[The statements referred follow:] STATEMENT OF HON. JAMES ABOUREZK, A U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA Mr. Chairman, I would like to open simply by expressing my personal appre ciation that your Subcommittee has moved so quickly to hold hearings on the question of public financing of Federal campaigns. I have been strongly in favor of public financing since about the first day had to go out and try to raise campaign money. I think that process is demean ing, corrupting, and absolutely without any redeeming value. I reject the argu ment that ability to raise money is somehow related to a man's public support or his likely effectiveness as a legislator. The ability to raise money is related to the wealth of your political friends and your ability to win battles for them. If you are an incumbent or a champion of some well heeled special interest then you get money. If you are not, then you don't. With a few exceptions that serve to prove the rule, that is the way things are today. I am sure that you have heard, and will be hearing, from scores of witnesses about the faults of our present system of funding campaigns and about the gen eralized need for public financing. Instead of covering that well-covered area again I would like to talk about a single policy question concerning the kind of public financing we might adopt. The question is one of the knottiest in the area It is the question as to whether primary elections ought to be covered by public financing. I feel very strongly that they should be. A public financing law, whether it be through matching funds, through direct grants, through free services, or vouchers, or any other device, is virtually useless if it does not cover primaries. The reason is obvious. If special interest contributions are corrupting, if they favor certain types of candidates, if they give unfair influence to certain types of interest, then they do these things in all elections, not just in general elections. It is patently obvious to every politician that you can't get elected unless you first get nominated. If you mortgage yourself in order to win nomination you are obviously just as mortgaged as you would be if you waited until the general election. It may well be that the kind of corrupting influence public financing is supposed to prevent would increase under legislation that covered only general elections. Primaries are the point of greatest vulnerability to questionable campaign contributions. It is during the primary that a candidate is hardest pressed to raise money. It is during the primary that a little extra money can achieve the greatest electoral effect and win the largest IOU from the candidate. If special interests targetted all of their funds on primary elections I believe they could frequently insure that the winning candidates of both major parties would be deeply in their debt. In order to see how effective large private primary contributions could be, you need only ask any successful politician what particular financial help he values above any he has received in his career. Almost always the answer will come back that the money that helped him most was the early primary contribution in his very first race. The refrain is certainly familiar to all of us here. "So and so has become one of my closest friends. He helped me back when I really needed it. In those days nobody had ever heard of me and I couldn't raise a dime." is the way most candidates would put it. If the people who give that crucial early money are big special interest donors looking for a place to spend the money they can no longer give in general elections, then our political system will certainly be no better off than it is now. Mr. Chairman, I am aware that public funding in primaries will require careful guidelines and close regulation. But I think that the fine piece of legislation drafted by Senator Hart, S. 1103, shows that this job can be done. Much is sometimes made of the fact that any public financing law containing formulas for disbursing funds to primary candidates would of necessity contain some fairly complicated sets of criteria. I frankly do not think this is a terribly big problem. If it were necessary that the general public understand every aspect of the will inquire to see whether he can qualify. Once he does this istering the public funding system would surely have no diffi material that would explain the system in terms he could re For all of the reasons I have outlined, and from my own per stinct and experience, I really believe that public financing wh primary elections would be a sham. I hope very much that t will write a strong public funding law covering primaries a enactment of this law just as soon as possible. Mr. Chairman, I want to thank you again for calling these permitting me the chance to appear. STATEMENT OF HON. RICHARD S. SCHWEIKER, A U.S. SENAT Mr. Chairman, I am delighted by the swift action this subcon to hold hearings on public financing of elections. This is a re has come, and I want to express my support for action during gress in this area. Earlier this year, the Senate passed S. 372, a comprehensiv act. This act drastically improved upon the campaign reporti law that we enacted in 1971, and builds on election experience s went into effect