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Mr. MITCHELL. I should say so. That comes back to the means of a man and the means of his backers. One of the things that concerned me personally during the campaign was the suggestion that I might hold the view that only a rich man should run for office. I have not said at any time in this campaign that I have been misquoted, and I do not say that now, but I do not hold that opinion. I do hold the opinion that a man who runs for office should check the statute and see how much the job pays, and if it does not pay enough to suit him, or enough to live on, he should not run for the office. That is quite a different thing from saying that a man without means should not run for office.
I can prove, and I am sure you can, that there is no profit in public service, but still I think a man ought to be free to do it if he wants to.
I am not aware that there were any outcries from any on the Democratic side in this primary that one candidate was hampered because of a lack of money, and you just illustrated that the one who spent nothing, or in whose behalf nothing was spent, was nominated. share your distress in trying to put hobbles on all of the processes.
Mr. KEATING. I think you were quoted at one time somewhere along the line as saying that Government should subsidize the conduct of political campaigns by having an appropriation made for all parties, or all candidates. Am I mistaken?
Mr. MITCHELL. I do not recall having said that. I would not object to the idea if it could be fairly applied, but there is always the usual problem—what do you do with the third party? Theodore Roosevelt was the first man who talked about that I think 40 or 50 years ago. It has been widely discussed, but I would never espouse the idea as I sit here. I would not today espouse it because I do not see how it would work. To me it is a little contra the idea that politics belong to everybody.
There is one idea rather along the same line that was suggested that may have some merit—and I do not suggest it as having merit—the suggestion that if you establish a maximum limit that a person may give, then say if you give more than that then you pay a 100-percent tax on that amount.
Mr. KEATING. I know of no illustrations on either side in this last campaign of any one person giving over $5,000.
Mr. MITCHELL. You will find some gave to various committees.
Mr. KEATING. That is right. You will find members of families who gave, the second and third generations. Each of them gave $5,000.
Mr. MITCHELL. The Democrats have not been rich that many generations.
Mr. KEATING. Oh, yes, they have, in our State. That was a favorite device of Senator Lehman and his family—to contribute through all members of the family. They all contribute to all organizations and they are very stalwart backers of the Democratic Party in my State.
Mr. MITCHELL. I am glad to hear that. Mr. KEATING. They have certainly benefited from contributions from various members of that family, if you will check the records.
Mr. MITCHELL. I know in the past that has been so, and I do not suggest that it was not done. I am not aware that the national committee received any
Mr. KEATING. I am not suggesting that it was an impropriety. I could not let go unchallenged the fact that all the big money is in the Republican Party. You and I had some hearings in which we brought out the fact that quite large contributions were made to the Democratic Party, considerably larger than to the Republican Party.
Mr. MITCHELL. I think that they must have contributed to the Republicans this year.
Mr. KEATING. They sensed success, because they were usually contributing, as you and I remember, to the successful side.
Mr. MITCHELL. Perhaps they were, but they did not come around.
Mr. KEATING. Possibly your activities and mine may have had a deleterious effect.
Mr. MITCHELL. I just hope that it did not hurt you as much as it did me.
There are only 48 individuals who contributed $45,000 to the Democratic National Committee this year, so that does not leave room for very many generations, or cousins.
The CHAIRMAN. Forty-eight out of how many contractors ?
Mr. MITCHELL. I do not have the average, but I have some figures broken down, Mr. Boggs, showing $1 to $100. There are a good many that are just $99. Then the sum does not have to be reported. In that group 16,000 people gave under $100. Up to $500 you get 20,000 people, and you would have to add to that the bulk of the 126,000,
, because those are the $5 contributions, or those who bought dinners.
Mr. KEATING. What contributions are those referred to as constituting 35 percent of the total?
Mr. MITCHELL. Those were up to $500.
Mr. KEATING. So, 65 percent of your funds came from those who contributed more than $500!
Mr. MITCHELL. Well, no. As a matter of fact, the figure is wrong in this. These are the recorded contributions that came in in dollars, and up to 1 cent under $500, irrespective of another category that came from the Ruml plan, $5 apiece.
