me and you are interested, to give some indication of what I have in mind.

Mr. ELLIOTT. I would like to have something like that.

Dr. MASE. Thank you, sir.

A contribution actually is a donation against the promise, as a consideration that this donation will be put to use for the benefit of a candidate or a cause which stands in an election. Actually, a contribution may never become active, never appear anywhere. It may, so to speak, be left in the bosom of a committee or a candidate. Indeed, there is a promise to use it, but it may not necessarily be put to use. It may be returned.

When you have an expenditure, this expenditure is actually a payment in consideration of something which is in the nature of a service. Suppose a committee engages time for a candidate on a TV station, the TV station must render service for the amount paid. In other words, the moment there is an expenditure the money is on the market. Permit me to use this expression.

When you have a transfer, committee A receives the money in the nature of a contribution. Then it says, "I don't want to do anything with that money. The only thing I want to do is to move the money to another committee, which would undertake, if it so desired, to make an expenditure out of it." Engage services, print posters.

Mr. ASHMORE. How can you prevent that transfer, Doctor? How do you control it?

Dr. MASE. In what respect should you control? The control, according to the bill, would be simply a reporting as a separate item. In other words, now when you have reports you must have some real knowledge of bookkeeping to separate expenditures and contributions from transfers, whereas here the report on the face of it will show a balance of expenditures and contributions, and then as a separate item receipts which were transferred. That means never put-permit me to use again this word-on the election market. In other words, this committee did not take a certain percentage of these funds and bring the weight of these funds to bear in order to influence an election. It simply said:

We believe it proper to move this part of our funds to another institution which may transfer it again or which may really spend it in order to influence the election.

Mr. LESINSKI. Mr. Chairman, I would like to hear the whole explanation, but there is something lacking someplace. Today there may be any number of committees established for the election of an individual to office. Whether they transfer funds, I do not know anything about that. The point is, I have heard of others having various committees and they all work toward the election of a single person. Have you reference to that, or have you reference to the fact that one committee will set up a second committee to avoid putting down the funds spent?

Dr. MASE. No, sir. I do not suggest any irregularity whatsoever. It is simply a measure to facilitate the disclosure, to make it possible for any layman or any uninitiated person to see immediately which money was received and expended and which money was simply transferred.

Mr. LESINSKI. According to my report, I report all moneys received and all moneys spent. Maybe I am Dutch. I am trying to figure out what you are trying to tell us.

Dr. MASE. I wish simply to say that there are cases where committees do not transfer any funds. Sir, by report you have reference to a personal report.

Mr. LESINSKI. Right.

Dr. MASE. This provision is particularly important with respect to committee reports. If you have a political committee which works exclusively in favor of one candidate, then it is very possible or even probable that no transfers would be made. But suppose that it is a committee which collects money on the local level and actually the spending is being done by some central committee, in these cases and in these reports you will have operations with vast or relatively vast amounts, whichever the case may be, which would be nothing but transfers or in a large part transfers.

Mr. LESINSKI. On that point, what harm would it be if you had a committee for collection which transferred the funds to the committee on election of a certain official? Suppose I had four or five groups around that call themselves Lesinski, and they gathered the funds and sent them to the central committee to be spent.

Dr. MASE. Right.

Mr. LESINSKI. What is wrong with that?

Dr. MASE. Nothing.

Mr. LESINSKI. You are saying

Dr. MASE. I prefaced my remarks

Mr. LESINSKI. I am trying to find out the reasoning behind your statement.

Dr. MASE. The reasoning is to give a completely clear picture of the movement of funds and their function.

I have had an opportunity to study these reports and figure it out, but, even so, it is not so easy. You must sit down and calculate and really see how it is.

In checking this problem, it is this way: If I set out transfers as a separate item, and the item says "To committee B" in the report of committee A, I immediately go to the report of committee B and have no difficulty in checking what course this amount of transfer had taken. Was it transferred to committee C in toto, or was part of it spent by committee B and part by committee C? As Senator Hennings said in his statement which I have submitted, this bill is primarily a disclosure bill. It is disclosure over controls, and control of contributions over control of expenditures. This is the basic purpose of this bill.

May I pass to the second item, which is connected with this very point?

Mr. ASHMORE. Doctor, do you have or does Senator Hennings have in the statement which you have given us very much of what you are giving us orally?

Dr. MASE. Yes; in part; but in part, of course, I give certain explanations which Senator Hennings, because of the shortness and formality, did not include in his statement. If he were present, he would give you these additional explanations. However, the legal analysis of the terms "contribution" and "expenditure" I submit to you as an item which it was not possible to include.

