Extra-Special Interest in Political Conventions
When Matt Keelen’s clients wanted access to the national political conventions in 2000, the fundraiser told them to write a $50,000 check to either the Republican or Democratic national committees. In exchange, they would get a convention “package” with invitations to breakfasts, lunches and other events.
But this year, thanks to a new campaign finance reform law, such donations are no longer allowed. So Keelen is telling his clients -- who include Washington lobbyists and corporate government affairs representatives -- to have their own gatherings.
“The one-stop shop is gone,” he said.
With most other avenues for corporate political spending cut off, this summer’s conventions are gushing with special-interest money. It’s flowing in two ways: a record amount of direct donations to the host committees putting on the conventions, or via the private bashes Keelen is advising his clients to sponsor.
Corporations, trade groups, lobbyists and unions are sponsoring hundreds of invitation-only affairs, among them cruises, a slew of concerts, a saloon party, trapshooting and golf tournaments, and even glow-in-the-dark bowling.
“The number of corporate gatherings, I think, is going to be unprecedented,” said Michael Toner, a member of the Federal Election Commission and former Republican National Committee chief counsel. “You’re seeing an offloading of the activity that used to be done by the national parties.”
The 2002 McCain-Feingold law banned “soft money” -- unlimited corporate, union and individual contributions -- to the national political parties. But because of a loophole, corporate and union officials and top fundraisers will be able to schmooze politicians and candidates at this summer’s conventions, with Democrats in Boston and Republicans in New York.
Special-interest money is being donated at record levels to the host committees putting on the conventions. Private donations are expected to exceed $100 million -- nearly double what was collected to help put on the 2000 conventions in Los Angeles and Philadelphia. The number of donors giving $1 million or more has increased as well.
Top-dollar donors who once gave to the political parties are now writing big checks to the host committees. In 2000, each convention committee received seven donations of $1 million or more in cash or services, according to PoliticalMoneyLine, which tracks campaign financing. This year, 25 corporations, foundations and individuals are million-dollar donors -- and fundraising is continuing.
Twenty-one corporations have contributed to both the Republican and Democratic convention committees. They include telecom giants AT&T; and Verizon, pharmaceutical manufacturers Pfizer and Bristol-Myers Squibb, as well as Marriott, Microsoft, Fannie Mae and insurer AIG.
Verizon says it has donated $3 million in cash to each convention, which in years past would have put it in the upper tiers of soft-money givers.
Sen. John McCain (R-Ariz.) said he had intended to stop the flow of all soft money to the political conventions when he cosponsored the campaign finance reform legislation two years ago with Democratic Sen. Russell D. Feingold of Wisconsin. But the legislation did not specifically do so.
“You can’t address every single entity,” McCain said.
Last year, the FEC ruled that corporations and others could write big checks to pay for the conventions, saying such donations were “presumably not politically motivated” but were instead undertaken to promote the “goodwill” of the host city.
“Goodwill for who?” McCain said in an interview. “Some special interest?”
The FEC also has said that corporations could contribute to convention host committees regardless of whether they had a presence in the host city. Previous rules said corporate donors had to be based in the convention city or have an office there.
New York City’s host committee is on track to raise $64 million from more than 100 corporations, individuals and others, while Boston’s committee is aiming for at least $39.5 million. It has commitments from more than 150 private organizations.
After the Watergate scandal in 1974, Congress created a public financing program for the conventions, which essentially banned private donations. (The money comes from taxpayers who check off a box on their income tax returns.) But host committees were formed in 1976, giving local businesses a new avenue to open their checkbooks. After the FEC loosened the rules even more in 1994, corporate donations skyrocketed.
The host committees are nonprofit organizations made up of local business and civic leaders. In Boston, Mayor Thomas M. Menino appointed the members. In New York, Mayor Michael R. Bloomberg and Gov. George E. Pataki are honorary chairmen, and the committee includes Democrats as well as Republicans.
“At the national level, for corporate funds, it is one of the only games in town,” said Washington election lawyer Kenneth Gross, chief counsel for the New York City host committee.
Gross said some corporate donors in previous years also contributed to the Senate and congressional party committees, which often held receptions at the conventions. The political parties may still hold receptions this year, but they must use so-called hard dollars -- contributions that are more tightly regulated and raised in smaller chunks -- to pay for them.
Top fundraisers and some large donors for each political party will still get special convention access and perks, though the list of thank-you events for them is smaller and less elaborate than in 2000.
Many corporations also have been holding their own private parties at conventions for years, since the FEC ruled in 1983 that a steel company could hold cocktail receptions at hotel ballrooms near the 1984 Republican National Convention in Dallas and the Democratic National Convention in San Francisco.
The events have increased exponentially since then. They’re glitzier, with live music from well-known acts, free-flowing, top-of-the-line liquor and lavish food. And they’re at exclusive venues -- including Sotheby’s in New York and the Museum of Science in Boston.
The still-in-progress master calendar of events for this year’s Democratic convention lists more than 100 private receptions, many billed as tributes to members of Congress. The East Los Angeles band Los Lobos will perform at a late-night Boston party paid for, in part, by the American Gas Assn.
Raytheon, Bank of America, Bristol-Myers Squibb, the AFL-CIO and other donors are ponying up $100,000 each for a star-studded tribute to Sen. Edward M. Kennedy (D-Mass.) at the Boston Pops.
