Political Gifts for Host City

Party Convention 'Loophole' Decried

Private donors are pouring more than $103.5 million into the Democratic and Republican national conventions this summer, nearly double the amount raised for the conventions four years ago, according to a nonpartisan campaign fundraising research group.

Most of the chief fundraisers for the two host committees hold federal office or have been major givers to the political parties, according to the study by the Campaign Finance Institute. The top host committee fundraisers for the Democrats meeting later this month in Boston include that city's mayor, Thomas Menino, Sen. Edward M. Kennedy (D-Mass.) and three of the most prolific presidential fundraisers for Sen. John F. Kerry (D-Mass.), according to the study.

Nine of the 12 leading fundraisers for the GOP's New York convention in August have either contributed to President Bush's reelection campaign directly or have raised more than $100,000 for him.

In addition, companies with strong interests in governmental actions also are heavy donors to the host committees. According to the study, 24 companies that gave more than $100,000 each to Boston's host committee also gave at least $200,000 to Democrats in the 2000-02 election cycles.

Thirty-five companies that gave major donations to New York's host committee also contributed at least $200,000 to Republicans during the same periods.

The institute said the unprecedented level of contributions from corporations, unions and wealthy individuals was made possible by a rule change approved by the Federal Election Commission last year. The agency, which oversees political giving, eliminated any requirement that donors to the conventions' host committees be local or have local ties.

Michael Malbin, the institute's executive director, complained that the new rule effectively allowed private interests to circumvent a ban on unlimited contributions to the political parties, called "soft money," that was put into law in 2002. The FEC "created a $100 million loophole for unlimited soft money contributions to the political parties," Malbin said.

Michael E. Toner, a Republican member of the FEC, defended the rule change. He said ending the locality requirement will allow mid-size cities such as Boston to raise enough money to hold a "successful and safe convention." Congress never intended to limit donations to host committees in the same way it reined in giving to political parties, he added.

The institute asserts that private donations, which 20 years ago were small and given exclusively by local businesses to promote themselves to potential customers, are now huge and given by interests and individuals that have been active in the big-money political game for years.

Many of the same companies and people who used to give soft money to the national parties before the McCain-Feingold law barred the practice are now major contributors to the national conventions.

In 1980, the Republican and Democratic conventions got by on a total of $1.1 million in private donations -- $400,000 to the Democrats in New York and $700,000 to the Republicans in Detroit.

That total is less than 1 percent of the amount of private gifts that will bankroll this year's Democratic convention (more than $39.5 million) and the GOP convention ($64 million).

"We don't really have final figures yet," said Steve Weissman, the institute's associate director.

But he said that at least 11 companies have given $1 million or more to the Democratic host committee in Boston, while a dozen people have pledged to either donate or raise $60 million of $64 million in private money for the Republican convention.