or more of tbe total num­ber of popUlar votes received by all candi­dates for the office In. the preceding elec­tion-is entitled to receive putillc funds inthe amount of 201' per eligible voter.

10. Acapdidate . of a "minor party"-aparty that received more than 5% but lessthan 25% of the popUlar vote In the preced­ing election-Is .. entitled to receive pUblicfunds In proportion to his share of tbe voteIn the preceding election. A candidate of aminor party may Increase his entitlement onthe basis of his performance In the currentelection.

11. A candidate of a "new party"-a partythat is not a major party or a minor party­Is entitled to receive pUblic funds In propor­tion to his share Of the popUlar vote In thecurrent election, if he receives more than 5%of the vote in tbe election.

12. Public funds wUl be a\'allable for ex­penditures made by a candidate of a majorparty during the period beginning with the

'see the "Presidential Election CampalgnFund Act," PL, 92,-178. 85 st~t. 497, 562,-575(December 10, 197:l.h as amended by theDebt Ceiling Act, PL. 93~3. 87 Stat. 134,138-139 (July I, 1973).

date on which the party nominates It~ can­didate and ending 30 days after the election.public funds will be available for candidatesof other parties during the sbortest period Inwhich they are available to a candidate of amajor party.

13. Individuals or committees not author­ized by a candidate may not spend more tban$1,000 during the campaign on behalf of thecandidate of a party eligible for public funds.

14. The program will be administered bytbe new Federal Election Commission, to beestablished by S. 372; A Congressional Elec­tion Campaign Fund Advisory Board Is cre­ated to advise the Commission In the per­formance of its duties.

15. Tbe program will go into effect for the1976 Congressional elections.

Mr. CRANSTON. Mr. President. I willend our colloquy on this matter at thistime. i yield back whatever time Ihaveremaining that was yielded to me for thispurpose.

Mr. President. I suggest the absenceof a quorum.

The PRESIDING OFFICER. The clerkwill call the roll.

The legislative clerk proceeded to callthe roll.

Mr. CRANSTON. Mr. President, I askunanimous consent that the order forthe quorum call be rescinded.

The PRESIDING OFFICER. Withoutobjection. it is so ordered.

AMENDMENT OF SMALLBUSINESS ACT

Mr. CRANSTON. Mr, President. I askthe Chair to lay before the Senate a mes­sage from the House of Representativeson S. 1672.

The PRESIDING OFFICER (Mr. HUD­DLESTON) laid before the Senate theamendment of the House of Representa­tives to the bill (S. 1672) to amend theSmall Business Act which· was to strikeout all after the enacting clause. andinsert:

AUTHORIZATIoNSEcrION 1. Paragraph (4) of section 4(c)

of the Small Business Act is arnended-(1) by striking out "$4,300,000,000" and

inserting in lieu thereof "$6.600,000,000",(2) by striking out "$500,000,000" where

it appears in clause (B) and inserting inlieu thereof "$725,000,000";

(3) by striking out "$500,000,000" whereIt appears in clause (C) and inserting inlieu thereof "$600,000,000"; and

(4) by striking out "$350,000,000" and In­serting in lieu tbereof "$475,000,000".

LOANS TO MEET REGULATORY STANDARDSSEC. 2. (a) Section 7(b) (5) of tbe Small

Business Act is amended to read as follows:"(5) to make such loans (either directly

or In cooperation with banks or other lend­Ing institutions througb agreements to par- .tlcipate on an Immediate or deferred basis)as the Administration may determine to benecessary or appropriate to assist any smallbusiness concern In effecting additions to oralterations In its plant, facllltles, or methodsof operation to meet requirements imposedon such concern pursuant to any Federal law,any State law enacted In conformity there­With, or any regUlation or order of a dUlyauthorized Federal, State, regional, or localagency issued In conformity with such Fed­eral law, if the Administration determinesthat such concern Is likely to suffer sub­stantll!l economic Injury without assIStanceunder this paragraph: Prot'ided, That themaximum loan made to any small businessconcern under this paragraph shall not ex­ceed the maximum loan which, under ntlesor regulations prescribed by tbe Admlnls-

tratlon, may be made to any business enter~

prise under paragraph (1). of this subsection;and"..

(b) (1) Section 7(b) (6) of the Small Busi-ness Act is repealed. .. ._.

(2) Paragraph (7) .. of such. section 7(b) . Isredesignated as paragraph (6).

(c) Section 28(d) of· tbe •OccupationalSafety and Health Act of 1970 (Public Law91-596) Is amended by striking out "7(b)(6)" and Inserting in lieu thereof "7(b) (5)".(d) In no case shallthe Interest rate charged

for loans to meet. regulatory standards. belower tban loans made· in connection withphysical dlsasters.-

CONFOaMING TECHNICAL AMENDMEN'l'SSEC. 3. (a) Subsection (g) of section 7 of

the Small Business Act. as added by section3(b) of tbe Small Business Investment ActAmendments of 1972. Is redesignated as sub~

section (h), -(b) Subsection (c) of section 4 of the Small

Business Act is amended by striking out"7(g)" each place It appears In paragraphS(1) (B), (2). and (4) and Inserting in lieuthereat "7(h) ".

DISASTER LOANSSEC. 4. (a) The second paragraph follow­

ing the numbered paragraphs of section7(b) of the Small Business Act is amendedby striking out "July 1. 1973," the first timeit appears therein and Inserting in lieuthereof "July I, 1975,",

(b) SUbparagraph (D) of the·second para­graph follOWing tbe numbered paragraphs ofsection 7(b) of the Small Business Act Isamended by striking out clauses (i) and (ll)and inserting In lleu thereof the following:"with respect to a loan made in connectionwith a disaster occurring on or after April20, 1973, but prior to July 1. 1975. and not­withstanding section 9 of Public Law 93-240,the Small Business Administration shall. atthe option of the borrower. either· cancel$2,500 of the loan and make the balance ofSUCb loan at an Interest rate of 3 per centumper annum, or make the entire loan at aninterest rate of 1 per centum per annum.In tbe event of the refinancing of a home ora business. the monthly payments after tberefinancing shall in no· case be lower thanSUCb payments prior. to the disaster,".

LIVESTOCK LOANSSEC. 5. Section 7(b) (4) of the Small Busi­

ness Act Is amended by inserting before thesemicolon at the end tbereof the following:": Provided, That loans under this paragraphinclude loans to persons who are engagedin the business of raising llvestock (includ­ing but not limited to cattle, hogs, and poul­try). and who suffer substantial economicinjury as a result of anima! disease".

EaosION ASSISTANCESEC. 6. Section 7(b) (1) of the Small Busi­

ness Act Is amended by inserting "erosiondirectly related to a flood. high water or tidalwave," Immediately atter ..floods....

LOANS FOR ADJUSTMENT ASSISTANCE INBASE CLOSINGS

SEC. 7. Section 7(b) of the Small BusinessAct Is amended by adding after paragraph(6) tbe following new paragrapb:

"(7) to make such loans (either directly orIn cooperation with banks or other lendingInstitutions through agreements to par­ticipate on an Immediate or deferred basis)as the Administration may determine to benecessary or appropriate to assist any smallbusinesS concern in continuing in businessat Its existing location. in reestablishing Itsbusiness, In purCbasing a new business. or Inestablisbing a new business if the Admlnls­tratlm1 determines that such concern hassuffered or wlll suffer substantial economicinjury as the result of the closing by tbeFederal Government of a major military In­stallation under the jurisdiction of the De­partment of Defense. or as a result of a severereduction in the scope and size of operationsat a major military installation."