More Corporate Sponsors Hedge Convention Bets

Posted July 28, 2004 at 1:34pm

When Boston Mayor Thomas Menino and New York City Mayor Michael Bloomberg began calling, New Balance Chairman and CEO Jim Davis knew he might have a problem.

Though the Republican businessman wanted to help finance the GOP convention in New York, his athletic shoe company is based in the heart of Boston.

“He has really good relationships with Mayor Menino and [Sen. Edward] Kennedy [D-Mass.], in addition to Mayor Bloomberg,” said Katherine Shepard, a spokeswoman for New Balance.

So Davis decided to settle the matter by writing a $1 million check to sponsor this week’s Democratic convention in Boston — and a $500,000 check to support its GOP counterpart next month in New York.

In doing so, New Balance joined a pack of companies that have established the latest fad in campaign finance: Donating money to stage both the Democratic and the Republican national conventions.

To date, two dozen companies have contributed to the host committees that are throwing this year’s Democratic and Republican conventions — three times as many “double donors” as in 2000.

“Very simply, they are hedging their bets,” said Steven Weiss, a spokesman for the nonpartisan Center for Responsive Politics. “They are trying to make the best impression that they can on both political parties so they can gain access and hopefully curry favor with elected officials of both sides of the aisle.”

In addition to New Balance, other double donors include corporate giants such as AT&T, Microsoft, Bank of America, Pfizer, IBM, Verizon Communications and 17 others U.S. firms.

In 2000, only AT&T, American International Group, General Motors, Microsoft, Global Crossing, Hewlett-Packard, American Water Works and Lockheed Martin helped to underwrite both the Democratic convention in Los Angeles and the Republican convention in Philadelphia.

Bolstered by contributions from the double givers, Republicans and Democrats raised twice as much for this year’s conventions — about $100 million — as they did in 2000.

Dual donors say that giving to both political conventions is a good way of supporting the political process and promoting their corporate brands.

“The sponsorships demonstrate in full view our belief in the political process and the concept of the political convention,” said Ed Bergstraesser, a spokesman for AT&T, which has contributed $500,000 to each convention.

“The conventions are an economic stimulus for these two cities,” added Maureen Flannigan of Verizon Communications. “We want to be a part of that.” Verizon plans to contribute $3 million apiece to the Democratic and Republican host committees.

But government watchdogs say that the donations to the host committees highlight the latest loophole in campaign finance law.

Two years ago, Congress banned corporations from sending such large soft-money donations to the national political parties.

However, corporations are still permitted to underwrite the summer’s political conventions with six- and seven-figure contributions.

Because host committees are one of the few avenues for corporations to spend large amounts of money on politics, critics say that companies write large checks to the committees to curry favor with elected officials.

“The companies believe that they can have influence or protect themselves by giving to both host committees,” said Steve Weissman of the Campaign Finance Institute.

What’s more, the Federal Election Commission recently relaxed a decade-old rule that had allowed only local companies to finance the conventions.

Still, many of the companies that finance conventions only do so when their home city is playing host.

“We gave to Boston because Boston is our home,” said New Balance spokeswoman Shepard. “We love the city, and we thought it would be very good for the city.”

The company decided to make a donation to the GOP convention because “it just seemed like the right thing to do,” Shepard added. “We are a nonpartisan company. We do business there. It just seemed only fair.”

Not all companies that are sponsoring the conventions are local, but most double givers say their donations help the local communities while providing a good marketing opportunity.

“We want to support the communities where we are doing business,” said Mart Martin, a spokesman for the Coca-Cola Co. The Atlanta-based soft drink maker plans to give $250,000 to each convention. “It’s as much about supporting the organizers and the community so that they can put on a great face for their visitors. [But], obviously, there are some benefits,” he added.

Nextel Communications sees its contributions to both conventions as a “tremendous marketing opportunity,” said spokesman Tim O’Regan.

The Reston, Va.-based firm paid an undisclosed amount of money to become the “official wireless carrier” of both the Democratic and Republican conventions.

As part of the deal, Nextel has beefed up its service in and around the Fleet Center and provided party officials with hundreds of phones to use to communicate during the convention. The company will provide the same service next month in New York.

“It’s a tremendous forum for us to showcase our products and services,” O’Regan said. “It gives people a chance to use our widely popular direct-connect phones and hopefully become Nextel subscribers.”