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Companies kick in for convention tabs

BY TOM BRUNE | tom.brune@newsday.com

August 22, 2008

WASHINGTON - At the 2004 GOP convention in New York City, Senate campaign-finance reformer John McCain threw a party for 1,500 at chic eatery Cipriani, but he refused corporate and lobbyist money and paid the $110,000 cost out of his own campaign fund.

This year, McCain and the Republican Party will be throwing a bigger bash for 45,000, to launch his presidential nomination at the convention in St. Paul, Minn. But, this time, big business and lobbyists are expected to pick up four-fifths of the estimated $75-million tab.

Meanwhile, in Denver, where ethics advocate Barack Obama is expected to be nominated at the Democratic convention that starts Monday, most of the nearly $80-million cost also will be borne by big companies and large unions.

"What irony," said Craig Holman of Public Citizen, an advocacy group. "This election year we've got the two biggest reform candidates in the most anti-reform election I've seen."

New flood of financing

Both men have built reputations on reform: McCain in 2002 co-sponsored a sweeping campaign-finance law and Obama last year helped pass a new congressional ethics law.

But Holman said the funding of the conventions - and the millions of dollars that interest groups spend separately on nearby parties and events - reveal a flood of influence-seeking money aimed at lawmakers.

And the conventions come near the end of a two-year presidential race in which analysts say candidates for the first time will spend a collective $1 billion to win the White House.

In the scramble for money, the St. Paul committee turned to Robert "Woody" Johnson, the New York Jets owner, to help raise funds. Obama himself became involved in fundraising for the Denver committee.

The two candidates say they are open to changes in funding.

McCain will seek reform if he sees evidence of donors trying to influence policy, a spokesman has said. Obama wants to change convention funding in the future, said spokesman Nick Shapiro, but couldn't do it this year "due to the very late end to the primary season."

The nonpartisan Campaign Finance Institute at George Washington University says Congress passed a law in the mid-1970s to end big-money's influence by publicly financing the conventions. But the Federal Election Commission created an exception for local host committees to raise private funds to cover costs.

Where no limits are set

This year the Democratic and Republican parties will be limited to spending $16.4 million each in federal taxpayer money. But host committees in Denver and St. Paul face no limits and have set out to raise upward of $60 million each.

While federal law caps individual donations to candidates at $4,600, host committees place no limits, and they don't have to report receipts until 60 days after the conventions.

In a survey of known donors, the institute found several donations of hundreds of thousands of dollars - including Qwest Communications' gift of $6 million to each host committee.

Corporations as citizens

Hosts and donors deny the money is about influence.

AT&T, for example, donates to both host committees and sponsors receptions outside the conventions.

"AT&T's role as a good corporate citizen is to showcase the elective process in the best light possible," said company spokesman Michael Balmoris.