Bloomberg News

Convention-Goers in Dark on Who Pays Bills: BGOV Barometer

August 24, 2012

Party convention-goers won’t learn much about who is paying for their hospitality in Charlotte and Tampa Bay until weeks after the gatherings have ended.

The BGOV Barometer shows the Democratic and Republican parties are seeking donations of at least $105 million through host committees that don’t have to provide a full accounting of donors and contribution amounts until mid-October. That makes the committees different from the candidates, parties and political action committees, which must provide regular reports of donors and amounts throughout the campaign.

This year’s targets may well be exceeded. Host committees raised $123 million from donors including corporations and labor unions in 2008 and collected $142 million in 2004. So far this year, the host committee in Charlotte, North Carolina, has identified a single contributor, Time Warner Cable Inc. (TWC:US), a sponsor of a media party Sept. 1. For Republicans, meeting next week in Tampa, Florida, the host committee has identified companies including Chevron Corp. (CVX:US) and Microsoft Corp. (MSFT:US) as sponsors, without specifying how much they’ve given.

The Democratic host committee, preparing for its convention Sept. 4-6 in Charlotte, hasn’t announced donors to one of its two fundraising committees, The Committee for Charlotte 2012, which has a fundraising target of about $36.7 million.

Host Contract

That organization, which isn’t accepting money from corporations and federal lobbyists or donations of more than $100,000 from individuals, signed a contract with city and convention officials in March 2011 that says contributors “shall be disclosed publicly” by the host committee “within an agreed-upon regular timeframe” on its website.

“The agreed-upon timeframe is the timing of the FEC filing, and that will be posted online,” Suzi Emmerling, a spokeswoman for the host committee, said in an interview, referring to the Federal Election Commission.

Democrats say they’re working to make the Charlotte gathering “the most open and transparent convention in our party’s history,” one that is “setting a new standard for how conventions are funded,” according to the donation page on the host committee’s website.

A second organization under the host committee, New American City Inc., aims to raise about $13 million and is accepting corporate donations to promote Charlotte and host hospitality events including the media party. While New American City has named only Time Warner as a contributor, other donors include Duke Energy Inc. (DUK:US), Bank of America Corp (BAC:US). and Wells Fargo & Co. (WFC:US), according to a person familiar with the effort.

St. Paul Funds

By comparison, the two convention host committees in 2008 raised $61.2 million for the Republicans in St. Paul, Minnesota, and $61.6 million for the Democrats in Denver, according to the Campaign Finance Institute, a Washington-based nonprofit that tracks political giving. In 2004, convention host committees raised $85.7 million for the Republicans in New York and $56.9 million for the Democrats in Boston, the institute’s data show.

Contributors “hope to get gratitude from the parties and the presidential candidates,” Steve Weissman, the institute’s former associate director for policy, said in an interview. Many have business before the federal government or are among the largest employers in the convention cities.

Previous Donors

Top donors to the Democratic host committee four years ago included the largest maker of equipment for computer networks, Cisco Systems Inc. (CSCO:US) ($1.7 million), the Laborers’ International Union ($1.6 million), Service Employees International Union ($1.4 million), and the National Education Association ($1.2 million), Campaign Finance Institute data show.

Cisco, based in San Jose, California, also was a major giver to the 2008 Republican convention, ponying up more than $1.8 million. Two of the top three donors were Minnesota-based discount merchandiser Target Corp. (TGT:US) ($3 million) and consumer electronics retailer Best Buy Co. (BBY:US) ($2.2 million). Denver-based Qwest Communications International Inc. gave $2.9 million.

The conventions get funding help from the federal government every four years; this year’s payment, adjusted for inflation, is about $18.2 million for each. The government also provides $100 million, divided equally between the convention cities, for security and related costs including overtime.

After the 2008 conventions, local officials claimed economic benefits of $266 million for metropolitan Denver and $170 million for the St. Paul-Minneapolis region.

Traffic Jams

Yet while conventions bring new business to a host city, increased security and traffic jams can discourage residents from dining out or shopping, according to a 2008 paper by economists at the College of the Holy Cross in Worcester, Massachusetts. During the 2004 Republican convention in New York, attendance at Broadway shows fell more than 20 percent, the study found.

“No one in their right mind is going to be showing up” in Charlotte or Tampa for vacations, visits or business travel “unless they’re directly related to the event,” Victor Matheson, a co-author of the paper, said in an interview.

“These events are gigantic security nightmares and you have huge areas of the cities cordoned off,” Matheson said. “You have significant difficulty moving around the cities. You have the regulars in your town stay away in droves.”

To contact the reporter on this story: Greg Giroux in Washington at ggiroux@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net


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