-Close the loopholes in the Federal laws regulating lobbying. -Assure the right to vote for millions of Americans who change their residences. II. THE ELECTION REFORM ACT OF 1967 In our democracy, politics is the instrument which sustains our institutions and keeps them strong and free. The laws which govern political activity should be constantly reviewed-and reshaped when necessary to preserve the essential health and vitality of the political process which is so fundmental to our way of life. In my 1966 State of the Union message I called attention to the need for a basic reform of the laws governing political campaigns in these words: 66 I will submit legislation to revise the present unrealistic restrictions on contributions to prohibit the endless proliferation of committees, bringing local and state committees under the act-and to attach strong teeth and severe penalties to the requirement of full disclosure of contributions. A year ago this month, I submitted my proposals to the Congress in the Election Reform Act of 1966. That measure reflected my concern, as one who has been involved in the process of elective Government for over three decades, that the laws dealing with election campaigns have not kept pace with the times. The Federal Corrupt Practices Act was passed 42 years ago. The Hatch Act was passed 27 years ago. Inadequate in their scope when enacted, they are now obsolete. More loophole than law, they invite evasion and circumvention. A sweeping overhaul of the laws governing election campaigns should no longer be delayed. Basic reform-with an emphasis on clear and straightforward disclosure-is essential to insure public confidence and involvement in the political process. On the cornerstone of disclosure we can build toward further reform-by charting new ways to broaden the base of financial support for candidates and parties in election campaigns. I again ask the Congress to take positive action in this field as we work together to insure continued and increased public confidence in the elective process. I recommend the Election Reform Act of 1967 to correct omissions, loopholes, and shortcomings in the present campaign laws. This Act embodies many of the same positive measures I proposed last May. Last October, after hearings, the subcommittee on Elections of the Committee on House Administration reported out substantially the bill I proposed "favorably and with bipartisan support." The Subcommittee Report called those measures vast improvement over existing law." Full Public Disclosure a The heart of basic reform is full disclosure. This measure would, for the first time, make effective the past efforts of the Congress and the Executive to achieve full disclosure of political campaign funds. Complete disclosure will open to public view where campaign money comes from and how it is spent. Such disclosure will help dispel the growth of public skepticism which surrounds the present methods of financing political campaigns. Full disclosure efforts are frustrated today by gaps in the law through which have passed an endless stream of national, state and local political committees. To insure full disclosure, I recommend that: -Every candidate, including those for the Presidency and Vice Presidency, and every committee, state, interstate, and national, that supports a candidate for federal office be required to report on every contribution, loan and expense item over $100. -Primaries and convention nomination contests be brought within the disclosure laws. Effective Ceilings on the Size of Contributions Closely related to full disclosure-the basic step in any election reform-is another equally demanding task. It requires that we make political financing more democratic by recognizing that great wealth-in reality or appearancecould be used to achieve undue political influence. Current law limits to $5,000 contributions to a single candidate for federal office or contributions to any national political committee supporting a candidate. But the law does not prohibit an individual from making a $5,000 contribution to each of several national committees supporting a candidate or party-and there is no limit to the number of such committees. Moreover, state and local political committees are not even covered by existing law. I recommend that a $5,000 limit be placed on the total amount that could come from any individual, his wife or minor children, to the campaign of any candidate. Repeal of Artificial Limits of Campaign Expenses With full disclosure and an effective ceiling on contributions we can move forward to cure another defect in our election campaign laws-the artificial limits on campaign expenditures. Under present law, for example: -National political committees can raise and spend no more than $3 million. But the law does not limit the number of national committees. -Senate candidates are limited to expenses of $25,000 and House candidates to $5,000. But the law does not limit the number of committees that can spend and raise money on the candidate's behalf. These legal ceilings on expenditures were enacted many years ago, when the potential of radio in a campaign was virtually unknown and when television did not exist. They are totally unrealistic and inadequate. They have led to the endless proliferation of political committees. I therefore recommend a repeal of the present arbitrary limits on the total expenditures of candidates for federal office. Barring Political Contributions by Government Contractors Present law prohibits corporations and labor organizations from making contributions to campaigns for federal office. But there is an anomaly which must be corrected in the law relating to contractors with the Federal Government. Non-corporate Government contractors are now prohibited from making political contributions at all levels of Government-federal, state and local. The bar on corporations with government contracts, however, extends only to political contributions at the federal level. These corporations are free to make political contributions at the state and local levels where finances are often intertwined with national political campaigns. In the interests of consistency and good sense, I recommend that corporations holding contracts with the Federal Government also be prohibited from making political contributions at the state and local level. Enforcement To insure that these reforms are strictly enforced, the Election Reform Act of 1967 would provide criminal penalties for violations of the law. III. CAMPAIGN FINANCING The proposed Election Reform Act of 1967 is corrective, remedying present inadequacies in the law. It goes hand in hand with the pursuit of another goal-to provide public support for election campaigns. The Background Democracy