DNC Fundraising Hypocrisy

Duke Energy CEO Jim Rogers and Charlotte Mayor Anthony Foxx

“The People’s Convention.”
“The most open and transparent convention in history.”

We have heard Democratic National Convention organizers recite these phrases ad nauseum. What exactly is it about this convention that makes it more open and transparent than conventions past?

DNC organizers pledged last year they would not accept money from special interests for the 2012 DNC, making this the first convention of either major party to do so. Traditionally, corporations, lobbyists, and political action committees have paid the vast majority of the bill for Republican and Democratic party conventions. Corporations gave $40 million of the $60 million raised for the 2008 DNC in Denver. Donations of $250,000 and up comprised 72% of all donations made in Denver. Practically all of the $57 million raised for the 2008 Republican National Convention in St. Paul was paid for with corporate money.

The fundraising guidelines of the host committee (Charlotte in 2012) specifically state they will not accept monetary contributions from corporations, political organizations, or from anyone registered as a federal lobbyist. Contributions have also been capped at $100,000.

 

Anthony Foxx

Convention organizers suggested the new rules would limit the influence of money in politics. It is no secret that political conventions are the place to be if you want to purchase access and influence. But despite the claims, this convention is truly no different. Convention organizers have not only figured out creative ways to bend the rules, but also how to break them altogether.

The host committee is co-chaired by Charlotte Mayor Anthony Foxx, and Duke Energy CEO Jim Rogers. They are both charged with helping raise the $36.6 million organizers claim is necessary for the convention. Both have a vested interest in making this convention a success.

Jim Rogers

Mayor Foxx’s reputation and political career are intricately linked to the outcome of the convention. Rogers is no stranger to the world of politics. He has made numerous political contributions to key politicians, including the President and the Mayor. The President has even introduced Rogers at a number of fundraising events. The Washington Post reported that President Obama considered Jim Rogers for the Secretary of Energy position after first being elected. There is some suggestion he may be up for that position again if Obama wins reelection.

Roger’s company, Duke Energy, has numerous political and financial ties. The company is on track to become North Carolina’s largest political spender. Duke recently merged with Progress Energy, becoming the nation’s largest utility. In the 2009-2010 election cycle, the companies spent over $19 million on lobbying and state and federal campaigns. Duke is providing several floors of uptown office space, rent-free, for the entire host committee. Duke has even guaranteed the host committee a $10 million line of credit in case their fundraising runs short. The host committee claims they will pay off any debt with Duke. Although the host committee claims this does not violate the rules, they refuse to discuss whether it would be a violation to pay off their debt using corporate funds.

It should come as no surprise that Rogers has personally given $100,000 to the host committee. On top of that, he has paid out of his own pocket to hire a personal assistant who works full-time on DNC fundraising. He has declined giving the staffer’s name.

Rogers, who Mayor Foxx has referred to as “our fearless leader in fundraising,” did not seem thrilled with the new rules. Rogers told the New York Times that “From the beginning of time, conventions have been funded by corporations, by PACs, by lobbyists. And so we went into this thinking we would do that in that traditional way.”

Indeed, sources familiar with the fundraising effort have revealed a number of ways convention officials are trying to skirt their own rules. Corporate executives have been actively encouraged to write personal checks. Donations by individuals are conveniently considered tax-deductible charitable contributions. Corporate foundations, who receive funding from their for-profit affiliates, are not barred from making donations, making this a convenient way to funnel corporate dollars.

Steve Kerrigan

Lobbyists have not been left out in the cold either. While not able to officially donate, they have been told they can help raise money from their clientele. Lobbyists who are able to bundle large donations from personal contributions, corporate foundations, and in-kind contributions (more on that soon), will be rewarded with special perks. Near the end of 2011, DNC CEO Steve Kerrigan held a meeting in Washington, D.C. asking for money on K Street, the heart of lobbying and special interests. He distributed a list of packages and perks with names like “Dogwood,” and “Goldrush” for donors able to bring forth large contributions. The top package, known as the “Presidential,” is reserved for donors raising $1 million. Politico reported that “In return, the convention promises a premier uptown hotel room, platinum credential package, platinum events package, concierge services and priority access for rental facilities. It also earns the fundraiser two tickets for the “First in Flight Series,” a number of pre-convention events based in North Carolina with elected officials, political vets and others and four VIP tickets to the “Dialogue Series.”

Corporations are also allowed to donate an unlimited amount of goods and services. These are known as in-kind contributions, and while they may not be cash, their monetary value counts toward the $36.6 million goal. In fact, in-kind contributions have played a larger role at this convention than typical. In return, the host committee has offered in its proposal requests to give businesses “marketing exposure.” Most of these donations are even tax-deductible. Convention goers will undoubtedly see these in-kind contributions all around them. It’s important to keep in mind that every item or service donated frees up cash to be used for other things. A full picture of what has been donated by whom is unknown, as this information will not be disclosed until two months after the convention.

What is known, however, is that Microsoft has given hundreds of thousands of dollars worth of software. Xerox is providing $150,000 worth of printing and supplies. Hewlitt-Packard has given computers, printers, and tech support. Bank of America stadium is being provided, rent-free, by the Carolina Panthers. Roger’s company, Duke Energy, has donated all of the host committee’s office space, valued at $1 million.

