In 1922, a major political scandal broke,
the Teapot Dome scandal. President Harding's Secretary of the Interior
leased Wyoming's Teapot Dome oil reserve to Sinclair Oil without bids or
any other standard governmental procedureS. The public perceived this as
a payback for the enormous contributions Sinclair had given to the Republican
National Committee, which in turn helped elect Harding.
The public was outraged. Legislators and reformers once again sounded the cry for campaign finance reform. A movement began to close the loopholes in the 1907 and 1910 legislation and to restore the intent--if not the wording--of the 1911 amendments, so that they would pass a Supreme Court test.
Fueled by the Newberry decision and the Teapot Dome scandal, the Federal Corrupt Practices Act was enacted. "It recodified many of the earlier reforms, adjusted spending limits for the House and Senate candidates, and placed the onus for disclosing campaign receipts and expenditures on the candidates themselves." (Gunlicks, 18) The major provisions of the act are as follows:
(Adapted from Alexander, 222-223)
During the late 1920s and in the 1930s,
the country went from an era of great prosperity to one of economic and
human devastation. Franklin Delano Roosevelt was elected President in 1932,
and was reform-minded like his Uncle Theodore. Roosevelt also had a goal
of making government agencies and departments more professional, and wanted
to forever expunge patronage from American government.
Good government had also been a long time staple of the Democratic party platform. Many new Democrats were elected to Congress because of the backlash against Hoover and the Republican Party and the American people's frustration with the Depression. However, Republicans also chose to support campaign finance reform since they lost considerable power and viewed campaign finance reform as a way to regain it.
With bipartisan support, a series of campaign finance laws were enacted. The Public Utilities Holding Act of 1935 barred public utility companies from making federal campaign contributions. They had evolved in a different manner than private corporations, and, under FDR's plans, were gaining more power and influence.
The Clean Politics Act of 1939, better known as the Hatch Act, prohibited Federal employees from participating in or contributing to Federal political campaigns. This legislation grew out of FDR's attempts to professionalize government, and from a legislative and public perception that major changes were needed to save the economic viability of the country.
In 1939, the world collapsed into World War II, and the U.S. became part of it in 1941. In the states, every effort went into winning the war, from victory gardens, to USO dances, to munitions factories. Patriotism ran high. Thus, when the steel workers' union went on strike for higher wages during the war, the public was outraged. Our soldiers needed steel for guns and tanks. In order to punish the unions and to make the legislature less dependent on them and their contributions, the Smith Connelly Act of 1943 was enacted. The law extended the Tillman and the Federal Corrupt Practices Act, effectively banning political contributions from labor unions until the end of the war.
After the war and the death of FDR, anti-union
and anti-Democrat sentiment ran high. The country wanted a change. These
two groups were to the "left of the center," and the Cold War
and another "red scare" were beginning with the Soviet refusal
to pull out of the Eastern section of Germany. Many Democratic seats were
lost to Republicans, with the exception of Southern seats. However, Southern
Democrats were very conservative and often joined in a conservative coalition
with the Republicans in Congress.
Due to the power of this coalition, public discontent with liberal Democrats who were often backed by unions, and lingering anger over wartime labor strikes, the conservative coalition was able to campaign for and enact further campaign finance reform. The provisions of the Smith Connelly Act were made permanent by the Labor-Management Relations Act of 1947, also called the Taft Hartley Act.