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FEC Likely to Keep the “Soft Money” Floodgates Open for Political Party Conventions

July 23, 2003

FEC Likely to Keep the “Soft Money” Floodgates Open for Political Party Conventions


Ignoring Calls by Public Citizen and Other Reform Groups, FEC Draft Rule Exempts Party Convention Funding from Soft Money Ban

WASHINGTON, D.C. – Despite the soft money ban in the nation’s new campaign finance law, the Federal Election Commission (FEC) is expected to approve a regulation on Thursday that would allow convention “host committees” to raise and spend unlimited soft money from special interests to pay for the national party nominating conventions.

Public Citizen believes that the elections agency should never have allowed soft money financing of convention-related activities, especially since a system of public financing of the conventions was designed to displace most private financing. In a letter submitted to the FEC today, Public Citizen renewed its charge that permitting soft money in political party conventions is contrary to federal law and that the agency should be prepared to reconsider its soft money regulations, including the convention-funding rules, after final resolution of the pending litigation in McConnell v. FEC. In that case, the legality of last year’s landmark campaign finance reform law banning party soft money, the Bipartisan Campaign Reform Act (BCRA), is being challenged.

In the past, party conventions were largely financed with government money. Because of revisions the FEC made to regulations, however, soft money began pouring into national political parties from businesses, other special interests and wealthy individuals seeking favors from the parties. Public Citizen contends that the current way in which the nominating conventions are funded is inconsistent with the original purposes of the Federal Election Campaign Act of 1971, as subsequently amended, and violates a campaign finance reform law passed by Congress last year.

Given that soft money has already been flowing into the 2004 party convention coffers, it is unlikely that the FEC will close this loophole for the 2004 conventions. However, Public Citizen’s letter to the agency asks the FEC to re-evaluate its convention-funding regulation for future party conventions after the U.S. Supreme Court issues its ruling on the legality of the BCRA.

One of the key pillars of the BCRA prohibits the national parties from raising or spending “soft money” – unregulated money from wealthy individuals in excess of legal contribution limits, as well as money from corporations and unions. But the FEC draft rule suggests that federal campaign finance law does not explicitly include party conventions in the ban on party soft money activities.

“As a result, nearly $100 million in soft money from corporations and special interests – many of which have business pending before the White House and Congress – is expected to turn the presidential nominating conventions into lavish soirees,” said Craig Holman, legislative representative for Public Citizen. “That amount of giving usually comes with expectations of getting something in return.”

Public Citizen’s letter asks that the FEC do a complete statistical analysis of the 2004 conventions and document the sources, uses and abuses of soft money in the convention proceedings. This information should be reviewed, along with the legislative history and intent of federal election laws, in light of the upcoming Supreme Court guidance.

To read the full text of the letter, click here. To read earlier public comment by Public Citizen and U.S. PIRG on party convention funding, click here.