Conventions 2008: Brought to You By Whom?
Political conventions involve unlimited money and disclosures come late.
Aug. 24, 2008 -- The big money flowing into national politics was supposed to have limits. That at least was the focus on the 2002 campaign finance reforms, which capped donations to both candidates and national parties.
But there is one key exception: the Democratic and Republican conventions, the multi-million dollar affairs which kick off this week in Denver and next week in Minneapolis.
The contributions that fund the massive, four-day affairs come mostly from businesses, unions and other organizations which often have business before lawmakers. And their contributions to the fetes can run into the millions of dollars, unlike money given to candidates, political action committees or national parties.
While many donors tout their sponsorship, by law the host committees don't have to disclose their donors until roughly two months after the convention -- just days before the presidential election. That means that most voters will go to the polls without knowing which interests gave millions to boost the candidates and buy access.
"This is a major loophole that was left in after [the] McCain-Feingold [bill in 2002]," Sheila Krumholtz, executive director of the Center for Responsive Politics, told ABC News.
And the committees are certainly taking advantage of it. Their fundraising strategy has been geared with one clear message: the bigger the donor, the better the access to events and members of Congress.
Brochures for both conventions divide donors by levels of support (gold or silver, for example). In return for their money, corporate sponsors receive a variety of benefits, from advertising opportunities to VIP tickets at events.
And most donations made to the host committees are tax deductible (although the value of the gifts they receive lowers their deduction).
Just how much business gets done at the conventions isn't entirely clear. But whether donors talk business or not, watchdog groups say, their intention is clear.
"They're there to curry favor with the party," Ellen Miller, executive director of the Sunlight Foundation, which tracks convention parties, told ABC News. "You know, you remember a million dollar donor if you're a party leader. And that sticks not just in your bank account to pay for the convention. But it sticks in your mind, as well."
Early estimates already put the cost of the two conventions north of $112 million – much of that from companies with significant lobbying operations in Washington D.C., according to the nonpartisan Campaign Finance Institute.
Indeed, at least 173 organizations – largely companies and trade unions – have given money to the conventions so far. Of those, 48 have given to both party conventions. Those 173 companies have spent $1.3 billion in lobbying expenditures over the past three years, according to a report by the Campaign Finance Institute. And during that same period, those companies' political action committees and employees have contributed $180 million to federal candidates and political parties – all perfectly legal.
It wasn't always like this. Following a scandal over donations to the 1972 Republican National Convention, the government began giving the political parties public financing for the conventions. But the local host committees, which are officially separate from the national party, could still receive limited private money either through municipal bonds or corporate donations from companies with local ties to the host city. The local tie restriction was hard to enforce and by 2003 the Federal Election Commission did away with that rule entirely, allowing all corporate donations to the host committee.
In recent years amount of private money spent on conventions has skyrocketed. In 1992, private money to the host committees was just $8.4 million. Four conventions later, that sum is expected to be more than 1200 percent higher. And that's on top of the $16.8 million in public funds for each party convention committee and the $50 million congressional grants for security during each convention.
The fundraising hasn't always been easy, and both parties have been raising money until the very end. Democrats have struggled more, even reaching out to Barack Obama's campaign to help meet fundraising targets.
For their part, the host committees say they are not breaking any laws. "We follow all the rules and regulations created by the Federal Election Commission," said Chris Lopez, spokesperson for the Denver Host Committee.
Teresa McFarland, spokesperson for the Minneapolis Committee, echoed that and added: "Many of the donors and companies are people that really drive our economy and the idea that they need to buy influence or access through a political convention is a little bit unrealistic. If they need to reach someone they can probably just do that."
What's more, she said, the conventions are a boost to the local economy. "The exposure that comes to an area because of the national political convention is second only to the Olympics. It's priceless."