Troubled financial services companies took advantage of campaign finance laws that allowed unlimited donations to the summer’s Democratic and Republican national conventions to pump millions of dollars into political coffers just weeks before securing billions in federal bailout money, according to a joint analysis published Wednesday by the nonpartisan Center for Responsive Politics (CRP) and the Campaign Finance Institute (CFI).
Insurance giant American International Group (AIG), for instance, gave each convention $750,000 shortly before getting an $85 billion loan from the federal government in September — one of more than a dozen companies, including banks, hedge-fund operators, securities firms and auto industry titans hobnobbing with party insiders for a price just before the dam burst.
Donors from other sectors, including pharmaceutical companies, high tech firms and labor unions, gave $118 million to both conventions — $61 million for the Democratic National Convention in Denver and $57 million for the Republican National Convention in St. Paul. The private donations totaled nearly four times the amount provided to the host committees by the federal government, CRP noted.
“If the executives who have come to Washington, hat in hand, looked familiar to members of Congress, maybe it’s because they met over the summer at the conventions,” CRP executive director Sheila Krumholz said.
Krumholz’s organization summarized the link between convention cash and bailout seekers thus:
Embattled insurance giant American International Group (AIG), which received an $85 billion loan from the government just weeks after the GOP convention, gave $750,000 to each gathering. And AIG isn’t the only high-profile company that sought a handout from taxpayers after writing a big check toward the summer’s political gatherings. Others included Citigroup (which spent a total of $600,000 on the conventions), Goldman Sachs (which spent $505,000), Ford Motor Co. ($100,000 to each convention) and Bank of America (which spent $100,000, entirely on the Democratic convention). The federal government took over Freddie Mac just weeks after the mortgage-buyer split half a million dollars between the two conventions.
CFI digs down to tie a massive donation from a foundation controlled by auto financier Kirk Kerkorian to a proposed $15 billion bailout to the auto industry, as well as other car-maker entanglements:
Kirk Kerkorian, whose Tracinda holding company controls MGM Mirage and gas producer Delta Petroleum, acquired about $1 billion in Ford Motor Company stock between April and July 2008, making him the company’s largest private shareholder. On August 22nd, his Lincy Foundation (both his holding company and the foundation draw their names from daughters Tracy and Linda) contributed $3.5 million to the host committees … In mid-October, after Kerkorian’s Ford stock had lost approximately half its value, he sold a small percentage of his shares and said he intended to dispose of the rest. Both the price of his holdings and his future role in the auto industry could be affected by pending proposals for a federal rescue of the industry. Ford Motor Company also donated $200,000 for the conventions, half to each host committee. (Separately, General Motors provided 735 new cars to the Democratic and Republican party convention committees for the use of elected officials and other VIPs.)
Rounding out the biggest industry donations, pharmaceutical, high tech and big labor, CRP found:
Joining the finance sector, pharmaceutical manufacturers, computer and Internet companies and labor unions also helped produce the conventions. The drug industry spent more than any other industry, giving $9.8 million, split nearly evenly between the two parties. While pharma seemed to hedge its bets, computer and Internet companies, along with individuals in the industry, favored Republicans, giving their convention $4.1 million compared to $3.1 million to Democrats. … Unions representing government employees, which ranked among the top 15 industries underwriting the conventions, were the most partisan, giving all of their $2.7 million to the Democrats’ gathering in Denver.
Labor, not surprisingly, favored the Democrats overwhelmingly, CFI notes:
The Democratic convention also benefited from substantial labor union support. In fact, five of the top ten organizational donors to the Denver host committee were the Laborers’ International Union, Service Employees International Union, National Education Association, International Brotherhood of Electrical Workers and American Federation of Teachers. The committee received $8.3 million in $100,000 or over contributions from unions. The Minneapolis-St. Paul host committee received nothing.
Check here to see which organizations gave to both the Democrats and the Republicans for their conventions. And here’s a table showing individual donors or family trusts.