abide by a complex series of state-by-state limits, based on population size. These have proved to be highly constraining in an era in which several state primary elections are often held on the same day, and candidates for a party’s nomination must depend on high-cost television rather than personal campaigning in many states. The limits also have proved troublesome for candidates in small states that hold high-stakes contests early in the pre-nomination process.
The result has been a continuing series of subterfuges to evade a particular state’s spending limit. For example, candidates have felt compelled to throw tremendous resources into New Hampshire, which traditionally has been the site of the first presidential primary election. Given the state’s relatively small population and its correspondingly low spending limit, candidates have used such strategies as buying time on Boston TV stations - which reach more than three-quarters of New Hampshire’s population - and charging the cost partially to the Massachusetts limit rather than wholly to the New Hampshire limit. Candidates campaigning in western New Hampshire have been known to spend the night in Vermont, allowing them to charge lodging costs for themselves and their staffs against the Vermont limit.
In 1984, the Mondale campaign sought to escalate this creative accounting through a device known as the “delegate committee.” A study of existing law by Mondale’s legal staff uncovered a 1980 FEC decision permitting those seeking to become national convention delegates to raise and spend money on their own behalf for such grassroots activities as brochures, buttons and bumper stickers (Germond and Witcover 1985, 226). These delegate committees had to operate independently of a national presidential campaign effort.
At the time, the Mondale campaign was fast approaching the prenomination spending ceiling. Compounding the problem was the fact that many of Mondale’s most reliable supporters had “maxed out” by giving the campaign the $1 000 limit on individual contributions. High-ranking Mondale campaign officials saw the delegate committees as a way around both the contribution and spending limits.
There was a second major factor behind creation of the delegate committees. Mondale, in an effort to free himself from criticism that he was too close to many of the Democratic Party’s “special interest” groups, had declared that he would not accept PAC donations. However, a top Mondale campaign official quietly informed the delegate committees by memo that because they were theoretically independent of the Mondale campaign, they could accept PAC money (Germond and Witcover 1985, 229). Organized labour, which had endorsed Mondale, proceeded to contribute substantial amounts of PAC dollars to the delegate committees.
When stories about these committees surfaced in the media, they unsurprisingly prompted criticism that Mondale was flouting the spending limits. The controversy became so intense that Mondale ordered the delegate committees shut down in late April 1984. By then, however, he was well on his way to becoming the Democratic Party nominee.
In May 1984, the FEC found “reason to believe” that the Mondale campaign was in violation of the law because the delegate committees were not functioning in a truly independent fashion (Germond and Witcover 1985, 273). The Commission’s decision was not disclosed until 27 November, after the general election. At that time, it also was announced that negotiations between the FEC and the Mondale campaign had produced an agreement in which the latter paid the federal government almost $400 000 to resolve the matter.9
The 1988 Campaign
The fourth presidential campaign held since the passage of the 1974 amendments witnessed an escalation of the efforts to skirt the spending limits. Because 1988 was the first election since the reforms in which an incumbent president was not running, there were hotly contested battles for the nominations of both major political parties, and this was reflected in the increase in spending. Although the rate of inflation between 1984 and 1988 was only 13.5 percent, total presidential campaign costs rose by 54 percent during that period (Alexander and Bauer 1991, 11).
Use of the presidential PAC reached new highs. In fact, presidential PAC spending for 1988 was more than twice the combined amounts expended in advance of the 1980 and 1984 elections (Alexander and Bauer 1991, 15). Another well-worn way around the presidential limits - independent expenditures - declined somewhat between 1984 and 1988. Nonetheless, they still played a crucial role in the general election campaign. Michael Dukakis’ campaign was hurt by explosive ads highlighting a felon named Willie Horton, who, while on a prison furlough program in Massachusetts, had escaped and brutally raped a Maryland woman. These commercials, designed to question Dukakis’ record on crime, were produced and aired not by the Bush campaign, but by two independent expenditure groups, and were widely shown on television news programs (ibid., 86-87).
But the most controversial element in the financing of the 1988 presidential campaign was a device that has come to be known in the American political vocabulary as “soft money.” In contrast to “hard money” regulated by the FECA, soft money was subject to neither the limits nor the disclosure requirements of federal law. In the context of major political parties, soft money refers to funds channelled to state and local party organizations for voter registration and get-out-the-vote efforts. These state and local party affiliates are outside the reach of federal law.
Because soft money has been raised primarily by officials of presidential campaigns, critics charge that it is benefiting presidential candidates while undermining the spending limits imposed on them. Because presidential candidates themselves have helped to raise this money, it raises questions about whether they are violating the legal provisions by which - in return for public subsidies - they agree to strict limits on private fund-raising during the general election. Finally, because soft money permits the collection of unlimited donations from individuals, critics say it is a throwback to the days of the very large contributor.
Soft money has been present in presidential campaigns throughout the 1980s. What distinguished 1988 from past elections was its quantity. During the 1988 general election, more than twice as much soft money was expended as during the 1980 and 1984 general elections combined.
In 1980 and 1984, the Republicans had far outstripped the Democrats in raising soft money. The Republicans raised $15 million in both elections while the Democrats were only able to raise $4 million in 1980 and $6 million in 1984 (Citizens’ Research Foundation). That changed dramatically in 1988 when the Dukakis campaign raised $23 million, and a Republican response produced $22 million in soft money for the Bush campaign.
This money was raised frantically, as if no public funding or expenditure limits existed, and it was raised in large individual donations far in excess of federal contribution limits. The Republicans claimed 267 contributors of $100 000 or more; the Democrats counted 130 individuals who donated or raised amounts in six figures (Houston 1988).10 This return of the very large contributor seriously eroded the concept behind the presidential funding structure embodied in the FECA Amendments of 1974. Public funds were intended to provide most or all of the money serious candidates needed to present themselves to the electorate, yet soft money offers a pathway into presidential politics for direct corporate and labour donations; the former was barred at the federal level in 1907 and the latter in 1943. But 30 states permit direct corporate contributions, and 41 allow direct labour contributions. Therefore, a donation can be directed by a party’s national committee from, say, a corporation in a state that bars corporate contributions to a state party committee in a state that allows corporate donations.
Soft money is not the only form of disbursement in presidential campaigns that is spent outside the general election limits. As table 1.3 illustrates, while the spending limit was $54.4 million (federal grants of $46.1 plus national party spending of $8.3 million), the amounts actually spent by or on behalf of the major-party candidates totalled $93.7 million for Bush and $106.5 million for Dukakis. In addition to state and local party spending (soft money), labour unions spent $30 million in parallel campaigning; this amount consisted of voter registration and turnout expenses as well as partisan communication costs to their memberships. Most of this benefited the