in April 1972. S. 372 tightens up the reporti laws, and adds spending and contribution limits. I am hopefu enact a similar measure. With enactment of spending and contribution limits, we can proceed to a third step-public financing of campaigns. It wo justify public financing at the same time that a candidate coul additional unlimited funds. But now that we are on the verge of spending and contribution controls in our campaign system, it i use of private money through a system of public financing of The purpose of public financing of election campaigns is to holder from the dangers and pressures of conflicts of interest campaign contributors. The Watergate hearings have demonstra influence that large money can have on campaigns and the c We must take steps to eliminate even the potential abuses of contributions by eliminating the need for huge private donat the taxpayer will be minimal, a small price to pay to help gu free good government on the part of all elected officials. At these hearings today, Senator Cranston, 28 other Sena presenting to the committee a statement of general principles campaign financing. We emphasize that we do not all necessaril point. Nor do we expect that every provision would necessari cluded in legislation recommended by this committee or a Senate. However, it indicates the strong conviction on the par third of the Senate that public financing of campaigns is a de Hopefully, the momentum generated by this statement of prin and a majority of the Senate will approve a public financing bill. Mr. Chairman, I have introduced along with Senator Mondal public financing of campaigns, S. 2238, the "Presidential Cam Act of 1973." Although this bill was referred to the Senate Fin its provisions and its principles, I believe, will be of interest to t evaluating the general subject of campaign reform through pu would like to close by requesting that my July 24, 1973 intro which describes this bill in greater detail, be included in the following this statement. STATEMENT BY SENATOR SCHWEIKER UPON INTRODUCTION OF MON "PRESIDENTIAL CAMPAIGN FINANCING ACT OF 1973' I am pleased to join the Senator from Minnesota, Senator M ducing a comprehensive new plan to use public financing for Pres and general elections. Congress and the courts have taken many steps during the pa sure that political representation of all neonle reflects princinh the body admin. ulty sending him dily understand sonal political in ch does not cover is Subcommittee ad will push for hearings and fe = FROM THE mittee has taken orm whose time he current Conelection reform = and disclosure nce the 1971 law and disclosure the House will ow realistically d be difficult to raise and spend putting realistic Feasible to limit mpaigns. move the office favors to large d the corrosive paign process vate campaign s. The cost to antee interest rs and I are the subject of agree on every have to be inToved by the of nearly oneable objective. les will grow, legislation for gn Financing ze Committee. committee in e financing. I tory remarks earing record E-SCHWEIKES lale, in introntial primary decade to in"one-man Campaign costs have skyrocketed in recent years, creaung a climate wher office-seekers too often become dependent on large contributions to wage thei campaigns. The shocking revelations of Watergate clearly indicate we must tak dramatic steps to eliminate the corrosive effect of large contributions from ou election process. Our public financing bill is designed to strengthen our Presidential politica election system through the following principles: 1. it provides a substantial campaign financial base for a candidate from public funds 2. it encourages small contributions of $100 or less from individual contributors and imposes contribution limits 3. it sets up reasonable campaign spending ceilings. For Presidential general elections, there would be a $30 million spending limit two-thirds of which would be financed from the existing income tax check-of plan. For primary elections, there would be a $15 million spending limit, one-hal of which would be financed from a new special treasury fund to provide match ing payments for individual contributions of $100 or less to each candidate Increases would be allowed in the amount of tax credits and tax deductions for contributions of $100 or less to help encourage small contributions by more in dividuals. This would enable a candidate to easily raise the difference betweer the spending limitations and the treasury funds. The important fact of this system is that a candidate could conduct a significant campaign without having to become dependent on large contributors, and without becoming indebted to large contributors who might seek special influence. Public financing is not a new idea. Presidential and Congressional review of public campaign financing proposals has gone on throughout this century. But today's high-cost campaign climate makes action today to enact a public financing system an urgent necessity. Our bill deals only with the Presidential race, but would include major financ ing of both primary and general elections. This has the advantage of building on an existing public financing mechanism, already approved by the Congress, the one dollar tax check-off option for Presidential races. In