It is a new approach, and I must take full responsibility for it. Mr. ASHMORE. I want to have time to discuss the thing as the members have started, and let you explain in detail as you are doing, but, due to another matter which we have to take up today, I believe it would be wise to discontinue now and let you file Senator Hennings' statement. It will be the next session before we can get to this bill. Dr. MASE. Surely.

Mr. ASHMORE. With that explanation of the reason I am cutting you off, and the only reason, because we do want to hear you, I think it would be best to do that and let us get on to this other business we must take up today.

Dr. MASE. Certainly, sir.

May I, in behalf of Senator Hennings, who asked me to do so, thank you particularly for your kindness.

Mr. ASHMORE. Surely. The counsel wishes to ask you one question. Mr. STILL. Doctor, you have a memorandum here which was prepared by the Senate committee, dated February 2, 1960. You would not have any objection to the committee's inserting that in the record? Dr. MASE. The memorandum which was mimeographed?

Mr. STILL. February 2, 1960.

Dr. MASE. That is right. May I ask for permission also to submit to the committee the memorandum to Senator Hennings which spells out the differences between the Senate bill as reported by the Committee on Rules and Administration and the version adopted by the Senate when passed?

Mr. ASHMORE. We would like to have that.
Mr. STILL. I have a copy of that.

STATEMENT OF HON. THOMAS C. HENNINGS, MEMBER OF THE U.S. SENATE FROM THE STATE OF MISSOURI

Mr. ASHMORE. We shall include in the record the statement of Senator Hennings, the explanation of the differences, and the memorandum of counsel.

(The material referred to follows:)

Hon. ROBERT T. ASHMORE,

U.S. SENATE, COMMITTEE ON RULES AND ADMINISTRATION, August 25, 1960.

Chairman, Subcommittee on Elections of the Committee on House Administration, House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: I regret that illness prevents my appearing before your subcommittee today during its hearing on legislation to revise the Federal election laws. However, I have prepared a statement on S. 2436 which briefly sets forth the needs for new legislation in this area and how the provisions of this bill meet these needs.

I hope that the subcommittee will include this statement in the record of the hearing.

With warmest regards, I am,

Sincerely yours,

THOMAS C. HENNINGS, Jr.,
U.S. Senate.

STATEMENT BY SENATOR THOMAS C. HENNINGS, JR., DEMOCRAT, OF MISSOURI,

AUGUST 25, 1960

Mr. Chairman, while illness prevents my coming to the Capitol, as author of the Senate clean elections bill, S. 2436, I would like to submit a statement setting

forth the need for new legislation and how the provisions of this bill meet this need.

The bill passed the Senate on January 25, 1960, by a heavy bipartisan majority vote of 59 to 22. If, however, those who announced in favor of the bill or were paired had voted the majority would have risen to 70. This bipartisan acclaim is, to my view, strong proof that the inadequacy of the existing election laws has been universally recognized. I firmly believe that the vote of the Senate reflects correctly the opinion held by the majority of our citizens regardless of partisan political or social affiliations. We are fortunate, indeed, to have reached this state of public consciousness. It was quite different in 1955 when I introduced my first clean elections bill and held extensive hearings on the matter as chairman of the Senate Subcommittee on Privileges and Elections.

The statutes governing present Federal election law, the Corrupt Practices Act and the Pernicious Political Activities Act (or the Hatch Act, as it is familiarly called) were passed decades ago in 1925 and 1939, respectively. In our fast-moving times, it is surely not surprising that statutes dealing with money in elections and campaign practices may be out of date and in need of incisive revision. Nor is it surprising that uneasiness spreads across the country at election time because present law is not positive enough in its provisions to safeguard disclosure of money used in political campaigns.

I submit that the reform of our election law cannot be long delayed and I am cheered by the resolution of your distinguished committee to take up the question of reform and to save the action of the Senate from extinction at the end of the current Congress.

The history of democracy is substantially the story of the ballot. Begining in the distant past with the right to vote limited by qualifications of origin, race, color, religion, property, or sex, it has culminated in the universal suffrage of our day. Every generation of Americans, in its time, sustained the elective principle of our institutions, to make free elections the substance and the symbol of our Government. The integrity and fairness of the election process truly touches the foundations of our political life, determining in the last analysis all the legislative and executive actions of the Nation.

The position of elections in the structure of our institutions calls for a continual evaluation of present election law in the light of prevailing campaign practices. I shall therefore point out at some length the weaknesses of the present law.

The existing Federal election law is primarily concerned with campaign financing. It is based on the idea that money spent in elections ought to be disclosed and the amount of expenditures and contributions controlled. The voter has the right to know the source, the applications, and the amount of money influencing the nomination and election of candidates. Secrecy and unlimited use of funds easily raises the suspicion of corruption, even if actually no corruption exists.

