Published on Saturday, August 12, 2000 in the Boston Globe
Corporations Will Pick Up Democratic Tabs At LA Galas
by Glen Johnson
WASHINGTON - Delegates heading to the Democratic National Convention may find that that their visit will be a lot more than speeches, party platforms, and the work of nominating a presidential candidate.

Like the Republicans last week in Philadelphia, the Democrats are taking advantage of federal campaign laws to use corporate donations not only for their party gathering at the downtown Staples Center, but also the parties and galas from Long Beach to Hollywood.

New Englanders will have an array of opportunities, with the Massachusetts delegates, for example, enjoying breakfast Thursday at the Beverly Hilton courtesy of US Representative Edward J. Markey of Malden - and Qwest Communications, according to a schedule provided by the state party. Qwest is a major telecommunications provider; Markey is the top Democrat on the House telecommunications subcommittee.

VIPs from all states will be shuttled across Tinseltown in one of 400 automobiles provided by General Motors, a donation of services valued at $1 million. Republicans enjoyed the same free ride.

Top donors to the Democratic Senatorial Campaign Committee will be treated to dinner at Spago, Wolfgang Puck's famed Beverly Hills eatery. AT&T is picking up the tab.

And the LA Host Committee 2000 will keep everything running smoothly with the aid of $750,000 worth of computer software donated by Microsoft Corp., which is currently fighting an antitrust case against the Justice Department.

''Is Microsoft giving because maybe they didn't give enough early on, or GM trying to fight tougher fuel economy standards for their SUVs?'' asked Ellen Miller, head of Public Campaign, an advocate of campaign finance overhaul.

Miller argues that the donations, made at both conventions, are aimed at currying favor with influential lawmakers.

''I sort of think of the convention fund-raising this year as the kid's birthday party that gets more elaborate each year,'' she said.

US Representative Martin T. Meehan of Lowell, a campaign finance overhaul advocate, was similarly dismayed. Meehan will speak at the ''shadow'' convention, organized by opponents of this year's major party affairs, about the influence of special interest money on politics.

''National conventions used to be high-drama, high-stakes affairs that determined presidential nominees and decided serious public policy questions. They're now mainly opportunities for those with issues pending before Congress to spend limitless sums of money for access and influence,'' said Meehan, a delegate to the Democratic convention.

Corporations and event organizers tread a fine line as they explain the affairs. They say they are trying to balance high costs, willing donors and a competitive business environment where contributions by one interest group must be matched by another.

''GM is the largest company in the world and, frankly, we're involved in almost every environmental and energy and safety issue you can think of,'' said William Noack, a spokesman for General Motors. ''We have relationships in both parties, and that's why we're completely bipartisan. But we have to represent our interests, and this gives us an opportunity for relationship building.''

Richard Miller, a Microsoft spokesman, said his company's giving predated the antitrust case. He noted that the case now rests in the courts, not with the members of Congress attending the conventions.

One fund-raiser, planned for Tuesday at the Playboy Mansion, was responsible for one of the few signs of discord within the party. Representative Loretta Sanchez of California had invited a select group to the Playboy Mansion in Los Angeles to raise money for a Hispanic political action committee.

Playboy, the men's magazine, was to pay part of the freight of the Sanchez event, along with the brewer Anheuser-Busch and Latina magazine. As many as 600 people were expected under a tent set up on the 5-acre grounds, where Hugh Hefner reigns, pink flamingos roam, and the pool is used - on other occasions - for R-rated frivolity.

But concern that Sanchez's choice of venue would clash with their attempt to address morality concerns in the general election campaign following President Clinton's impeachment, prompted Democratic officials to cancel her speech at the convention.

Even Gore voiced support for the party's effort to dissociate itself from the Sanchez event and rejected the comparison between using the Playboy mansion for a fund-raiser and his own acceptance of campaign money from Playboy magazine executives, including Hugh Hefner.

After initially insisting that the event would continue as planned, Sanchez last night announced that she would move the fund-raiser to Universal Studios.

At a news conference last night, Sanchez said she regretted the ''discord and disagreement'' within the party, but made no apology for originally scheduling the event.

''This in no way reflects anything other than appreciation to the Hefners and to Playboy Enterprises,'' Sanchez said. ''Sponsors and donors, in particular the Hefners, are with us in this move.''

At the root of the giving are two factors: the increased cost of conventions and a change in federal law that allows unlimited - and tax deductible - corporate support.

The Democratic convention, like its Republican counterpart, is expected to cost up to $50 million. The federal government provides each party $13.5 million to stage its convention, and in Philadelphia, the city and the state of Pennsylvania chipped in another $7 million apiece. They also provided untold millions in services, as are Los Angeles and the state of California.

The arithmetic leaves a deficit, one that corporations have stepped in to eliminate.

In the early 1970s, corporations were banned from giving to the parties after discovery of a memo suggesting that ITT Corp. had donated $400,000 to the 1972 Republican National Convention in hope the Nixon administration would settle an antitrust case between the company and the government.

In 1984, however, federal regulators loosened the purse strings by agreeing to let corporations make unlimited donations to convention host committees. They are the bipartisan structures convention cities establish to seek and then run the party gatherings.

The government also agreed the donations can be tax deductible, since they are a marketing expense. The gifts must be reported, but not until 60 days after a convention concludes.

Today, money flows not only from corporations to host committees, but also to candidates, to each political party and numerous causes and political action committees. In addition, conventions are a way to thank past donors by providing them prime accommodations and tickets to the best events.

US Representative Patrick Kennedy of Rhode Island, chairman of the Democratic Congressional Campaign Committee, has established a caste system for his organization aimed at fielding support to Democratic House candidates.

According to a report in The Washington Post, $5,000 donors are members of the ''Chairman's Council,'' which entitles them to a room at the Le Merigot Santa Monica Beach Hotel. Donors of $50,000 have membership in the ''Majority Council,'' giving them access to two rooms at the Loews hotel in Santa Monica. Those who donated $100,000 gain entry into ''Team 2000,'' as well as three rooms at Loews and a dinner party with Kennedy and Representative Richard A. Gephardt of Missouri, the House Democratic leader.

''The conventions have become one huge marketplace, and what's being marketed is the access to people who write legislation,'' said Miller, the head of Public Campaign.

Even Meehan, the congressman who has joined with Senator John S. McCain of Arizona to fight for campaign finance overhaul, acknowledged it would be hard to remain pure over the coming days.

With Sam Adams Brewery throwing another breakfast for Massachusetts delegates, and New England delegates being feted at other regional celebrations, the challenge is daunting.

''It probably will be difficult to get through a convention and attend all of the necessary events without hitting one of them,'' he said.

Copyright 2000 Globe Newspaper Company