50 Years On… The Bait-And-Switch Behind Post-Watergate „Reforms”

Authored by Stephen Anderson via The Mises Institute,

Today is the fiftieth anniversary of the resignation of President Richard Nixon, who later was pardoned of all Watergate crimes by President Gerald Ford. The Watergate break-in occurred at the Democratic National Committee headquarters office in June 1972 at the Watergate building in Washington, DC, during a presidential election year. The Nixon Administration exerted great effort to conceal its involvement in the break-in. The United States Department of Justice and press reporters (Carl Bernstein and Bob Woodward) found five people involved in the break-in received thousands of dollars of hush money from the Committee to Reelect the President, which was the fundraising organization of President Nixon’s reelection campaign.

Many of Nixon’s administration staff were convicted of federal crimes, leading to their being sentenced to federal prison from the Watergate scandal. President Nixon used presidential powers to obstruct the Watergate investigation which pundits claim led to greater public cynicism and distrust of the federal government. The response of Washington’s political elites, naturally, was to further expand centralized power.

Members of Congress claimed that Watergate evils came from the misuse of presidential campaign donations used in the break-in cover-up. One “solution” to solve these election finance evils and rein in presidential power excesses was to expand federal power through legislation into federal election finances.

One post-Watergate legacy was the passage of new federal election finance laws and the creation of a new agency to enforce, finance, record, and regulate them. This law was passed by Congress in 1974, creating the Federal Election Commission (FEC). One FEC function is to dole out federal taxpayer money to congressional, senatorial, and presidential election campaigns, which incentivizes federal election control.

These new laws required candidates, political parties, and political action committees that were raising and spending money in federal elections to file periodic campaign finance reports subject to FEC audit and enforcement. When a campaign chose to receive federal tax dollars for their federal election campaign, one requirement was accepting campaign contribution limits from nonfederal sources and hold to campaign spending limits.

Mises Institute executive editor Ryan McMaken, in a Mises Wire article in October 2016 entitled “Decentralize the Elections,” described the history of states administering elections for federal offices and the methodical takeover of elections by the federal government over time. Presidential candidates began receiving federal funds for their campaigns from the 1971 campaign finance law, and funds distribution expanded in 1974.

The stated intent of federal taxpayer financing for presidential campaigns was to level the candidates’ playing field and remove the major party nominees’ need to seek political contributions during the general election. Taxpayer funding and the increased campaign fundraising demand included Congressional candidates. Expanded federal funding allowed more presidential candidates to run and extended the campaign season, with increased fundraising pressures on each candidate. Major party nominees spend much of their time today raising campaign cash for their parties, despite the fact that the alleged reason for government campaign funding was to eliminate the need for such fundraising.

The federal government’s campaign-funding intervention resulted in a presidential candidate’s campaign depending on federal taxpayer dollars to function. This long-term federal intervention has led to higher campaign costs with candidates chasing money.

The FEC board is composed of six members, with three affiliations each from the Democratic Party and the Republican Party. Each member is nominated by the president and confirmed by a Senate majority for staggered six-year terms. A presidential campaign contributor can be nominated by the president to the FEC board as a favor for past sizable campaign contributions.

The board needs four sitting members for a quorum to conduct agency business. FEC board functionality in the twenty-first century is partisan with each side pointing fingers at each other on alleged federal campaign financial wrongdoing. Sometimes the board only had three sitting members, so a quorum was not attained, and agency decisions halted. Some members remained after completing their six-year term when no nominee was confirmed to replace them.

For all the lessons supposedly learned from the Watergate scandal, the only real lesson is that so-called reform in Washington is little more than bait-and-switch. While Congress passed a number of post-Watergate laws that supposedly reined in what progressives were calling Nixon’s so-called imperial presidency along with its phantom campaign funding, the power of the executive branch has grown exponentially in the past five decades, and campaign spending has grown with it.

No doubt, the usual suspects in the media will be praising the Watergate reforms and claim that Congress rescued the nation from Richard Nixon’s lawlessness and set the country on the right path again. The truth is that whatever executive power Nixon abused probably would seem trivial when compared to what happens regularly today in the White House.