Companies spend millions to fund conventionsby Tim Pugmire, Minnesota Public Radio
Corporations and trade organizations will spend tens of millions of dollars to get their messages heard during the convention here and the Democratic National Convention in Denver. They're making large donations to the local host committees in both cities and staging lavish parties for after-hours hobnobbing. But the total amount they spend might never be known. That's because a loophole in campaign finance law allows most of the convention spending to go unreported.
St. Paul, Minn. — If you know the right people, you could land an invitation to hear Styx play at the AgNite Gala at The Depot in Minneapolis.
There's also the Mississippi Rising party that the American Gas Association is hosting at the Epic nightclub, and the receptions Union Pacific will host in historic train cars coming to downtown St. Paul.
Steve Knuth, the owner of a St. Paul government relations firm, is organizing several big events through his convention-consulting venture called "GOP Convention Strategies." Knuth says the slow economy doesn't appear to have affected convention events. He says political influence is always a good investment.
"It's a business decision and I think it's a very calculated one," he says. "I don't think many of the clients that we work with make these decisions about spending you know a hundred or two hundred or $500,000 lightly. And I think they see a return on that investment or they wouldn't be making it."
Knuth is keeping most of his client names and the events they're hosting private.
The Sunlight Foundation, a government watchdog group based in Washington, D.C., recently posted an unofficial scorecard of known events. The list identified 370 parties, receptions and symposiums in both convention cities. The lobbyist sponsors include AT&T, Honeywell and the National Association of Realtors.
But the after-hours parties are just one part of the convention spending. It also takes millions to stage the events. That money is being collected by so-called host committees in Minnesota and in Denver.
Corporate donations to host committees are also hard to track, with no disclosure required until 60 days after the conventions.
"We're talking about $142 million in 2004 for the two conventions and at least $115 million and probably more in 2008 for the two conventions," says Steve Weissman.
He has been studying convention spending, and its potential for corruption, for the Washington-based Campaign Finance Institute.
Weissman says the Bipartisan Campaign Reform Act of 2002 eliminated unlimited, soft money contributions to political parties. But he says the Federal Elections Commission preserved an exemption for national political conventions, as long as the money is raised by local host committees.
"The assumption is that even local companies, which maybe are appealed to and are appealed to support this because it will kind of put our city on the map or maybe help us economically in the future in some vague way," he says. "But the truth of the matter is that the people raising the money also say to these companies and others look, if you give money, we're going to set you up with elected officials at the federal level. Both host committees are doing this."
Weissman's research found that Denver's host committee offered private events with top government leaders to corporations that donated more than $250,000.
He also uncovered a document used by Gov. Tim Pawlenty for a fundraising breakfast last year with Minnesota CEOs. One of Pawlenty's talking points said donors would have the opportunity to connect with influential government officials.
During an appearance at the National Press Club last week, Pawlenty downplayed the impact of influence-peddling during the conventions.
"I think under the new rules, the ability for companies to lavish goodies on people at the convention has been greatly reduced," he said. "So, you can come and have a hamburger or something to drink, but I doubt that's going to change a lot of votes in the United States Congress."
Promises of political access haven't made the fundraising any easier this year. The Los Angeles Times reported this week that Minnesota organizers needed a last minute donation of $10 million from the owner of the New York Jets to reach the host committee's final goal.
- Morning Edition, 08/13/2008, 7:20 a.m.