Who's paying for the parties' parties?

The Democratic and Republican convention extravaganzas are stage-managed down to the tiniest detail, but the real influence is bought and sold behind the scenes. Elizabeth Schulte explains how corporate cash pays for the parties' parties.

Who's paying for the parties' parties? (Eric Ruder | SW)


In the days before the Democratic National Convention, Barack Obama told a crowd at a barbecue in Eau Claire, Wis., what image of him he'd like people to take away from the Denver convention: "He's sort of like us. He comes from a middle-class background, went to school on scholarships. He and his wife had to figure out child care and how to start a college fund for their kids."

Yeah, the Democrats attending the convention in Denver are lot like you and me--that is, if you're used to rubbing elbows with the rich and famous at lavish parties and sleeping at the Ritz-Carlton, with a 6,800-square-foot spa.

The Democrats' convention Web site brags that the party is making history, with the "first convention since 1960, when President John F. Kennedy moved his acceptance speech to the Los Angeles Memorial Coliseum, to open its doors to more than 75,000 people from across the country, as Barack Obama accepts the Democratic nomination for President of the United States at Invesco Field at Mile High. In the first 48 hours after the invitation was issued, more than 80,000 Coloradans requested community credentials for Senator Obama's speech."

But what they don't mention is that not all attendees are created--or will be treated--equally. During Obama's Invesco Field speech, reported the New York Times, "most supporters will be sitting under the open night sky. But a group of lobbyists and corporate executives will watch the event from plush skyboxes, with catered food and a flowing bar, and a price tag of up to $1 million."

What else to read

Public Citizen's report "Party Conventions Are Free-for-All for Influence Peddling" documents how the conventions have become mostly privately financed soirees funded by corporations and lobbying firms that seek favors from the federal government.

The Sunlight's Foundation's Party Time Web site is tracking the parties thrown at the 2008 Democratic and Republican National Conventions, as well as fundraising activities by all lawmakers running for Congress that happen all year round in Washington, D.C.

For a guide to the influence of money on U.S. elections and public policy, see the OpenSecrets.org Web site sponsored by the Center for Responsive Politics.

Skybox attendees--which include representatives from Quest, Comcast and Xcel Energy and Tom Golisano, a New York Republican who donated $1 million--will also be able to avoid long security lines, since they have a separate entrance from "the community" and a private elevator to get them to their seats.

It's rumored that Oprah Winfrey, one of the wealthiest people in the world, was so excited to attend the convention that she rented a house for the week--to the tune of $50,000, more than many workers make in a year.

Before the convention, the Democrats made sure the media were rewarded for their compliance and were wined, dined and entertained like spoiled children--at the Elitch Gardens Amusement Park.

If excess is the unstated theme of the Democratic convention, there's more of the same at the Republican National Convention a few days later in St. Paul, Minn.

McCain and the Republicans will also try to peddle their "regular folks" image at their convention--much the same as George W. Bush, the straight-talking, no-nonsense portrait of a prep-school-then-Yale-graduate-turned-simple-rancher, did four and eight years ago.

While the GOP will be upstaged by the star power of the Democrats--Kanye West vs. Styx, George Clooney vs. Dennis Miller, you be the judge--the corporate cash will flow like champagne, or beer in deference to the "regular folks."

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THE CONVENTIONS aren't just about making an impression on the American public who watch the events on prime-time television. They're also about the parties after hours that no one sees. This is where the real decisions get made.

Party conventions are where the real influence gets peddled. Corporate lobbyists and donors can escape federal election laws that regulate the donations they can make to individuals candidates--through loopholes that enable them to give tens of millions to put on the conventions.

"Corporations have turned our national nominating conventions into an opportunity for executives and lobbyists to wine, dine and schmooze lawmakers all under the pretense of a public purpose," said Public Citizen President Joan Claybrook.

As a report released August 20 by Public Citizen states, "Today, the presidential nominating conventions are not very newsworthy because the presumptive nominees are chosen in advance; fewer people care about the conventions, as declining TV viewership shows; and yet more special interest money than ever is raised and spent at the conventions.

"Under the guise of 'civic boosterism' unlimited and unregulated contributions are funneled through a giant loophole to host committees that largely serve the political purpose of providing advertising and access to corporate and other moneyed contributors."

Donors also escape the rules through something called the "municipal fund," in which the host city creates a fund for the convention so wealthy private donors, corporations and banks can contribute. The condition of the fund is that it is supposed to be for all conventions in the city--not just presidential ones.

But that doesn't keep the municipal fund from ballooning before a major party convention and evaporating afterward. The Dallas Convention Fund in the 1980s is a prime example, according to Public Citizen. "The Dallas municipal fund was, in fact, chaired by Washington political insider and real-estate developer Trammell Crow, with corporate offices at 30th and K Streets," the organization reported. "Shortly after the 1984 Republican national convention, the Dallas Convention Fund folded."

Because of these loopholes, the amount of soft money flowing into conventions has increased exponentially over the last decade. In 1980 and 1984, public funds paid for the parties' conventions, for the most part--slightly more than $4 million in 1980 and about $7 million in 1984, according to Public Citizen.

