How did the watergate scandal affect policies surrounding campaign finance? a. the federal government instituted closer controls on campaign donations. b. there were no major changes to federal policy. c. congress allowed for greater campaign contributions. d. president nixon’s campaign was fully compliant with campaign finance laws. passage: the watergate committee’s final report recommended legislative action in three areas: regulation of campaign activities and contributions, the establishment of a permanent special prosecutor, and the creation of a permanent congressional legal service. some, though not all, of these recommendations became law. in 1974 congress amended the federal election campaign act. the revisions imposed limitations on expenses and contributions, required regular reporting by election committees, and established a means for public financing of presidential nominating conventions and primary elections. congress passed the ethics in government act in 1978. the bill required financial disclosure by executive and judicial branch officials and established the office of government ethics as an oversight agency. it also created mechanisms for the appointment of a special prosecutor.