A Look Inside the Case That Enshrined Political Power for Billionaires

For a brief moment in American history, the rich didn’t control politics.

Back in 1974, in the wake of the Watergate scandal, Congress passed new campaign finance restrictions that would have largely eliminated the ability of wealthy people to buy elections. In addition to donor disclosure rules and contribution limits, the new legislation capped so-called “independent expenditures” on behalf of political candidates at $1,000 a year. There were even curbs on what rich people could spend to get themselves elected.

David Koch, a wealthy industrialist, was enraged.

“I have the right to spend whatever I choose to promote what I believe,” he later wrote, adding that the law “makes my blood boil.”

Flash forward to the 2024 presidential campaign. Six of the nation’s wealthiest billionaires spent more than $100 million apiece to help get another billionaire, Donald J. Trump, elected president. Independent expenditures by wealthy outsiders for the first time in history exceeded what the candidates’ own campaign committees spent, a New York Times analysis showed. Mr. Koch’s brother Charles was among 300 billionaires and their families who accounted for 19 percent of all contributions in federal elections.

So what happened?

A Supreme Court decision that most Americans probably never heard of. Fifty years ago, in a case called Buckley v. Valeo, the court upheld many aspects of the post-Watergate campaign finance law, clearing the way for public financing of presidential elections and empowering the new Federal Election Commission.

But it eviscerated other parts of the law, leaving the rich with their own set of rules. The court ruled that wealthy Americans could spend unlimited amounts of money to independently support candidates and causes they favored.

Later cases, like the better-known Citizens United decision, opened the doors even further. But it was Buckley that established the nation’s modern, muddled campaign finance system, and Buckley that allowed the Koch brothers to build a right-wing political money machine that rivaled that of the Republican Party itself.

The case is as relevant as ever. Since taking office, Mr. Trump has celebrated billionaire donors at a White House dinner and raised unprecedented sums for a lame-duck president.

Interviews with surviving Buckley combatants and a review of archival records from the Library of Congress, the National Archives and three universities, as well as other available documents and research, explain how post-Watergate legal and political currents upended a momentary defeat for the wealthy, creating an environment where a single donor can spend hundreds of millions of dollars on a favored candidate.

What it shows is that the legal assault on the most expansive campaign finance legislation in the nation’s history was engineered not just by well-funded right-wing activists, including the Koch-backed Libertarian Party. It was also pushed by some liberals and the American Civil Liberties Union, who agreed with conservatives that the right to spend money on behalf of candidates and causes was an essential element of free speech.

Gerald R. Ford, who had inherited the presidency after Richard M. Nixon resigned, had felt obliged to sign the legislation. But documents show that his administration nonetheless worked to undermine the law. One midlevel State Department official, Francis L. Kellogg, was even among a small group of people who financed the litigation against it, archival records show.

Robert Bork, the Ford administration’s hard-line conservative solicitor general charged with defending the law in court, privately referred to the statute, the Federal Election Campaign Act, known as FECA, as “fecal matter.” Records have shown that Mr. Bork helped devise an unorthodox strategy that allowed the administration to submit dueling briefs, both supporting and undercutting the 1974 amendments to the law that were at issue.

The Washington law firm of Covington & Burling took the case pro bono. But expenses were also covered by a small group of bankers, oilmen and industrialists who appear in the archives of the lead plaintiff, Senator James L. Buckley of New York, who was a standard-bearer of the Conservative Party in New York, founded in the 1960s amid dissatisfaction with the G.O.P.

Senator Buckley’s private files, at St. John’s University in Queens, include copies of thank-you notes to moneyed donors to the litigation effort, including Boeing and G.D. Searle, the pharmaceutical company that developed the first birth control pill. Individual contributors whose names appear in fund-raising ledgers include the Texas oilman Perry Bass; John C. Whitehead, who would soon become co-chairman of Goldman Sachs; and Thomas S. Murphy, who once controlled ABC.

The Libertarian Party joined Senator Buckley as a litigant; Charles Koch cut a $10,000 check to the party right before it paid its share of legal expenses, and included checks from his brother David and their mother as well. He was regularly kept apprised of developments in the case by the party’s leadership, archival records show — though in a statement, a spokesperson said that Mr. Koch “was not involved in this litigation” and his contribution had been directed generally to the party.

One of the most instrumental supporters of the legal challenge was John Bolton, who would have a long history in politics and diplomacy and went on to become President Trump’s national security adviser, and, after he was ousted, one of his critics. He was subsequently indicted by the Trump Justice Department and has pleaded not guilty.

At the time, Mr. Bolton was only recently out of Yale Law School, and pushed Covington & Burling, where he’d joined as a new associate, to take on the Buckley case.

Today, Mr. Bolton concedes that campaign finance is as deep a problem as ever.

