It’s their party: DNC demands boost cost of convention, paid for by special interests

Introduction

On the way to running up an estimated $95 million tab for its 2004 presidential nominating convention in Boston, the Democratic National Committee (DNC) requested hundreds of computers, phones and cell phones, dozens of cars, thousands of parking spaces, and at least $2 million worth of parties for their state and territorial delegations, according to documents reviewed by the Center for Public Integrity.

Some of the tab for this year’s Democratic convention will be picked up by special interests with business before the federal government. Boston 2004, the private host committee designated to raise funds and organize welcoming events for the convention, is contractually on the hook for $39.5 million, to be funded by private contributions. The city itself pledged $10 million for security costs, but if Boston 2004 doesn’t raise all $39.5 million, those city officials’ signatures that were put on the official convention contract will obligate taxpayers to make up the difference. The rest of the money—mostly outlays for increased security costs—will be charged to local, state and federal taxpayers, with the latter group providing the lion’s share of the proceeds.

The estimated $95 million price tag for this year’s Democratic convention is up from the $85.4 million spent on the 2000 Democratic convention in Los Angeles. For the L.A. convention, contributors kicked in $36 million, California and Los Angeles spent a total of $35.8 million, and the federal government spent $13.5 million, according to the Campaign Finance Institute (CFI) and press reports.

As in 2000, federal, state and municipal taxpayers will chip in millions of dollars to host the convention. And private interests are once again contributing millions of dollars worth of equipment, facilities, travel, entertainment and other items for the 2004 nominating convention.

For example, Zenith Electronics is providing the Republican convention committee with TVs, VCRs and DVD Players free of charge in return for the right to advertise their brand in conjunction with the convention. In the same way, Nextel Communications is providing the Democratic convention committee with telephone equipment and blackberries.

Both companies are currently providing these things to the convention committees, and other businesses have struck similar deals with the national parties. Contributors to the Democratic convention committee include Microsoft Corporation (computer software and technical support), General Motors Corporation (31 vehicles), United Airlines (plane tickets) and US Airways (plane tickets), according to Federal Election Commission records.

Another way in which corporations can directly aid the conventions, is by contributing directly to the host committees set up by the cities hosting the conventions. The host committees are not considered political committees and have an even easier time accepting corporate aid.

Bloomberg reporter Jonathan Salant estimated that Verizon donated $3 million to the New York City Host committee, and that IBM has donated $2 million to the host committees in both New York and Boston. He added that “Raytheon has given $1 million to the Boston committee, according to committee Web sites and company officials.”

The value of the company’s in-kind contributions does not have to be disclosed under FEC rules.

After months of reviewing thousands of FEC and other public documents, the Center for Public Integrity has completed an analysis of the making of the 2004 Democratic National Convention. From examining the Requests for Proposal (RFP) issued by the Democratic National Committee (DNC)—which details an exceedingly long list of items any city willing to serve as host would have to provide party officials—and actual convention spending, to the site selection tours, where select Democrats are feted in grand style all over the country, the Center seeks to provide an overview of the costs and expectations surrounding a national convention. The Center will give an overview of the Republican National Convention in August.

A summary of the findings:

