Firms Cut Convention Funding
Some Formerly Big Givers Say Outlays Aren’t Worth It
During the Republican and Democratic conventions in 2000, United Parcel Service delivered. The politically savvy corporate giant gave a total of more than $300,000 to Republicans and Democrats to help stage the national political conventions. The company spent another $100,000 to host a half-dozen receptions and parties for key lawmakers.
But don’t expect to see much of UPS this week.
Despite abundant reports of lavish corporate spending at the Democratic and Republican conventions this year, UPS is part of a growing group of politically savvy companies that have decided that spending big at the national party conventions is no longer worth the money.
While funding of convention host committees is generally up, scores of big players in past conventions — from AT&T to United Airlines — have decided to scale back their investments in the conventions this year.
“We made a conscious decision not to make the commitment at the same level as prior conventions,” said David Bolger, a spokesman for UPS. “Everybody with the exception of Union Pacific, Pfizer and a few others are scaling back.”
More than half of the companies cited by PoliticalMoneyLine as having contributed $100,000 or more to the Republican and Democratic host committees in 2000 tell Roll Call that they plan to spend less this year, including General Electric, Unisys, Delta, DaimlerChrysler and U.S. Airways.
To be sure, many of the companies still plan to maintain a presence at the convention — just a lower-key presence.
In the case of UPS, the company will run a few ads in National Journal’s ConventionDaily. “But we are not even throwing our big UPS party,” Bolger said.
The shift is the latest offshoot of the decision by Congress to ban soft-money contributions to the Republican and Democratic parties.
In prior years, UPS and other corporations could contribute large checks directly to the national political parties to help pay for various events at the conventions.
“The campaign-finance reform law obviously has taken some effect on the ability to give corporate money because you are not giving directly to the parties like you used to,” said Brandon Winfrey, a GOP fundraiser.
Though corporations can still donate to the Republican and Democratic host committees that stage the conventions, an increasing number of companies don’t think they are getting a return on their investment.
“I definitely have seen a lot of our clients concerned about what if any benefit you get from participating in some of these things,” said Tom Crawford, a lobbyist with the C2 Group who represents more than a dozen U.S. corporations.
Another corporate lobbyist said that contributions to the conventions are a waste of money.
“From a lobbying point of view, we have all the people we need right here in Washington. Why would we pay hundreds of thousands of dollars to pay for events in Boston or New York?” the lobbyist asked.
One of Crawford’s clients, Pepsi Co., is a good example.
In 2000, the soft-drink and snack-food giant donated $500,000 to be one of the top corporate sponsors of the GOP convention in Philadelphia.
This year, Pepsi will not contribute a dime to the host committees of either convention. Instead, the company simply wrote a check for a few thousand dollars to help sponsor a bash at the Roxy nightclub in honor of the conservative Democratic Blue Dog caucus.
“You are constantly trying to evaluate what it is exactly you get for the investment, and I just don’t think that we got as much out of our participation with a host committee — as much visibility — as we get from doing a separate event during the convention like we are doing this time,” said Galen Reser, vice president of government affairs for Pepsi.
Despite such backtracking by formerly big convention donors, the host committees for the Republican and Democratic conventions have actually hauled in more money than ever before.
Democrats raised $39.5 million in private contributions for this week’s festivities in Boston, a modest increase over the $36.1 million donated for the 2000 convention in Los Angeles, according to a recent study by the Campaign Finance Institute.
Republicans have banked $64 million in private contributions for their convention in New York next month — three times as much as the GOP host committee raised for the Philadelphia convention in 2000.
But even though convention host committees have been able to solicit money from out-of-town companies for the first time, they remain heavily reliant on hometown companies for funding.
Nine of the ten largest supporters of this week’s Democratic convention, for example, have their headquarters in Boston, including Fidelity Investments, FleetBoston Financial, Raytheon and New Balance, each of which contributed $1 million or more to the Boston host committee to finance the week’s events.
Likewise, nearly half of the 40 top contributors to the New York City host committee are based in the Big Apple.
Beyond companies based in Boston and New York, however, many large corporations have decided to give less to the conventions than in prior years.
“We are not going to be significantly involved,” said Fruzsina Harsanyi, the chief lobbyist for Tyco International. Tyco paid $150,000 to sponsor the GOP convention in 2000, but this time the company has decided that working on restoring its corporate image — which was tarnished recently by executive scandals — is more important than funding the conventions.
Meanwhile, the U.S. airline industry, facing unfriendly skies, also has seen its participation in the conventions plummet.
United Airlines has been a big player in 1996 and 2000 for the Democrats. The 1996 convention in Chicago was held at the United Center in the company’s home town. And in 2000, United contributed $325,000 in cash and free airline tickets to sponsor the Democratic convention in Los Angeles. Its competitor U.S. Airways donated $250,000 to be the official airline of the GOP convention at its Philadelphia hub.
This year, the two airlines are partnering to share the title of official carrier of this week’s convention in Boston.
“It seems that every convention time, it adds less and less value to the corporation,” said a lobbyist for United Airlines. “There is so much going on that it’s just hard to stand out and get through the clutter.”
Another perennial convention financier that has decided to lower its level of support is AT&T.
In 2000, AT&T was among the top benefactors of the Republican and Democratic conventions, donating a total of more than $1.5 million, according to PoliticalMoneyLine.
This year, one of the biggest donations that the long distance carrier will make is a $150,000 grant to underwrite an eight-month exhibit of photos, memorabilia and documents from the 1960 presidential campaign that is on display at the at the John F. Kennedy Library.
“We are keeping our hands on the reins on expenditures in fairness to our customers and shareholders,” said Ed Bergstraesser, a spokesman for AT&T.