addition, it immediately reduces the need for large contributions in the most expensive election. Some of the spending and contribution ceilings, and other provisions of our bill will be covered in debate on S. 372, the pending campaign reform legislation Additional details may be added or modified at a later date. However, the im portant principle of beginning to reassess our system of campaign financing must be addressed immediately, and I urge the Congress to quickly turn to hearings and consideration of public financing of elections. STATEMENT OF HON. DONALD W. RIEGle, Jr., a U.S. REPRESENTATIVE FROM THE Mr. Chairman, I want to thank you and the members of this Committee for the opportunity to present to you for the record a statement in strong support of campaign reform. At the outset, let me say that I strongly adhere to the eight principles which many of you have endorsed. I am pleased to see such widespread bipartisan support. In December of 1970, I testified before the House Committee on Standards of Official Conduct firmly believing that urgent and major overhaul to laws and practices relating to campaign financing was one of the five or six changes we must make in order to have a workable political system and society that functions equitably for all citizens. In that statement, which I herein submit for your record, I listed many objectives and principles which should guide reform and outlined several areas and recommendations where reforms could be made. Today-over 21⁄2 years laterit is painfully clear that further steps are essential. Even though events have overtaken certain specific recommendations contained in my earlier statement, I strongly believe that most of the reasoning and concepts are just as valid today and thus of value to your committee. Events since December, 1970, now lead me to make three major amendments to my previous testimony. The need for sensible public financing of campaigns is abundantly clear for reduce the diversion of positive energies spent on raising fu the advantage of the incumbent. The advantages of the incumbent must be reduced if all ci anything like equal opportunity to run for public office. I am more inclined today to favor reasonable limits ald disclosure and reporting in order to minimize excesses. We talk of democracy, but we do not have real democra today. The often prohibitive campaign costs of seeking publi people from any real chance to be elected representatives. W largely a government of the rich-overly dependent on a sma tributors or special interests. Public financing of campaigns Such action will also help to equalize the excessive advant by incumbents and the disadvantages of the challenger. Altho reform measures were not feasible, the time has come to giv to these more progressive ideas. Further, I fully endorse the concept of a "check off" payers designate a portion of their income tax payment to g financing. In summary, the major reforms which I would like to see 93rd Congress are: No cash contributions. Mandatory audits of all political and party financial re public accountants. Plugging of loopholes in reporting of political income. Limiting the size of individual contributions to candidates Reasonable limits on campaign spending in each race. Public financing of campaigns. Establishing an independent, non-partisan federal electio oversee and enforce campaign regulations. In considering various reform measures. we must not lose s tive to allow for fair competition among the best people and i level and at any given time in the country; to insure an in with a maximum of public participation in the politcial proces to reenforce the faith and confidence of the electorate. In light of the numerous unfortunate events which result Presidential campaign, it is imperative that the Congress take so that future campaign years will not result in further abu tion of public trust. In retrospect, the Federal Election Cam was too little, too late. Although this act was a definite direction, it is now time to take the initiative and to act swi positively on further much needed reforms. A copy of my 1970 testimony follows. [From the Congressional Record, January 21, 1971] CAMPAIGN FINANCING AND REPORTING: THE URGENT NEE I. CAMPAIGN FINANCING-THE LARGER PERSPECTIV Domestic and international issues which we face today ar so tough that it is not easy to see our way through to good sol future. However, the processes of politics and government ar in which men and women in public service work to deal with confront our country. While we may not find easy answers to can, nevertheless, reform and re-tool the conditions which aff how they are elected, and the way they do their job after they Today, the problem of campaign reporting and financing candidates and, to some extent, elected officials and undermine of our entire governmental system. Financial obstacles, pressur tionate influences keep many good people from running for of unhealthy potential for affecting the job performance of those those who are elected. If we understand the urgency, and if w crucial and long overdue reforms in this area, we can upgrade ar the number and quality of people who participate in ele quality of their performance, and. in turn, the faith and confi torate. As a result, this single set of reforms