Campaign Finance in U.S. History, Part 1

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Speaker 1: Welcome to Stuff you missed in History Class, a production of iHeartRadio. Hello, and welcome to the podcast. I'm Holly Frye and I'm Tracy V. Wilson. Tracy, you, like me, are a registered voter. Yep. That means that I guarantee you have gotten appeals from candidates that comes through your inbox or your physical mail or other ways asking you to do massa, chimpaigns, Oh my gosh, so many all of the things. And you may wonder why, why why do candidates need so much money? Why are they asking me for money all the time. It can be so exhausting and irritating to see that constant flow of requests for donations. And the thing is, campaigns cost money, and they always have and campaign funds go to things like travel costs and staffing and advertising and consultant fees. When you see people message you and say, if we don't earn x amount, we're out of the race, and you go, why does it cost money to be in the race? Because they recognize that they're spinning their wheels and they won't get enough recognition to gain voters if they're not spending as much as other candidates to get in the public sphere and have people hear their messages. And here's the thing. There have been efforts in the United States for a very long time to regulate how campaigns are funded and how campaign money can be spent. And as this seems like a point of escalation, because I sure am getting a lot of these lately, I always do, but they've really amped up, this seems like as good a time as any to talk about some of the milestones in campaign finance history in the United States. And this is a two parter because there have been a lot of twists and turns along this road. Even the precursors to that are their own stories. Finance reforms have been passed, amended, and overturned, and there's been a lot of people figuring out how to get around the letter of the law. So this is a lot of ground to cover, even with two parts. So just for expectations management, we're not getting super duper granular. This is by no means comprehensive, and in fact, we're mostly just going to take it up through the nineteen seventies because that was a very busy and important decade for campaign finance. And we'll touch on a few points after that in the most recent century, but not as many. So also, I just want to say, heads up, if you're me or if you're like me, you might find this all really really depressing. I just found myself in the duldrums the entire time I was working on this. Yeah. So, as I said, this is a this is an episode about US campaign finance, but this story starts before the United States gained its independence. There was campaign spending in the colonies. Often. The first instance sided of this is George Washington's campaign to be elected to the Virginia House of Burgesses in seventeen fifty eight. He famously spent thirty nine pounds six shillings to purchase quote, a hogshead and a barrel of punch, thirty five gallons of wine, forty three gallons of strong beer, cider, and dinner for his friends. That is according to an account that was written by Washington's step son, George Washington Park custis in George Washington, a biographical companion, which was written by Frank Grizzard and published in two thousand and two. There's a more granular list of the drinks, and that includes quote nearly forty seven gallons of beer, more than seventy gallons of rum punch, about thirty four and a half gallons of wine, two gallons of cider, and three and a half pints of brandy. So all of that booze was not for Washington and his team to drink. It was distributed by Washington's agents to voters, and the expenditure land Washington the votes he needed to win the election. But to be clear, he was not the first person to operate this way. This is kind of just one that's well documented, and because of his stature in American history, it's been recorded and maintained. It was really customary for elections in the seventeen hundreds to feature alcohol as part of voting day festivities. And George Washington had lost the prior election in seventeen fifty five by a lot. Some people will say because he didn't step up and offer drinks win or Hugh West got two hundred and seventy one votes in that election and the other contender, Thomas Werringin, had gotten two hundred and seventy and they had both included libations in their campaigns, and Washington was engaged in the French and Indian War at the time, so he did not campaign in person, and he did not send anyone on his behalf to distribute drinks. The practice of spending money on campaigns was standard from the beginning, but those nines typically came out of the candidate's own pocket. Friends who were supporters almost certainly also paid for some expenses. But it really wasn't until Andrew Jackson's eighteen twenty eight campaign for president that the idea of political fundraising got started. That was because Jackson didn't have the wealth that other presidential candidates before him had. He had become a lawyer after he taught himself law. This was not the result of having an expensive education or generational wealth to rely on. And we want to be very very clear Jackson was by no means poor when he ran for office. His law practice very fruitful. He had become a territorial governor of Florida after serving as a general in the