POLITICAL ACTION COMMITTEES
Nothing symbolizes the funding of campaigns after the post-Watergate reforms of 1974 as aptly as political action committees ( PACs). And nothing better typifies the discontent that regulatory system has generated. For the central fact is that, while PACs existed as early as the 1940s, they reached their maturity and full flowering in the 1970s and 1980s. In the first counting in 1974 there were 608 registered with the Federal Election Commission (FEC), but by the end of 1984 there were 4,009. Within the same ten-year span their contributions to all congressional candidates rose from $12.5 million to $105.3 million. In short, PACs have become the most visible icons of this generation's campaign finance.
The first American PAC was called the Political Action Committee, a name that quickly became the generic term for all of its successors. It was founded in 1943 as a political arm of the Congress of Industrial Organizations (CIO), largely in response to Congress's outlawing of direct campaign contributions from the treasuries of labor unions. (Congress had outlawed direct contributions by corporations thirty-six years earlier [document 2.1].) Its purpose--to raise money in voluntary individual contributions for a separate political fund from which to support the interests of the sponsoring organization with campaign contributions--is still the chief purpose of most PACs.
PACs proliferated slowly and somewhat silently until their sudden growth coincided with the first years of the post-Watergate reforms. The connection was clear and direct. Congress in the Federal Election Campaign Act of 1974 (FECA; document 2.9) set the limit on contributions by individuals at $ 1,000 per candidate per election and that for PACs at $5,000. Primaries and general elections each were a separate election; thus the effective limits were $2,000 and $10,000 for the two-year election cycle. In 1974 Congress wanted above all to curb the giving of wealthy individuals (the so-called "fat cats"); W. Clement Stone, a Chicago insurance executive, had set a record in 1968 with $2.8 million in contributions, most of it to Richard Nixon's campaign for the presidency. In its zeal to end the influence of wealthy contributors, Congress apparently overlooked the incentive for collective action it was creating with PAC limits five times greater than those placed on individuals.
PACs flourished, however, for other reasons. The number of interest groups and the range of their agendas exploded in the 1970s. As citizen loyalties to political parties waned, as the party organizations weakened, and as the parties lost control of campaigns to the media and candidates, interest groups became the political organization of choice for many Americans concerned about specific (and even narrow) interests and issues. PACs were the instruments by which interest groups invaded the home territory of the parties: the politics and campaigns of elections. Their rise marked the end of an informal but historic division of labor in which parties had mobilized support in elections and interest groups brought influence to bear on officials already elected.
Finally, PACs grew in the 1970s because the Fed-