Even Super PACs have been let in on the fun. A campaign, known as Super-O-Rama, is planned during the DNC to involve Democratic Super PACs. Politico reported “the kitschy name is for a massive fundraising push at the national convention in Charlotte, where Democrats aim to woo elusive big donors with parties featuring live music, open bars and mingling with ‘senior Democratic policy leaders,’ according to a fundraising appeal.” Super PACs have the luxury of spending an unlimited amount of cash without having to disclose their donors. While they are supposed to remain independent, they are typically run by friends and former staffers of their respective candidates. Priorities USA, for example, is run by former Obama aide, Bill Burton.

The methods described thus far are a convenient way to accept special interest funds while still technically following the rules. But convention organizers are breaking the rules altogether with the formation of New American City, Inc. New American City is a non-profit entity, registered with the FEC, that was quietly formed immediately after the new fundraising guidelines were announced. What differentiates this fund is that it is exempt from the same  fundraising restrictions. Their top three donors are Bank of America, Wells Fargo, and Duke Energy. New American City even has at least one lobbyist donor. According to documents filed with the FEC, the PAC for Hill & Knowlton, a lobbying and PR firm, has given to New American City.

Organizers claim New America City is a separate organization created to promote Charlotte. It’s hard to argue that New American City is separate from the host committee, when in fact, the host committee admits to creating it. They are both run from the exact same Duke-provided office space, by the exact same people. The President of the fund is none other than Mayor Anthony Foxx, co-chair of the host committee. Former Mecklenburg County Commissioner Dan Murrey serves as both the executive director of the host committee and the treasurer of New American City. The fund was incorporated by Will Miller, and Joseph Sadler, two senior convention officials. Will Miller is a board member on the host committee, while Joseph Sadler serves as the host committee legal counsel, and formerly served as a DNC campaign finance lawyer.

Dan Murrey

The corporate money from New American City pays the salaries of all 41 full-time host committee employees, as well as their health insurance, office space, and travel expenses. Indeed, the host committee is being paid with corporate money to do the job of not accepting corporate money.

When confronted with these facts, Suzi Emmerling, a spokeswoman for the host committee, told The Wall Street Journal “The host committee is not accepting corporate money for the convention, but if the host committee does things to promote Charlotte, the rules don’t apply.” Not to be outdone, Murrey told the Associated Press what will certainly be remembered in the annals of convention history, “I guess it comes down to how you define `the convention.’”

‘”Don’t look to convention organizers for any functioning definition of “the convention,” as New American City, and its special interest backers will cover the costs of many events directly affiliated with the convention.

Bank of America already seems to be reaping the rewards of this tight-knit relationship. DNC organizers deposited $17.7 million into the bank, with it potentially reaching $65 million. Two members of the convention steering committee are directly linked to the bank. Outside of being one of the leading corporate donors to New American City, Bank of America is also sponsoring two media gatherings.

 

New American City will also pay for a multitude of parties for delegates and donors, including the Labor Day street festival and the September 1st media welcoming party, which will be sponsored by Time Warner Cable. Belk has contributed funds in furtherance of these events, and AT&T has been selected as the official wireless provider of the convention. Buses and a fleet of courtesy cars will be provided by corporate backers as well. FEC records show that New American City employs Mary Tribble and Scott Bishop, two event planners working directly on DNC host events.

As part of its contract with the Democratic National Convention Committee, the host committee is required to share monthly financial reports. Unfortunately, the host committee and New American City have refused to disclose any financial information. When pressed, Dan Murrey told the Charlotte Observer “We’re not in a position where we want to do that. I’m sure we will at some point.” The sources and amounts contributed will not be revealed until potentially 60 days after the convention. Sixty days after the convention just so happens to be election day. It’s not difficult to imagine they will release the information that day, as media attention will certainly be focused elsewhere. Outside of reporting to the FEC, New American City is required to report its fundraising totals on its tax return, as it is technically considered a non-profit. The fund has yet to file its 2011 tax return after applying for an extension. Who knows what kind of information has yet to be revealed by the host committee and New American City?

These elite events have not only been paid for by special interests, but by tax dollars. Specifically, each convention has been given $18,248,300 tax dollars by the FEC, with very few restrictions on how this money can be spent. Tax dollars are being used to subsidize convention entertainment, salaries, catering/beverages etc. Local taxpayers have also contributed, as the the DNC will be using city-owned property, including the Convention Center and Time Warner Cable Arena.

This years conventions provide the perfect lens in which to view both major parties. The Republicans make no attempt to hide their special interest relationships. The Democrats claim to be the party of the people, while behind the scenes raking in the same special interest money.

Americans are fed up with the influence of money in our political system. Instead of being a government of the people, by the people, for the people, we have truly become a government of the rich, by the rich, for the rich. Conventions are the perfect showcase of the dangerous influence of special interest money in politics. They are an opportunity to buy access, curry favors, and ultimately affect policy. This isn’t just a question of hypocrisy, but rather a question of where our nation is headed.

In a time when corporations are legally considered people, I guess convention organizers were right when they say this is “the People’s Convention.”

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