Weeks before they came to Washington seeking a financial rescue, corporations and individuals at the center of the nation’s financial crisis contributed a combined $14 million for the Democratic and Republican conventions in Denver and St. Paul, according to a report released Wednesday by the Center for Responsive Politics and the Campaign Finance Institute.
American International Group, Inc. gave $1.5 million to underwrite the conventions shortly before receiving an $85 billion loan from the government. Freddie Mac, which was receiving federal aid at the time, contributed $500,000. And billionaire investor Kirk Kerkorian, a major Ford largest shareholder (who also has ties to GM and Chrysler) gave $3.5 million to the host committees through his Lincy Foundation.
Citigroup, Goldman Sachs and Bank of America also gave hundreds of thousands of dollars on the political conventions in the months before the government’s financial sector rescue.
Direct contributions from corporate and union treasuries to political parties and federal candidates are illegal, but the national conventions provide an alternate route for organizations and individuals to make unlimited donations to political interests. Private interests provided $118 million to finance the two major-party conventions, versus just $16 million in public funding for each party, according to the report.
“If the executives who have come to Washington, hat in hand, looked familiar to members of Congress, maybe it’s because they met over the summer at the conventions,” said Sheila Krumholz, executive director of the Center for Responsive Politics.
Banks, hedge funds and investment companies together gave more than $7 million dollars. The report also found that the drug industry provided $9.8 million split between the parties, and computer and internet companies contributed $4.1 million to the Republican convention and $3.1 million to the Democrats. Unions representing government employees gave all of their $2.7 million to the Democrats’ Denver convention.
“By taking advantage of the false distinction between a political party and the committee hosting the party’s convention, unions were able to support the Democratic Party in a way that hasn’t been allowed since the days of soft money, when labor was among the biggest givers," Krumholz said.
As Germany's iron chancellor, Otto von Bismarck, noted: "People sleep better at night when they do not know how their laws or their sausages are made."
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