• What Democrats want: Democratic Party officials demand a lengthy list of goods and services from cities seeking to host their national, quadrennial conventions. For 2004 those included: Five hundred computers, 100 televisions with cable TV access, transportation costs, parking costs, meals for 100 staffers for almost two months, all office furniture and supplies, and a host of hospitality rooms to be furnished, decorated and stocked with food and beverage.
• The site selection process: The method of selecting a city to host a presidential convention is becoming increasingly lavish. Ranging from the pomp surrounding the delivery of the official, elaborately packaged bid documents to Democrats in Washington, D.C., to taking up to 60 members of the Site Selection Committee around to a city’s best restaurants and treating them to top-shelf entertainment, the factors that go into the decision making have gone well beyond a simple analysis of whether a city has enough hotel rooms to accommodate the 35,000 people who attend the convention. The Center can conservatively estimate that it costs up to $1 million for the four or five cities and civic organizations that put bids together to pay for the entire process, as well as for Democratic site selection committee tours.
• The costs of hosting the convention: There’s disagreement about whether presidential conventions provide an economic boon to host cities. But in the case of this year’s Democratic convention, most analysts and critics say the convention will actually cost the city of Boston and the region tens of millions of dollars, particularly because of security travel restrictions imposed by the Secret Service.
• Where does the convention-related money go? An analysis of the 2000 Los Angeles convention spending by the Democratic National Convention Committee (DNCC), an arm of the DNC, found that a large chunk of party money, $6.7 million went to cover payroll and consulting costs, followed by $2 million for travel and lodging. As for the spending for the 2000 Los Angeles host committee—the private fundraising and convention organizing group that served as a pseudo ATM to the Democrats—$12.6 million went to cover equipment, transportation and security costs. Construction and production came a close second at $6.8 million, with delegate events at $2.7 million.

A look at the 2004 spending by the DNCC between October 2002 and March 31, 2004 found that $2.6 million has gone to cover payroll and consultants’ fees, while $150,000 has gone to cover travel expenses. Boston 2004, the host committee for convention, isn’t required to divulge its spending until after the convention. (See Spending Spree)

Expanding costs, diminishing returns

When Senator John Kerry considered postponing his official acceptance of the presidential nomination until weeks after the Democratic convention to take advantage of campaign financing loopholes, critics warned that the any such move might spell the end of presidential conventions. The Washington Post said if Kerry went to Boston and didn’t accept the nomination—even though he’d been the unofficial nominee for months—the convention would be a “farce.” A week later, after Kerry agreed that he would indeed accept his party’s nomination in Boston, the Post, in an editorial entitled, “U.S.-Funded Infomercials,” continued to question the purpose of presidential nominating conventions, particularly when taxpayer money is used to underwrite a large portion of the costs.

Since 1980, nearly $629 million has been spent on the Democratic and Republican Party conventions, according to the Washington, D.C.-based Campaign Finance Institute, supplemented with additional analysis by the Center. That number is likely to escalate as the original budget figures for this year’s conventions continue to rise. That number doesn’t include the amount of money spent on the site selection process by cities and civic organizations that competed to play host to a national convention. The Center estimates that at least $1 million was spent by cities when trying to land the 2000 Democratic convention, and at least that much on this year’s Democratic gathering.

Federal spending on conventions since 1980 totaled $196 million, according to a Center analysis of the Campaign Finance Institute numbers; Congress is currently considering a bill that would authorize an additional $25 million for added security costs for each party’s convention. (If the cities get the additional federal security money, federal taxpayers will have paid a total of $129.8 million for this year’s Democratic and Republican conventions.) Local and state government monies have chipped in $217 million since 1980, while private contributions have reached nearly $214 million, according to Institute’s figures.

While the parties have spent well over a half-billion dollars on conventions in the past 24 years at events where the presidential nominees are no longer selected, the public has been tuning out. The parties have been increasingly relying on professional and media production consultants to develop made-for-TV events, while TV ratings for the conventions have been on a downward spiral. Citizens, whose votes the parties are trying to win, pay less and less attention. Ratings for the 2000 conventions declined by almost half compared to 1960, when 30 percent of viewers tuned in, the Los Angeles Times reported in August 2000.

Network attention to the conventions has ebbed as well. Twenty-four hour cable stations notwithstanding, the major networks cut down on the total number of hours they dedicated to coverage of the national conventions—from 20 hours in 1992 to 11 hours in 2000. A June 30, 2004 article in The Hill quoted news executives from the major networks saying that they were planning to scale back convention coverage even more, to as little as one hour on Wednesday night and maybe two hours on Thursday, the night of the nominee’s acceptance speech.

While ratings have declined, the conventions themselves have grown ever more costly, fueled by the demands of the political parties.

