Investigation of Presidential, Vice Presidential, and Senatorial Campaign Expenditures, 1940

mittee because of illness in his family. On the same day Josh Lee, Oklahoma (Democrat), was appointed, but due to other matters he was unable to serve and resigned on October 3. On that day Alva B. Adams, Colorado (Democrat), was appointed to fill the vacancy.

B. JURISDICTION

1. Subjects of investigation.-Under the resolution the committee was authorized and directed to investigate:

(a) The campaign expenditures of the various Presidential, Vice Presidential, and senatorial candidates in all parties, and the method. of expenditures;

(b) The amounts contributed, the names of the persons, firms or corporations subscribing to such candidates or their campaigns;

(c) The use of any other means or influence, including the promise or use of patronage or use of public funds, and all other matters in relation to such campaign expenditures which would be of public interest.

2. Purposes of investigation. These were:

(a) To serve as a study which would aid the Senate in enacting remedial legislation; and

(b) To aid in deciding any contests which might be instituted involving the right to a seat in the United States Senate.

3. Scope of authority. The investigation under the resolution applied to:

(a) Presidential, Vice Presidential, and senatorial candidates and to contests before primary elections and nominating conventions which contests and campaigns terminated in the general election of 1940.

4. Authorization.-The committee was authorized to act

(a) Upon its own initiative and upon such information as in its judgment may be reasonable or reliable; or

(b) Upon complaint being made before the Committee, under oath, by any person setting forth allegations as to facts which it would be the duty of the Committee to investigate pursuant to the directions of the resolution of authority.

5. The committee was required to make a full report to the Senate on the first day of the Seventy-seventh Congress. This was extended by Senate Resolution 336 to January 30, 1941, and by Senate Resolution 59 to Febuary 15, 1941.

C. POLICY OF SPECIAL COMMITTEE

At its first meeting the committee unanimously adopted a policy of giving fair consideration to all complaints within the purview of its authority and direction. They declared as a particular purpose to give consideration to violations of Public Law No. 252, approved August 2, 1939 (the Hatch Act), and amendments thereto.

They further declared a policy to pursue such investigations as the committee deemed necessary of all complaints which in the opinion of the committee had apparent substantial basis, such investigations. to be made with consideration alone for the public welfare, regardless of partisan and personal considerations.

With reference to apparent violations of existing laws that might come to the attention of the committee or develop in the course of any investigation, the chairman was authorized and directed refer all

facts in the possession of the committee relating thereto to the appropriate enforcement or administrative authority for their information.

D. SCOPE OF INVESTIGATION

1. General.-Hundreds of complaints were received. Many related to matters not within the purview of the authority of the committee; others were of alleged specific instances of violations of existing statutes, particularly the Hatch Acts. The latter were referred to the appropriate enforcement and administrative agencies.

2. States in which investigations were made.-Investigations of complaints in the following States were ordered: Kansas, Missouri, Maryland, West Virginia, Nebraska, New Jersey, Ohio, Pennsylvania, New York, Wisconsin, New Mexico, Delaware, Maine, Illinois, Kentucky, Alabama, Iowa, and Wisconsin.

II. HATCH ACTS

A. In an effort to eliminate recognized evils incident to the expenditure of vast sums of money and the exercise of control by supervising officials over the political activities of Government employees during political campaigns the Congress, in 1939, and again in 1940, enacted legislation commonly known as the Hatch Acts. In reality the legislation constitutes one law composed of the original Hatch Act of August 2, 1939, and the amendment of July 19, 1940. Complete texts of both measures and of the Corrupt Practices Act, 1925, are set out in appendix I commencing at page 96 hereof.

B. Among the provisions of the Hatch Act there were established the following limitations or prohibitions:

(1) A limit of $5,000 on the amount which could be contributed by any person during any calendar year or for use in any one campaign or election;

(2) A limit of $3,000,000 on the amount which could be received. as contributions or expended by any political committee during any calendar year;

(3) In the original act administrative employees of the United States or employees of the executive departments of the Federal Government were prohibited from using their official authority to affect or influence elections or to take an active part in political campaigns;

(4) The amendment extended the operation of the Hatch Act to include State employees paid in whole or in part by loans or grants from the United States or from any agency thereof.

Severe penalties were provided for violations of the Hatch Act including removal from the positions held in certain instances and fine or imprisonment or both in other instances.

