By R. Jeffrey Smith
Washington Post Staff Writer
Wednesday, April 21, 2010; A01
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.
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.
The RNC's expenditures for "office supplies" in the period through February topped $773,000, according to a Post tally, including jelly beans for Steele's office and thousands of dollars' worth of liquor and wine. Although not asked to review specific party expenditures, Mindy Kramer, an Office Depot spokeswoman, said that in general, firms with 100 office workers -- about the size of the RNC headquarters staff -- spend $30,000 to $50,000 a year on supplies.
Doug Heye, the RNC spokesman, declined to reply to most questions about committee spending. Hari Sevugan, spokesman for the Democratic National Committee, did not take issue with the Center for Responsive Politics' calculations but said that "fundraising is a core function of a national party."
Historically, the FEC has cared more about accounting accuracy than the appropriate use of funds. Unlike many private companies, neither committee appears to tightly enforce spending controls. Sevugan, for example, described his colleagues' decision-making as elastic.
"There are occasions when a commercial flight is not available," he said, explaining why DNC officials rent private planes. "We understand that it takes money to raise money or to operate a national political party, but we try to do so efficiently."
Although the two parties' monthly reports are supposed to delineate spending for items such as salaries, equipment, supplies, lodging, events, advertising, polling and political contributions, the explanations attached to many such items raise questions about accuracy.
To finance an RNC event last November in Beverly Hills, Calif., for example, the committee spent $717 on limousines, $11,076 at Spago restaurant and $4,583 at the Beverly Wilshire Hotel. It also spent $4,266 at a Los Angeles sports ticket broker called StubHub, but listed the expense as "lodging," and $923 at the Little Door restaurant, but listed that expense as "office supplies."
In December, the RNC also reported spending $496 for "meals" at Henri Bendel, a posh New York women's clothing store, a circumstance previously reported on AlterNet.org; Bendel's personnel say the store's restaurant closed four months earlier. The RNC also listed $282 in "meals" at a fly-fishing outfitter in Boca Grande, Fla., that has no restaurant. Wines the committee bought for $982 from a Vermont vineyard were listed as "office supplies," as were smaller amounts spent at PetSmart and a men's clothier.
Since January 2009, both the RNC and the DNC have spent donated funds at a local store called Tiny Jewel Box: The RNC said it paid $19,851 for "office supplies," while the DNC said it paid $666 for "rental" costs. But store personnel said they were unaware of any DNC event hosted there , and Sevugan said the item was "miscoded on our FEC report as a rental. It was for thank-you gifts."
Other reported expenditures lacked useful detail. RNC Deputy Finance Director Debbie LeHardy was paid $5,608 for "office supplies" on Oct. 8 and has been reimbursed $6,048 for "tips" since January 2009. Allison Meyers, fired by the RNC last month in connection with the nightclub outing, was reimbursed $1,917 for "tips" in the same period.
Benjamin Ginsberg, a former RNC counsel, said reporting such expenses "is not a perfect science" because the categories established by the FEC "are so broad and inherently imprecise."
Heye, at the RNC, declined to name who had used chauffeured cars or limos costing more than $131,000 since January 2009, or who flew on private jets costing more than $184,000. Sevugan said the DNC, which spent nearly $35,000 at limousine and car service firms in the same period, needed them to reach the airport "at off hours," to bus staff members to official events or to reach the office during snowstorms.
Patricia Maureen White, the DNC national finance chairwoman from 2001 to 2006, similarly said she considered hiring a car "to pick you up or take you someplace" a normal expenditure.
Both party committees spent lavishly for meals in destinations such as Miami Beach, Las Vegas, Hawaii and Boca Raton, Fla. Although the DNC charged many expenses to credit cards and did not detail them in FEC reports, the RNC's reports state that staff ate occasionally at Arby's or Cinnabon but also frequently ran up single tabs exceeding $500, including an $829 meal at Capitol City Brewing Company and a $4,020 meal at Bullfeathers.
The biggest total RNC tab at one venue appears to have been accrued at the Capitol Hill Club, a private Republican eatery in a building adjoining the committee's headquarters. Donor funds financed $31,012 in meals at the club in the period. Heye said it would be incorrect to assume that "everything billed from the Capitol Hill Club to the RNC is for personal use."
Research director Lucy Shackelford contributed to this report.