The Appearance of Corruption

Both Theodore Roosevelt and John McCain tried to save their reputations by pushing campaign finance regulations.

When Theodore Roosevelt became president in 1901, he quickly established a reputation as a trust buster, railing against the power of giant corporations. In 1902 he ordered a Sherman Act lawsuit aimed at dissolving the Northern Securities Company, the first of 45 antitrust cases pursued during his administration. For the 1904 election, Roosevelt amassed a $2.2 million war chest ($52 million in today’s dollars), mainly by hitting up businessmen who had reason to fear him. The donations included $150,000 from Wall Street banker J.P. Morgan, $100,000 from railroad tycoon George Jay Gould, $125,000 from Standard Oil, and $150,000 from three insurance companies.

When Roosevelt’s Democratic opponent, Alton Parker, claimed corporations were trying to curry the president’s favor by donating heavily to his campaign, the Hero of San Juan Hill called it “a wicked falsehood.” Embarrassed by publicity about his financial support from big business, Roosevelt took up the cause of campaign finance reform, pushing it in his 1905 and 1906 addresses to Congress.

Thus was born the Tillman Act of 1907, which banned corporate contributions to federal campaigns. Nearly a century later, national campaign finance regulation reached its apex thanks largely to another politician determined to prove he was not corrupt.

John McCain was one of five senators who met with federal regulators in 1987 and encouraged them to ease up on the Lincoln Savings and Loan Association, which was under scrutiny for risky investment practices. The taxpayers ended up bailing out the California-based S&L’s federally insured depositors two years later at a cost of $3.4 billion. For his role in the debacle, Lincoln’s chairman, Charles Keating, served more than four years in prison (although his state and federal fraud convictions eventually were reversed because of juror misconduct and faulty jury instructions).

Keating had been the single most important benefactor of McCain’s early political career. Between 1982 and 1987, he had steered $1.4 million in campaign contributions and gifts to the five senators who intervened on his behalf. McCain received $112,000 of that, along with nine trips on Keating’s jets to the Bahamas and elsewhere. In 1991 the Senate Ethics Committee reprimanded the Arizona Republican for his “poor judgment.”

Like his idol Roosevelt, McCain denied any wrongdoing (at least for the first couple of decades; in his 2007 book Hard Call the senator finally admitted to “self-interest” in doing a favor for “an important supporter”). But by his own well-worn account, the Keating Five scandal drove McCain to sponsor legislation aimed at removing the taint of money from politics, an issue that helped define his reputation as a “maverick” and played a conspicuous role in his 2000 campaign for the Republican presidential nomination. “The thing I learned was that it’s not only impropriety that counts,” he said during that campaign. “It’s the appearance that’s just as important.”

Thus was born McCain-Feingold, a.k.a. the Bipartisan Campaign Reform Act of 2002, a law that took Roosevelt’s self-serving crusade a few steps further than the Supreme Court was willing to tolerate. To McCain-Feingold’s supporters, the law’s ban on “electioneering communications”—TV or radio messages sponsored by unions or corporations that mention federal candidates close to an election—was a logical follow-up to the ban on corporate donations championed by Roosevelt.

McCain’s single-minded focus on campaign finance reform won him much applause from journalists, who largely shared his view that money in politics, as he put it in 2001, “affects everything: the tax code, the military, Medicare, Social Security, gambling—you name it.” Yet by 2008, after six years of evidence that McCain-Feingold did not reduce money in politics, McCain was no longer talking about it. When he ran for president against Barack Obama, his own party platform repudiated his signature legislative accomplishment, insisting on “the free-speech right to devote one’s resources to whatever cause or candidate one supports.”

When the Supreme Court struck down McCain-Feingold’s ban on electioneering communications in Citizens United v. Federal Election Commission, the reach of the ruling surprised advocates on both sides of the issue. But it was a foregone conclusion once the Court confronted the implications of letting politicians restrict speech in an effort to avoid the appearance of their own corruption. 

Senior Editor Jacob Sullum (jsullum@reason.com) is a nationally syndicated columnist.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

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  • Fist of Etiquette||

    ...in an effort to avoid the appearance of their own corruption.

    It's not all about the money. Let's not discount the motivation of McCain-Feingold's shielding of encumbents from criticisms around election time.

  • Fatty Bolger||

    Yes, it would be more accurately referred to as the McCain-Feingold Incumbent Protection Act of 2002.