Mr. KEATING. Is the Ruml plan included in the figures that you have given us?
Mr. MITCHELL. It is included in the total to the extent of our participation, but it was not included in those percentage figures.
Mr. KEATING. Is it included in the total of 126,000 contributors ?
Mr. MITCHELL. Yes. A great many of them made up the bulk of that figure.
Mr. KEATING. Was the Ruml plan a great success?
Mr. MITCHELL. No; I would not say that it was. We do not have full figures. It is quite a painstaking job to make an audit because of the number of items. But it was quite successful and the total amount was approximately $500,000.
Mr. KEATING. The original prospect was about $3,000,000; was it not?
Mr. MITCHELL. There were various estimates. I think Mr. Ruml hoped that it would be that much, that it would be over $1,000,000, and I think had it been started earlier and had there been some adjustments in the distribution it would have been that much. I think it is a
sound thing. It was a very desirable thing as a democratic activity. It is a very good thing for a number of reasons, largely because of general participation. It did receive wide acceptance where people got a fair chance at it. By that, I mean they were asked about it and understood it, and so on. But it was started late, and most of the States and counties had already sought contributions and did not accept it too readily. I think that is just the fact. I think that it is a very sound thing to do. I would encourage it, but I do not have enough confidence or belief in the results, or in our ability to get those results, to say to you we ought to run the risk of limiting the presentation of the issues in a national campaign by putting a limit on an individual down to anything like that.
Mr. KEATING. Do you think that we should change to the $5,000 limit?
Mr. MITCHELL. I think it is going to be changed by the habits of people by the gift tax to $3,000, for one thing.
Mr. KEATING. It was limited to $3,000 in this last campaign. Being in the position of a political manager, I do not think that I should say that we should limit the legal amount of money that the people should give. I think that it may well be demonstrated over the course of time that that would not work any hardship.
Mr. MITCHELL. There has been a development since 1928. Then $1,000,000 was given by 15 people. Now, the limits came in around $ 1940 or thereabouts. It spread the total. We made a real effort here to get wide participation and did succeed in a moderate way in relation to the amount of effort and time that was expended. Politics and political management is a very inexact science, I have found. I am not going to try to pontificate.
Mr. KEATING. There is no doubt about that. I am sure that we can agree on that.
Mr. MITCHELL. There is a point that I have in mind that I am willing to venture a suggestion on. I think it is proper that labor unions should participate in educational activities. I think that limits on labor-union activities in a political sense are wrong in general.
Mr. KEATING. In other words, they should be allowed to spend any amount?
Mr. MITCHELL. I did not say that. I say any suggestion in the press that I have read that labor unions should not have what are so-called educational activities is an improper view. I think it is wrong. They should have it.
Mr. KEATING. Do you think that is true of other organizations and that they should also have the right to conduct educational activities?
Mr. MITCHELL. I do. I think associations of individuals should be allowed to do that. The labor unions were singled out as an object to be restricted. I think that an aggregation of workingmen would be in the same position as an aggregation of any other type or class or industrial group.
Mr. KEATING. I agree with you. I cannot understand where any opposite idea could
have originated. Mr. MITCHELL. It was reported that such testimony was given before this body.
Mr. LONG. Did you have any experience with scurrilous literature during this last campaign, Mr. Mitchell ?
Mr. MITCHELL. A bit of it was forwarded to our office.
Mr. Long. Do you think the existing law is adequate in that field, or perhaps more action should be taken!
Mr. MITCHELL. I do not know whether or not it is a question of law. I do not know how you deal with slander and libel. Some of these things that are foisted are so repulsive or so scurrilous that to repeat them causes more damage, and you cannot meet them without some repetition.
Mr. Long. The idea was expressed by a political scientist, or was presented to the committee, that a continuing group of eminent citizens be active during the campaign to whom any such examples would be pointed out immediately so that they could conduct an immediate investigation and relate publicly the true state of facts as they existed.
Do you think that would again be contributing to the scurrilous literature in its rounds?
Mr. MITCHELL. I just do not know. I have no opinion that I could support concerning it. Mr. Long. I agree. It is very difficult.
