In contrast to the United States, where there is little or no public financing of parties and candidates below the presidential level, the German “party state” grants generous subsidies in a variety of forms to the political parties, though not to individual candidates. The German Basic Law (constitution), various laws passed by the national and Land (state) parliaments, and the Federal Constitutional Court have been important factors in the development of a complex and costly system of public financing for election campaigns, parliamentary parties and party foundations and for free television and radio time and billboard advertising space. In addition, the federal government incurs large tax expenditures through the encouragement of tax deductible contributions to political parties. In spite of the crucial role which public financing has assumed, recent scandals have occurred involving illegal contributions from business interests. A revised party law of 1984 and a Federal Constitutional Court decision in July 1986 have brought about significant changes, but controversy in Germany over public financing and the impact of recent reforms continues.