Special Interest Funding of Conventions Should Be Banned

We need to rein in excessive spending on political party conventions and check influence peddling.

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Craig Holman is a government affairs lobbyist at Public Citizen.

The national nominating conventions certainly are not what they used to be. The conventions have changed into expensive affairs marked more by corporate influence peddling and lobbyist-sponsored soirees than party-building activities. Today's excesses can all be traced back to unlimited corporate dollars flooding the conventions and overwhelming the reasonable spending ceilings set by public funds. It isn't supposed to be that way.

The presidential public financing system was created in 1974 in the wake of a convention fundraising scandal. The International Telephone & Telegraph Corp. was facing several antitrust lawsuits. After meeting in secret with Nixon administration officials, IT&T agreed to provide $400,000 in financing for the 1972 Republican National Convention. Shortly afterward, the administration agreed to an out-of-court settlement very favorable to the company.

The public financing system was created to lessen the influence of special interest money over campaigns and at the conventions. The Democratic and Republican parties would forgo corporate funds and pay for their conventions almost entirely with a public grant. It worked. In 1976, both parties paid for their conventions almost exclusively from public funds, about $2 million each. In 1980 and 1984, the parties still relied mostly on public funds, at slightly more than $4 million in 1980 and somewhat more than $7 million in 1984.

[Read Tom Cole: Taxpayers Shouldn't Fund Conventions]

But then the Federal Election Commission decided to allow corporate and special interest money to flow back into the conventions through "host committees"—private, nonprofit entities originally intended to supplement the financing of the party conventions. Instead, the corporate money raised by host committees quickly overwhelmed convention financing, amounting to more than four times the public grant for the 2008 conventions. Today the conventions are primarily funded by corporate and special interest money, transforming what should be modest nominating proceedings into the effusive affairs we now witness.

This special interest money doesn't come free. Most of the private donors have business pending before the federal government. The Campaign Finance Institute reported in 2008 that the 187 entities that provided the bulk of that year's convention financing also spent $1.6 billion on lobbying the federal government and made $273 million in campaign contributions between 2005 and 2008. Business interests at the center of the pending financial meltdown chipped in $14 million for the conventions and got a seat at the table with party leaders, members of Congress, and the presidential nominees.

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This year, both parties will receive $18.3 million in public grants, which should be about the total cost of each convention. In reality, the unregulated host committees will spend many, many times more than that in special interest money raised mostly from those who want something from the government.

If the objective really is to clean up the conventions and rein in excessive spending, legislation should be passed to ban all special interest and lobbyist financing of the conventions and strengthen the public financing system—exactly as the law originally intended. This simple move would cut spending on the conventions by two thirds or more and place a firm check on influence peddling.

The proposal to end public financing of the conventions attacks the solution, not the problem.