War of eighteen twelve. His Tennessee mansion, the Hermitage, had a large and enslaved workforce, and he had been a judge and held office as a congressman and senator before running for president. But he was perceived as kind of a man of the people because he didn't come from old money. He first ran in eighteen twenty four, and though he won the most votes in the popular vote, he didn't have a majority, and John Quincy Adams ultimately became president in the electoral college vote. Jackson believed that the outcome had been the result of what he called a corrupt bargain between Adams and Henry Clay, who had put his support behind Adams after he was out of the running. So Jackson approached the next election with a way more aggressive plan, and as part of that plan, he had a well developed network of contacts that essentially formed a campaign staff. This marks the first time that a campaign staff really existed in US politics. Prior to this, friends might have supported a candidate by talking them up and maybe helping out, but this one was actually organized. It established the idea of having a campaign staff. In return for this work, supporters were often rewarded with appointments to various offices. The understanding was really that those people would continue to support the newly formed Democratic Party through both organizational efforts and money. This idea stemmed from the belief, which kind of sounds good in theory that anyone should be able to run for office, they should not have to have like a lot of generational wealth to do it. That's very much in line with Jackson's position as a relative outsider to politics. When he ran for president, he was known more for his military efforts than his brief forays into congressional politics. But this also became mandatory. People in government positions had their salaries assessed for the amount they were expected to contribute, and that became a standard operating procedure for both parties. Things escalated considerably in the decade that followed Jackson's eighteen twenty eight election, so this idea of wage assessment was not a publicly discussed matter, but people who moved in political circles certainly knew about it. As early as eighteen thirty four, there was outcry about the practice of government employees donating a quote regular and proportionate rate of their pay, and we should put donating in air quotes there as well. That specific quote about regular and proportionate rate was in a report by Daniel Webster, who was serving as a Senator for Massachusetts at the time and who chaired the Senate Finance Committee. But Webster acknowledged that while this was a practice, it was also a new practice that kind of happened on the down low, so he didn't have hard evidence to back up his claims and really pursue the matter. Another similar accusation came from John Barton Derby just a year later, but this included his personal experience. Derby had served as Deputy surveyor of customs in Boston and went on the record about having his salary assessed a five percent starting in eighteen thirty. He wasn't appointed to that job for having been a political supporter of Jackson or anybody else, but by that point the financing initiative had really trickled down. People above him had donated They needed to recoup some of that money and help pay for future campaigns. While it was not on the record as such, Derby called this assessment attacks. In this case, the money came back to the customs officers. Derby believed that the assessing of underlings had been deemed a no no by people even higher up in the chain than his bosses, but he and his colleagues were encouraged to donate the money on their own volition. In return, they would receive a Democratic Party magazine. Yeah, so just for clarity, someone had said, uh, we should not be doing this. This is going to look really bad. Let's give that money back to those guys. But let's ask them to just give it to us now, which is and we'll give them a pamphlet. Be fine. The Democratic Finance Committee started to put pressure on the US Commissary General in Philadelphia, Irvine Calendar, in the late eighteen thirties. They wanted him to start collecting assessments from his employees for the party, but Calendar was not willing to do it. He believed that people should not have to pay anyone anything as part of their suffrage rights, and that any donations or contributions should be made because people wanted to and believed in a party or candidate, and not through pressure or coercion. In eighteen thirty seven, Representative John Bell of Tennessee tried to introduce a bill that was intended to end the practice of wage assessments for political donation. Bell wanted to end this forced contribution system because of its potential to impact elections. He also wanted to end the practice of appointing people to government jobs in exchange for their political support, and to similarly forbid anyone from being dismissed from a position if they did not support someone with the power to make decisions about their job. This was not a super popular bill. A February fourth, eighteen thirty seven article in the Louisville Courier Journal mentioned quote a personal altercation that took place when Bell tried to introduce this bill. Jacksonian Representative Leonard Jarvis of Maine outright told Bell on the House floor that nothing was ever going to come of this