Money in Politics

National Party Conventions: Lingering Loopholes

Summer 2008

 

Download the printer-friendly version.

 

The most expensive election cycle in history is nearing its peak. Candidates will raise and spend an anticipated $5 billion around the country by November, with money raised mostly from wealthy individuals and interest groups. No event rivals the national party conventions, however, for enabling those with deep pockets to purchase access to prominent political leaders.

 

This is largely due to two glaring remaining campaign finance loopholes at the party conventions: the “Host Committees” that can accept unlimited corporate and union contributions and the lavish receptions for groups of lawmakers permitted by a narrow reading of a new congressional ethics law. Substantially more money in larger chunks pours in through the funnel of the “Host Committees.” The packages of access and hobnobbing opportunities that six- and seven-fi gure gifts buy are arguably a much greater concern than the nightly parties alone. The lavish receptions paint a vivid and unseemly image for the public and magnify the problem.

 

Host Committees and the civic boosterism myth

 

The FEC upheld a “narrow exemption” for Host Committees under the Bipartisan Campaign Reform Act of 2002, which banned soft money contributions to the national political parties, under the logic that “[T]he fact that historically members of the opposite party have played key roles in the convention host committees strongly supports the Commission’s conclusion that the host committee activity is motivated by a desire to promote the convention city and not by political considerations.”[1]

 

Such a rationale doesn’t stand up to scrutiny. The Campaign Finance Institute (CFI) came to a far different conclusion:

 

When one looks not simply at the formal organization of the host committees (as the FEC did) but at who is actually raising the money, one sees that the dominant roles are being played 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. … Contrary to the FEC’s conclusion, “political considerations” have a lot to do with host committee fundraising activity. All the more so when one considers that about half of the private money for both conventions this year is slated to come from out-of-state companies with relatively little desire to “promote the convention city.”[2]

 

The “offers of special access to federal elected officials” cited by CFI increase with the size of the contribution and represent a direct link between large political donations and access to elected officials. Soft money banned by the McCain-Feingold law remains the coin of the realm at the party conventions. The Host Committees and convention planners for the Democratic convention in Denver are asking for the top-level contributors to give $1 million or more[3], and their counterparts at the Republican convention in Minneapolis-St. Paul are asking for $5 million or more[4], offering “packages” of access in return.

 

These donors are seeking favors: a CFI analysis showed that the “more than 100 organizational donors” have spent “nearly $100 million in contributions to federal candidates and parties, mainly through their Political Action Committees (PACs) but also via giving by their executives and other personnel. In the same period, they have spent over $700 million to lobby Congress and the Executive Branch.”[5]

 

And the major donors’ political agendas are hardly secret. From 2005-08, the high end Host Committee donors also spent tens of millions of dollars on lobbying and campaign contributions for Congress. For instance, AT&T’s lobbying budget approached $50 million over that time frame, while their recent lobby reports reveal a sharp focus on the FISA bill that included legal immunity for the telecommunications companies that participated in warrantless wiretapping on behalf of the U.S. government—an amendment that likely saved AT&T and others enormous court fees. AT&T, Comcast, and Verizon are all among the top lobbying groups that are also top Host Committee donors, and all three will be heavily invested in the internet neutrality debates in Congress in 2009.

 

Through that lens, the packages that these major donors purchase for the conventions amount to a treasure trove of opportunities to rub elbows with important policy-makers and further their political ends.

 

Receptions, galas, and parties

 

Conventions are defined by imagery: a candidate delivering a keynote address. A screaming crowd waving signs. A city temporarily transformed. A string of glitzy events sponsored by wealthy interests. While that last image may not get as many headlines, and those dozens of sponsored cocktail hours, receptions, and gala events that stretch from morning until night throughout convention week may not be the image that the parties want to project, but it is nonetheless striking.

 

In 2007, the ethics and lobbying reform package passed by the new Congress – the Honest Leadership and Open Government Act – prohibited lobbyists from giving gifts to members of Congress and prohibited lavish receptions for a member of Congress. The House ethics committee’s narrow interpretation of the law read it to cover only parties honoring an individual member of Congress, leaving open the option of throwing a party for multiple lawmakers. Thus wealthy interests honoring a state delegation or a caucus with a lavish event is deemed acceptable.[6] Common sense deems otherwise: if a reception thrown by a wealthy interest means favorable access to lawmakers, what difference does it make whether it’s one, two, or 10 lawmakers? Indeed, indulging more lawmakers arguably buys more influence, not less.