What Democrats want

If you’re looking to host a Democratic convention in your city any time soon, you’d better be prepared to pay, fundraise like mad and call in a lot of favors from businesses willing to make in-kind contributions. The list of items that the Democratic Party will require you to provide them, their staff and the DNCC is lengthy.

In the fall of 2001, DNC officials invited a select group of cities to consider hosting the 2004 convention. By February 2002, the cities which showed an interest in hosting received the party’s Requests for Proposal detailing the DNC’s desires.

The DNC’s RFP for its 2000 presidential convention exceeded 100 pages and listed numerous requirements. For example, if a city were put on a short list to be visited by party officials, the city would have to pay for “the cost of air travel, lodging, meals and ground transportation for the [Site Advisory Committee] and DNC/DNCC staff,” according to the Democrats’ RFP for the 2000 convention. At that time, some of the party’s requirements of a city and its host committee were to provide the DNCC with at least 425 room nights worth of complimentary hotel rooms; 475 personal computers, 40 laptops, 100 laser printers, three portable bubble jet printers and five color laser printers; a total of 300 cell phones to be provided beginning two weeks before the convention; dinner for up to 100 staff per day during a four-month period; and 56 welcoming receptions for delegates, a media party for 15,000 and four 5,000 square-foot furnished and decorated rooms for dignitaries and entertainers (with fresh water and soft drinks on hand).

Four years later, the party’s demands on potential host cites grew. According to the bid submitted by the winning city—Boston—these are some of the items the city offered the Democrats in response to their 2004 RFP:

• 400 personal computers.
• 100 laptop computers.
• 15 multi-media Web workstations.
• Wireless network at the FleetCenter, headquarters hotel and satellite offices.
• 150 black and white laser printers.
• 40 color laser printers.
• 40 high-speed photocopiers.
• 40 flatbed scanners.
• 5 digital cameras.
• 100 TVs with cable TV service.
• All DNCC office furniture needs.
• Electronic subscriptions.
• Periodicals subscriptions.
• 500 phones with headset jacks and LCD displays.
• 40 conference room phones.
• 50 multi-function office machines including printing, scanners and faxing capabilities.
• 450 cell phones.
• 100 handheld wireless devices.
• 500 two-way radios.
• 100 two-way pagers.
• Local and long distance telephone service.
• All DNCC office supplies.
• Pitney Bowes postage meter for $25,000, $15,000 for overnight mail, $10,000 for local courier service.
• 56 state and territorial delegate parties ($1 million, $800,000, plus $200,000 in-kind).
• Media party for 15,000 ($800,000).
• “Delegate day” and tours.
• Media lounge.
• Diplomat/foreign dignitary lounge.
• DNC members/Democratic elected official lounge.
• DNCC lounge ($100,000).
• Transportation passes for up to 350 DNCC staff 60 days prior to convention period.
• Air-conditioned buses.
• 45 vehicles, fuel, registration fees, parking, up to 12 months before the start of convention period, and up to 300 during the convention period.
• 1,000 parking spaces for two months prior to the convention.
• 5,000 parking spaces during convention period.
• 75 parking spaces near headquarters staff office at least two months before the start of the convention and three weeks after.
• Audio system and audio consultants, designers and operators.
• Teleprompter system.
• Production designer ($100,000).
• Design and construction of podium backdrop ($850,000).
• Balloon or confetti drop (and convention decorations, $250,000).
• Office safes.
• 10 offices and four holding rooms.
• Makeup room.
• Dinner service for up to 100 staff per day for two months.

Boston’s bid document did specify that the computers, web workstations, flat bed scanners and printers provided to the Democrats would have to be returned to the city after the convention for use in Boston schools. The photocopiers would be leased. Neither Boston officials nor representatives from the DNC or the DNCC replied to written questions from the Center inquiring about what would happen to the other goods provided by Boston and Boston 2004 to the Democrats once the convention concludes.

“I think the whole thing is kind of very expensive,” Kelly Martin, former chief of staff to former Los Angeles Mayor Richard Riordan told the Center. Los Angeles hosted the 2000 Democratic convention.

