Gala's big donors happen to have issues of their own

By Tom Hamburger and Vimal Patel

Aug. 25, 2008 12 AM PT

Times Staff Writers

DENVER —

Last year, when a union for government workers in Colorado needed help from Gov. Bill Ritter, he issued an executive order making it possible to organize state employees. Months later, it was Ritter who needed a favor, and the union readily delivered a $500,000 donation to help fund the Democratic National Convention.

Like the governor, Colorado’s congressional delegation also managed to find folks eager to help pay for the convention. It called on Qwest Communications International Inc., a company seeking help in Congress with a case pending before the Federal Communications Commission. One House member, Rep. Diana DeGette, active on the convention’s fundraising committee, wrote to the agency about the case. Qwest, at $6 million, is now the largest donor to the convention.

Ritter and DeGette emphatically deny any connection between official actions and donations to the convention host committee. But the coincidence of these actions speaks to the problem facing public officials raising large donations for both political parties’ conventions: The largest donors frequently have some of the largest business issues pending before state and federal agencies at the time lawmakers ask them to donate.

Qwest, which offered cash and in-kind services, is appealing a long-standing case before the FCC that would give it relief from regulatory requirements.

The case also affects Qwest’s sometimes competitor, the cable and Internet behemoth Comcast Corp., which, like other telecommunications companies, has huge policy questions pending in Washington. Comcast provided a total of $5 million to the Democrats, mostly in video and other services, according to the Campaign Finance Institute, a nonpartisan research and advocacy organization.

Electric utility Xcel Energy Inc., a major donor to both conventions, has issues before the public utility commissions in Colorado and Minnesota, where the Republican convention will be, as well as before federal regulators. It is based in Minnesota but is also the largest supplier of electricity to Colorado.

And UnitedHealth Group Inc., which also donated to both events, plays a central role in the health policy and insurance debates already coursing through the executive and legislative branches.

All of the donors said their giving was unrelated to any government policy decisions.

In the case of the American Federation of State, County and Municipal Employees, Colorado has historically limited union efforts to organize state workers. Last year, Ritter vetoed legislation that would have given unions sweeping new rights, but later issued an executive order that allowed the federation, in a coalition with other public employee unions, to launch its current drive -- said to have signed up about 35,000 of the state’s 50,000 employees thus far.

If the federation succeeds in getting enough signatures to represent workers in contract talks, it will, directly or indirectly, be bargaining with a governor who sought and received major financial support from it.

A spokesman for Ritter did not dispute the account of his fundraising. “The governor had an obligation to raise funds for the convention and the financial obligation is tremendous,” said Evan Dreyer, Ritter’s communications director, adding that the governor’s executive order was written independent of any requests from unions.

At the federation, political director Lawrence Scanlon said the donation had “absolutely no connection” with the union’s organizing drive. “This is about civic pride for the state of Colorado. From our union’s perspective, we are supporting the Democratic candidate and party, and it needs to have the money to run a good convention program. You can’t do it in a pup tent.”

Colorado members of Congress who were raising money said their efforts were similarly altruistic.

A spokesman for DeGette said that she did write a letter to the FCC regarding Qwest’s case but that it did not take sides in the matter. The spokesman, Kristofer Eisenla, said that the letter was unrelated to convention fundraising efforts and that she never asked Qwest for funds. DeGette is a member of the House Energy and Commerce Committee, which has jurisdiction over the FCC.

“It’s not my favorite activity,” DeGette said about such fundraising. “It’s not some secretive soft money slush fund, because it’s really going to a convention” that will be a boon for the city and the state.

Fundraising calls by governors and prominent members of Congress are not unusual, particularly this year, when the convention hosts, Denver and Minneapolis-St. Paul, are mid-size cities and must solicit huge sums from a relatively small donor pool.

Minnesota Gov. Tim Pawlenty, a Republican, has been calling corporate chiefs in his state. Initially, the host committee suggested the executives be promised personal meetings to “connect with influential government officials (Cabinet, president, next president),” according to a memo prepared for the governor.

Those promises were subsequently removed from official presentation documents, but access to powerful figures is still an important draw in the big-dollar fundraising for both conventions.

The practice of corporations and unions making big convention donations has a long tradition and is criticized by groups that want to limit the role of money in politics.