 

No official guide exists of all the sponsored events taking place in Denver and Minneapolis-St. Paul this summer, but the schedules that have leaked to the public offer more than enough to paint a picture of nonstop feting of lawmakers:

 

Denver - At the Democratic convention in Denver, the telecom interests will be out in force, with Qwest Communications hosting multiple events at the swanky Palettes Restaurant at the Denver Art Museum and US Telecom sponsoring an evening concert. Financial interests VISA and US Bank will host a reception for the Freshmen Class and the financial industry will host an “FSR Literacy” luncheon.[7]

 

Minneapolis-St. Paul - At the Republican convention in Minneapolis-St. Paul, the National Association of Realtors will host a luncheon on affordable housing, while Fannie Mae, Freddie Mac, and the National Association of Home Builders have a scheduled session on “Building Stable Communities for America’s Future.” Freddie Mac reportedly pulled out of both conventions, however, amid the recent deepening of the home foreclosure crisis – a likely nod to the lawmakers who would not want to be seen at a lavish event sponsored by the mortgage giant while so many of their constituents face foreclosure. AstraZeneca will hold a luncheon. Citibank and Anheuser Busch are both sponsoring the “hospitality space” at the RNC.[8] The list goes on.

 

Conclusion

The way to address these flagrant displays of the undue influence of powerful moneyed interests in our politics is simple. Congress should close this loophole by extending contribution limits to contributions made for party conventions and require more timely disclosure of those donations.

 

Similarly, the House and Senate rules committees should interpret the ban on receptions for lawmakers expansively, to cover all such receptions, and not allow the continued trend of lawmakers attending lavish affairs thrown for their benefit by interests that have something to gain in return.

 

While comprehensive public financing is the ultimate answer to our campaign finance problem, closing these gaping loopholes is critical to restoring accountability and public confidence that big money cannot buy undue influence in our political system.



[1Federal Register, Vol.68, No. 153, August 8, 2003, pp. 47401-02.

[2Inside Fundraising for the 2008 Party Conventions: Party Surrogates Gather Soft Money While Federal Regulators Turn a Blind Eye. 3 June 2008. Campaign Finance Institute. 20 Aug. 2008 http://www.cfinst.org/pr/prRelease.aspx?ReleaseID=192.

[3] Wayne, Leslie. “Democrats Miss Marks to Finance Convention.” New York Times, May 28, 2008. 20 Aug. 2008 http://www.nytimes.com/2008/05/28/us/politics/28convention.html.

[4Inside Fundraising for the 2008 Party Conventions: Party Surrogates Gather Soft Money While Federal Regulators Turn a Blind Eye. June 2008. Campaign Finance Institute. 20 Aug. 2008 http://www.cfinst.org/pr/prRelease.aspx?ReleaseID=192.

[5Donors to Party Conventions Have Spent Over $1 Billion on Federal Lobbying Since 2005. 15 July 2008. Campaign Finance Institute. 20 Aug. 2008 http://www.cfinst.org/pr/prRelease.aspx?ReleaseID=199.

[6Common Cause Letters. 17 Jan. 2007. Common Cause. 20 Aug. 2008 http://www.commoncause.org/site/apps/nlnet/content2.aspx?c=dkLNK1MQIwG&b=686043&ct=3454763.

[7] 2008 Democratic Convention Tentative Schedule. 7 Aug. 2008. Quinn, Gillespie & Associates LLC. 20 Aug. 2008. http://media.sunlightprojects.org/partytime/pdf/DNC_convention_parties_08.pdf.

[8] 2008 Republican Convention Tentative Schedule. 7 Aug. 2008. Quinn, Gillespie & Associates LLC. 20 Aug. 2008. http://media.sunlightprojects.org/partytime/pdf/DNC_convention_parties_08.pdf.


 

   Take Action on Campaign Finance Reform  Donate to Support Campaign Finance Reform