  • Rich||

    money in politics, as [McCain] put it in 2001, “affects everything"

    Money, as Cyndi Lauper put it in 1983, changes everything.

  • SIV||

  • JoshINHB||

    Didn't help progressives so much in '10.

    Or Linda McMahon, Meg Whitman, Carly Fiorina.

  • ||

    If our representatives were seated via Trial by Combat, this "money corrupts" problem would go away.

  • ||

    Ya know, I think you might be on to something there. Just imagine, every two years we have "American Senators" on TV. And at the end, instead of Hillary or Harry, we'd have Hellga and Nitro. Of course, the Senatorial steroid bill would be crushing....

  • Wind Rider||

    Two candidates enter, one candidate leaves.

  • Realist ||

    Better yet two candidates enter...none leaves!

  • Mr. FIFY||

    The Klingon method. I'm all for it.

  • Russell W. Behne||

    The McCain-Feingold bill was only meant to -appear- to deal with the APPEARANCE of corruption, but not to actually deal with the corruption itself. It actually worsened the corruption, and virtually eliminated 3rd party competition by interfering with campaign financing for them, while protecting incumbents and the Two Big Parties.

    The reason why it failed to stop corruption is simple:

    The problem with politics isn't the money, it's the power. As long as politicians have the power to grant favors, exemptions, and business protection, people will find a way to subvert them--if not with money now, then with promises to take care of them later.

    The only way to clean up campaign financing isn't by limiting third parties and trampling the rights of the voters. It's by taking power away from the politicians and reducing the federal government to just the functions specified in the Constitution.

  • Russell W. Behne||

    By the way, here's what I said before the McCain-Feingold bill was passed into law:

    http://fredericksburg.com/News.....002/524933

    See? I told you so!

  • Realist ||

    John McCain is one of the stupid fucks nominated by his party this millennium. If you consider the millennium started in 2000, the others are Gore/Bush, Kerry/Bush and Obama. This country doesn't have a chance.

  • Quiet Desperation||

    And when that failed, Teddy would wrestle a bear, kill it with his bare (ha!) hands and eat its heart.

    Teddy didn't need any limp political tricks.

    This is the President that led the Rough Riders into battle and continued giving a speech for 90 minutes after being shot.

    It was widely reported that although he loved guns, he could, in fact, kill with his mind. And he rocked a 'stache like no President has since.

  • Robert||

    Are you sure you're not mixing him up with Professor Elemental or Vladimir Putin?

  • ||

    B-b-but deys tells me on Huffingstons dat Obama is alreddy tze gretest ting sins hydrogenated palm oil.

    He passed Obamacare and financial reform. I mean, come on! Don't you know it's not necessarily the quality of the legislation but the appearance of doing something "for the people."

  • ||

    once the Court confronted the implications of letting politicians restrict speech in an effort to avoid the appearance of their own corruption.

    This never happened.

  • Anonymous Coward||

    the 1904 election, Roosevelt amassed a $2.2 million war chest ($52 million in today’s dollars), mainly by hitting up businessmen who had reason to fear him. The donations included $150,000 from Wall Street banker J.P. Morgan, $100,000 from railroad tycoon George Jay Gould, $125,000 from Standard Oil, and $150,000 from three insurance companies.

    So Roosevelt used the power of the US government to extract protection money from corporations under the unspoken threat of antitrust suits?

    Tut, tut, tut.

  • qualir||

    The truth Estulin seeks includes destroying Bernays-type communications myths in these situations. Who were really the bad guys, and who were really the good guys? Unless you have the concern, the consciousness to understand one from the other, you may find yourself on some battlefront fighting an enemy you know nothing about, wondering why he wants so desperately to kill you. Perhaps it is because your government has done something unspeakable to his people or your own people to give your supposed enemy a reason.

  • Russell W. Behne||

    "Yet by 2008, after six years of evidence that McCain-Feingold did not reduce money in politics, McCain was no longer talking about it."

    Actually, this isn't entirely true.

    Although McCain-Feingold did not reduce money in politics for the Democrat and Republican parties, it effectively throttled off almost all campaign contributions to all third parties and independents.

    So the McCain-Feingold bill did exactly what it was designed to do!

    That's why I call it "The Incumbent Protection Act".

  • shiroi neko||

    Corruption is the root of all evil.

  • Robert||

    Same way politicians can make up for their own drug-besotted past by coming out tough on drugs.

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