Firms donated at least $112m to conventions
WASHINGTON - After it was discovered that ITT had received a favorable antitrust ruling in return for donating $400,000 to the 1972 Republican National Convention, Congress barred the use of corporate funds and established a public financing system for political conventions.
Nevertheless, this year one of the largest financial backers of the Democratic and Republican conventions is none other than AT&T, another telecommunications giant.
In what watchdog groups say is a gaping loophole in campaign finance laws, public records show that nearly 200 pharmaceutical, information technology, automobile, airline, and other corporations have donated at least $112 million to the "host committees" organizing the 2008 political extravaganzas in Denver and St. Paul. In addition, they are bankrolling countless parties and closed-door receptions for lobbyists and members of Congress attending the conclaves.
In the process, critics charge, both parties are flouting the intent of federal laws designed to prevent special interests from gaining undue influence with elected officials.
"This is a complete abrogation of the presidential public financing system," said Craig Holman, a campaign finance lobbyist at Public Citizen, a public advocacy group in Washington. "It was specifically set up to get corporate money out of the conventions."
Under the 1974 law that set up the public financing of conventions, each party has received $16.4 million in taxpayer funds to pay for their conventions this year, on the condition that they not use private funds.
Yet organizers have found a way around the law by funneling the corporate donations through the host committees in both cities.
While campaign finance laws prohibit unlimited contributions directly to political parties, the Federal Election Commission has exempted the host committees from the restriction, asserting that they are "motivated by a desire to promote the convention city and not by political considerations."
But according to the Campaign Finance Institute, which obtained documents under the Freedom of Information Act, the convention fund-raising has been led by "teams of elected officials at all levels of government from the convention party and their associates in the party's network of financiers and operatives."
"Basically, Republican elected officials, their financiers, and party operatives are asking for money to fund the Republican convention while Democratic ones are doing the same thing for the Democratic convention," the nonpartisan institute concluded in a report earlier this summer.
For example, Steve Farber, a Denver lawyer who is also a Washington lobbyist, was head of the fund-raising committee for the Democratic convention's host committee.
According to fund-raising data reviewed by the Center for Responsive Politics, another nonpartisan watchdog group that tracks the influence of money in politics, Farber has also raised $148,000 for federal election campaigns since 2003, the vast majority for Democrats. Farber, who did not return several calls for comment, has also raised money for President Clinton's presidential library.
On the Republican side, one of the co-chairs of the host committee in St. Paul is Governor Tim Pawlenty of Minnesota, who is also co-chairman of Senator John McCain's presidential campaign.
Pawlenty hosted meetings with corporate CEOs to raise funds for the GOP convention, according to records obtained by the Campaign Finance Institute under the Minnesota Government Data Practices Act. "Talking points" drafted by the governor's staff for one of his pitches instructed telling the CEOs that donations would give them the opportunity to "connect with influential government officials."
The Minneapolis-St. Paul host committee asserts, however, that it is following the regulations set forth by the FEC.
"We are playing by the rules," said Teresa McFarland, a committee spokeswoman. "We are trying to relieve the burden that would otherwise fall on the local community," such as the cost of transportation, insurance, media facilities, host committee offices, and providing "hospitality" for thousands of delegates and other attendees.
"These companies have come together not because of politics but to showcase our cities," she said.
Nevertheless, watchdog groups believe the fund-raising activity violates the spirit of 1974 law and the recent ban on soft money contributions to political parties.
These host committees are "a soft money loophole because Congress banned any unlimited donations from corporations, unions, and wealthy individuals to political parties," said Steve Weissman, the associate director for policy at the Campaign Finance Institute. "When you get unlimited contributions like this - largely corporate - you get the potential for powerful, concentrated wealth to earn the gratitude of the next president and other elected federal officials. They can eventually cash it in for special attention."
Private contributions to host committees have skyrocketed from about $1 million in 1980 to $8 million in 1992, $56 million in 2000, and $142 million in 2004, according to disclosure forms.
The totals for this year are not yet known because the committees are not required to report the data until 60 days after the conventions.
But the cozy relationship among corporations, their lobbyists, and elected officials has been on full display.
One Denver event organized by a collection of banks, credit card companies, and mortgage lenders included at least three members of Congress with direct oversight of the banking industry. The message of the event, according to attendees: that the industry is properly educating consumers and does not need further government regulation.
There have been countless other gatherings, including breakfasts, lunches, and parties sponsored by firms with lobbying interests.
One in Denver by the Truman National Security Project, which advocates for more hawkish defense policies, was sponsored by defense giant Lockheed Martin.
"It is not unlike what goes on in Washington every day of the year," Massie Ritsch, communications director for the Center for Responsive Politics, said by telephone from Denver, where he was investigating the corporate influence on the Democratic convention before heading to the GOP gathering starting tomorrow in St. Paul. "The characters are all the same."
Bender can be reached at bender@globe.com 