Chester Arthur's Ghost: a Cautionary Tale of Campaign Finance Reform

• Jurisdiction: United States,Federal
• Publication year: 2020
• Citation: Vol. 71 No. 3

Chester Arthur's Ghost: A Cautionary Tale of Campaign Finance Reform

Anthony J. Gaughan

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Chester Arthur's Ghost: A Cautionary Tale of Campaign Finance Reform

by Anthony J. Gaughan^*

I. Introduction

Chester Arthur may not be the first name that comes to mind when one thinks of major figures in the rise of campaign finance law. But despite his obscurity, he deserves to be ranked among the leading reformers in American history. As President, he signed into law a reform that cleared the way for the modern system of campaign finance to take root.

This Article puts the current debate over money in politics in historical context by examining the first major campaign finance reform in American history. The 1883 Pendleton Act¹ is remembered today for establishing a professional, nonpartisan civil service. But equally important, it banned the use of political assessments (that is, mandatory dues imposed on federal and state officeholders by the political parties) to fund federal election campaigns.²

President Arthur played an important role in the Pendleton Act's success. After signing the bill into law, he supported efforts to enforce the new rules and reform the major parties' campaign finance practices. In the long run, Arthur and the reformers achieved their goal of ending the parties' use of political assessments to fund campaigns. At the same time, however, the Pendleton Act shifted election financing from the

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political parties to corporate America and wealthy donors. Thus, instead of reducing the influence of money in politics, the Pendleton Act ushered in a new and even more controversial era in campaign finance law, one that continues to haunt our politics today.³

The story of the Pendleton Act is thus of much more than just historical interest. It demonstrates how deeply rooted the problem of money in politics is in American history. Long before the Supreme Court of the United States heard cases like Buckley v. Valeo⁴ and Citizens United v. Federal Election Commission,⁵ money played a highly controversial role in American elections. As the story of the Pendleton Act demonstrates, campaign finance reforms have had unintended—and sometimes quite unwelcome—consequences from the very beginning.

II. The Age of Political Assessments

In the first decades of the American republic, presidents usually left in place a large number of their predecessors' subcabinet appointments, regardless of the employee's political affiliation.⁶ For example, even after the acrimonious 1800 election, Thomas Jefferson kept nearly half the executive branch officials appointed by his bitter rival and predecessor, John Adams.⁷ But a far more partisan approach to government staffing would take hold as the size of the federal bureaucracy grew.⁸ By the 1820s, the federal government's major departments—particularly the United States Post Office, the Treasury Department, and the War Department—employed thousands, which

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created an opportunity for the major parties to turn government payrolls into a source of campaign funds.⁹

The new approach to government employees began with the presidency of Andrew Jackson, a fiercely partisan Democrat.¹⁰ When Jackson took office in 1829, he used the growing federal bureaucracy to advance his party's hold on the government.¹¹ President Jackson and his fellow Democrats built highly professional political machines in states across the country (the direct antecedents of modern campaign organizations) that were specifically designed to establish a national political party and raise money from a large number of politically interested donors.¹² In the process, the Jacksonian Democrats brought thousands of people from working class and middle-class backgrounds into government positions previously monopolized by upper-class elites.¹³

Under Jackson's "patronage" system (also known as the "rotation" or "spoils" system), the Democratic Party fired nearly all preexisting government employees—low and high ranking alike—and replaced them with loyal Democrats.¹⁴ Although Jackson and the Democrats initiated the system in 1829, the Whig Party followed suit when it won

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the White House in 1840.¹⁵ Presidents soon understood that their own political fortunes depended on their commitment to the patronage system. In 1847, President James Polk wrote in his diary that "[t]he office seekers have become so numerous that they hold the balance of power between the two great parties of the country."¹⁶ By the time James Buchanan took office in 1857, the spoils system was an entrenched feature of American government.¹⁷ As the political scientist Daniel Carpenter has observed, the patronage system defined nineteenth century "party politics more than any other development, save perhaps the Civil War."¹⁸

