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The Nation | THE RACE TO THE WHITE HOUSE

Extra-Special Interest in Political Conventions

With new limits on gifts to parties, more money flows to private bashes and host committees.

July 06, 2004|Lisa Getter | Times Staff Writer

WASHINGTON — When Matt Keelen's clients wanted access to the national political conventions in 2000, the fundraiser told them to write a $50,000 check to either the Republican or Democratic national committees. In exchange, they would get a convention "package" with invitations to breakfasts, lunches and other events.

But this year, thanks to a new campaign finance reform law, such donations are no longer allowed. So Keelen is telling his clients -- who include Washington lobbyists and corporate government affairs representatives -- to have their own gatherings.

"The one-stop shop is gone," he said.

With most other avenues for corporate political spending cut off, this summer's conventions are gushing with special-interest money. It's flowing in two ways: a record amount of direct donations to the host committees putting on the conventions, or via the private bashes Keelen is advising his clients to sponsor.

Corporations, trade groups, lobbyists and unions are sponsoring hundreds of invitation-only affairs, among them cruises, a slew of concerts, a saloon party, trapshooting and golf tournaments, and even glow-in-the-dark bowling.

"The number of corporate gatherings, I think, is going to be unprecedented," said Michael Toner, a member of the Federal Election Commission and former Republican National Committee chief counsel. "You're seeing an offloading of the activity that used to be done by the national parties."

The 2002 McCain-Feingold law banned "soft money" -- unlimited corporate, union and individual contributions -- to the national political parties. But because of a loophole, corporate and union officials and top fundraisers will be able to schmooze politicians and candidates at this summer's conventions, with Democrats in Boston and Republicans in New York.

Special-interest money is being donated at record levels to the host committees putting on the conventions. Private donations are expected to exceed $100 million -- nearly double what was collected to help put on the 2000 conventions in Los Angeles and Philadelphia. The number of donors giving $1 million or more has increased as well.

Top-dollar donors who once gave to the political parties are now writing big checks to the host committees. In 2000, each convention committee received seven donations of $1 million or more in cash or services, according to PoliticalMoneyLine, which tracks campaign financing. This year, 25 corporations, foundations and individuals are million-dollar donors -- and fundraising is continuing.

Twenty-one corporations have contributed to both the Republican and Democratic convention committees. They include telecom giants AT&T and Verizon, pharmaceutical manufacturers Pfizer and Bristol-Myers Squibb, as well as Marriott, Microsoft, Fannie Mae and insurer AIG.

Verizon says it has donated $3 million in cash to each convention, which in years past would have put it in the upper tiers of soft-money givers.

Sen. John McCain (R-Ariz.) said he had intended to stop the flow of all soft money to the political conventions when he cosponsored the campaign finance reform legislation two years ago with Democratic Sen. Russell D. Feingold of Wisconsin. But the legislation did not specifically do so.

"You can't address every single entity," McCain said.

Last year, the FEC ruled that corporations and others could write big checks to pay for the conventions, saying such donations were "presumably not politically motivated" but were instead undertaken to promote the "goodwill" of the host city.

"Goodwill for who?" McCain said in an interview. "Some special interest?"

The FEC also has said that corporations could contribute to convention host committees regardless of whether they had a presence in the host city. Previous rules said corporate donors had to be based in the convention city or have an office there.

New York City's host committee is on track to raise $64 million from more than 100 corporations, individuals and others, while Boston's committee is aiming for at least $39.5 million. It has commitments from more than 150 private organizations.

After the Watergate scandal in 1974, Congress created a public financing program for the conventions, which essentially banned private donations. (The money comes from taxpayers who check off a box on their income tax returns.) But host committees were formed in 1976, giving local businesses a new avenue to open their checkbooks. After the FEC loosened the rules even more in 1994, corporate donations skyrocketed.

The host committees are nonprofit organizations made up of local business and civic leaders. In Boston, Mayor Thomas M. Menino appointed the members. In New York, Mayor Michael R. Bloomberg and Gov. George E. Pataki are honorary chairmen, and the committee includes Democrats as well as Republicans.

"At the national level, for corporate funds, it is one of the only games in town," said Washington election lawyer Kenneth Gross, chief counsel for the New York City host committee.

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