. The CHAIRMAN. Mr. Leventhal, do you have any comments that you would like to make? You are responsible for advising the chairman and are familiar with all of these election laws.
Mr. LEVENTHAL. I have a personal view, if I may make it in those terms.
The existing prohibition of gifts in excess of $5,000 is avoided under the present framework of the statutes by gifts to numerous State and independent committees. As you well know, and as your predecessor committees have already commented, that has been done. I have reference to those massive appendices that appear in the Senate Special Investigating Committee as to the 1944 campaign, which show for each of a number of individuals contributions of $30,000 or $25,000 spread over a number of State and independent committees. It seems to me;
if one of the intentions of the present statute was to limit the effectiveness in financial terms of any one citizen, that the statutes could be strengthened on that score. I am mindful of the effect as election day draws near we keep on having affirmed to us that every person in this country has equal political strength, one vote, but of course the power to contribute for political campaigns is also a factor in political strength, if you please.
I made this suggestion to Mr. Mitchell, and I would like to make it to you: That, without changing the prohibitory features necessarily of the present statutes, all of a person's political contributions could be grouped together, political contributions during any one year, and that his total political contributions free of tax might be set at $5,000, and if he made political contributions in excess of that amount they would be subject to a special excise tax on the making of that gift which would be steep in character. In other words, you could lawfully, under the present statute, make $25,000 worth of gifts by splitting them up, but the exclusion from the gift tax would apply only to $3,000 or $5,000 of gifts for a political purpose, contributions for a political purpose, and if you then had a tax of 50 percent, or a graduated tax, you would have some deterrent to the very large sums that any individual may now lawfully make.
The CHAIRMAN. As it is now, you have quite a deterrent in the income-tax structure itself?
Mr. LEVENTHAL. The old admonition that the best conservative people do not give money out of capital does not seem to be effective any Ionger, and people are willing to give out of their capital for political purposes, which is proper, but the importance of the total gifts of one person will be very large if he merely takes care in splitting, and you can compound his effectiveness that way.
Now, the gift-tax rates at the present time are not very high. They start at 21/4 percent for the first $1,000 over the exclusions now provided in the law, and I think they run up almost to 60 percent if your gifts exceed $10,000,000, which is not a practical percentage rate. But, if you should have personal rates of 25 or 50 percent, and especially if they were graduated, and if there was a requirement of reporting gifts to the various political committees—and I mean, by that, State and local as well as national—I then think that you would have a lawful and proper and democratic means, and one that is more readily enforceable than the criminal státute of limiting political contributions of any one person.
Mr. KEATING. Why do you think it is more possible of enforcement than the criminal statute?
Mr. LEVENTHAL. Well, it has been my experience that when the sanctions behind a bit of legislation are too severe it is not as likely to be invoked. I am not suggesting that the present statutes are violated, or that they have been violated, to my knowledge, but I do think that the consequences of the tax laws are more respected; it is understood that they can be checked on readily and they act as a practical guide for good conduct. That is true of my clients and from observations that I have seen of other people.
The CHAIRMAN. Do you have any other specific suggestions that you think we should consider?
Mr. LEVENTHAL. No; I think that is all.
Mr. MITCHELL. This may be a bit out of your realm, but it is certainly a matter for consideration by this committee. We have certain limitations today on the amount of money that may be spent for a candidate for the House of Representatives or the Senate. Again, there is no limitation upon the number of committees that may be created and the amount of money that may be expended by these various committees.
Mr. KEATING. Unless it is being expended with the knowledge of the candidate. Then the limitation takes place.
The CHAIRMAN. I submit to that. I might even suggest to my colleague that it has been very difficult to understand that some of our elected brethren are unaware of the amounts that are spent in their behalf.
Mr. KEATING. I agree with you. They have so many friends that they do not realize it.
The CHAIRMAN. I noted in some of the recent senatorial contests committees have spent well over $1,000,000. Is it your feeling that somewhere down the line limitations must be drawn on how much should be spent ? Should there be no limit at all ?
Mr. MITCHELL. I should think the same principle applies there as would apply to the Presidential campaign, that there is some need for maintaining equality of opportunity, but I should also think that