The Center made attempts to contact both DNC and DNCC staff to explain why cities are required to provide the aforementioned goods and services in order to host the Democratic convention. Phone calls, e-mails and faxes went unanswered.

The site selection process

Once the cities are invited to consider hosting a presidential nominating convention, some mayors immediately start wooing the party leaders, even before the RFPs are distributed.

After his unsuccessful pursuit of the 2000 Democratic convention, Boston Mayor Thomas M. Menino was so desperate to have his city host its first ever presidential convention that he made sure DNC officials knew he was serious. In January 2002, during the DNC’s winter meeting in Washington, D.C., Boston organizers put on a cocktail party for 400 Democrats at the Marriott Wardman Park Hotel, featuring Sam Adams beer, steaks and hot dogs, Legal Seafood’s clam chowder and lobster rolls, in addition to scallops with raisin sauce made and served by celebrity chef Todd English. The event, which cost about $125,000, was funded through donations, according to press reports. According to documents from Menino’s office obtained through a Center public records request, Boston organizers spent $9,600 on catering (an additional $4,500 for Todd English’s fare), $10,568 for the bar tab, $450 for a character actor, nearly $2,000 in travel related expenses, and distributed goodie bags for DNC members valued at $5,000. Goodie bag contents included Lobster Beanie Babies, cookies, Boston baked beans, Celtics golf balls and Boston Pops CDs.

“We’re looking for a city that wants us,” Alice Huffman, co-chairwoman of the DNC’s site selection committee, told the Associated Press at the time.

By April 2002, five cities submitted bid proposals—all of which cost thousands of dollars to prepare, mostly from private funds raised by convention and visitors’ bureaus from the cities. Officials from Boston, Miami, Detroit and New York City would not respond to requests from the Center by press time to detail exactly how much the process cost the cities, their visitors’ bureaus and private donors. (Baltimore, which submitted a proposal, dropped out.) (See “Wining and Dining the DNC“)

The only estimate of costs for the 2004 bidding process the Center was able to locate was the costs of the Detroit bid, which The Detroit Free Press put at $400,000, paid for by the Detroit Metro Convention & Visitors Bureau. A spokesman for Detroit’s mayor’s office said he had no information on how much the bidding process cost the city and referred the Center to the Detroit Visitors Bureau. However officials from the Bureau refused to divulge the amount the bidding process cost. By comparison, in 1998, business leaders and organizers in Los Angeles, which landed the 2000 Democratic convention, reportedly spent $800,000 on its city’s bid, according to Los Angeles Magazine. (See “A Study of Excess“)

Boston’s Menino hand delivered his city’s bid for the 2004 convention to DNC headquarters in April 2002 with great fanfare, flanked by Massachusetts Senators Ted Kennedy and Kerry, who went on to win the party’s nomination. Actors impersonating Boston historical figures, Paul Revere and Sam Adams, accompanied by a fife and drum corps met the Boston delegation in Washington, D.C.‘s Union Station, according to The Boston Herald.

Not to be outdone, Detroit Mayor Kwame Kilpatrick delivered his city’s proposal to Democratic officials in Washington in a silver briefcase labeled “top secret.” Kilpatrick was accompanied by his mother, Representative Carolyn Cheeks Kilpatrick and Representative John Dingell, the Associated Press reported. Officials from Miami-Dade also trekked to Washington to personally deliver their bid to DNC headquarters. Their bid, handled by two leaders of the Greater Miami Convention & Visitors Bureau, was accompanied by a brass band, boxes of stone crabs from two of the county’s well known eateries and a person dressed as a donkey, according to press reports.

New York City Mayor Michael Bloomberg, whose city eventually landed the 2004 Republican convention, delivered his city’s pitch to host the Democratic convention to DNC Chairman Terry McAuliffe in the main lobby of Grand Central Station. Included with the bid document was a CD-ROM that included a video clip of Bloomberg making the city’s case.