“The system now is such a wreck that nobody would have put it in place,” he said in an interview. “In fact, that was one of our thoughts. If we could blow enough holes in it, the whole thing would have to come down.”

But that is not what happened.

‘Post-Watergate Morality’

The Watergate scandal emerged after operatives of Mr. Nixon’s re-election campaign were caught breaking into Democratic Party headquarters in 1972. Revelations followed about secret Oval Office tapes and funds laundered by the Nixon campaign through a Mexican bank.

Then came a “spasm of post-Watergate morality,” as the Washington Post columnist David Broder put it.

But not long after President Ford signed the campaign finance legislation, Mr. Bolton, new to Covington, received a call from David Keene, an aide to Senator Buckley and a future president of the National Rifle Association.

Mr. Bolton learned during the call that Senator Buckley had taken an interest in potential litigation over the new law.

“I consider this challenge to be one of the most important projects I have undertaken since coming to Washington,” the senator wrote in a 1975 letter to potential donors.

The new campaign finance law limited House candidates to expenditures of $140,000 for both the primary and general elections, about $900,000 in today’s dollars, which is less than half of the average spent by winning congressional candidates today.

It also limited independent expenditures: Even interest groups could not spend more than $1,000 promoting a specific candidate, at a time when a full-page ad in The Washington Post cost $6,971.04. That raised hackles on both the right and the left.

“A thousand dollars may well have been too low,” said Fred Wertheimer, who was legal counsel for Common Cause when it intervened in the case, in a recent interview. But on the other hand, he said, “a system of unlimited contributions is inherently corrupt.”

For the Koch brothers, the issue at hand was their inability to continue infusing large amounts of money into the Libertarian Party, which favored an end to most government regulation.

They and many other hard-line conservatives had felt betrayed after the Nixon administration imposed wage and price controls and abandoned the gold standard, leading them to back third parties. In a 1975 letter to fellow oil executives, Charles Koch lamented that Republicans “were no better allies in the fight for free enterprise than the Democratic Party.”

Third-party supporters believed the new legislation favored the two large parties and their extensive donor networks. David Koch, who died in 2019, called the new law “an act to preserve the two-party monopoly.”

Mr. Bolton volunteered to join the Buckley legal team, successfully pitching it to Covington. Mr. Keene worked on assembling a coalition. He reached across the aisle, recruiting Eugene McCarthy, an anti-Vietnam War Democrat who later ran for president. But his biggest get was the New York branch of the American Civil Liberties Union. The A.C.L.U. had already been skirmishing in court over Nixon administration attempts to use campaign finance laws to block the A.C.L.U. and other groups from running advertisements on the Vietnam War and other issues.

“Keene was the guy who at some point calls me and says, ‘Well, we’re thinking of challenging the whole ’74 amendments. You guys want to?’” recalled Ira Glasser, the former head of the A.C.L.U. “I loved the whole idea, because my position was: It had to be made clear that this was not a liberal versus conservative issue, that this is an issue of speech that affected everybody.”

The case was the first of the year to be filed in the Federal District Court in Washington, in January 1975.

Mr. Bolton likened the motley assemblage of plaintiffs to “the bar scene in Star Wars.” Joel Gora, an A.C.L.U. lawyer who worked on the case, recalled that “every time we met they would razz me about the A.C.L.U. position on affirmative action.”

The opposing lawyers were even more unlikely bedfellows. One of Mr. Nixon’s most bungled acts was known as the Saturday Night Massacre, on Oct. 20, 1973, when he ordered the firing of Archibald Cox, the special Watergate prosecutor. The attorney general and his top deputy refused, resigning in protest. That left Mr. Bork to carry out the order.

Mr. Bork and Mr. Cox now found themselves on the same side of the Buckley case. But only technically. Mr. Bork loathed the campaign finance legislation. But because the president had signed it, the Justice Department released a supportive brief. However, the department also filed an unusual second brief raising constitutional concerns about contribution and spending limits, reflecting Mr. Bork’s view.

The chairman of the F.E.C., Thomas B. Curtis, whose agency was created by the law, was not pleased.

“Where is the vigorous defense when the chief defense counsel seeks to carry water on both shoulders?” he wrote in an October 1975 letter to the Justice Department.

Other lawyers took the lead in defending the law, including Mr. Cox, who intervened on behalf of Senator Edward Kennedy, a proponent of the campaign finance legislation, and Lloyd Cutler, a future White House counsel, who represented Eugene McCarthy.

Mr. Bolton credited Ralph K. Winter Jr., the lead lawyer and one of Mr. Bolton’s former professors at Yale, with developing the case’s main legal theory, an argument that became known as “money is speech.” It held that preventing people from spending money to express their political views violated their constitutional rights.