rests on the voice of the people. Whatever blunts the clear expression of that voice is a threat to democratic government. In this century one phenomenon in particular poses such a threat—the soaring costs of political campaigns. Historically, candidates for public office in this country have always relied upon private contributions to finance their campaigns. But in the last few decades, technology-which has changed so much of our national life—has modified the nature of political campaigning as well. Radio, television, and the airplane have brought sweeping new dimensions and costs to the concept of political candidacy. In many ways these changes have worked to the decided advantage of the American people. They have served to bring the candidates and the issues before virtually every voting citizen. They have contributed immeasurably to the political education of the nation. In another way, however, they have worked to the opposite effect by increasing the costs of campaigning to spectacular proportions. Costs of such magnitude can have serious consequences for our democracy: -More and more, men and women of limited means may refrain from running for public office. Private wealth increasingly becomes an artificial and unrealistic arbiter of qualifications, and the source of public leadership is thus severely narrowed. -Increases in the size of individual contributions create uneasiness in the minds of the public. Actually, the exercise of undue influence occurs infrequently. Nonetheless, the circumstance in which a candidate is obligated to rely on sizable contributions easily creates the impression that influence is at work. This impression-however unfounded it might be-is itself intolerable, for it erodes public confidence in the democratic order. -The necessity of acquiring substantial funds to finance campaigns diverts a candidate's attention from his public obligations and detracts from his energetic exposition of the issues. -The growing importance of large contributions serves to deter the search for small ones, and thus effectively narrows the base of financial support. This is exactly the opposite of what a democratic society should strive to achieve. It is extremely difficult to devise a program which completely eliminates these undesirable consequences without inhibiting robust campaigning and the freedom of every American fully to participate in the elective process. I believe that our ultimate goal should be to finance the total expense for this vital function of our democracy with public funds, and to prohibit the use or acceptance of money from private sources. We have virtually no experience upon which to base such a program. Its risks and uncertainties are formidable. I believe, however, that we are ready to make a beginning. We should proceed with all prudence speed to enact those parts of such a program which appear to be feasible at this time. The Problem PRESIDENTIAL CAMPAIGNS The election of a President is the highest expression of the free choice of the American people. It is the most visible level of politics—and also the most expensive. For their free choice to be exercised wisely, the people must be fully informed about the opposing candidates and issues. To achieve this, candidates and parties must have the funds to bring their platforms and programs to the people. Yet, as we have seen, the costs of campaigning are skyrocketing. This imposes extreme and heavy financial burdens on party and candidate alike, creating a potential for danger-the possibility that men of great wealth could achieve undue political influence through large contributions. In recognition of this problem, the Congress last year enacted the Presidential Election Campaign Fund Act. By so doing, it adopted the central concept that some form of public financing of Presidential campaigns would serve the public interest. I did not submit or recommend this legislation. It was the creation and the product of the Congress in 1966. As you will recall, it was added as an amendment to other essential legislation. When I signed that Act into law last November, I observed that "it breaks new ground in the financing of Presidential election campaigns" and that the "new law is only a beginning." It was my belief then, as it is now, that the complex issues involved in this new concept required extensive discussion and penetrating analysis. Over the past six weeks, we have heard men of deep principle and firm conviction engage in a spirited and searching debate on the law. While there were honest and vigorous disagreements, they were voiced by those who share a common faith in the free ideals which are the bedrock of our democracy. The Issues The course of the debate has illuminated many of the issues which underlie the matter of Presidential campaign financing. For example: -In what amount should Federal funds be provided for these campaigns? -What limitations should be placed on the use of these funds? -Should there be a complete bar on the use of private contributions for those aspects of campaign financing which would be regularly provided through appropriations? -Can the availability of public funds result in an undue concentration of power in National Political Committees. If so, what steps can be taken to prevent it? -Is the tax check-off method a sound approach or is a direct appropriation to be preferred? -How can equitable treatment of minor parties be assured? -What sanctions would be most effective to insure compliance with the law? -Whatever the ultimate formula, how can we preserve the independence, spirit and spontaneity that has hallmarked American political enterprise through the years? The Recommendations Against this backdrop of concern for the political process, the protection of the public interest, and the issues that have been raised, I make these eleven recommendations to improve and strengthen the Presidential Election Campaign Fund Act: 1. Funds to finance Presidential campaigns should be provided by direct Congressional appropriation, rather than determined by individual tax check-off. This approach would: -Provide the opportunity for Congress to make a realistic assessment, and express its judgment, of what it would cost Presidential candidates or parties to carry their views to the voters. This assessment should consider the recommendations of the special Advisory Board to the Comptroller General, created under the Presidential Election Campaign Fund Act. The Board consists of representatives of both major political parties. Based on this review and recommendation, Congress could then appropriate the necessary funds. -Make the amount appropriated for the campaign fund more stable, by removing its uncertain reliance on tax check-offs, whose numbers might bear no reasonable relationship to the amount required to bring the issues before the public. 