A month later, McAuliffe sent letters to the four remaining cities letting them know that the party’s site selection committee, comprised of 40 members, would be traveling to their cities that summer for a three-day tour, for which the cities would have to foot the bill, from transportation and lodging costs, to meals.

The site selection process brought Democrats to Boston, Detroit, New York City and Miami. In each city, Democrats were not only treated like royalty, they often went home with loads of gifts and full bellies. The total costs for the royal treatment are unclear. When asked, city officials often say that their local visitors’ bureaus and businesspeople pay the costs, and are often unwilling to provide hard numbers. For the 2004 convention site selection process, the only informed estimates the Center was able to track down were the $125,000 Boston organizers paid for a January 2002 D.C. reception for Democrats and a press report about the $400,000 that the Detroit Metro Convention & Visitors Bureau spent on the overall bidding process. No overall figures were made available for the bids from Boston, New York City or Miami.

Boston’s site selection tour

During the three day tour of the city that calls itself The Hub, Democrats were treated to an array of events and fine food. Included among the events of the Boston site selection tour were:

• A dinner in the Boston Public Gardens.
• A luncheon at the New England Aquarium.
• A luncheon aboard the Bostonian III cruise ship on Boston Harbor, where Democrats were treated to salmon, pasta salad.
• An event at Fenway Park while the Red Sox played the Cleveland Indians, including a visit from Sox president Larry Lucchino.
• Breakfast at the gilded Wang Center with a private performance by cast members from the show “Rent.”
• A private hour of shopping at the original Filene’s Basement.
• A tour of the Boston Museum of Science and clambake.
• Nightcaps at the Boston Park Plaza Hotel’s bar, Whiskey Park.
• An evening tour of the nightlife on Boston’s Landsdowne Street.
• A tour of the “Big Dig,” a massive, years-long highway construction project on the city’s most important artery that dominated parts of Boston, followed by ice cream with cherries, walnuts and fudge on the Bunker Hill Zakim Bridge that hadn’t yet been opened to the public.
• A tour of the John F. Kennedy Presidential Library overlooking the waterfront.

To try to seal the deal, Menino made another trip to Washington in September 2002 to lobby for Boston’s bid. He didn’t want to lose out like he had in 1998, when it was widely believed that the Big Dig, which has been plagued by cost overruns and delays, torpedoed the city’s chances.

That time around, Boston handed Democratic site selection committee members Palm Pilots, silver Paul Revere bowls and Rockport shoes, courtesy of the Boston tour organizers. During a $30,000 May 1998 reception for Democrats that Menino held in Washington—funded by private monies—Boston officials plied party officials with Samuel Adams beer, lobster, a parquet flooring with the Celtics logo on which one could take basketball shots, a string quartet, a rubberized pitcher’s mound and a rendering of Fenway Park’s hand-operated scoreboard. But the Palm Pilots and lobster didn’t cut it for Boston in 1998. Menino’s enthusiasm and the heavy pressure from Senator Kennedy are believed to have been the keys to the city’s success in landing the 2004 convention.

Costs of hosting the convention

Once a city’s convention bid is accepted, the city and the Democratic Party sign a contract, specifically detailing who will be responsible for what. In the case of this year’s Boston convention, the DNCC and the DNC officials would not respond to repeated requests from the Center for a copy of the contract.

Based on the $49.5 million bid submitted to the DNC by Boston, Hub officials agreed that their host committee—run by Mayor Menino’s former chief of staff David Passafaro—would raise $39.5 million in private donations to help fund the convention, while the city would chip in $10 million for security. The Democratic Party, like the Republican Party, also received $14.9 million from the federal government for convention related costs. As security costs increased, Boston officials sought additional federal money and were awarded $25 million in late 2003, and were actively seeking another $25 million in June 2004.