This approach to the question of campaign financing is undoubtedly sound. There may be differences of opinion, however, as to the relative importance of publicity and controls. There is also the fact that the provisions of the existing law are too weak and therefore fail to implement its avowed purposes.

The present law requires that candidates and political committees report the money they receive for political campaigning and the amount and type of expenditures they make to influence elections. These reporting provisions are too general. In order to gain a clear picture of campaign financing it is not enough that contributions and expenditures be separately stated. Transfers of funds between political committees play an important part in our campaign practices, but their function is different from that of contributions and expenditures. Therefore, the law should require that transfers be reported as separate items. Under the present system, reports are not easily understandable and fall short of the requirement of disclosure.

The present law is also too narrow. In the first place, it is limited to the election of Senators and Representatives. Presidential and vice presidential candidates are not subject to reporting. Nor are they subject to any limitation on spending.

It is even more significant that intrastate political committees are not required to report under the existing law, and this includes party committees (only local committees of factional organizations have to report). At present, all we know of the financial transactions of these committees depends on the requirements of State law. In this respect, however, State laws differ vastly. Some

States have no reporting provisions at all, while others have different standards ranging from general provisions to comprehensive detailization. Yet, past surveys have shown that in populous States some local committees handle large amounts of money and play a more important part in campaign financing than many a committee operating in two or more States.

Furthermore, the existing law is limited to election as distinguished from nomination. The financing of primaries, caucuses, and conventions of political parties is outside of the disclosure provisions of the law as it now stands.

It is difficult to justify this limitation. In a democracy all phases of the election process are equally important. The people must have a voice not only in electing candidates but also in the process of selecting them. Actually, thoughtful analysis has shown that money plays a more decisive part in the process of nomination than in the process of election. This fact can be easily explained by saying that when the election phase is reached, the bulk of the voters are more or less familiar with the personalities and the ideas of the candidates. By contrast, in the process of nomination, candidates are often newcomers to the political scene. It takes publicity to present the candidates to the constituents and publicity costs money.

It has been said, however, that the process of nomination is of local interest and any Federal regulation would interfere with the vested rights of individual States. Strictly speaking, only the election of the President and Vice President is truly national in character. But even that is technically not quite correct because we have no direct popular presidential and vice presidential elections. All elections to Federal office are, strictly speaking, local matters as far as the right to vote is concerned. If so, it is difficut to see any difference between the process of nomination and election. And it is also well known that money flows across State lines both in case of election as well as as nomination.

On the other hand, the inclusion of nomination within Federal reporting provisions would not otherwise regulate the conduct of primaries as such. There is no foundation for any apprehension which is being expressed that any such inclusion of primaries would cause an avalanche of legislation designed to invade the rights of the States in matters of elections. I wish to remind you that the existing law deals with primaries in three considerably important situations. The provision barring corporations and labor organizations from making political contributions or expenditures applies to primaries (18 U.S.C. 610). So does the provision requiring that campaign literature shall be identified as to its source (18 U.S.C. 612). And again, the prohibitions of individual campaign contributions in excess of $5,000 for a candidate or a political committee during one calendar year comprises not only elections but also nominations (18 U.S.C. 608). And finally, the general language of the statute which prohibits a Member of Congress from soliciting or accepting money from Federal employees carries an implication that primaries are within its purview (18 U.S.C. 602, formerly 18 U.S.C. 208). These statutes, as we know, have never become opening wedges in destroying State jurisdiction over primaries.

I wish to add that no constitutional question exists here. Since the decision of the case. United States v. Classic (313 U.S. 299 (1941)), there is no doubt that Congress has the power to regulate primaries insofar as they are an integral part of the Federal election process. Whether or not primary financing shall be reported on Federal level is a matter of legislative policy and not one of constitutional considerations.

Equally restricted are the provisions with respect to the dissemination of reports. At present these are not readily available to the electorate. Under the present system campaign reports are filed with the Clerk of the House, and in the case of candidates for Senator with the Secretary of the Senate. Under these provisions, interested persons must either go to Washington, D.C., or rely on press reports. The principle of disclosure obviously calls for dissemination of reports on the local level.

The "clean elections" bill which the Senate passed last January provides for separate reporting of transfers; requires presidential and vice presidential candidates to report as any other candidates; its reporting provisions include intrastate committees and the nomination phase of election.

Thus, the Senate bill projects an effective statute which would be very different from the existing law.

In the legislative scheme of the present law the principles of disclosure through reporting and control of contributions and expenditures are evenly balanced. And as between contributions and expenditures, the control of expenditures is