In New York, Bank of America will help pay for a “cosmic bowling” party -- the balls and lanes glow in the dark -- in honor of Rep. David Dreier (R-San Dimas). Republican governors will celebrate at Planet Hollywood in Times Square, after Democratic governors have partied at Fenway Park, courtesy of UBS Financial Services, an international investment bank.
Although the direct donations to the host committees will be made public, the millions spent to sponsor private parties will not be disclosed. And that troubles watchdogs.
Democracy 21, a Washington group that opposes undue influence of big money in American politics, last week called for new ethics rules banning members of Congress from holding “lavish parties for themselves at the national political conventions paid for by corporations, trade associations and others, including charitable groups.”
Ethics rules allow members of Congress to be honored guests at receptions as long as the identity of the sponsor is written on the invitation.
Democracy 21 President Fred Wertheimer said the corporate parties, which he described as a “growth industry,” were nothing more than “clear avenues for special interests to buy access and gain influence with the members.”
The party hosts don’t see it that way.
“It’s a chance to honor and thank people we work with,” said Darrell Henry, director of government relations for the American Gas Assn., which is spending $700,000 to put on private parties at both conventions.
“Companies like to be part of the democratic process of our country. It gives us exposure, and we get to be involved in the biggest political event of the season,” he said.
The American Gas Assn., which represents 192 local energy utility companies, is sponsoring a string of events honoring members of Congress. Some of those lawmakers worked with industry lobbyists on the Bush-backed energy bill, which included money to increase natural gas production in the U.S. but remains stalled in the Senate.
Henry said the association was pooling its money with other energy interests -- including the Edison Electric Institute, the National Mining Assn., the Nuclear Energy Institute -- to get more bang for its buck.
Hospital associations and drug companies will honor members of Congress who deal with healthcare. And Wall Street and banking interests are feting lawmakers who sit on committees that oversee their issues.
Bell South, the Edison Electric Institute and at least a dozen other corporations are picking up the tab for a Caribbean-themed bash at the New England Aquarium to honor retiring Sen. John B. Breaux (D-La.), one of the Senate’s influential dealmakers. The party tab could reach $500,000.
New York party planner Catherine Saxton, who got her start throwing bashes for the queen of England, said many of her clients had decided not to hold big events at this year’s convention. Instead, she said, they wanted her to organize “small, elegant and discreet” parties where it’s easier to meet one-on-one with influential guests.
What do they get in return?
“Access,” Saxton said. “So they can show their best clients and best customers they know pretty important people.”
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Private contributions to help pay for political conventions - particularly from corporations - have skyrocketed since 1996. This year’s private donations are expected to exceed $100 million, nearly double what was collected to help put on the 2000 conventions in Los Angeles and Philadelphia.
*--* Year Convention Public funds and Private Grants (in contributions (in millions) millions) 1992 Houston (R) $18.3 $2.2 New York (D) $32.1 $6.2 1996 San Diego (R) $25.2 $18.0 Chicago (D) $27.4 $20.0 2000 Philadelphia (R) $55.3 $20.1 Los Angeles (D) $49.3 $36.1 2004** New York (R) $67.0 $64.0 Boston (D) $50.0 $39.5
**Dollar amounts are estimates.
Corporations, unions and individuals can no longer donate unlimited sums to national political parties, but such restrictions do not apply to convention financing.
Donors of $1 million or more to 2004 Democratic convention:
Blue Cross and Blue Shield of Massachusetts
The Boston Foundation
Bank of America Corp.
The Gillette Co.
John Hancock Financial Services
Liberty Mutual Group
New Balance Athletic Shoe
State Street Corp.
Donors of $1 million or more to 2004 Republican convention:
New York Mayor Michael R. Bloomberg
Retired banker David Rockefeller
The New York Times
Developer William Rudin
One trade group’s parties
The American Gas Assn., which represents 192 local utility companies, is spending $700,000 at the conventions this summer.
For Democrats, the association will help pay for:
-- “A Night on Beacon Hill” to honor Sen. Max Baucus (D-Mont.) and the Montana delegation
-- Lunches for Sen. Byron L. Dorgan (D-N.D.) and members of the North Dakota delegation and Sen. Jeff Bingaman (D-N.M.) and the New Mexico delegation
-- A Los Lobos concert with the Congressional Hispanic Caucus Institute
-- A late-night Irish pub gathering for the Democratic Governors’ Assn.
For Republicans, the association will help pay for:
-- “The Wildcatters Ball” at Rockefeller Plaza to fete Sen. James M. Inhofe (R-Okla.)
-- A “Wild Wild West Saloon Party” for Rep. Richard W. Pombo
(R-Tracy) and other members of the House Resources Committee, featuring the Charlie Daniels Band, 38 Special and Otis Day and the Knights
-- A reception at a Johnny Cash exhibit at Sotheby’s to honor Sen. Lamar Alexander (R-Tenn.) and Senate Majority Leader Bill Frist
-- A “Texas Honky-Tonk Salute” for Rep. Joe Barton (R-Texas), chairman of the House Committee on Energy and Commerce
-- A “Taste of Brooklyn” party for the Republican Governors Assn.
Sources: Campaign Finance Institute, George Washington University, American Gas Assn., PoliticalMoneyLine, convention host committees, Times research