The Boston Globe reported in June 2004 that the convention’s production and construction costs had climbed an additional $10 million, partly due to changes Kerry’s aides are seeking to alter the look of the convention. City, DNC and Boston 2004 officials are quarreling over who will pick up those additional costs, The Boston Globe said. But as of late June, Boston 2004 was still $3 million short of raising the $39.5 million in private donations.

When city officials were trying to convince Democrats to have their 2004 convention in Boston, they loudly touted the event as likely to generate $150 million for the city and region.

Since winning the convention, critics have pointed out that the city has lost other multi-million-dollar events because its resources and venues would be consumed by convention activities. The non-profit, non-partisan Beacon Hill Institute, which has projected a $34.3 million loss from the Democratic convention, said in an April 2004 report, “The convention has caused Boston to lose Sail Boston 2004 and the USA Gymnastic qualifying event.”

The Boston Business Journal editorialized in March 2002, “The Democratic convention will be a once-in-a-lifetime event. But in economic terms, it’s better to view it as a loss leader, an expensive and inconvenient promotion of Boston that one hopes will yield dividends for the city in the years ahead.”

Then the Secret Service officials spoke.

In May 2004, the Secret Service unveiled a strict, post-9/11 security plan designed to protect conventioneers and dignitaries. The breadth of the plan left many to rethink the promises of a $150 million boon. Security measures for the four-day convention at the end of July included: Shutting down nearly 40 miles of major roads and highways in the greater Boston area (including parts of Interstate-93), shutting down the subway/commuter rail station next to the FleetCenter, the cancellation of commuter ferry service, the cancellation of Amtrak service between Maine and Boston, anticipated four-hour delays at Logan International Airport, and dramatic parking and delivery restrictions. On the day the restrictions were announced in mid-May 2004, Mayor Menino urged employers to consider having employees telecommute, work off-site, stagger work schedules or take vacation, The Boston Herald reported.

Two days after the security measurers were made public, The Boston Globe suggested that holding the convention in Boston would yield not a $150 million boon, but instead, could cost the region $50 million. “Economists’ conservative estimates of the loss range from $34.3 million to $49.8 million for the week, but some forecasts say the potential losses could be much higher if the effect on suburban communities is factored in as well,” The Boston Globe reported on May 22, 2004.

Following the 2000 Los Angeles convention—with its pre-9/11 security measures and their accompanying costs—business owners gave mixed responses as to whether hosting the presidential convention was a financial plus or minus. On the positive side of the ledger, former Los Angeles Mayor Riordan’s chief of staff Martin said she thought that hosting the convention was worth it for the city in the long run. Saying that the city had just suffered through riots, earthquakes and recession, she said the positive images being beamed out of Los Angeles were priceless public relations gems. “We really wanted to showcase the city and show that we were back,” Martin told the Center. “I think people have forgotten that L.A. was in a bad place.”

When asked whether it was a net gain or loss in terms of dollars, Martin replied, “I don’t think the size of the convention is what it’s about . . . It’s the intangibles. It’s the city being showcased night after night.”

On the negative side of the ledger, the city of Los Angeles wound up allocating $36 million in municipal funds, mostly for security and police overtime, for the convention week. “The Democratic convention was supposed to generate $133 million in benefits to the Los Angeles economy,” reported The Wall Street Journal in August 2000. “But many economists and local leaders say the cost may be nearly as high.”

The general manager of the Wilshire Grand, which, according to FEC reports, took in over $358,000 from the DNCC in 2000, told The Boston Globe that many of the delegates didn’t patronize restaurants or bars because there were so many privately funded parties. “All over town, somebody was hosting the delegation and entertaining them,” general manager John Stoddard said. “If there was free food and booze someplace, they weren’t going to open up their wallets and spend their money here.”

The full cost of the entire Democratic convention process—from the creation of bid documents by prospective host cities and civic organizations, the costs of the numerous receptions and gifts given to Democrats, to the costs of hosting a lavish site selection tour and paying the travel expenses for a group of up to 60 members of the site selection committee—remains elusive. But one thing is certain, in the post-9/11 world, hosting a national presidential nominating convention will be costly to any host city.