bill and that the time would be better spent on other legislation. Of course, that legislation specifically was on something Jarvis wanted to introduce in regard to naval service enlistment. It actually took three years for Bell to get his bill to the House floor, and at that point no one from the opposition defended the practice of wage assessment. But they also weren't denying that it happened. It was kind of like, if we don't talk about it, this will just go away. And they were right, because when it finally got to vote, this bill got little real attention and was aultimately rejected. This whole thing sounds just so strange to me in an era where like for many years I have been paid and there's a statement specifically detailing all the things that have been deducted out of it and what they are for, uh, bookkeeping a little loosey goosey. Sometimes we'll talk more about that in a bit. So another bill was introduced on this issue in eighteen thirty nine, and this time it was in the Senate by John Crittenden, a Senator from Kentucky who was part of the Whig Party at the time. Crittenden's quote Bill to Prevent Interference on the part of Officeholders under Government with Elections was intended to limit any government office holder from doing anything regarding an election except for voting. This sputtered. There was a brief rally of support, but it really didn't gain enough to fraction to pass. So we're going to talk about one result of all of this concern over wage assessment for political campaigns in just a moment, But first we'll pause for a sponsor break with the discussion about mandatory donating becoming more and more public. In eighteen thirty nine, there was a congressional investigation launch to look at exactly what was going on with campaign finance. But this investigation had been catalyzed not by people complaining about assessments, but because of a different issue of mishandling of funds. There were concerns about the assessment of wages for what was mandatory or at least heavily pressured donation, as well as other accusations of misuse of funds in offices where those assessments have been going on. So many that the resulting report even noted that it could not cover all these accusations or issues and had to focus on just a couple of things in the prefatory remarks section of the Committee's rite up. After this investigation, at states quote, it was most obvious, however, that the whole field of inquiry presented by the resolution appointing Committee could not be properly traversed to report the antimony thereon, either satisfactorily to the country or to the Committee. During the short remainder of the present Congress. This impressed upon the Committee at once a resolution which has been rigidly adhered to, of limiting the investigation to such branches of the subjects referred to them as had most deeply excited public anxiety and alarm and to undertake only so much of those as might be thoroughly exhausted within the allotted period of the committee's researches. Because this investigation involved multiple issues, sometimes it's a little hard to track why both misuse of funds and these donation assessments were tied up together, So we are going to try to pick it apart. Samuel Swartwout was one of Andrew Jackson's most ardent supporters in Jackson's bid to become president, and once Jackson was in the White House, he appointed Swartwout to the position of customs collector in New York City. That was a very coveted position because a lot of money passed through New York. And in eighteen thirty nine, Swartwout lost a lot of money on speculative investments in land and railroads. That part's not a crime, but the money he used for those investments allegedly came from the money he had been collecting from his employees at the customs House. At least some of that money was supposed to have been given to the Democratic Finance Committee, and some of it was Some of it was money that was collected as customs fees and tolls, and there were accusations that Swartwout had been skimming a lot. This is a little bit complex in nature because customs collectors were allowed to allocate funds to themselves sort of. So customs collectors at the time were allowed to retain money from the sums collected as a way to cover personal debt that was associated with the job. That may sound weird, but here's what's up. That means that there were responsibilities that came with the job that the head of a custom's office could be considered personally responsible for. If there were any issues, like if someone sued the custom's office, it would have been on the head of the custom's office. They would be the person named in the suit. This whole system was intended to keep things streamlined in terms of litigation issues. If challenges to the custom's house came up, the head of that custom's house could just handle it without a bunch of bureaucracy. But then, of course, if there were judgments found against the custom's house, that was also on them, and in that case they could make the case to the treasury that they needed money to cover the debt of a judgment and that would be issued, but as a quickie workaround to that red tape, customs officials were also just allowed to keep money in reserve from the customs House coffers and Schwartwoud did note that he had hung on to two hundred twenty one thousand, nine hundred seven dollars and thirty