“We ended the role of federal officeholders seeking huge unlimited contributions for the federal electoral process,” said Fred Wertheimer, a campaign finance reform advocate who helped draft recently approved changes to federal election law. “This is the only place left where it continues.”

Members of both convention committees -- and Barack Obama -- agree on the need for reform. For Obama and his closest advisors, asking for million-dollar donations appears particularly embarrassing given the candidate’s repeated emphasis on raising funds through small individual donations.

Nonetheless, at least one of Obama’s top advisors has been on the telephone asking union chiefs and corporate executives for large sums, a person familiar with the calls said.

Raising the estimated $60 million in cash and in-kind donations that each major party will spend would be difficult without such appeals to donors with deep pockets, and the donors see it as money well invested.

Even quasi-governmental mortgage giants Fannie Mae and Freddie Mac, which many lawmakers wanted to bar from lobbying if they received an unprecedented government bailout, planned to host convention events until their participation drew criticism.

The value of the donations made by almost 150 corporations varies.

Some, such as nationwide garbage hauler Waste Management Inc., are offering services instead of cash. Waste Management is handling recycling at both conventions.

Others have agreed to pay $1 million to get access to a special package that includes stadium skybox seats to hear Obama’s acceptance speech Thursday, in addition to hotel suites and private seminars with the senator’s top advisors.

David L. Cohen, executive vice president of Comcast, said the cable giant was providing “a package of in-kind commitments designed to help the city and state promote themselves. It has nothing to do with politics. It has nothing to do with the party.”

Telecom and Internet companies are at the top of the donor list this year at both conventions in part, industry insiders say, because decisions are about to be made by the FCC and state utility commissions that will shape the future of the industry.

Google Inc., which is investing large sums nationally to influence congressional and executive branch debate over the future of online communications, rented a 9,000-square-foot space adjacent to the Denver convention hall to serve Internet surfers and bloggers. In addition, the company is throwing an exclusive party with Vanity Fair magazine and opening a “retreat” for tired delegates and media representatives that will offer smoothies and massages.

Not to be outdone, Microsoft contributed a not-yet-disclosed sum to be named “official software and HD Web content provider.” Comcast, another firm with a huge stake in the future of the Internet, will have high visibility during the convention. Recently, a senior Comcast executive was named to Obama’s informal telecom advisory committee.

Other companies competing in the digital realm, such as Verizon Communications Inc., are donating significant sums. Verizon also was invited to join the Obama advisory team. AT&T; Inc. won’t say how much it is donating, but a new survey suggests that it is holding more receptions and parties than any other corporation.

New ethics rules were designed to curb lavish entertainment by specifying that only “finger food” and appetizers could be served.

AT&T; has driven a large catering truck through that narrow description. At an event this week at Denver’s tony Pinnacle Club, members of Congress and convention delegates will be served an exotic menu including elk quesadillas, buffalo meatballs and, yes, Rocky Mountain oysters.

“The presidential conventions give AT&T; a unique opportunity to present and display the many leading-edge technologies and products that we offer to tens of thousands of consumers,” company spokeswoman Claudia Jones said in a statement.

Corporate giving has become commonplace at conventions, thanks to a provision in campaign finance laws that allows wealthy individuals, unions and companies to give unlimited donations of cash and equipment to help local convention planners meet their budget goals.

These so-called soft money donations were supposed to have been limited after the Nixon-era Watergate scandal, which included instances of big donors giving large sums to the Republican Party. But loopholes were quickly found.

Recalling grander days from the past, railroad companies Union Pacific Corp. and Burlington Northern Santa Fe Corp., which face a congressional threat of new freight price regulations, are offering retreats at both conventions for members of Congress in the form of luxury train cars, with such amenities as domed ceilings and upscale kitchen and dining facilities.

Union Pacific has donated $1 million to the Democratic convention.

tom.hamburger@latimes.com

vimal.patel@latimes.com

Times staff writer Peter Nicholas contributed to this report.

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Corporate donors

Qwest Communications

Donated to conventions: $6 million in cash and services to each convention

Amount spent on federal lobbying since 2005: $10.7 million

Government concerns: Rural broadband legislation, federal telecommunications policy

Comcast

Donated to conventions: $5 million to Democratic host committee