The Republican convention: The party begins in New York City, paid for by special interests

Introduction

President Bush will accept his party’s nomination in New York City at the Republican National Convention, an event that will cost an estimated $166 million. In addition to the tens of thousands of patriotically themed balloons, Republicans asked for and received millions of dollars worth of phone lines, computers, hightech gadgets, automobiles and parties, many of them paid for by special interests that had, in the past, contributed soft money to the Republican National Committee.

The largesse comes at a time when political conventions are attracting fewer and fewer viewers. Ratings for July’s four-day Democratic convention on the three major networks, as well as on cable news stations Fox News, MSNBC and CNN “hit an all-time low,” Entertainment Weekly reported.

Despite spending an estimated $95 million to throw the Democratic National Convention in Boston – the final tab won’t likely be known for months – the event did little to change the dynamics of what still appears to be a close presidential election, especially among the crucial undecided voters. In the first national polls taken just after John Kerry accepted the Democratic nomination for president in his hometown, there was precious little, if any, bounce detected. Surveys conducted by various media organizations showed everything from what Newsweek called a “baby bounce” in his lead over Bush (up four points, the smallest post-convention bounce in the history of the magazine’s poll), to what the Gallup organization saw as an actual five-point loss among likely voters, despite day after day of glowing adjectives being lavished on Kerry’s image in front of a crowd of 15,000 journalists in the FleetCenter in Boston.

Many pundits have argued that the election results won’t really be affected by the nominating conventions at all, but instead will hinge on the debates this fall between Kerry and Bush. Though presidential nominating conventions may no longer move poll numbers up, the price tag for the events shoots ever upward. According to a study by the Washington, D.C.-based Campaign Finance Institute , which tracks the escalating costs of presidential campaigns, spending for these four-day convention productions has grown, even if the impact of the conventions on the final election results is diminishing. “In a sense, the [convention] committees are building the stage props for a television production, with the costs going up even as hours of major network television coverage and average audience ratings have skidded,” CFI analysts wrote in a July 2004 study.

As Senator Joe Biden, D-Del., made his way home from Boston, he remarked to The Boston Globe, “Maybe I’ve been to too many of these things, but two days would do it.” Similar sentiments were uttered four years ago after the Democratic convention in Los Angeles wrapped up. “We ought to consider the possibility of shortening it,” then-House Democratic Leader Richard Gephardt told The Wall Street Journal.

But cutting down—or even eliminating—the number of days of the national conventions would put a damper on the special interest parties slated for the weeks of the Democratic and Republican conventions. Lobbyists, businesses and interest groups hoping to make a pitch or build relationships with policy makers planned hundreds of private parties held during the Democratic convention in Boston and slated for the Republican convention in New York City. Though the Bipartisan Campaign Reform Act of 2002—better known as McCain-Feingold—banned unlimited cash donations to parties (known as soft money), special interests still can write large checks to a party’s convention host committees, or throw elaborate bashes for the party leaders themselves. Or both.

“Companies like to be part of the democratic process of our country,” Darrell Henry, the American Gas Association’s government relations director told the Los Angeles Times. “It gives us exposure, and we get to be involved in the biggest political event of the season.” The group is spending hundreds of thousands of dollars on parties at the Democratic and Republican conventions this year.

The senators and congressmen who are feted at convention week events like AGA’s parties are often specifically invited for their areas of expertise and their committee assignments. In New York City, the AGA has teamed up with other energy interests, like the Edison Electric Institute and the National Mining Association, to throw a “Texas Honky-Tonk Salute” for Representative Joe Barton (R-Texas), the chairman of the House Committee on Energy and Commerce. The same groups are throwing “The Wildcatters Ball” at Rockefeller Plaza for Senator James M. Inhofe (R-Okla.), chairman of the Senate Committee on Environment and Public Works, according to media reports.

The Boston Herald estimated that some $20 million was spent in Boston alone on these private receptions. At least 50 parties costing $100,000 or more have been slated for both conventions, according to Broadcasting & Cable.

On top of the lavish parties, private groups are getting around the campaign finance regulations by pouring unlimited amounts of money into the committees hosting the conventions, technically designated as charitable, civic booster organizations by the Federal Election Commission. These groups don’t have to reveal the names or contribution amounts of their donors.

Still, an examination, based on newspaper reports, press releases, Web sites and other sources, of the donors to the New York City 2004 host committee and to Republican campaigns as well as to the Boston 2004 host committee and to Democratic campaigns yields interesting results. Twenty-six companies gave either cash or in-kind contributions to the host committees for both conventions, according to a Center for Public Integrity analysis. Most of those companies also contributed soft money to both parties in the 1999-2000 election cycle, as well as to the federal campaigns of both President Bush and Senator Kerry, as well as to Kerry’s Political Action Committee. (See chart).

