Justices Should Think of Quarter Pounders in Latest Money in Politics Case

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This post first appeared in the Brennan Center blog.

Double Quarter Pounder with Cheese
(Coal Miki/flickr)

In October, the Supreme Court will hear oral arguments in the McCutcheon v. FEC case, which challenges aggregate limits on money that individuals can give every two years in federal elections to all candidates, political parties and PACs, combined. The current limit is $123,200. When they do so, the Justices should remember the price of a Quarter Pounder in the 1970s. And here’s why.

The aggregate limit at issue in McCutcheon was one of the post-Watergate reforms put in place by Congress to discourage corruption and its appearance. With Watergate 40 years in the rear view mirror, it is easy for President Nixon’s campaign finance violations to slip from the collective consciousness.

But as a reminder, Nixon’s successful reelection campaign was remarkable for its receipt of big, secret and illegal campaign contributions. So when Congress clamped down on how much a citizen could give to individual federal candidates and collectively to all federal candidates, the members had the Committee to Reelect the President (also colloquially known as CREEP) firmly in mind.

One concrete example from the Nixon era illustrates the risks that are posed by unlimited contributions from individuals: the price of the Quarter Pounder. The story revolves around Ray Kroc, who, at the time, was the CEO of McDonald’s. Mr. Kroc had a few problems that the federal government could help fix if it were so inclined. Problem one was he wanted the minimum wage dropped for his then-largely teenage workforce. Problem two was he wanted to raise the price of his hamburgers when the Nixon administration had imposed price controls on many consumer goods, including food, in a vain attempt to stave off inflation. Solving these problems would line Mr. Kroc’s pockets.

Mr. Kroc decided to donate over $250,000 in 1972 to CREEP (equal to roughly $1.3 million today) by routing the money through multiple committees. Maurice H. Stans, former secretary of commerce and chief fundraiser for Nixon’s reelection campaign, claimed that Mr. Kroc gave the quarter million out of the pure goodness of his heart and with no requests made of the Nixon administration. Mr. Stans may not be the most credible witness on this point, though, as he later pled guilty to five counts of violating various campaign finance laws while fundraising for Nixon.

What happened after this generous gift of campaign cash from CEO Kroc?

One theory about what the $250,000 bought for McDonald’s was the chance to get a “subminimum” wage for teenagers. According to Eric Schlosser in Fast Food Nation, the minimum wage, which was then $1.60/hour, would have been slashed to $1.28 for teenagers under what became known as the “McDonald’s bill.” But Congress refused to put the subminimum wage into the final bill presented to Nixon for signature. According to contemporaneous reporting by Congressional Quarterly, Nixon vetoed the bill because it lacked the subminimum wage. That’s why People Magazine called it the “McDonald’s Veto.” Even Kroc’s New York Times obituary mentioned the attempt to drop the minimum wage in exchange for campaign cash.

As for the price of a Quarter Pounder? Under President Nixon, price controls were administered by a Cost of Living Council chaired by Treasury Secretary John B. Connolly and aPrice Commission. The basic idea was to freeze the price of consumer goods — a rather ironic move towards central control of the American economy from a man fighting the Soviets.

The timing over what happened to the price of the Quarter Pounder was certainly suspicious. In November of 1971, during the period when the general price freeze was in effect, McDonald’s raised its price on its Quarter Pounder with Cheese from 59 cents to 65 centswithout authorization from the Price Commission. In May 1972, the Commission ordered McDonald’s to drop the price back to the original cost in compliance with the general price freeze. Between May and September 1972, Ray Kroc contributed the $250,000 to CREEP. And in September 1972, the Price Commission reversed its decision and granted McDonald’s price increase. The relief was for McDonald’s alone. From the outside it looked like a quid pro quo and critics like Senator Harrison Williams called out the corruption. Mr. Kroc called Senator Williams names I can’t print here.

The lists of things a modern day CEO wants from the federal government are probably different from Ray Kroc’s wish list, but they surely abound. I would wager dollars to donuts that most of us would rather not have a small coterie of big donors calling the shots, regardless of whether the policy question is the minimum wage or the price of a hamburger. I strongly suspect — and poll after poll shows — that most of us would prefer generally applicable laws, not ones that are riddled with loopholes that only benefit big campaign donors. At base, that’s what’s at risk if the over $123,000 cap on contributions is lifted and that’s why I hope the Justices think of McDonald’s when they consider McCutcheon.

Ciara Torres-Spelliscy, fellow at the Brennan CenterCiara Torres-Spelliscy is a Brennan Center fellow and an assistant professor of Law at Stetson University College of Law. She is the author of Safeguarding Markets from Pernicious Pay to Play: A Model Explaining Why the SEC Regulates Money in Politics. For more Brennan Center news, connect with them on Facebook and Twitter.
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  • Jeanette Wishall

    Actually, I would say that being able to pay us less while charging us more is EXACTLY what CEO’s and stockholders want to do. It’s what they ALREADY do.

  • Anonymous

    Nixon was a big time, thoroughly revolting, crooked president. He and Earl Butts Sec of Agri messed up there as well. Nixon took bribes from ATT. I wondered why they wanted to impeach Nixon for Watergate when “accepting bribery, treason, and other high crimes against the state” were grounds for impeachment clearly specified In the Constitution. I decided that nobody wanted to cast that stone. The cancer had already spread. Now look at it! Now it is simply the way business is done on the Hill and that goes for all 3 branches!

  • strider367

    This just pointed out corruption in government. Has been going on since the beginning of time. Problem now is there so out of the box corrupt they don’t care who see’s it. I’ve been asking anybody who will listen. Where is the richest city in this country. I’m surprised by their reaction when I tell them no its not Aspen, New York, Hollywood. But in fact its Washington DC. These corrupt piglets who come to Washington DC. Quickly become full grown swine.

    Even Thomas Jefferson believed that a revolution every 20 years or so is necessary. To clear out corrupt officials. Not too long ago the FBI would catch these swine’s for all to see. Now congress has inoculated themselves from the law. By making themselves exempt from all corruption laws.
    The insider trading joke law that 60 minutes brought up. They stalled on that, then passed a law supposedly stopping congress from insider trading. Then last January they exempted themselves from that law. Really are we the people that stupid?
    This is a level of corruption. I have never seen in this country before and I’m Bill Moyers age. If this isn’t stopped then were all doomed…

  • http://www.facebook.com/denis.p.sugrue Denis P. Sugrue

    George Steinbrenner of NY Yankees fame illegally contributed to Tricky Dick’s campaign, yes? He was a convicted felon as well if my memory serves me

  • DavidW

    How does a society prosper when there are hidden actors. How does an unequal person with little to no assets compete with what big money can buy? We can join together and build cooperative enterprise to compete against these corporate 1%ters. Take some of their market share, cut them down in size a bit and keep more of the wealth we create within our own communities.

    Think Credit Unions and Food Co-ops as a start, let’s start building and growing.

  • strider367

    I suggest you go somewhere else if you want to be a dick. On a week old comment I made, Get a life…

  • David

    This is a pretty silly article. The contribution limit today is $2600 to any candidate.