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The real cost of the convention Friday, 29 August, 2008

Posted by Farbod in Features.
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Press TV – The real cost of the convention.

Over 100 years ago a man called William Hanna said, “There are two things that are important in politics. The first is money, and I can’t remember what the second one is.”

Hanna transformed how presidential elections are fought in the US. During campaigning for democratic candidate William McKinley, he went to big business and Wall Street and came back with over $3.5 million which helped push McKinley into the White House in 1897. Hanna was the forefather of Big Money Politics in the US.

Today, Big Money dominates American politics like never before. 2008 looks set to become the first $1 billion election campaign in history, with both Barack Obama and John McCain likely to raise over $500 million each in their bid to become president according to a former head of the Federal Election Committee (FEC).

The questions raised are obvious. Who donates the money and what is it buying? The answers are less clear, despite the many pages of US legislation devoted to the issue, which are ostensibly designed to bring transparency to the election process.

The main rules and the main loophole

The primary source of direct campaign funds, or hard money is individuals and what are known as PACs (political action committees). Contributions are regulated and strictly limited, for example, an individual may give no more than $2,300 to any one candidate, and corporations are prohibited from contributing.

Donations in the form of soft money are unlimited in size, but may not be spent on contributing directly to a candidate’s campaign. However regulators do allow soft money to be spent on the biggest, most publicized event in the entire election calendar – the national convention. Contributing in this way can serve as a legal way of funneling major money to the political parties

What do you get for your soft money?

The current Democratic Party convention, and the upcoming Republican event will see Barack Obama and John McCain confirmed as the presidential candidates for their respective parties. The conventions will be the candidates’ biggest single promotional festival in the campaign. The 4-day events will also allow special interest groups and corporations to mingle privately with current and potential political leaders.

“These events are created as a way for high level politicians to rub shoulders with lobbyists and others with an interest in what happens once they are elected,” said Nancy Watzman, director of an organization with tracks political spending.

According to the nonprofit Campaign Finance Institute (CFI), corporate donors who pay more than $1 million to the Democratic Party conventions host committee will get invitations to private events with members of Congress and high ranking members of the Democratic Party. This ranges from a morning round of golf with the elite leaders of the party, to VIP invitations, to evening parties where they have a drink with celebrities and the politicians they would like to represent their concerns for the next 4 years.

A recent report published by CFI gave a detailed analysis of corporate donations to the Democratic and Republican conventions. The information was provided by the parties on a voluntary basis, so does not reflect the whole picture, however the numbers are still staggering. Almost $160 million has been donated to support the current democratic convention, which includes $4.3 million donated by Lockheed Martin, the defense company responsible for supplying military interogation systems to Guantanamo Bay and Abu Ghraib.

The CFI report also showed that telecommunications giant AT&T have contributed over $7.3 million to the convention, where its presence is felt everywhere. From holding lunches to hosting exclusive parties, the company is wining and dining the delegates. But AT&T have a particular problem. Individuals and organisations who believe the Bush administration have illegally monitored their phone calls and emails want to take the company to court. A bill currently going through Congress could protect AT&T from these lawsuits. The man responsible for negotiating this bill on behalf of the Democrats is House Majority Leader Steny Hoyer, who recently attended a lavish party sponsored by the communications giant.

Another significant donor to the convention coffers are the massive mortgage companies Freddie Mac and Fannie Mae. Over the past decade, they have spent nearly $200 million on lobbying and presidential campaign contributions. Freddie Mae has contributed over £1.4 million to support the upcoming Republican convention. In the current financial crisis sweeping the US, these two companies have been hit harder than any other. They acts as guarantors to around half of all mortgages in the US. With the housing market across the US crumbling, their finances have come under severe stress. But, when their stock prices took a dive last week, their friends in government stepped in, extended a helping hand with a plan for the Treasury Department, the Federal Reserve and, possibly, Congress to shore up the companies.

And what does the public get?

Charles M. Arlinghaus from the Josiah Bartlett Center for Public Policy called the Democratic and Republican national conventions “the biggest wastes of time and money in American politics”. In the age before mass telecommunications, the events were useful for allowing delegates to come together, discuss and vote for their president candidate. Today, at best they indulge political insiders, at worst they are a 4-day party, during which unelected corporations purchase influence on government policy.

Once a corporation gives significantly to support the party convention, it creates “additional pressure on politicians to be supportive.” according to Bob Duffy of Colarado State University.

“What they’re hoping is that somebody will remember [their donations].”

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