August 27, 2012 / 8:48 PM / 7 years ago

Democrats find it's hard to party on the cheap

TAMPA, Florida (Reuters) - Republican hopes for a blow-out convention in Tampa have been tempered by a tropical storm, but Democrats have only themselves to blame if their convention next week doesn’t quite live up to the parties of the past.

General view of Bank of America stadium site where U.S. President Barack Obama will give his acceptance speech at the Democratic National Convention in Charlotte, North Carolina August 22, 2012. REUTERS/Chris Keane

Eager to show they pay more heed to grassroots supporters than to the rich and powerful, Democrats imposed voluntary limits on donations to pay for their convention in Charlotte, North Carolina.

The limits have stressed out fundraisers and angered party insiders, who worry the new rules may alienate powerful allies they will need to re-elect President Barack Obama on November 6.

Democratic insiders see less enthusiasm on the part of the party faithful. Fewer politicians will be making the trip to a second-tier host city with few cultural attractions. And some worry that the parties that swirl around the convention will be less lavish than in years past.

But good-government types say there are enough loopholes to ensure that big donors will still enjoy plenty of clout. And the Obama campaign acknowledges that the rules won’t do much to impress voters.

“I don’t think anybody expected us to earn a whole lot of points for our decision to keep special interest money out,” one Obama campaign official said.

Private money has become increasingly important to the Republican and Democratic conventions as costs have soared over the past three decades.

In 1980 the combined cost of the two conventions was just $16 million, with private funds paying for 7 percent of the total, according to the nonpartisan Campaign Finance Institute. That rose to $180 million in 2004, with private interests covering 77 percent of the costs.

The cost has fallen in recent years. Republicans expect to spend $55 million this year and Democrats aim to raise $37 million, a figure that does not include the cost of outside events.

Mindful of Obama’s efforts to limit money in politics, the Democratic host committee capped donations at $100,000 and turned down contributions from lobbyists, political action committees and for-profit corporations.

Democratic officials say the new restrictions won’t limit their ability to mount an impressive, made-for-TV spectacular that will paint Obama in the best possible light.

“I don’t think your average American watching this on TV will see any difference at all. It will still be people with funny hats, the whole deal,” said an official with the Obama re-election campaign.

For the lobbyists, consultants and other Washington types who travel to Charlotte — what one promoter called the “investor class in conventions” — it’s a different story.

The fundraising limits compound a number of other factors — from the sluggish economy to the Obama administration’s strained relationship with the business community — that have made it harder to convince corporations and trade groups to underwrite the parties and other events around the convention, they say.

Fewer members of Congress are also expected to attend than in years past.

“I think there’s more and more of a sense that the conventions are an anachronism and why bother? Why spend all this money?” said Steve Elmendorf, a Democratic lobbyist who worked on the presidential campaigns of Dick Gephardt and John Kerry.


Democrats also face a tougher political environment than they did four years ago, when they gathered in Denver to crown Obama as the first African American to win a major party’s presidential nomination. And many were already less than enthusiastic about spending a week in Charlotte, which is known more for its banks than its cultural amenities.

“It’s grim,” said Heather Podesta, a Democratic lobbyist who scouted 30 of the city’s restaurants earlier this year. “Going to the NASCAR Hall of Fame isn’t reason enough to be in Charlotte.”

Party insiders worry that the restrictions will lead to a bare-bones convention that will alienate the allies they need to inspire ahead of the election. Labor unions, for example, donated $8.6 million to the party’s 2008 convention but are not participating this year.

Others note there are plenty of loopholes.

The restrictions don’t apply to contributions made to an affiliate organization, New American City, to pay for parties and other events outside the convention hall. They also don’t apply to donations of office space, computer equipment or other products or services.

Because the restrictions don’t apply to nonprofit organizations, businesses also have been asked to donate through charitable foundations, several people said.

“The Democrats, if they had to do it over again, would quite certainly rethink the no-corporate-participation rule, because they’re using loopholes to fund their convention,” said Phil Musser, a Republican political consultant who worked on Republican presidential candidate Mitt Romney’s 2008 campaign.

Republicans appear to be mounting their convention the old-fashioned way — through large checks from corporations and wealthy individuals. Fundraisers expect to meet their $55 million goal, and big donors will be rewarded, said Ken Jones, head of the convention’s organizing committee.

Over the decades, political conventions have surrendered most of their drama as the primary system has allowed rank-and-file voters to pick a presidential nominee months ahead of time.

But they remain important events for networking, fundraising and schmoozing — what party insiders call “donor maintenance.”

Unlike direct contributions to candidates or parties, the Federal Election Commission has ruled that convention contributions should not be subject to limits because they amount to a donation to the host city’s economy, rather than a political contribution.

Those donations can get very large. In 2008, 87 percent of the $57 million raised for the Republican convention came in amounts larger than $250,000, according to the Campaign Finance Institute. Democrats raised 72 percent of their $61 million from amounts at least that big.

The companies, labor unions and individuals that write those large checks are typically rewarded with access to the convention floor and hotel rooms near the center of the action, where a donor might easily run into the chairman of a congressional committee or a top campaign strategist.

Campaign-finance reform advocates say Democrats deserve some credit for trying to limit the influence of big money on their convention, but the arrangement has too many loopholes to do much good.

“It doesn’t seem like they’ve limited influence, and at the same time it doesn’t seem like they’ve won any friends,” said Bill Allison, editorial director of the Sunlight Foundation. “The lobbyists may be complaining about it, but that’s not going to stop them from being in Charlotte.”

Reporting by Andy Sullivan; editing by Claudia Parsons and Jim Loney

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