|BUSINESSWEEK ONLINE : JULY 24, 2000 ISSUE|
The Conventions: Don't Forget to Nominate Someone
At both conventions, the real show will be Corporate America's extravagant parties for politicians
On July 31 in Philadelphia, it's going to be Republican party time. Forget the nominating speeches and platform planks at the GOP National Convention. The party of business is going to be partying with business--and Corporate America will pay the tab.
Corporate entertainment used to be a sideshow at political conventions, but this year it's the main event. When the Democrats convene in Los Angeles on Aug. 14, business will lay out the red carpet there, too. Not only is Big Business coughing up most of the $95 million that Philadelphia and Los Angeles need to put on the conventions, but it's also shelling out millions to host hundreds of invitation-only bashes that give execs and lobbyists face time with elected officials and power brokers.
The soirees are already raising hackles. ''This is a classic opportunity [for corporations] to contribute significant amounts of money,'' says Common Cause President Scott Harshbarger. ''They are going to be remembered by the party. They will have access, and they will have paid to play.''
To Common Cause and other watchdog groups, the conventions have evolved into the Super Bowl of Lobbying out of the public eye. While contributions to each convention's host committee must be disclosed, the sponsors of off-site events that pamper lawmakers in hopes of winning access and favors need never be named. Why? Federal election law does not require disclosure--because convention shindigs are not considered campaign-related.
And congressional ethics panels don't ban such extracurricular activities--even if they are as lavish as the $400,000 party that utility, telecom, and cable companies will throw on Aug. 1 at Philadelphia's Navy Pier for Republican W.J. ''Billy'' Tauzin of Louisiana, who chairs the House telecom subcommittee. And every penny spent is a tax-deductible business expense.
''It's going to reach high levels of obscenity,'' says Fred Wertheimer, president of Democracy 21, a nonpartisan watchdog. ''This is about purchasing access, and it comes at the expense of 250 million Americans who can't do it.''
With hundreds of TV cameras and some 15,000 journalists covering the conventions, they are also a relatively inexpensive marketing opportunity. GM (GM) is lending convention officials 400 cars. AT&T (T) is handing out cell phones. Verizon (VZ) (formed from the merger of Bell Atlantic and GTE) is handing gift bags to 35,000 GOP delegates. DaimlerChrysler (DCX) will run a mini auto show at both conventions and throw a party for House Speaker J. Dennis Hastert. Microsoft (MSFT) is donating software at both events.
Convention costs are through the roof. Republicans will spend nearly $50 million, some $20 million more than in 1996. Democrats will shell out $45 million, or $10 million more. ''There's a lot of money around,'' says David F. Girard-diCarlo, co-chairman of Philadelphia 2000.
Corporations had been barred from making convention contributions by the 1976 passage of Watergate reforms. But in 1994, the Federal Election Commission opened a loophole that lets companies doing business in host cities support convention efforts. There is no limit, but donations must be reported 60 days after the conventions to the FEC.
Not so with the hundreds of parties and events that will take place off-site. For example, the U.S. Chamber of Commerce will have at least two parties on a yacht owned by Amway President Dick M. DeVos Jr., whose family is among the GOP's biggest donors. Who's invited? The Chamber isn't saying.
House Majority Leader Richard K. Armey (R-Tex.) has hired country music phenom Brooks & Dunn to entertain 5,000 at a Salute to George W. Bush on Aug. 3. ''It's the hottest ticket of the week,'' says Pat Shortridge, head of Armey's leadership political action committee, which is hosting the event. Who will foot the bill? ''We have corporate sponsors, and we're not going to get into discussions of how much it will cost,'' says Shortridge.
BUNNIES? Some of the merrymaking is controversial for reasons other than corporate largesse. In Los Angeles, the Hispanic Unity PAC of Representative Loretta Sanchez (D-Calif.) is hosting an Aug. 12 party at the Playboy Mansion off Sunset Blvd., compliments of Playboy Enterprises (PLA) and other companies. ''What kind of message does that send to voters?'' frets one Democratic official.
Not surprisingly, those close to the action see nothing wrong with the lineup of corporate parties and the lack of disclosure. ''We've got a chance for the first time in 50 years to win the White House, the Senate, and the House,'' says James Ellis, executive director of Americans for a Republican Majority, the leadership PAC of House Majority Whip Tom DeLay (R-Tex.). ''That fulfills dreams of a lot of people coming to this convention. The adrenaline is flowing faster and harder than ever.''
John E. Bromley, director of corporate affairs at Union Pacific Railroad Co., also defends the schmoozathons. Union Pacific will haul a 1950s-era train, complete with art-deco lounges, to Philly and L.A. for lawmakers to use as a retreat during convention hours and a place to party afterward. ''It's important we have access to political leaders across the country,'' says Bromley. ''The reality is you have to do that to be in the game.''
The reality also is that as most of the voters tune out the nominating conventions as foregone conclusions, corporate lobbyists have tuned in--and taken over the show.
By Lorraine Woellert and Paula Dwyer in Washington
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The Conventions: Don't Forget to Nominate Someone
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