After Conventions, a Debt to Donors

http://www.nytimes.com/2016/05/11/opinion/after-conventions-a-debt-to-donors.html

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This year the Republican and Democratic nominating conventions in Cleveland and Philadelphia will be bankrolled entirely with money from corporations and wealthy individuals. Not since the Watergate era, when a $400,000 pledge to the 1972 Republican convention from ITT Corporation was linked to a favorable outcome for the company in a federal antitrust decision, has this happened.

Industries with business before the federal government have long found opening their checkbooks for the conventions to be one of the most efficient means for influencing an incoming administration and Congress in one quick action.

Come July, some of America’s best-known companies will pay to celebrate the nomination of Donald Trump, whose racist rants have in the past caused NBC, Macy’s and Nascar to distance themselves from him. Progressive political groups like ColorOfChange.org and Credo Action are pressuring Coca-Cola, Walmart, Microsoft, Facebook and Google to cut off money for the Republican gathering. But the protest against Mr. Trump doesn’t address the deeper problem of corporate influence over both parties.

The ITT scandal prompted legislation that provided public financing for conventions, and limited their budgets to that amount. But the parties soon found multiple ways around that, including using “host committees” that operate in the cities where the conventions are held, soliciting unlimited amounts of convention money from corporations and wealthy individuals. These committees, established to skirt federal laws banning corporations from giving to political parties directly, should be abolished.

The demise of public convention financing is a result of the 2014 Gabriella Miller Kids First Research Act, named for a Virginia girl who died of brain cancer. The law ended government funding for nominating conventions, which in 2012 amounted to about $18 million, or one-quarter, of each political party’s convention costs, and redirected $126 million over 10 years to pediatric disease research.

The law shifted ever-escalating convention costs onto rich donors and corporations like Google, Facebook, Duke Energy, Coca-Cola, Microsoft, Bank of America, General Motors and AT&T, which were all past contributors. Corporations can give unlimited cash, services and swag to Democratic and Republican host committees for conventions that basically are four-day-long parties. Shareholders in these companies pick up the tab since the money comes directly from corporate coffers.

The 2012 Republican convention in Tampa, Fla., cost about $74 million. That didn’t include millions more that corporate lobbyists spent on parties and concerts with top-name entertainment that took place outside the convention hall, and off-limits to TV cameras. The 2012 Democratic convention in Charlotte, N.C., cost about $66 million. Democrats tried to limit corporate sponsorship that year, but that didn’t lead to less spending. The convention instead went into debt, which Duke Energy, one of the nation’s largest electric power providers, paid off by forgiving a $10 million loan.

This year, the two political parties together will most likely spend upward of $150 million on their conventions, all of it paid by private entities.

Lawyers who advise corporations on campaign finance laws say that so far, most previous corporate donors will continue financing both conventions, eager to ensure that they’re covered regardless of which party takes the White House in November. “It’s a dangerous system that creates widespread opportunities for influence peddling,” says Fred Wertheimer, who leads Democracy 21, a campaign finance watchdog group.

Convention spending is part and parcel of the creeping corporate buyout of America’s political system. In a year marked by voter anger at a political class out of touch with struggling Americans, one might expect both Republicans and Democrats to rein it in. But as with all political spending, the tendency is always toward more, not less. That publicly held companies seeking favors from the government will underwrite this excess is offensive, and entirely legal.