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Both national party committees spend big chunks on fancy meals, hotels, travel

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By R. Jeffrey Smith
Washington Post Staff Writer
Wednesday, April 21, 2010

Both the national Democratic and Republican party committees spend about two-thirds of the money they take in on the care and comfort of committee staffs and on efforts to raise more funds, with lavish spending on limousines, expensive hotels, meals and tips, an analysis of the latest financial disclosure data shows.

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Monthly committee spending reports, like those that were due by midnight Tuesday, illustrate cultures in which vast sums are consumed with limited accountability, a Washington Post review has found. Neither committee appears to have clear internal spending guidelines, and their reports do not explain hefty expenditures in categories such as "office supplies" and "tips" that consume tax-exempt party funds.

The two parties assert that to raise money, they must spend it, and both have long used donated funds to court and pamper prospective donors with luxurious getaways and gifts.

The nonprofit Center for Responsive Politics, in an analysis done at the request of The Post, calculated, however, that administrative and fundraising expenses consumed about $60 million of Democratic revenue in this cycle through the end of February, or 59 percent of total revenue that exceeded $100 million. For Republicans, the amount exceeded $74 million, or 68 percent of $109 million in revenue.

Sheila Krumholz, the center's executive director, said the controversy last month over the Republican National Committee's expenditure of $1,946 for meals at a bondage-themed nightclub had convinced her that "there is inadequate budget oversight within the parties." Her views are not isolated: Louisiana's Republican governor, Bobby Jindal, joked at the party's New Orleans leadership conference on April 9 that "I have a word of warning for RNC staffers: You may want to stay away from Bourbon Street. Just a word of advice."

"There is a class of [political] donors who expect to be wined and dined and who expect to have gala receptions as part and parcel of giving a donation," said Anthony J. Corrado, a Colby College professor specializing in campaign finance. But he said many current expenditures "are not the type that are going to translate into a large financial boon . . . such as spending on charter flights, limousines, entertainment, food and beverages at party headquarters."

The two political committees are not typical nonprofit organizations, and such high spending for overhead is almost unheard of in the nonprofit world. A rule of thumb among nonprofits is that administrative and fundraising costs should consume no more than 20 to 25 percent of income.

Ken Berger, who runs Charity Navigator, a New Jersey group that monitors nonprofits across the country, said that "the most critical measure is effectiveness." He said his advice for prospective donors to any nonprofit group that spends as much as 60 to 70 percent of revenue on overhead, including fundraising, would be to "run away."

Spending reports at the Federal Election Commission offer vivid illustrations of luxurious tastes. When RNC Chairman Michael S. Steele and colleagues took several dozen party donors on a retreat last August to Jackson Hole, Wyo., for example, golf and tennis fees were paid, whitewater rafting and trout fishing guides were contracted, and limo drivers and photographers were hired. Flowers worth about $1,300 decorated tables filled with food from three caterers.

Including rooms at the Four Seasons Resort, which promotes itself as offering "pampered adventures," the event appears to have soaked up more than $170,000 from party coffers, the data show.

The Democratic Party racked up a similar bill -- $176,000 -- to cover 14 months of catering at events at the Washington Hilton.

Last month, the RNC spent $260,476 on a single meeting in Hawaii and $14,937 on Dallas Cowboys football tickets, according to its report Tuesday. It also paid hefty cancellation fees to Ritz Carlton and Four Seasons hotels.


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