-Over the weekend, five men were nabbed in the Democratic national headquarters here
in Washington, seemingly preparing to tap or bug the place.
It was the scandal to end all political scandals. And while it may have started as a burglary,
it soon led to a secret money trail.
-Illegal contributions to President Nixon's re-election campaign...
-The secret $200,000 contribution…
-…putting the U.S. government on the block for sale, like a side of beef.
And a law that was to limit the influence of money in politics forever.
-We’re never, never, never going back to the old corrupt way of doing things.
But money found its way back in.
-Soft money.
-Secret money.
-Dark money.
And decades later, there are record amounts of money flowing through the political system,
a system some say is less accountable than ever.
-We can do legally everything Nixon had to do illegally.
It was 1972, and President Richard Nixon was on his way to a landslide re-election victory,
backed by one of the most successful fundraising efforts in history.
-If it takes money and organization to elect a president, the Republicans are ready with both.
But that victory would soon unravel after five men with ties to the Nixon campaign were
arrested for breaking into the Democratic national headquarters at the Watergate Hotel.
The ensuing coverup and widespread abuse of power
would eventually bring down Nixon’s presidency.
-I shall resign the presidency effective at noon tomorrow.
But right after the break-in, the administration was concerned that campaign contributions
had been tied to one of the burglars. John Dean, who was later implicated in the coverup,
was White House Counsel.
-When Watergate occurs, it’s immediately a problem for the White House. It raised the
whole issue of what their campaign committee is doing, and the fact that they’ve raised
a lot of money.
Watergate investigators learned that right before a disclosure deadline, the Nixon campaign
had received tens of millions in confidential donations.
-They had, literally, stacks and stacks of cash sitting around. They couldn’t count it as
fast as it was coming in.
The source of the money was revealed when a watchdog group, Common Cause, sued the Nixon
campaign and discovered a secret White House list of donors. It included corporations,
which were legally barred from any political giving.
-That list had the names of all these corporations and the amounts of money they had given.
Some people were buying influence, and some people thought that if they didn't put the money up,
they would get punished.
-American Airlines has admitted it made illegal corporate contributions to President Nixon’s
re-election campaign.
-American has charged it was a victim of a shakedown.
-There are two aspects: Would you get something if you gave it, or would you be prevented
from getting something if you didn't give it?
-But this money bought results. The President of the United States
was exchanging government policy for money.
After the dairy industry pledged $2 million to his re-election campaign,
Nixon approved an increase in the price of milk.
-The former head of the country's biggest dairy cooperative pleaded guilty today...
The scandals led to the convictions of some of America's biggest corporations, and to
an overhaul of the campaign finance system. The law would now limit how much individuals could
give to candidates and how much they could spend in elections, while corporate contributions
would remain illegal.
-The Federal Campaign Act of 1974 is going to change American politics forever, and hopefully
for the better.
-We thought that we got what we needed. I felt we had achieved a very, very historic reform.
-Thank you for your generosity.
-Thank you very, very much.
But by the 1988 presidential campaign, it was clear there was a major loophole.
While donations to candidates were limited to $1,000, individuals and corporations could give any amount
to political parties.
-Campaign handlers like to call it “soft money.”
-Soft money can be raised in any amount.
-All perfectly legal, the campaigns insist, since they don’t spend the money directly.
-You’ve already done 25,000 so...
I’ve always believed that campaign finance reform
creates a blueprint for how to game the system.
Robert Farmer broke fundraising records for Democratic nominee Michael Dukakis by being
the first to capitalize on soft money.
-It can’t be coordinated with the campaign but it certainly, it’s going to be spent
to help the candidate. That's well known.
Farmer convinced big donors and their friends to become “trustees” by asking them to
donate $100,000 to the Democratic Party.
It was a strategy his opponents quickly adopted.
-We took such abuse from the Republicans for this program. That went on for about 45
days and they instituted the exact mirror image of our trustee program. Any campaign
is a competition. If you don’t have the resources to wage a credible campaign,
you're out of it.
-You can’t imagine how important you are to this campaign.
When President Bill Clinton needed money for his 1996 re-election campaign, he invited supporters
and some of his party’s biggest soft money donors
for coffee and sleepovers at the White House.
It's called the Lincoln Bedroom. And while Lincoln never actually slept there,
a lot of other people did, including
big money contributors to the Democratic Party.
-The president's overnight guests contributed at least $7 million to the Democrats.
-The President of the United States took the Lincoln Bedroom,
treated it like Motel 6 and he was the bellhop.