six cents of the Treasury's money. The way that worked was that when he left the job, all such retained funds had to be handed back to the treasury, but Samuel Swartwaud did not give the money back. Thus the investigation, the committee heard testimony from two employees of the Customs House who had paid a percentage of their income for political assessments. There was Errant de Paster and David S. Lyon. The Paster testified that when he initially refused to pay the requested fifteen dollars, it was strongly suggested to him that he would lose his job if he did not. Lyon told a similar story, noting that he had also seen other employees threatened with being reported if they did not pay what both witnesses referred to as the tax. A man named Abraham Vanderpohl was called to testify about having been one of the people who calculated what his fellow customs employees paid. He had also been named by de Paster as the person who suggested that de Paster's job would be in jeopardy if he did not pay. Vanderpool refused to answer most of the questions that were asked of him. The other witness mentioned in the committee's write up after the investigation was John Becker, who worked for the Democratic Party, and he was outright hostile to the committee during questioning. All of this was written up and published in a report titled The Devocations of Samuel Swarthout and Others. While this report included the accounts of assessments and clearly found them problematic, the real focus was on Swerklout, and it stated that the committee's investigation had revealed that when the Treasury finished all of its accounting, his defalcations amounted to one million, two hundred and twenty five thousand, seven hundred five dollars and sixty nine cents. Moreover, the testimony of the Treasury Controller indicated that quote, the first misuse of the public money by mister Swartweldt as collector appears to have commenced in eighteen thirty. The committee found that his acts were quote of a character to elude the vigilance of the accounting officers of the Treasury for a series of years. Okay, more than a million dollars at this period in time is an awful lot of money, and this report explains just how this kind of thing was possible. So the Customs House of New York, aside from the ability for the customs officer to keep money back for his own expenses, had a rather unique style of bookkeeping that had been in place, according to the investigation since seventeen ninety nine. It used quote numerous subordinate accounts by way of making distinct exhibits of the expenditures made upon distinct objects. But these expenditure accounts were quote balanced only when the same charges are transferred to the quarterly account of the collector. So it seems as though Swartwout was taking advantage of this convoluted system of multiple accounts that did not really have regular reconciliation and was moving money around basically untracked because the Treasury Department wasn't monitoring those separate small accounts that were kind of under his jurisdiction and there were people who testified and indicated that they didn't think there was any wrongdoing on Swartwout's part. For example, a customs auditor identified as mister Fleming was asked on the investigation quote, do you or do you not believe from the examination you have made of set accounts that said amount is not properly chargeable to mister Schwartwout as a defalcation, but should have been set down as an error from which no money was realized by him. Mister Fleming responded that he believed the amount was purely an error. When Fleming's predecessor and his position, who had also worked with Swartwelk, was called to answer some similar questions, he backed up Fleming's answers, replying quote, mister Swartwout regularly entered all the tonnage, duties and money received therefore upon his cash book and other books, and accounted regularly for the same in his quarterly and other returns. I am certain of this, and I show you now in the book before the committee, the cash book and other books. So they were so entered and accounted for at the proper times. It is not right to say mister Swartwout is a defaulter for any of these items, and I maintain and show that they have been regularly accounted for to the United States. So these officials from the Cussam's House have over the years been painted as either incompetent or as loyal to Swartwout, depending on the point of view of the person writing the account. Additional questioning, however, revealed that the various receipts that were used to claim need of funds on Swartwout's part were simply entries in his own accounting book, like writing down on a line item, I need money for this thing, and then that was all you needed. It wasn't like today where you would get a printed receipt for a transaction. So unless anyone auditing the accounts followed up to see that every expense that a person had claimed had in fact been paid out, it would have been very, very easy to record false transactions. And there were definitely things that should have raised an eyebrow, like an item in the amount of eighty seven hundred and sixty nine dollars and fifty three cents that was retained on his quarterly reports repeatedly as cash quote retained for refunding merchants. This report found no fault with the US Treasury because by the time reports were submitted to the Treasury, everything