The parties' interest in building highly cohesive organizations stemmed from the inescapable reality that the nation's growth gave rise to steadily increasing campaign costs. In 1860, for example, the United States had a population of 30 million, and the Republican National Committee (RNC) spent $100,000 to secure Abraham Lincoln's election to the presidency.¹⁹ By 1884, the nation's population exceeded 50 million, and the RNC spent more than $400,000 (the equivalent of $10 million in today's dollars) in the presidential campaign that year.²⁰

The patronage system played a crucial role in financing the increasingly costly federal and state election campaigns.²¹ In the 1830s, the parties began to require government employees to contribute a percentage of their salaries to the party in power for use in its reelection campaign.²² Government employees who refused risked losing their jobs.²³ These mandatory dues became known as political or

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party "assessments," and the parties imposed them on every federal, state, county, and municipal employee.²⁴ The system reached full maturity under President Martin Van Buren, the Democrat who succeeded Jackson in the White House in 1837.²⁵ One newspaper of the era reported that, under Van Buren, "every officeholder . . . was subject to a tax for election purposes."²⁶

The career prospects of individual party officials depended on their success in raising money for the party.²⁷ Senior government officials understood that their professional future depended on generous contributions to their party. For example, New York City Postmaster Isaac Fowler gave $1,000—a huge sum at the time—to James Buchanan's presidential campaign in 1856.²⁸ The parties also demanded that candidates themselves make and solicit large campaign contributions.²⁹ By the 1880s, for example, the parties expected each New York City mayoral candidate to come up with $25,000 for campaign expenses.³⁰ Political assessments thus served as a crucial source of campaign funds.³¹ As the historian Mark Wahlgren Summers has observed, "[t]he assessment process, both on candidates and on officeholders, was in effect an informal tax system to sustain the parties."³²

From the beginning, critics warned that the patronage system resulted in government officeholders motivated by personal profit

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rather than political principles. Former President John Quincy Adams, for example, described the new political class as "wolves of the antechamber, prowling for offices."³³ But Jacksonian democracy had some redeeming qualities as well. By creating modern political parties and tying their electoral success to job security for government employees, the spoils system encouraged mass participation in democratic elections.³⁴ The patronage system took root at a time when states across the country adopted universal white male suffrage, a development that dramatically increased the size of the electorate.³⁵ With the parties mobilizing voters on a massive scale, turnout among eligible voters stood at 75% from the 1840s until 1900, the highest turnout level in American history.³⁶ Thus, under the spoils system, the United States became the "world's first large-scale popular democracy."³⁷ As one observer remarked in the 1840s, the country "heaved and tossed in wild commotion at every presidential election as a result of the hope of office."³⁸

Not coincidentally, the surge in turnout levels saw money flow into campaigns like never before. As election costs soared, the assessment system gave the parties a ready source of campaign funds, which not all politicians viewed as a good thing. In 1834, Senator Daniel Webster condemned political assessments as "abuse of official station" and "misuse of the money paid for public services."³⁹ But the lucrative assessment system proved irresistible to the parties. With each passing decade, the parties became ever more proficient at wringing funds out of government employees. In 1853, for example, political assessments on the 557 employees of the Port of New York generated $6,817.50 per month for the Democratic Party.⁴⁰ The growing number of local, state, and federal government employees generated a steady flow of campaign

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cash for the parties. By 1881, for example, the Postal Service alone employed 55,000 people, which made it a major source of funds for the incumbent Republican Party.⁴¹

President Lincoln was one of the most aggressive and successful practitioners of the dark arts of patronage and fundraising.⁴² Upon taking office he removed 1,457 of 1,639 officials.⁴³ During the Civil War, the Lincoln Administration imposed steep political assessments on Republican officeholders, usually five percent of their salaries but in some case up to ten percent.⁴⁴ Lincoln required campaign contributions from Republican-appointed customs officers, federal workers, war contractors, and even Cabinet officials.⁴⁵ Three of Lincoln's cabinet members—William Seward, John Palmer Usher, and Montgomery Blair—contributed $500 each to the reelection campaign, and the campaign assessed $250 campaign dues on the rest of the Cabinet members.⁴⁶ Meanwhile, Henry Raymond, Lincoln's campaign...