Senator John McCain, who was criticized years earlier for his role in the Keating Five campaign
finance scandal, went on to introduce legislation to close the soft money loophole.
-There was too much money that was washing around unattributed and unaccounted for.
The system had become corrupted. It took an enormous amount of public pressure to bring about the
passage of the legislation.
-Tonight, the first significant reform since Watergate is headed to the president’s desk.
It took seven years but in 2002,
Congress passed the McCain-Feingold Bipartisan Campaign Reform Act.
-Congress finally cleaned up the system, outlawing huge unlimited contributions from business,
labor unions, and the wealthy known as "soft money."
-We felt very good. We knew there were going to be challenges, we knew they were out there,
but I was very surprised and deeply disappointed when the United States Supreme Court made
fundamental decisions such as corporations are the same as people.
-A blockbuster decision from the Supreme Court today.
Just eight years after Congress passed those major reforms,
the Supreme Court ruled that putting campaign spending limits on corporations and labor unions
was unconstitutional.
-The sharply divided justices declared that the law violates the First Amendment’s guarantee
of free speech for all, even corporations.
In a case known as Citizens United v. Federal Election Commission,
the court said that political donations were a form of free speech,
and that corporations and unions had the same First Amendment rights as people.
-The First Amendment says Congress shall make no law abridging speech. It doesn’t
give the right to speak to certain people. It gives it to everyone.
Attorney James Bopp brought the Citizens United case and has since brought others in pursuit of
his goal: more money and more speech in elections.
-We need a lot more money spent because people are woefully uninformed.
Uh, most people can’t even name their congressman.
The rulings in Citizens United and other recent cases mean that individuals,
corporations and unions can now give unlimited money to outside political groups.
-Nonstop negative TV ads from Super PACs, big money groups outside the campaigns.
And while Super PACs have to disclose their donors, other outside groups, known as 501c's, can
accept what critics call "dark money," contributions from donors who don't have to disclose who they are.
All this means that in the decade after Citizens United, record amounts of cash flowed into
U.S. elections. Outside groups spent $7.3 billion, with the bulk of the money coming from
a few big donors from both parties.
-I don’t think the problem is the speech.
I think the problem is the fundraising.
Harvard Law professor Lawrence Lessig has written about the influence of the super rich
in politics.
-We’ve given this tiny, tiny fraction the power to do, effectively, the nominating.
They choose who can have the money to be able to run in the elections, to be able to compete
effectively against the other side.
And it’s absolutely clear that candidates bend themselves, contort themselves, to keep
those funders happy.
-If money is free speech, then the wealthiest people in America are those that get to speak
the most freely.
And it's not just high profile, national elections.
Big outside money is also pouring into state and local contests, even judicial races.
-We want judges to protect us.
And funding attack ads like this, which ran during the
primary race for the North Carolina Supreme Court.
-Justice Robin Hudson: not tough on child molesters, not fair to victims.
-I was horrified when I saw it.
The very idea that I or anyone else on the court would, quote, “side” with
child molesters is just completely ridiculous.
If they were coming in here spending money to actually educate voters,
that would be one thing. But that’s not what they’re doing.
The ad was paid for by Justice for All NC, whose address was a P.O. box at this
Raleigh UPS Store.
Most of its money came from the Republican State Leadership Committee, an outside political
group based in Washington.
-We look to find the best return on our investment for our dollars and the most effective way
to convey a message to the general public.
The Committee takes donations from corporations and other contributors and funnels them into
state-level organizations.
Those groups then spend that money to influence elections, from the courts to statehouses.
-The money is a means to convey a message about which direction you want
the country to go.
Anybody that, um, thinks that there should be less money in politics, um, is essentially
at odds with the United States Supreme Court that said that this is one of our
fundamental freedoms.
-I think we’re well on the way to see all of the major legal justifications
for campaign finance laws to be, uh, overturned.
For years, secretive dark money overwhelmingly flowed to Republican candidates and causes.
But by 2020, Democrats took the lead, as liberal groups outspent conservative ones by over
two to one, in the most expensive election ever.
-Nobody looks at this political system and likes it.
This is overwhelmingly despised by the American public.
There’s no reason for them to worry about politics because they don’t matter.
They don’t count.
They don’t have the dollars that have a role.
-What was at the core of the Watergate campaign finance scandals?
Corporate money, secret money, unlimited contributions from individuals.
What do we have today?
Corporate money, secret money, unlimited contributions from individuals.
-We are full circle to the days prior to Watergate.
There are not people walking around the streets of Washington, D.C., with briefcases full of money, but,
uh, we are very close to that.