Campaign contributions provide another route to influence legislators. In 1971, in response to public pressure, Congress passed the Federal Elections Campaign Act, which required disclosure of campaign financing. After the Watergate scandal, Congress strengthened the Act in 1974 by creating a comprehensive system of regulation and enforcement, including public financing of presidential campaigns and the establishment of a central enforcement agency, the Federal Election Commission. In 1976, however, in the Buckley vs. Valeo decision, the U.S. Supreme Court (including Lewis Powell) struck down most limits on candidate expenditures and certain other limits on spending, calling such rules unconstitutional infringements of free speech. This and subsequent court decisions opened the door for a growing corporate role in election financing.
Thirty years later, in the 2006 congressional elections, corporate political action groups contributed $120 million to congressional candidates, a 33 percent increase from the 2002 elections. As the electoral winds shifted towards the Democrats that year, so did corporate contributions. The pharmaceutical, tobacco, and insurance companies that had previously heavily favored Republican candidates began to hedge their bets, increasing their contributions to Democratic candidates. “Our approach to our political contributions,” David Howard, a spokesman for Reynolds American Tobacco Company, told the Wall Street Journal, “is that we support those who will support us or will give us an ear.”
By 2012, another record year in campaign spending, outside corporate and PAC contributions became a primary source of funding for both Democratic and Republican congressional and presidential candidates. Total reported spending exceeded $4 billion, probably an underestimate. The U.S. Chamber of Commerce, which describes itself as the world’s largest business association, reported independent spending of $32,676,075 in the 2012 election cycle. However, according to the Sunlight Foundation, an independent monitor of campaign spending, only 6.9 percent of the Chamber’s spending supported winning candidates. The day after the election, Gregory Casey, head of the Business Industry Political Action Committee, a Chamber-rival organization that encourages political participation by corporations, told the Washington Post, “We learned you cannot address the fiscal and cultural differences in our society by throwing money at political dogmas that may have outlived their usefulness.”