Contributors to Boston and NYC host committees

Democratic soft money 1999-2000

Money to Kerry federal campaigns and PACs since 1991

Republican soft money 1999-2000

Money to Bush federal campaigns since 1999

Allied Domecq

$51,600.00

$725,017.00

$7,500.00

Amgen Inc.

$150,000.00

$11,500.00

$1,780,200.00

$31,840.00

AstraZeneca

$6,425.00

$105,000.00

$8,200.00

AT&T

$7,142,507.00

$19,550.00

$12,176,649.00

$54,215.00

Bank of America

$41,952.00

$233,550.00

Bristol-Myers Squibb Company

$7,402.00

$57,050.00

CB Richard Ellis

$18,300.00

$62,770.00

Citigroup

$202,310.00

$328,695.00

Clear Channel Outdoor

$985,000.00

$14,500.00

$2,154,950.00

$93,615.00

Credit Suisse First Boston

$106,154.00

$430,550.00

DaimlerChrysler Corporation

$14,000.00

$3,450.00

$212,725.00

$37,025.00

Delta Air Lines, Inc.

$1,275,000.00

$30,350.00

$818,996.00

$76,611.00

EMC Corporation

$12,975.00

$1,820,000.00

$172,515.00

Ernst & Young

$2,238,000.00

$74,975.00

$2,769,525.00

$443,809.00

Fannie Mae

$38,000.00

$37,465.00

General Motors Corp.

$12,500.00

$11,500.00

$331,300.00

$138,295.00

IBM Corporation

$78,980.00

$67,693.00

KPMG LLP

$26,550.00

$1,312,850.00

$171,027.00

Marriott International, Inc.

$260,000.00

$6,250.00

$1,099,500.00

$23,875.00

Microsoft Corporation

$3,901,876.00

$115,913.00

$8,822,623.00

$230,740.00

New Balance Athletic Shoe, Inc.

Pfizer Inc.

$1,040,000.00

$26,150.00

$14,030,244.00

$118,304.00

Serono, Inc.

The Coca-Cola Company

$400.00

$4,500.00

Verizon Communications

$3,000,500.00

$87,158.00

$5,280,832.00

$134,980.00

Waste Management, Inc.

$525,000.00

$5,750.00

$1,935,535.00

$143,519.00

(Source: Center for Public Integrity analysis based on FEC data)

“In kindness” of interests

When not directly writing checks to the campaigns, some companies are showing their appreciation to the parties indirectly, by giving in-kind donations to the host committees.

General Motors, for example, supplied 300 vehicles to Democratic convention organizers in Boston. Neither convention organizers nor city officials would say what happened to those vehicles after the convention. The same number of vehicles was donated to the GOP convention in New York. Officials on that end were also mum about what will happen to those shiny new vehicles after the balloons drop from the Madison Square Garden ceiling. Kimberly Hippler, a spokeswoman for GM, told the Center that donating the vehicles is “good for the political process by helping solve sheer transportation issues at the convention, and it’s good for GM to be doing this.” She said it is “hard to estimate the cost” of the vehicles and that after the convention, the vehicles are “all dispersed into different applications, dealers, auctions, [I] can’t say where they’re all going to.”

Panasonic made donations of various video and audio products to Republicans—as they did with the Democrats—giving conventioneers more than 100 Panasonic Viera high definition plasma monitors, according to the Republican convention and Panasonic Web sites. The retail price for those units ranged from $3,700 for the 37-inch Panasonic Vieras to $8,000 for the 50-inch models. Panasonic officials did not return Center phone calls regarding what will happen to its televisions after the convention has concluded.

Officials from the Republican Party, the host committee and the New York City mayor’s office refused to field questions about what will happen to the in-kind contributions, like the cars, plasma TVs and Blackberries, donated for convention use once the Republicans leave town.

After months of reviewing thousands of pages of FEC and other public documents, the Center for Public Integrity has completed an analysis of the making of a Republican national convention. From examining the Request for Proposals issued by the Republican National Committee—which details a long list of items any city and civic committee willing to serve as host would have to provide party officials—and perks expected for GOP convention delegates, to actual convention spending for the 2000 Republican convention in Philadelphia and spending thus far for the 2004 convention in New York, the Center sought to provide an overview of the costs and expectations surrounding a national convention.

