, campaign financing has traditionally come from private sources. After the Watergate scandals, Congress adopted amendments in 1974 (and again in 1976 and 1979) to the Federal Election Campaign Act of 1971 (FECA) which tightened public disclosure requirements, set limits on political contributions by individuals, political parties and political action committees (PACs), restricted the making of certain campaign expenditures and provided by 1976 for matching federal funds for candidates in the presidential primaries and elections, which was financed through voluntary checkoffs by taxpayers on their income tax returns. The 1974 law also established an independent bipartisan agency, the Federal Election Commission (FEC) to facilitate disclosure and enforce the law.
This system broke down for number of reasons:
(1) The $1,000 limit on individual contributions to a candidate and $20,000 overall to political parties for federal elections could were circumvented by bundling --i.e a group of individuals made separate contributions of $1,000 each.
(2) All restrictions on independent contributions made by individuals to finance their own campaigns and all restrictions on campaign expenditures were struck down by the Supreme Court in Buckley v. Valeo (1976) 424 U.S. 1) because they violated the First Amendment guarantee of free speech. Former Senator Bill Bradley said that this decision declared that "a rich man's wallet is the same thing in free speech terms as a poor man's soap box" (McNeil, Money, 1996, November 28, p. 3).
(3) FECA barred corporations and labor unions from making direct political contributions, but allowed them, subject to individual campaign limits, but without any overall limits, to make contributions through political action committees (PACs), funded by 'voluntary' contributions from their members. The so-called 'hard money' limits in FECA were circum
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