Aug. 20, 2008

Party Conventions Are Free-For-All for Influence Peddling    

Benefits to Host Cities Are Overstated; Contributions Used for Parties, Not Civic Boosterism

WASHINGTON, D.C. – Corporate donors and lobbyists are taking advantage of loopholes in federal election law and congressional ethics rules to contribute more than $112 million toward the upcoming Democratic and Republican national conventions. This flood of unlimited soft money from special interests, and the lavish parties and wining and dining it pays for at the conventions, runs counter to the federal election law and congressional ethics rules. Adding insult to injury, much of this money is given under the pretense of boosting the economies of the host cities, according to a report released today by Public Citizen.

[In addition to the report, Public Citizen made a YouTube video to bring the message about campaign finance abuses at the conventions to a wider audience. See it here.]

In recent years, the conventions have become lavish parties paid for by special interests seeking favors from elected officials, instead of the publicly financed electoral events they were intended to be. Private money spent on this year’s conventions dwarfs the $16.4 million in public grants provided for each convention.

“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,” Public Citizen President Joan Claybrook said. “The only way to return these conventions to the public is to close the loopholes and remove the influence of special interests from the conventions.”

A series of controversial Federal Election Commission (FEC) advisory opinions and regulations has reversed the reforms gained under the post-Watergate Federal Election Campaign Act (FECA). Most notable is an FEC determination that wealthy individuals, corporations and unions can make unlimited contributions, for certain purposes, to “host committees” – supposedly unaffiliated with the national party convention committee.

However, the official party convention committees largely approve and direct the host committees’ budgets and activities. In turn, the conventions serve as big advertisements for the presidential candidates and congressional leadership, and these lawmakers know which corporations are paying for their ads, Public Citizen’s report says.

Public Citizen’s report points out that the actual benefits of this “civic boosterism” are minimal, with evidence showing that the conventions can actually have a negative impact on the host cities.   Many businesses and attractions in host cities suffer during the conventions because tourists stay away and convention-goers spend most of their time and money at the convention and convention-related events.

Public Citizen’s report also details the evolution of the modern conventions into corporate-funded galas and breaks down what donors can expect for their contributions. For example, a $1 million donation to the Republican National Convention host committee will get donors VIP access to the Xcel Energy Center in St. Paul, while a similar contribution to the Democratic host committee gets donors VIP tickets to the Denver Convention Center and “first consideration” for popular Denver venues.

So far, nearly 400 parties are scheduled to be thrown at the conventions, many of them hosted by corporations, lobbyists and lobbying organizations. Several new ethics rules were approved by Congress to curtail influence peddling through lobbyist-sponsored parties, but many of the lobbyists are trying to find ways around the rules. For example, even though the rules ban lawmakers from attending a party hosted by a lobbying organization that honors a specific member, AT&T appears willing to host parties that honor congressional caucuses, such as the “Blue Dog Coalition” or the “Republican Main Street Partnership.” This is an apparent violation of ethics rules.

“The FEC should reverse its decisions on corporate sponsorship of host committees and municipal funds,” said David Arkush, director of Public Citizen’s Congress Watch division. “If the FEC refuses to address the issue, then Congress must rein in this abuse of the electoral process.”

In addition, “the House ethics committee should follow the Senate’s example and issue guidance that will foster compliance with the congressional ethics rules rather than undermine them,” he said.

Public Citizen warns that any member of Congress attending any party that honors a member or members of Congress will violate the ethics rules. Members of Congress would do well to steer clear of the party scene altogether. The burden for compliance lies most heavily on members and their staffs, but lobbyists also may be held liable if they deliberately encourage members or staff to violate the rules. The particular penalty varies widely, depending on the nature of the infraction.