A summary of the findings:

• What Republicans want: Like their Democratic counterparts, GOP officials mandate many goods and services from cities and their civic organizations seeking to host their national, quadrennial conventions. For its 2004 convention, Republicans asked for housing for a year for designated GOP convention staff, new computer equipment, Blackberry wireless devices, 300 air-conditioned buses, sedan car services for GOP officials, gasoline and drivers for all vehicles donated to the host committee and more than $1 million in office supplies, to name a few of the line items.
• The site selection process: The method of selecting a city to host a presidential convention is becoming increasingly lavish. Cities hoping to land the 2004 Republican convention and its 50,000-person entourage went to great lengths to show the scouting party of about 20 Republicans that they know how to throw a party. In 2002, the cities vying for the convention treated the Republicans to fine food, lodging and elephant-shaped ice sculptures. The real cost of these three-day, multi-city tours goes largely unreported, as many cities and their visitors bureaus are reluctant to divulge this information. But according to documents filed by the Philadelphia 2000 host committee with the FEC, the group spent more than $1 million on its site selection process to lure the Republicans to its city for the 2000 convention. New York officials declined to say how much its host committee and other city organizers spent on its winning bid.
• The impact of hosting the convention: There’s disagreement about whether presidential conventions provide an economic boon to host cities immediately, pay off later after four days of a positive national spotlight on the community, or actually cost the city money. But in the case of this year’s Republican convention, some analysts say it likely won’t be as much of a boon as public officials claim. The Boston-based Beacon Hill Institute reported that although New York City Mayor Michael Bloomberg has said his city will yield a $250 million boost from hosting the Republican convention, once the security measures required by the Secret Service are taken into account, the city will only benefit to the tune of $163 million. [See “Counting the Costs“]
• Where does the convention-related money go? An analysis of the 2000 Philadelphia convention spending by the RNC’s Committee on Arrangements(COA) for the convention found that the largest chunk of party money—$8.2 million—was spent on payroll and consulting costs, followed by $2.7 million for travel and lodging and almost $1.1 million for media. As for the spending for the 2000 Philadelphia host committee—the private fundraising and convention organizing group that served, in the words of the Campaign Finance Institute, as an automatic teller machine for the Republicans—the top dollars went to consultants, $20.7 million, while costs related to events and facility renovations topped $17.9 million, followed by travel, lodging and transportation at $7.4 million.

A look at the 2004 spending by the COA between January 2003 and June 30, 2004, found that $4.67 million was spent on payroll and consulting, $585,000 was spent on travel expenses and $283,000 was spent on media expenses. New York 2004, the host committee for convention, isn’t required to divulge its spending until 60 days after the convention. [See “Spending Spree“]

What Republicans want

Post-9/11 security measures aside—the federal government gave the two conventions a total of $100 million to cover security costs, in addition to the nearly $30 million it gave them to spend as they pleased—convention costs continue to increase, mostly due to the demands the parties place on their host cities for goods and services.

Through a Freedom of Information Act request filed with the city of New York, the Center for Public Integrity obtained a copy of the winning bid submitted to the RNC by the city of New York, and the contract signed between the RNC, the city, and the city’s host committee, New York City 2004 (NYC 2004). The documents detail the party’s expectations and what New York City and its host committee are obliged to provide for the Republican shindig.

Here’s a partial list of the items, along with the price tags listed in the documents, when provided:

• 56 delegate events ($2.2 million).
• Media, volunteer, hotel staff parties ($2.4 million).
• Hospitality lounges for media, diplomats, Republican Party officials ($1 million).
• Welcoming and information booths ($250,000).
• Special events ($1.55 million).
• Delegate packets ($800,000).
• Decorations ($1 million).
• Podium ($2.5 million).
• Décor and fabric coverings for Madison Square Garden ($808,000).
• Office supplies for COA staffers ($1.2 million).
• Shuttle for COA staff ($150,000).
• A year of housing for COA staff ($2.3 million).
• Telecommunications system ($5 million).
• Laptop and desktop computers ($1.22 million).
• 24-hour police security for all COA facilities and convention hotels, as well as for dignitaries.
• 300 air-conditioned shuttle buses for convention participants.
• Sedan car service for “officers and staff of the COA and other officials as designated by the COA when such persons are in New York City conducting convention-related business,” according to the contract.
• Drivers, vehicle maintenance costs and gasoline for vehicles given to the host committee or the COA.
• Subway and rail passes good for 60 days prior to the convention and throughout the duration of the event.

Unlike the contract signed between the city of Boston, its host committee Boston 2004 and the Democratic party—which specified that computer and web equipment would be returned to the city’s schools, but gave no word on what would happen to the remainder of the items donated to the Democrats or the host committee—the contract between New York City and the RNC did, at least, make one issue a bit clearer, “No items, resources, services, or funds provided by the Host Committee or any Host City Party shall be used other than for Convention purposes.” The contract further states, “The Host Committee agrees to use its best efforts to promptly return to the City such goods and equipment after the Convention Period, in good and operable condition, reasonable wear and tear expected.”

