The lack of new general campaign finance regulations between 1925 and 1971 did not mean that the issue was not present in political debates in Congress, as well as during presidential and congressional campaigns, which saw increased interest from various organizations contributing to particular candidates. In the 1930s, such interest occurred on the side of labor unions, which saw in the electoral process a proper way of influencing changes in government policies. This was especially visible during the implementation of New Deal programs, which were supported by members of various labor unions and organizations. As a part of the New Deal coalition, these suddenly became important contributors to federal campaigns for Congress and the White House. Furthermore, there were allegations that the Democratic Party used employees of the Works Progress Administration to pursue their political and electoral goals. All this led to the implementation in 1939 of the Act to Prevent Pernicious Political Activities, known as the Hatch Act, after its sponsor Senator Carl Hatch.

The authors of the law wanted to limit the political impact of those federal civil employees not restricted by the Pendleton Act and its extension. These individuals were now prohibited from contributing to all federal campaigns. The Act, however, did not control the flow of big money in federal campaigns. Therefore, a year after creating The Hatch Act, Congress decided to amend it by broadening the types of entities banned from contributing to presidential and congressional elections. It also introduced the first annual limits on individual donations in these elections. In practice, both laws limited the influence of political parties on the process of financing campaigns, which resulted in the growing impact of outside organizations on that process.

An Act to Prevent Pernicious Political Activities…