2. The funds should be used only for expenses which are needed to bring the issues before the public. Under the procedure I recommend: -The funds so appropriated would be used to reimburse specified expenditures incurred during the Presidential election campaign itself, after the parties have selected their candidate. -The amount appropriated should be adequate to defray key items of 3. Private contributions for major parties could not be used for those items of expense to which public funds could be applied. Private contributions, however, could be used to defray the cost of other campaign expenses. These would include the salaries of campaign workers, overhead, research and polls, telegraph and telephone, postage and administrative expenses. Citizens who want to make contributions to the party or candidate of their choice will be free to do so. Party workers at the grass roots will be able to pursue their neighborhood activities, a responsibility which is deeply woven into the fabric of American political tradition. But under the measures I have proposed, the major burden of raising money for soaring campaign costs will be lifted from a Presidential candidate's shoulders. No longer will we have to rely on the large contributions of wealthy and powerful interests. 4. A “major party" should be defined as one which received 25% or more of the polular votes cast in the last election. A percentage-of-votes test is more realistic than the fixed number of votes (15 million) now in the present law. It recognizes our growing population with more Americans entering the voting ranks each year. 5. A "minor party' should be defined as one which received between 5% and 25% of the popular votes cast in the current election. For the same reasons I described above, the eligibility test for Federal support should not be based on a fixed number of votes (5 million for "minor parties" in the current law), but rather on the percentage of votes received. Third party movements can support the rich diversity of American political life. At the same time some reasonable limitations should be developed so that Federal financial incentives are not made available to parties lacking a modicum of public support or created solely to receive Government funds. Under this proposal, "minor parties" would receive payments based on the number of votes they receive in the current election. The payment for each vote received by a minor party would then be determined so as to be the equivalent of that made to the major parties. For example, assume that two major parties received a total of 80 million votes in a prior election, and Congress had appropriated a $40 million campaign fund for those two parties. Although the major parties would share equally in that fund ($20 million each), the allocation would amount to 50 cents per vote cast for those parties. Using the 50 cents per vote as the guideline, a minor party receiving 5 million votes in the current election would be entitled to $2.5 million for its recognized campaign expenses. 6. A "minor party" should be eligible for reimbursement promptly following an election. A "minor party" should be able to qualify promptly for federal funds, based on its showing in the current election, rather than waiting four years until the next election. This added source of funds should enhance a minor party's opportunity to bring its programs and platforms into the public arena. 7. The percentage of federal funds received by a major or minor party which could be used in any one state should be limited to 140 percent of the percentage the population of that state bears to the population of the country. This would prevent the concentration of funds in any particular State and would minimize the ability of national party officials to reduce the role and effectiveness of local political organizations. At the same time, it would retain the flexibility necessary to carry a party's programs to the public. The Comptroller General should be empowered to issue rules for the equitable allocation, on a geographic basis, for national campaign expenses, such as network television. 8. The Comptroller General should be required to make a full report to the Congress as soon as practicable after each Presidential election. This report should include: -payments made to each party from the fund; -expenses incurred by each party; any misuse of the funds. 9. The Comptroller General should be given clear authority to audit the expenses of Presidential campaigns. It is imperative that the strictest controls be exercised to safeguard the public interest. The General Accounting Office is the arm of the Government which I believe is best suited to monitor the expenditures of the fund. Payments from the fund would be made only upon the submission of certified vouchers to the Comptroller General, If the Comptroller General's audit reveals any improper use of funds, the following sanctions would be applied: -the amounts involved would have to be repaid to the Treasury; and -if the misuse is willful, a penalty of up to 50 percent of the amount involved would be imposed. 10. To bring greater wisdom and experience to the administration of the act, the Comptroller General's special Advisory Board on the Presidential Election Campaign Fund should be expanded from 7 to 11 members. This Advisory Board is faced with a heavy and demanding task. It must "counsel and assist" the Comptroller General in the performance of his duties under the Act. The membership of the Board now consists of two members from each major political party and three additional members. I recommend that the Board be enlarged to encompass the wisdom and experience of 4 distinguished Americans: -The Majority Leader of the Senate -The Minority Leader of the Senate -The Speaker of the House of Representatives 11. Criminal penalties should be applied for the willful misuse of payments received under the Act by any person with custody of the funds. The penalties should be a fine of not more than $10,000, or 5 years imprisonment, or both. Criminal penalties would also be applied against any person who makes a false claim or statement for the purpose of obtaining funds under the Act. OTHER CAMPAIGN FINANCING We should also seek ways to provide some form of public support for Congressional, state and local political primaries and campaigns. Here, the need is no less acute than at the Presidential level. But the problems involved are as complex as the elections themselves, which vary from district to district and contest to contest. Because the uncertainties in this area are so very great, and because the issues have not received the benefit of the extensive debate that has characterized |