Corporations buy influence and ‘civic pride’ with DNC cash
More than 100 sponsors, many of them corporations, are footing the bill for this summer’s Democratic National Convention in Denver Aug. 25-28. Most donors won’t respond to queries about why they coughed up cash; others say their companies have given out of civic pride. But some say such corporate donors are seizing a political opportunity as they pump cash into the system via convention host committees.
Much has been made of the DNC host committee falling more than $11 million short of its June fundraising goal of $40 million. The committee had secured $29 million from donors by the second quarter deadline – which also marks the last fundraising report that will be made available before the convention, according to host committee spokesman Chris Lopez. Additional funds raised between now and the late August confab will go unreported until October, according to Federal Election Commission rules that don’t require host committees to report complete numbers until 60 days after the convention.
In contrast, the Minneapolis-St. Paul host committee is reportedly on track to raise $58 million from 53 corporate sponsors, according to the Minnesota Independent.
Of the 112 sponsors listed on the DNC host committee Web site, only 23 (a mere 20 percent) would reveal how much they had donated. Those who did disclose gave almost $14.8 million, or half of the current money haul. The "silent majority" that make up the remaining 89 convention donors contributed $14.2 million.
“If individual sponsors want to [disclose their donation amounts], they certainly can. Just as a matter of practice and policy, we don’t disclose because most of the donors don’t want us to,” Lopez said.
Lopez said the Denver host committee plans to file paperwork disclosing the sponsors, donation amounts and committee expenditures by the Oct. 15 deadline, 20 days before this year’s presidential election.
Many companies point to the eventual release of all donor identities and amounts as a reason for their reluctance to put out their numbers before the event, saying they’d rather have their contributions seen in the context of every donation or simply want the host committees to handle releasing the information.
“We’re privately held; we don’t share virtually any financial information,” said Steven Carrico, the chief financial officer for Hensel Phelps Construction Co., after declining to say how much his company contributed to Denver’s host committee.
Nick LeMasters, general manager of Cherry Creek Shopping Center in Denver, said it would be “inappropriate” to share the amount of the mall’s donation.
“It’s really a private business agreement between us and the host committee,” LeMasters said.
In 2004, Boston’s Democratic National Convention Host Committee took in more than $56 million in donations, while its Republican counterpart in New York collected over $85 million from sponsors, according to the Campaign Finance Institute (CFI).
Bob Duffy, chairman of Colorado State University’s Department of Political Science, said donations to a convention host committee inject money into the political process while keeping the relationship between the donor and political candidates and causes ambiguous.
“For the larger donors, especially those who are giving to both the Democratic National Convention and the Republican National Convention, it’s goodwill. What they’ll claim is they’re supporting the democratic process, but they’re looking for goodwill,” he said. “This is a way for corporate money to get into the political process.”
The FEC regards all donations to convention host committees as a contribution to the community rather than to a certain political party. But some political observers say the ability for companies to make unrestricted donations to host committees is the largest campaign finance end run in American politics.
“This is definitely the biggest loophole for corporate money, which is excluded from campaign contributions,” said Steve Weissman, associate director for policy at the Campaign Finance Institute and author of numerous campaign finance reports, including The $100 Million Exemption.
From the report:
Since the FEC loosened its restrictions on donations to host committees for convention expenses in 1994, private financing of conventions has exploded from $8.4 million in 1992 to at least $103.5 million in 2004. Between 1992 and 2000, the number of donors who gave at least $500,000 to a host committee increased from one to thirty-two, including fourteen givers of at least $1 million. 2004 has seen the advent of the $5 million cash donor.
While campaign finance reform laws forbid corporate giving directly to candidates running for federal office, and big businesses routinely skirt contribution limits by contributing to PACs, convention host committees can serve as a legal way of funneling money to major political parties.
Depending on how much a company donates, its representatives may get a variety of benefits, including access to the convention, a mention in the convention’s guide, invitations to welcoming events, and even hotel rooms during the convention, Lopez said, although he couldn’t outline the different levels of sponsorship the committee had asked for or their respective perks.
Qwest has given the Denver host committee what appears to be, at $6 million, the highest donation. The telecommunications company contributed an equal amount to the Republican National Convention in what some call a “cover your bets” strategy that’s aimed at getting access to more than convention-related perks.
The committee’s Web site contains a secondary sponsor list of “Summit Club members,” or local organizations that have contributed undisclosed, but presumably smaller, amounts to the committee.
Allstate, State Farm, Target and Lockheed Martin are among the companies donating equal, undisclosed amounts to both convention host committees, according to company representatives.
“You want access to the White House no matter who wins,” Duffy added.
CFI has already identified 37 companies that are donating to both conventions’ host committees this year.
Lopez said the host committee will continue to solicit donors until the convention’s Aug. 25 kickoff. The committee’s online list of recognized sponsors isn’t necessarily comprehensive, he added.
He said he was unaware of the total number of donors, the number of repeat donors or the average donation amount.
Among the companies that have made more than one contribution is Wells Fargo, which initially donated $250,000 to the host committee and contributed an additional $52,800 after a request for funds from Denver Mayor John Hickenlooper, said company spokeswoman Cristie Drumm.
Hickenlooper, Gov. Bill Ritter, Sen. Ken Salazar, host committee chairwoman Elbra Wedgeworth and Denver lawyer and political power broker Steve Farber have been soliciting potential donors on the host committee’s behalf, Lopez said.
“That such high-level political firepower as senators and governors and big-time national party fundraisers has to be deployed, and special access to policymakers dangled, to coax out the corporate money suggests it is sometimes not something they want to do naturally,” Weissman said. “In many cases their executives are already giving significant limited contributions, and corporations have well-connected lobbies. But once they give unlimited ‘soft money’ to support the party convention, it does create additional pressure on politicians to be supportive.”
Duffy puts it another way: “What they’re hoping is that somebody will remember [their donations].”
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