Today, public funding is only a tiny portion of the money that flows in for conventions. In 2000, private sources provided $20 million for the Republican convention and $36 million for the Democrats. In 2004, $57 million came in for the Democrats and $86 million for the Republicans. It's estimated that more than $112 million in private money will flow through convention coffers in 2008.

The conventions haven't been about debating the party platform or deciding on the nominee for some time. It's not so much about deciding who will represent the party, but about who the parties will represent--the drug industry, health care industry, financial institutions, etc.

During the convention, corporations and their lobbyists can buy a little face time with lawmakers--for a price. When they donate to the convention host committee, they are buying their seat at the table.

And they get what they pay for. Here are a few examples of what donations buy.

A "Platinum Sponsor" at the Republican convention--someone who contributes $1 million--gets VIP access to the Xcel Center and a private reception with Gov. Tim Pawlenty, Sen. Norm Coleman and the mayors of St. Paul and Bloomington, Minn. These Platinum donors will include UnitedHealth, Medtronic, St. Jude Medical and US Bank. Donors who give $2.5 million were offered a golf outing with Republican leaders.

These cash-for-access schemes were so unseemly that the RNC removed them from their publicized packet after the media reported the story.

As for the Democrats, a brochure sent out on behalf of the Denver host committee advertised it this way: "The 2008 Democratic National Convention will bring together a unique group of business leaders, high-level lawmakers, members of the national and international media and prominent academics. This is a rare opportunity to play a leadership role in a substantive discussion on timely issues affecting your industry with company executives, scholars, elected officials and members of the media."

Those who gave $1 million or more--the "Presidential Sponsor" level--get convention credentials to all hospitality suites and are assured invitations to private events hosted by Colorado Sen. Ken Salazar, Gov. Bill Ritter Jr., members of the state's congressional delegation and other leading Democratic politicians.

Smaller donation can buy you advertising at convention events. For example, to reach the "Mile High Plus" level at the DNC, a donor can pay $52,800 and be invited to a host committee event, where they can mingle or give away bags with their corporate logo to delegates or the media who attend. The more money you pay, the bigger the event you can go to.

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SOME 400 parties will be thrown at the conventions, many of them hosted by corporations, lobbyists and lobbying organizations.

Last year, in a pledge to clean up corruption, Congress passed a rule that was supposed to end the practice of lobbyists or the corporations they work for from throwing extravagant events honoring lawmakers at the party conventions.

But, as usual, wherever there's a rule, there's a loophole. When the House Ethics Committee issued its guidelines in December, it said lobbyists or their clients could throw parties for a group of House members, just not for a single lawmaker.

A case in point: a party celebrating a group of conservative Democrats called the "Blue Dog Coalition" on Sunday night in Denver is sponsored by AT&T and Genworth Financial. It's worth noting that these two companies have historically gone to the Republicans. But the conservative members of the Blue Dog Coalition have a "unique appeal," according to a Center for Responsive Politics (CRP) Capital Eye blog.

"The Blue Dogs' fundraising advantage has been in their ability to capture pro-business interest groups that usually swing Republican, while simultaneously receiving money from left-leaning ideological groups," noted CRP's Anit Jindal. So far in the 2008 election cycle, the group has attracted $2.3 million from individual donors, a large part coming from the health care, banking and real-estate sectors.

But AT&T isn't taking any chances buttering just one side of its congressional bread. At the Republican convention, the telecom giant is co-sponsoring a reception for the "Republican Main Street Partnership" before the convention begins in St. Paul.

The "AgNite" party at the RNC, featuring the not-gone-but-almost-forgotten rock band Styx and sponsored by the Minnesota Agri-Growth Council, is described by the council's president, Daryn McBeth, as a "semi-educational event in a party setting."

Here are a few more examples compiled by the non-profit Sunlight Foundation, which is tracking the conventions:

-- A reception honoring the "Freshman Class" of House Democrats sponsored by Visa and US Bank.

-- A "Financial Literacy Brunch" at the Democratic convention hosted by Allstate, Bank of America, Capital One, Charles Schwab, US Bank, Visa, Wells Fargo, Wachovia and others.

-- A "Building Stable Communities" forum at the Republican convention sponsored by Fannie Mae, Freddie Mac, the National Association of Home Builders and the National Association of Realtors.

-- "Creative Coalition Gala Concert" at the Republican convention featuring the Charlie Daniels Band and sponsored by Target.

Another option for corporations trying to cozy up to lawmakers is "hospitality suites" hosted by the Democratic Congressional Campaign Committee, where donors can meet House Speaker Nancy Pelosi and other House leaders. At the RNC, Honeywell, Citi and Anheuser-Busch have their own hospitality spaces where they can make friends and influence people.

A total of $112 million in corporate cash at the conventions. That could provide a lot of health care, put a halt to quite a few foreclosures and pay the wages for a small army of teachers.

Or it could buy a lot of political influence.

"The business interests would not be spending this kind of money if they didn't think it was good for business," Meredith McGehee, policy director for the Campaign Legal Center in Washington, told the Denver Post. "They believe they're getting a return on their investment."