But Republican officials wouldn’t reply to Center inquiries about what would ultimately happen to those goods donated by private interests and not paid for by the city.

Site selection: Show me the free food

Some of the things Republicans can’t give back are the free meals and trips they got when site selection committee members and other party officials were wined and dined by officials who wanted the GOP to hold its 2004 convention in their city.

Like the Democrats, Republicans hold a nearly year-long audition for would-be convention hosts, expecting potential host cities to show them the best of what they have to offer. Philadelphia’s host committee spent well over $1 million in its attempts to woo the GOP to host its 2000 Republican convention in its city, according to FEC documents. And in March 2002, the RNC distributed a 30-page Request for Proposals to two dozen American cities to start the audition process anew, inviting them to submit bids if they were interested in hosting its 2004 convention.

Among the first to woo the Republicans were Bostonians, who held a clambake for members of the RNC in Beantown, nearly three years before the convention, before the party had even issued its RFP. Mayor Thomas M. Menino, a Democrat, and then-Governor Jane Swift, a Republican, hosted the event in July 2001. More than 300 Republicans dined on lobster at the John F. Kennedy Library overlooking Boston Harbor, after first enjoying an amphibious excursion about the city on its famous “Duck Tours,” according to a newsletter produced by Boston 2004, the committee that eventually hosted the Democrats in 2004.

Five cities eventually submitted written bids to GOP headquarters in Washington in 2002: Boston, Miami, New York City—all three of which also sought the Democratic convention—New Orleans and Tampa-St. Petersburg. The New York, Tampa and Miami bids were the only ones delivered in person by officials from those locales, although Boston sent its three-pound bid in red computer bags with the logo, “We’ll Do More in 2004,” according to The Boston Herald. In July, the GOP announced it would make three site visits to New York City, New Orleans and Tampa-St. Petersburg.

For 10 days in August 2002, nearly two dozen Republican leaders took to the road to be feted in grand style.

According to The Bradenton Herald, Tampa-St. Petersburg organizers said they spent approximately $100,000 for the bid. Estimates for how much New York and New Orleans spent on their bids—including the costs of the site selection tour for 20 Republicans—haven’t been publicly released.

An appeal to history

Yet New York had an advantage that its Southern competitors couldn’t match, summed up in a date that hangs over the election—and the site selection process as well: September 11. With Mayor Bloomberg and former Mayor Rudy Giuliani on hand, New York Gov. George Pataki told fellow Republicans that New York City would be the best place to hold the 2004 convention for President Bush because it was symbolic of one of Bush’s finest moments, when he went to Ground Zero to speak with the rescue workers days after airliners crashed into the World Trade Center, sending the towers crashing to the ground. “This will be an opportunity for the people of New York to say to the President, ‘Thank you,’” Pataki said, according to The New York Daily News. The city’s bid proposal featured newspaper images of Bush standing at Ground Zero on top of the pile holding the infamous bullhorn he used to speak with the rescue workers.

The focal point of a Republican convention in New York City, slated to run well into September, very close to the 9/11 attack’s three year anniversary, would be the convention hall, Madison Square Garden, less than 4.5 miles from Ground Zero.

Imagery aside, New Yorkers still had to convince the Republicans that they should play host to their convention in a city where people of their political persuasion are outnumbered by a 5-1 margin. Among the site selection tour festivities USA Today reported that Republicans enjoyed:

• A stay at The Plaza Hotel. (Its website boasts, “The crown jewel of Manhattan’s fabled Fifth Avenue, The Plaza reigns over New York with a grace and glamour . . . a stay at The Plaza entails the ultimate in gracious luxury.”)
• A horse-drawn carriage ride across the city to Mayor Bloomberg’s home on the Upper East Side.
• A luncheon at the New York Stock Exchange, one of the most important centers of American commerce.
• A Broadway performance of Thoroughly Modern Millie.
• Breakfast at the locale made famous by author Truman Capote and Hollywood icon Audrey Hepburn, Tiffany’s on Fifth Avenue.

If Republicans were not sufficiently impressed by their Big Apple tour, Mayor Bloomberg—who threw $7 million of his own cash into New York’s bid—capped six months of intense lobbying with one more trip to the nation’s capital in November 2002. Bloomberg pressed not just the GOP, but Democrats as well, arguing that his city should be the host of both conventions. According to press accounts, Bloomberg had dinner with DNC chairman Terry McAuliffe and later a separate meeting with President Bush’s political advisor Karl Rove to argue that his city had the fundraising promise and the high profile necessary to make for a successful convention, according to Newsday.

The polls will tell whether Bloomberg’s pitch pays off for Republicans.