always looked accounted for. In the words of the report quote, it was only on the books of the Customs House that it appears he concealed and suppressed the true cash balance in his hands. So all of this is a clear example of a systemic failure, but it didn't address the issues of campaign finance their interconnected problems, though, because it was through a political appointment that swartwild got the job and was able to manipulate treasury funds to his will, which also revealed how easy it had been for workers to be strongly encouraged to give a percentage of their income to the Democratic Party treasury. None of the finances were being tracked because even when there were people in place to perform audits and monitor accounts, they tended to disregard their duties and instead stick with their political allegiances. Swartwout did eventually settle his debt with the US government, a large chunk of it was found to have actually been embezzled by one of his assistants. By the time the dust had all settled, Swartwout was only on the hook for the sum he had always stated as the amount that he held onto that was just a little bit over two hundred and twenty thousand dollars. He fled to London as all of this turmoil started. He only came back to the US in eighteen forty one once everything was settled and he was no longer in danger of being prosecuted. So we're going to pause to hear from the sponsors to keep stuff you missed in history class going, and when we come back, we will talk about the first real efforts a campaign finance reform in Congress. So even after that huge Customs House investigation revealed problems that were part of government appointments in the way that money could be squeezed out of government employees to pay for political campaigns, there wasn't any real movement in campaign finance reform for nearly thirty more years. And that effort that came up finally was strictly to prevent money from being taken from naval yard workers. That was the Naval Appropriation's Bill of eighteen sixty seven, which had gone through committee the previous year before finally getting passed. At the time, the portion of the bill about political campaign contributions was pretty minimal, and it only stipulated that naval yard workers could not be solicited for donations by government workers or officers. It was another sixteen years before the Civil Service Reform Act was passed in eighteen eighty three. It may have taken a lot longer had it not been for the shooting of President James A. Garfield. Garfield's assassin, Charles Gutteau, had been motivated by the belief that Garfield had promised him a lucrative government appointment if he was elected. Gueto thought that he had been instrumental in getting Garfield into the White House, although he really hadn't been the issue of anybody expecting a government job in exchange for campaign support, which had just long been a source of debate. Suddenly that was central in the death of a sitting president. I don't know if I can't remember if we talked about this specific assassination in our live show about it. We did. Yeah, it's definitely in the book we were discussing in that live show from many, many many years ago. Yeah, that is Brian Young's book. I think it's called a Book of a children Presidential Assassination for children. Yeah, yeah, I think it's Children's Illustrated History of Presidential Assassinations or something like that. Yeah, it's quite fun. And his child, Scout, did many of the illustrations for it, which is pretty great. Scout is now an adult, which is amazing to me. Yeah. I think that was the first live show that we ever did, which means it was an enormous number of years ago. Now, it sure was. Senator George Hunt Pendleton of Ohio was the architect of the act that addressed this problem, and while it was introduced as an act to regulate and improve the civil service of the United States, it was just called the Pendleton Act. The main thrust of its reform was that federal government jobs had to be given based on merit and in some cases exams. There are positions in the Act provided for as presidential appointments, but they are strictly limited in the language of the legislative document as quote, the President is authorized to appoint by and with the advice and consent of the Senate, three persons, not more than two of whom shall be adherents of the same party as Civil Service Commissioners, and said three commissioners shall constitute the United States Civil Service commission. Said commissioners shall hold no other official place under the United States. But the section pertaining to campaign finance is Section fourteen, which reads Section fourteen that no officer, clerk, or other person in the service of the United States shall directly or indirectly give or hand over to any other officer, clerk, or person in the service of the United States, or to any Senator or member of the House of Representatives or territorial delegate, any money or other valuable thing, on account of, or to be applied to the promotion of any political object, whatever. The next significant moment in campaign finance was the election of William McKinley to the presidency. But the person we need to talk about is Marcus Hannah, an Ohio native born in eighteen thirty seven who became one of Cleveland's most prominent residents and who ran McKinley's campaign, drumming up a massive