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Democrats give special interests a role at convention

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WASHINGTON — As a candidate in 2008, Barack Obama vowed to squelch the role of special interests in financing the party conventions — so he barred corporations and lobbyists from contributing money to this year's national convention in Charlotte, N.C.

But even as Democrats tout the three-day event in September as a populist gathering, organizers have found ways to skirt the rules and give corporations and lobbyists a presence at the nominating convention. That suggests they can't raise the $37 million for the political extravaganza without at least some help from moneyed interests.

Despite the ban on corporate money, for example, convention officials have encouraged corporate executives to write personal checks, according to sources familiar with the fundraising. And they have suggested that corporations can participate by donating goods and services to the convention, and by giving up to $100,000 through a corporate foundation.

They have also quietly explained to lobbyists that while they can't make contributions, they can help raise money from their clients — by soliciting personal checks from executives or in-kind contributions from corporations. Lobbyists who bundle high sums will get perks like premium credentials and hotel rooms.

Labor unions, meanwhile, are not specifically prohibited from giving. They provided millions of dollars for the 2008 Democratic convention in Denver.

The role of special interests at the convention reflects Obama's broader struggle to fulfill his 2008 vow to limit the influence of money in politics.

"What they're doing sounds like the old forms of raising money that they claimed they were not going to do," said Fred Wertheimer, president of the campaign finance reform group Democracy 21. "They may not be violating the letter of their own rules, but they certainly are not complying with the spirit of their own rules."

Obama's defenders say he has gone further than others in trying to reduce the clout of special-interest money. Unlike his GOP challengers, he doesn't accept campaign contributions from lobbyists or political action committees, and he discloses the names of bundlers who solicit major donations. And while the Democrats have set rules for who can finance their convention, the Republicans have not adopted similar restrictions for their convention in Tampa, Fla.

"We've done more to promote reform than any convention in history," said Democratic convention spokeswoman Kristie Greco. "Republicans are still operating under the status quo, playing by the same old rules that cater to the highest bidders."

But in his 2008 campaign and statements as president, Obama promised more than just to do better than his opponents. He cast himself as a reformer — leaving himself open to criticism from both the left and the right when he strays from the ethical high ground.

The Republican National Committee pounced last month when Vice President Joe Biden hired a former lobbyist, Steve Ricchetti, despite a White House ban on hiring people who have worked as lobbyists in the last two years. (Ricchetti de-registered as a lobbyist in 2008, though he still was running a lobbying shop.)

Earlier this year, Obama reversed his long-standing opposition to outside political groups and gave his blessing to an independent "super PAC" backing his reelection. He was responding to unfettered spending in the GOP presidential primaries, made possible by a series of court rulings in 2010 that allowed massive donations by billionaires and corporations to super PACS.

"You've got a campaign and a candidate who showed his ideals and intentions in the 2008 campaign, but the political reality of how the Republicans changed that landscape have forced them to become more pragmatic," said Democratic strategist Joe Trippi.

The latest example involves the party conventions, which the Federal Election Commission decided in 1977 could be produced in part through unlimited donations to a local host committee charged with promoting the host city.

Four years ago, organizations such as corporations and unions gave 86% of the $61 million Democrats raised for their convention in Denver. Nearly three-quarters of the donations were in amounts of $250,000 and up, according to the nonpartisan Center for Responsive Politics and the Campaign Finance Institute.

"If you want to go rub shoulders with elected officials and give them your 30-second elevator speech, the convention is the place to go. It's like shooting fish in a barrel," said former Democratic lobbyist LeeAnn Petersen, whose consulting firm Conventions 2012 arranges logistics for corporate clients seeking a presence at the events.

This year, "the rules are making it a little harder, but we've still got tons of interest," she said.

Under terms set by the Democratic National Committee, individuals are limited to giving $100,000 to the host committee, the organization raising money for the convention. Donations from for-profit corporations, political action committees and lobbyists are prohibited. Corporations that have not repaid money from the Troubled Asset Relief Program or other bailout programs cannot make in-kind contributions.

The host committee is emphasizing its efforts to attract small contributions; a promotion that launched Wednesday will plaster the names of $5 donors on a NASCAR stock car.

But lobbyists can still bundle large donations and qualify for special perks, such as platinum credentials, concierge services and VIP tickets to special events for those who raise $1 million.

"They have a policy of encouraging ineligible people to help them raise money," said Tony Podesta, a top Democratic lobbyist who is soliciting contributions from interested clients. "I don't take it personally."

Corporations that provide in-kind services can also receive the goodies donors crave: hotel rooms and convention passes.

In addition, the Charlotte host committee set up a separate fund that is accepting unlimited sums from corporations. That committee, called New American City, is covering administrative costs and welcome parties for the media and delegates. Although donors won't get convention passes, they could still get prominent exposure.

Convention Chief Executive Steve Kerrigan and Jim Rogers, chief executive of Duke Energy and co-chairman of the host committee, met with Democratic fundraisers and lobbyists on Dec. 15 at Washington's posh Jefferson Hotel to lay out the ways corporations and lobbyists could help raise money, according to sources familiar with the briefing. The meeting was first reported by Bloomberg News.

The approach irritated some who attended, who said that the organizers still want the help of lobbyists even while claiming they are not involved.

Convention officials said the meeting was an effort to educate people about the new rules, not to recruit lobbyists as bundlers.

It is unclear how the restrictions are affecting fundraising. Charlotte officials refuse to reveal how much they have brought in, saying only that they are on track.

But several Democrats involved in helping the effort said the rules had made it hard for organizers, particularly because executives of publicly traded companies aren't eager to personally give $100,000.

Some party strategists said it might have been unrealistic to try to finance the convention through small donors.

"There is no history of these conventions not being dependent on money from all kinds of corporate entities," said Democratic consultant Bill Carrick. "They've always been involved — there's no other donor base for it."

matea.gold@latimes.com

Copyright © 2014, Los Angeles Times
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