may do more to inc to deal with today's issues than anything else we can do. The purpose of this statement is to express the urgent need the obstacles to reform, the objectives and principles which sho and to outline specific areas and recommendations where reform s, and to reduce ens are to have = with complete in our country ffice block most are today if not number of 004ld change that es now enjoyed h in 1970 mary Serious thought Her which tax- dertaken in the ls by certified parties. commission to t of our objec s, at any given med electorate and ultimately from the 1972 In Act of 1971 R REFORM complex and ns in the near e environment issues which problems, we who is elected elected. Dusly cripples • performance nd dispropor and create an o do run and solve to make eatly broaden politics, the e of the elec • our capacity II. THE NEED FOR REFORM The problems created by outdated and almost totally ineffective laws governing campaign financing and reporting are legion. Among them are: 1. Of the estimated $150 to $250 million spent on campaigns in a major election year in the United States, only a small fraction-10-20% at the most—is reported. 2. Unrealistic and unenforced laws have led to a condition where evasion, manipulation and outright disregard for the law are the norm, not the exception. For all practical purposes, political financial contributions and expenditures are virtually uncontrolled. 3. The tacit acceptance of this sham and hypocrisy in high places-both public and private-breeds a disrespect for the law, an insidious double-standard, and a deepening public cynicism about our political processes which, taken together, undermine public leadership and the "consent of the governed" on which our democracy depends. 4. That information which is reported is so incomplete and so after-the-fact that there is little basis for effective enforcement, for understanding the unhealthy influence of special interests on our political system, or for having the data available on which to base intelligent decisions for reform. 5. The cost of campaigning-both for nominations and for general electionsand in some cases doing the job and communicating with the constituency after election-have skyrocketed at an ever-increasing rate. The upward pressures include the costs of TV and other media techniques-even something as basic as postage; the costs of travel; communicating about more complex issues while competing with all the other bits of information which bombard the average citizen every day; and the cost of professional information research and management techniques which are necessary to allocate and use campaign resources effectively. At the same time, the necessary funds for waging campaigns have not begun to increase at a proportional rate. The result is an ever-widening gap between the cost and the sources of income associated with competing in public service. The consequences are serious: (a) Many good men and women are unable to run for office because they are in effect priced out of the competition. (b) Politics is fast becoming a rich man's game. (c) Those who do run for office are forced to find ways to make up this deficit and. all too often, must seek and accept large contributions from special individual or group interests. This gap is further accentuated by the very real advantages that an incumbent office holder often holds over a challenger. Thus, there is an increasing potential for the "public interest" to be compromised or distorted through the sometimes subtle and often not so subtle pressures of disproportionate financial obligations. 6. Only a small fraction of the electorate participates financially in the costs of running for office-with the largest estimates being between 10-15%. This means: (a) a small number of people can potentially exert an influence far beyond their numbers and (b) more important, over 85% of our citizens do not have a sense of investment-either personal or financial-in the system. The danger here is that they— like one who is not a stockbroker-are less likely to share an interest in, or a high expectation of performance from, an enterprise in which they do not participate. The dual consequences are that they may do less themselves and demand less of their elected officials. 7. The current chaotic patchwork of laws in this area at the local, state and federal levels are so confusing and riddled with loopholes that they actually encourage violations of the law. For the most part, they were formed decades ago when conditions and times were vastly different than today. The most blatant example of an unrealistic statute is that which prohibits the expenditures on a congressional campaign from exceeding $5,000 and a senatorial campaign from exceeding $25,000. This has led to the unbridled proliferation of campaign committees allowing virtually unlimited amounts of contributions to a campaign, thus making a wholesale mockery of an existing, but outdated, statute. The by-product of violating these unrealistic ceilings opens the door on the one hand to excessive contributions and spending, and on the other, fragmenting, and thus obscuring the precise source of, cumulative large donations and contributors. And so, the public, and sometimes even candidates themselves, have no way of pin |