sixteen million dollars in support. In that campaign, Hannah made a lot of promises to get support and votes, and part of that was courting donations from large businesses with the promise that a McKinley administration would be favorable to big business. Hannah saw that money and power were tightly entwined, and is often famously quoted as saying, quote, there are two things that are important in politics. The first is money, and I can't remember what the second one is. McKinley's campaign garnered a lot of accusations of corruption and specifically bribery, but it wasn't only his campaign. William Jennings Bryan, who ran against McKinley, had similar accusations lobbed at his campaign. As a consequence, campaigns and their finances got a lot of public scrutiny. Miss is often cited as the first time there was a real call for campaign finance reform that actually came from the general public and not from within the government. Oh, there's another scandal on the horizon and a president calling for reform. But that is all going to be in Part two, because this is all I can take of campaign finance. Shan, Yes, today, do you have listener mail that is less upsetting to you? I do great. I have two quick ones. They are both about Frank Duvinix, so I figure we can put them together because they're both short. The first one is from our listener Andrew, who says, I just wanted to drop you a quick note and say how delightful it was to hear about how nice of a guy Frank Duvinic was, with no apparent dark sides or caveats. As is so often the case with people you profile on the podcast, who did good things also have no disclaimer required this time, cheers have been enjoying stuff you missed in history class since twenty sixteen. I think I'm not going for my PhD. I'm just letting your Saturday classics catch me up on old episodes. And there is a miniature docs in picture that is ridiculous and adorable and the most relaxed kitty in the world, which I needed, you know, sometimes see picture of a real relaxed kitty. Yeah, so cute. I love the pet pictures. Thank you to all of you who send us pet pictures. This docson looks a little I'm sure it is just catching an animal in the moment, but it's out in this beautiful nature scene and it looks a little like but can we go home where it's warm. I'm just projecting that that docson may love being out in the in the weather, so thank you for that email, Andrew. The other one, also about Frank Duvinek, is a correction. This is from our listener Julia, who writes, I'm excited to finally have a reason to write in. I'm an art teacher living in Cincinnati and I've listened to every episode before we get into your letter. Thank you for being an educator. Julia writes, I have a small correction on your behind the Scenes Mini's Frank Lizzian Noodle's episode. You won't find Frank Duvinac's painting The Cobbler's Apprentice at the Cincinnati Art Museum. It is actually at the Taft Museum of Art, which is also located in Cincinnati. I'd also like to add a fun fact you didn't mention about the painting. There is a large mural inspired by The Cobbler's Apprentice where the cigar is replaced by a baseball bat. It's located downtown, not too far from the Red Stadium and gives a nod to the history of Cincinnati having the first professional American baseball team. And then Julia sent a picture of the mural. I didn't include it on purpose. Because I didn't know how to work it in Oh yeah. And also I don't know why I don't like that mirror. Oh no, But no disrespect to the person that sent it. And I'm glad Julia pointed it out because it is, you know, part it's tied to that history of Frank Duvenek and Cincinnati. M M. I don't know what bugs me about it. I can't quite get my brain around it. This is literally my thing to work on, nobody else's. But I do want to thank Julia for making that correction. Here's the thing, people that haven't visited Cincinnati might not know a lot of good art in that city. So I'm glad that Julia mentioned that there are two museums you can go to that we'll both have great things to look at. And I have really, really enjoyed times when I have gone to Cincinnati specifically to visit museums. Listen, they may have had Star Wars costumes. I may have made a trek there when I was following those costumes around the country, and then I was blown away because the rest of the museum was great too. So thank you to Julia. Yeah, I was just gonna say if the only old episodes of the show that you want to listen to or Saturday classics, totally fine, go for it. If you want to skip those because you heard them already, also fine, Yes, indeed, I'm I think we're both big proponents of like, engage with your entertainment however works for you. Yeah, yeah, no rules here. Are not enjoying a thing, you can just skip it. Look, if it gives you joy to listen to us at three time speed and mock our crazy voices that squeak at that point, great, yeah, wherever joy comes from at this point. If you would like to email us, you could do so at History podcast at iHeartRadio. You can also find us on social media as missed in History And if you haven't subscribed and you want to, because that's the way listening works best for you, you can do that on the iHeartRadio app or wherever you listen to your favorite podcasts. Stuff you Missed in History Class is a production of iHeartRadio. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.