Corporate donors fund conventions
Campaign finance loophole is seen
An unprecedented flood of private donations from corporations and individuals is funding this year's national political conventions, and donors to the Boston 2004 convention host committee include a range of healthcare companies and others with interests before Congress and the city, a report has found.
The study, released yesterday by the nonpartisan Campaign Finance Institute, shows a sharp escalation in the amount that private entities have given to conventions in recent years, even after the 2002 McCain-Feingold campaign-finance overhaul, which was meant to reduce the influence of big money on politics. Private sources are on track to contribute about $110 million to this year's Democratic and Republican conventions combined, some 13 times what they gave for the 1992 conventions.
Organizers of this year's Democratic National Convention in Boston have leaned heavily on top party contributors and out-of-town interests, as they seek to raise $44.5 million from the private sector for this month's event, the report shows.
Twenty-six of the 71 biggest donors to Boston 2004 made at least $20,000 in political action committee contributions and other soft money contributions to the Democratic Party in the last election cycle, according to the report. Seventeen of the donors gave at least $100,000 in unregulated contributions to Democratic Party funds in the 2002 cycle, and 33 of them are headquartered outside the Boston area.
Don Fowler, a former chairman of the Democratic National Committee, said that spiraling convention costs are being covered -- and, in some cases, driven -- by individuals and special interests who are seeking to gain access to top elected officials at the huge political events.
''Some of the best lobbying in the world is done at these conventions," Fowler said during a panel discussion hosted by the institute yesterday at the National Press Club in Washington. ''Because campaign finance law is looser and there are less restrictions than there used to be, more people give. It's that simple."
The Federal Election Commission allows unlimited, tax-exempt donations to convention host committees, on the premise that such contributions are ''motivated by a desire to promote the convention city and not by political considerations," according to regulations issued last August. But the study's authors say the data show that the FEC's premise isn't valid.
''The FEC rules have created a $100 million loophole for unlimited soft money contributions to the political parties," said Michael Malbin, executive director of the institute, which is affiliated with George Washington University.
At the Boston convention, which will be held July 26-29 at the FleetCenter, about $44.5 million is being covered by private donations, with the remainder of the $94.5 million budget set to be covered as a federal grant for security purposes.
(The Democratic National Convention Committee is also receiving a $14.9 million grant from the federal government, but that money is paying for the committee's operating expenses, not for direct convention costs. An identical amount goes to the Republicans).
Cheryl Cronin, Boston 2004's clerk and legal counsel, said donors have agreed to contribute because they realize the convention will be good for Boston and the region. She said passing convention costs on to the private sector is necessary when public entities are strapped for cash.
''The reality is that companies are contributing because they're very invested in the city of Boston and the region," Cronin said. ''Most of the contributions that have come in to the host committee come from companies based in Boston or the New England region or from companies that have an interest in Massachusetts because they do business here."
Many of the biggest Boston 2004 donors are huge Boston presences, in addition to being Democratic Party benefactors.
That list includes Fidelity Investments,
Smaller convention donors include locally prominent developers who often have projects requiring city approval, including
Big donations have also flowed from large companies with no strong Boston ties. AT&T, which gave $1.6 million to Democratic PACs and in soft-money funds in the 2002 election cycle, pledged $500,000 to the convention host committee.
In addition, nine pharmaceutical and healthcare companies gave donations totaling $4.1 million, including
Senator Edward M. Kennedy is the top-ranking Democrat on the Senate committee that oversees health care, a situation that the report's authors said raises questions about his role in fund-raising. A Kennedy spokesman denied the possibility of donations to the host committee influencing the senator's policy decisions.
''Absolutely none whatsoever," said David Smith, the spokesman. He added that Kennedy was careful not to ask for donations from any companies with legislation affecting them before his committee.
Still, the report points out that the host committee's biggest fund-raisers have deep political connections to the Democratic Party and the presumptive Democratic presidential nominee, Senator John F. Kerry. Initial fund-raising was spearheaded by Menino and Kennedy, both veteran Democratic officeholders who are serving as national cochairmen of Kerry's campaign, and Alan Leventhal of Beacon Capital Partners, a longtime donor and fund-raiser for the Democratic Party and national Democratic candidates.
In recent weeks, as the host committee has raised money to cover an expected $5 million in cost overruns in construction and production, fund-raising has moved even closer to Kerry himself. Three top Kerry fund-raisers -- Robert Farmer, Lou Susman, and Elizabeth Frawley Bagley -- were brought in by the candidate's team to ensure that the convention has adequate cash.
''Most of the fund-raising is done by national partisans, even if they are political figures," said Steve Weissman, one of the report's coauthors. ''There's a substantial political motivation here."
Klein reported from Boston; Vascellaro from Washington. Rick Klein can be reached at rklein@globe.com.