In August 1975, a ruling came down in the U.S. Court of Appeals for the District of Columbia largely upholding the legislation; an appeal was quickly lodged with the Supreme Court, which heard oral arguments in November.

The justices’ views did not track along simple ideological lines. Justice Byron White, a Kennedy appointee, felt that limiting spending was critical; otherwise, “you can get and spend all the money you want,” according to notes kept by Justice William J. Brennan Jr.

But five other justices were First Amendment hard-liners, from William Rehnquist, a conservative future chief justice, to Harry Blackmun, a liberal stalwart. Mr. Brennan and Thurgood Marshall, both liberals, contemplated supporting Justice White, and Congress, in curbing spending. But the archives show that both feared giving the government the ability to silence groups like the NAACP, where Justice Marshall, the first Black justice, had served as lead counsel.

“On the one hand, there’s this huge concern about corruption in government,” said Rick Hasen, a law professor at the University of California, Los Angeles. “On the other hand, there are these very powerful First Amendment arguments that had not ever been really considered by the court.”

‘The Current World’

Even as the justices were deliberating, the Libertarian Party was exploring whether the Kochs could test the new campaign finance limits by donating $25,000 to the party itself, rather than to a specific candidate. Mr. Bolton, who also did legal work for the Libertarian Party, helped devise a plan to put a $25,000 contribution from the Kochs in escrow while they awaited word on whether it would be legal, a gambit ultimately rejected by Charles Koch.

On Jan. 30, 1976, the court handed down its decision, a 6-to-2 ruling that upheld the law’s limits on contributions to political campaigns, its disclosure requirements and the new program for public financing of campaigns. But the justices ruled 7 to 1 against limits on how much people could spend on their own campaigns, or on independent expenditures on behalf of other politicians they hoped to see elected.

Three years later, David Koch seized on what he called, in a letter to fellow Libertarian Party members, “the best loophole the Supreme Court gave us.” The rich could spend on their own campaigns without limit. He offered himself as running mate to the party’s 1980 presidential candidate, Ed Clark.

“I have no particular expertise in politics, campaigning or running a campaign,” he explained in the letter. But he did have a very large wallet.

The Libertarians — who were calling for abolishing the minimum wage, Social Security, Medicare, Medicaid and all income taxes — captured just over 1 percent of the vote. The Reagan campaign took advantage of the new loopholes and organized independent campaign committees, including one led by Mr. Keene that ran a $1 million campaign to persuade Southerners to abandon Jimmy Carter, who was soundly defeated.

The Kochs pivoted in the years that followed, reimagining political power as a vertically integrated business, leveraging all that was made possible by Buckley. They began underwriting favored professors and university programs as test wells for ideas like climate change skepticism and hostility to regulation. They backed think tanks like the Cato Institute to refine those ideas, and interest groups to spread them.

They pioneered efforts to overhaul the judiciary and, finally, anointed certain politicians to advance their ideas, including candidates like Mike Pence and the former Wisconsin governor, Scott Walker. In the 2024 election cycle, the Koch political influence machine spent nearly $550 million.

But it was Elon Musk, the founder of Tesla and SpaceX, who officially spent about $300 million on a single candidate, Donald Trump — not counting the “dark money” donations that the Supreme Court’s later decisions did not require him to disclose. “Without me, Trump would have lost the election,” Mr. Musk boasted.

It was the culmination of the court’s half-century of reshaping of the nation’s campaign finance system. Few are pleased with the situation as it stands.

“Sure, it bothers me to see these half a dozen people giving a ton of money,” Mr. Gora, the former A.C.L.U. lawyer, said, reflecting on his group’s role in Buckley. But spending limits don’t prevent billionaires from pushing their agendas, he added. They can just buy newspapers or social media platforms.

Some who backed Buckley find themselves on the wrong side of a billionaire president, including Mr. Bolton. Covington & Burling has been targeted by the Trump administration for its work with Jack Smith, the former special prosecutor who twice indicted Mr. Trump.

Mr. Bolton’s position on Buckley has not changed. No one side of the nation’s political divide benefits more than the other from the ability of wealthy donors to move elections, he said.

“We’ve never had anything like Trump, that’s for sure, but the fact is that big money is more evenly divided than people think, and I think it’s especially true now,” he said.

Campaign finance records back Mr. Bolton up. A Times analysis showed a vigorous foray by Democrats into anonymous big-money donations in 2024, helping give former Vice President Kamala Harris a financial edge over Mr. Trump.

But if billionaires are not necessarily tilting power to one party or another, they do hold enormous sway over the two-party system in general. And that goes back to Buckley.

“If those justices had been aware then of what we now face, my guess is that we would have had the opposite result,” said Geoffrey Stone, a law professor at the University of Chicago and co-editor of a new book of Buckley scholarship. “They weren’t imagining the current world.”

Steven Rich contributed reporting.