C. VOLUNTARY INTERPRETATIONS OF HATCH ACT

From the time of the introduction of the original Hatch Act in Congress early in 1939 the subject matter of the legislation aroused an increasing public interest. The amendments to the Hatch Act limits the amount of contributions and expenditures and extends its operation to State employees financed wholly or partly from Federal funds. The amended act was not passed by Congress until after the Democratic and Republican National Conventions had met and selected the Presidential nominees.

This matter continued to hold a wide public interest throughout the preconvention and postconvention campaigns of 1940. The Attorney General of the United States issued various formal instructions to employees in all sections of the country requiring a number of persons to withdraw from the Department or from designated political posts. Particularly during the postconvention campaign there were many voluntary interpretations of the Hatch Act among which were the following:

1. GENERAL COUNSEL OF REPUBLICAN NATIONAL COMMITTEE

About August 1, 1940, the general counsel of the Republican National Committee gave to press representatives an interpretation of the Hatch Act. He stated that the $5,000 limit on contributions of individuals could be subdivided among different candidates and different political committees without violating provisions of the Hatch Act. Furthermore, the general counsel construed the act to permit contributions to independent political committees which could be in addition to the $3,000,000 limit on the Republican National Committee.

2. POSITION OF GENERAL COUNSEL OF DEMOCRATIC NATIONAL COMMITTEE

The general counsel of the Democratic National Committee stated to the special committee during the general election campaign that while section 21 of the Hatch Act did not apply to committees independent of the established national committees of the two major parties it was, in his opinion, the intention of the Congress to impose in that act all-inclusive limitations in amounts that may be received and expended on behalf of Presidential and Vice Presidential candidates.

In view of this opinion on the part of the general counsel, it was asserted by him and by the treasurer of the Democratic National Committee that they proposed to attempt to comply with what they conceived to be the spirit of the act irrespective of strict legal interpretations of it.

3. PUBLIC STATEMENT OF ATTORNEY GENERAL OF THE UNITED STATES

Wide publicity was given in the press of the Nation to the opinion of the general counsel of the Republican National Committee. This publicity prompted the Attorney General to make a public statement about the matter. He said that the Department of Justice would not. render advisory interpretations of the Hatch Act for political parties or for other private persons but that silence in the face of this widely published opinion might mislead well-intentioned persons to believe. that it is an accepted interpretation of the Hatch Act. The Attorney General said that no plans for avoiding the limitations of the Hatch Act would be accepted or approved by the Department of Justice.

4. SPECIAL COMMITTEE POSITION

During the course of the general-election campaign the special committee refrained from rendering any opinion regarding the Hatch Act.

However, in light of studies by the special committee of activities of many political committees and groups in the general-election campaign, it must be recognized that provisions of that act with respect to limitations imposed by sections 12 (a) 1,13 (a) and 21, by reason of express exemptions therefrom, did not prove effective in preventing enormous expenditures in the recent general-election campaign as will appear from this report and from testimony before this committee.

III. ACTIVITIES OF SPECIAL COMMITTEE

A. CHARACTERIZATION AND SUMMARY OF ACTIVITIES

In accordance with the general policy of the special committee, which was empowered to act on its own initiative, no actual steps were taken in any instance until a complaint was received. Every complaint was carefully considered and wherever such action was justified a preliminary investigation was ordered by the special committee.

B. SUBJECTS INVESTIGATED

Hundreds of complaints were received and all complainants were given an opportunity to substantiate their allegations in order that the committee could determine its action. Forty-seven complaints were acted upon, 29 of which were hearings before the committee or subcommittees, and 18 by investigators. These included investigations and study of contributions, expenditures, and activities of Democratic, Republican, and independent committees; character of campaign literature; political activities by Federal agencies; political activities of private corporations; prenational convention activities; post-convention activities on behalf of Republican nominee; alleged registration irregularities; primary campaigns in various States; and election campaigns in various States.

1. CONTRIBUTIONS, EXPENDITURES, AND RELATED ACTIVITIES

A significant development of the entire campaign of 1940 grew out of the series of voluntary interpretations of the Hatch Act, examples of which heretofore have been set out.

In the campaign of 1940 independent political committees had a mushroom growth shortly after the announced opinion of the general counsel of the Republican National Committee that the Hatch Act limitations would not preclude contributions and expenditures up to those limits by independent committees separate and distinct from those permitted to the national committees of established parties. Reports and complaints about these independent committees were called to the attention of the special committee. The committee requested attendance of responsible officials of all these independent committees to which their attention was directed for the purpose of securing statements as to their background, functions, and relations to the sponsored candidate and to the established political committees.

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