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Bonus Chapter: Soft Money and Cold Hard Cash: How Campaign Finance Affects the Election

The second oldest profession and its resemblance to the first, as Ronald Reagan put it, is alive and well in the 2004 presidential election campaign. Chris Katsaropoulos talks about campaign finance and how it will affect the upcoming U.S. Presidential election.
This chapter is from the book

"Politics is supposed to be the second oldest profession. I have come to realize that it bears a very close resemblance to the first."

—Ronald Reagan

The second oldest profession and its resemblance to the first, as Ronald Reagan put it, is alive and well in the 2004 presidential election campaign.

George W. Bush has raised more than $215 million dollars to fund his re-election campaign, and John Kerry has raised more than $148 million. In 1996, the total spent by both parties—combined—on the presidential campaign was $116 million.

And the totals for 2004 don't include money spent by political action committees and so-called "527s"—special interest groups and issue advocacy groups that will contribute millions more to the campaign in the form of indirect funding and TV ads.

The Second Oldest Profession

Buying influence through campaign contributions has been around as long as American politics. Various laws have been passed through the years to try and curb the influence of campaign donors on the politicians they elect, but the issue came to a head in 1971, when the Federal Election Campaign Act (FECA) was passed. Spending for the 1972 campaign peaked at $366 million by both parties combined.

FECA defines strict rules regulating campaign donations, including limits on how much individuals and corporations could donate to any one candidate or party. It also regulates how candidates can spend their money.

Laugh Track

"Bush's campaign bus is a technological marvel. It gets $2 million per gallon."

—David Letterman

More Loophole Than Law

Like all the campaign finance laws passed before it, FECA had loopholes that the parties quickly discovered and exploited. The Watergate investigations uncovered a variety of instances of influence-peddling by President Nixon.

But the problem existed long before Nixon. President Johnson admitted in 1967 that the older laws were "more loophole than law," and Teddy Roosevelt proposed in 1905 that "all contributions by corporations to any political committee or for any political purpose should be forbidden by law."

Such restrictions sound good in principle but have been impossible to achieve in practice. And the Supreme Court has ruled against many of the attempts to limit contributions, characterizing them as violations of the First Amendment right to free speech.

CREEP—Committee to Re-Elect the President

They called it the Committee to Re-Elect the President (CREEP), but the acronym they used said more about the way they operated. CREEP was set up to operate as a shadow finance organization for Nixon's 1972 campaign. It went about its business behind the scenes and outside the control of the official Republican Party election campaign committee.

CREEP acquired millions in laundered campaign funds, much of it in exchange for political favors ranging from naming contributors as ambassadors to foreign countries to raising the price of milk in return for $2 million from the Milk Producers Association.

This type of influence-peddling was not uncommon. It was the reason for the 1971 reform initiatives in the Federal Election Campaign Act—legislation that was passed before the '72 campaign. But CREEP took the corruption to another level.

The Committee used its funding to launch a series of covert and subversive operations on George McGovern's campaign—and anyone else who was suspected of being against President Nixon.

Nixon Chief of Staff H.R. Haldeman ordered operatives to scour the tax returns of McGovern and his staff in an effort to find any information they could use against him. They also conducted similar searches on reporters who were considered to be unfriendly to the president.

The ultimate debacle for CREEP—the one that brought down the Nixon administration and our nation's confidence in its leaders—was breaking into the offices of the Democratic National Committee headquarters at the Watergate hotel and office complex in Washington, D.C.

In the early-morning hours of June 17, 1972, a security guard at the Watergate complex discovered several members of CREEP cowering behind office furniture in the Democratic campaign headquarters, holding cameras, bugging devices, and lock-picking tools. They were led by former CIA operatives James McCord and E. Howard Hunt, along with White House "plumber" G. Gordon Liddy.

This so-called "third-rate burglary," as Nixon first described it in his efforts to shrug it off and deny responsibility, ultimately brought Nixon down. He was successful in spinning aside the crisis long enough to win the election later that year, but the cover-up and the subsequent investigation into the inner workings of Nixon's administration were so damaging that Nixon was eventually pried from office under the threat of impeachment.

The damage CREEP did has far outlasted the Nixon administration. It has infected our public dialogue about politics and undermined our faith in the politicians who represent us.

But perhaps the most lasting impact of CREEP has been to shed light on the shady, behind-the-scenes dealing that can result from big-money campaign fundraising.

Efforts to control the excesses and abuses of PACs and other shadow organizations through campaign finance reform laws are somewhat like computer security software companies working against viruses and hackers: a noble but never-ending quest.

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