The Watergate scandal of the 1970s led to monumental reforms of America’s election and campaign laws, not only in Washington but in each state capitol. Alabama was no exception to the tidal wave of ethics reform. Our current ethics law was a product of the aftermath of Watergate and our current campaign finance law was also spurred by the national scandal. Both our ethics and fair campaign practices acts were passed in the 1970s in the sweeping trend of reform occurring in all fifty states. Many of the state laws were boilerplate and had very similar language. However, Alabama’s ethics law was stronger than most and our fair campaign practices was considered a model.

Prior to the passage of our campaign finance law there was no law governing the giving and receiving of campaign money in Alabama. Vote buying was rampant. Contributions to politicians in brown paper bags during and after elections were common practice.

Alabama had a direct link to Watergate. During the Watergate hearings it was revealed that the Nixon campaign had given $400,000 to the Albert Brewer campaign for Governor in 1970 to help defeat George Wallace. Wallace had run for President as an Independent in 1968 and had carried five southern states which would have otherwise voted Republican for Nixon. It almost cost Nixon the election to Humphrey. They did not want Wallace to run as a spoiler again in 1972.It appeared that Brewer had Wallace on the ropes. Nixon’s people realized that if Wallace lost the Alabama Governor’s Race he would be a nonentity, so they sent the $400,000 to Alabama in a hurry. That was a lot of money in 1970.

Wallace won by the skin of his teeth in a primary runoff. It has been argued, and rightfully so, that the $400,000 Nixon sent to Brewer was the cleanest money a campaign could have received. It did not come from a road builder who wanted to buy special consideration. Nixon’s folks just wanted Wallace eliminated politically.

Whatever the intent it would be illegal today under Washington or Alabama laws. Under our current campaign law, candidates must report all campaign contributions they receive and the givers, if they are PACs, must report how much and to whom they contribute during a campaign. However, over time many creative ways to give money to campaigns have appeared causing the furor over the need for new reform of Alabama’s campaign finance law. There is a glaring loophole that has been created and it is known as PAC to PAC transfers. A simple example illustrating what is happening is Company X, a somewhat unsavory business, wants to keep its political activity and contributions private and the ultimate recipient of the campaign money, Politician Y, does not want to be tainted with receiving Company X’s contribution. Therefore, Company X starts a PAC and hires a lobbyist. Lobbyist Z creates a number of PACs with innocuous names like “Good Government PAC”, “The Good Guys PAC”, or “Apple Pie and Motherhood PAC”. Company X’s money is put into PAC A, B, or C, switched around a few times within the PACs, and then sent to Candidate Y.

Candidate Y’s campaign disclosure shows a contribution from Apple Pie and Motherhood PAC, rather than Company X, and the folks looking at the candidate’s campaign contribution report think, “What a nice candidate. He is for apple pie and motherhood.” When in actuality the candidate is receiving campaign money from a company that might be pouring raw sewage into the Cahaba River and wants to keep doing so.

The practice of PAC to PAC transfers has become so pervasive that playing the shell game with campaign money is the norm rather than the exception. Companies and groups who are well liked and would seem to have nothing to hide are even playing the game. This rampant maneuvering has been the focus of campaign speeches and legislative agendas for the past decade.

The legislation to ban PAC to PAC transfers seems to be on a fast track this year. Hopefully it will be passed and this loophole in the law will be closed. The present practice of swapping money around in PACs before it gets to the intended recipient totally effaces the initial money’s origin and renders our campaign reporting laws meaningless.