Outside cash finds a way in to the conventions

For lobbyists, unions and corporations with business before Congress, political conventions are the ultimate target-rich environment.

Banned from giving unlimited money directly to the national parties and with new ethics rules tightening their ability to wine and dine lawmakers, unions and corporations have turned to the conventions as the last place to drop major dollars directly on their friends.

“They’re not just trying to make sure delegates have a good time. They want something, and they’re going down to the conventions to tell the members of Congress and the presidential candidates what they want. These conventions have turned into huge influence-peddling events,” said Craig Holman, a lobbyist for Public Citizen, a liberal-leaning nonprofit that works to reduce money’s influence in politics.

Taxpayers give each party $18 million to spend on their assemblies, with the condition that they not accept outside money, an attempt to limit influence-peddling. Yet four years ago, each party’s convention cost more than $55 million.

That’s because both parties have found ways to set up unofficial “host committees” that take money from such groups, in addition to parties held independently by companies for lawmakers and others. Once inside, a convention is a lobbyist’s dream: Nearly every lawmaker who matters, all in one place, and all prepared to schmooze over a cocktail and hors d’oeuvres.

As Republican National Convention kicks off in Tampa, Fla., on Monday, entertaining them will be interest groups with billions of dollars worth of business pending before Congress:

The American Petroleum Institute will hold a party with the Zac Brown Band, while the Transportation and Infrastructure Industry convenes a “transportation leaders late-night reception” for the members who hold the key to the industry’s income. The Organization for International Investment, which represents foreign-owned companies, will hold a party. State Farm Insurance Cos., which has spent $1.3 million so far this year lobbying Congress, may get better bang for its buck at the breakfast it is hosting.

Sponsors are not disclosed until months after the convention, but those events come from invitations obtained by the Sunlight Foundation, a government transparency group.

Democrats say that this year, for the first time, their convention in Charlotte, N.C., won’t accept direct corporate funds or lobbyists.

But both they and Republicans will accept “in-kind” donations of products and services from corporations, which turn out to provide some of the most memorable interactions for attendees.

In Tampa, groups offering entertainment include the National Rifle Association renting time at a clay-pigeon shooting range and the Personal Care Products Council, which is fighting off regulations on beauty-supply safety in the House, holding a “cocktails and cosmetics” event at a salon.

The public financing system that doles out taxpayer funds for the gatherings was created in 1974 after ITT Corp., a telecommunications company being sued for antitrust violations by the Nixon administration, offered $400,000 to finance the Republican National Convention, and days later received a favorable settlement, according to Mr. Holman.

But though the new taxpayer funding came with a ban on supplementing the money with outside funds, the Federal Election Commission soon ruled that corporations and unions could give to ostensibly unaffiliated “host committees,” which were to be a “local organization whose principal objective is the encouragement of commerce in the convention city, as well as the projection of a favorable image of the city to convention attendees.”

Those committees soon turned into massive organizations that sprouted just before the convention and folded just after them, and they had far more connections to Washington than they did to any local entities, Mr. Holman said.

The Republican National Convention’s host committee declined to answer questions about its funders or explain its activities as a Tampa civic booster group.

In June, Sen. Tom Coburn, Oklahoma Republican and a fiscal watchdog, proposed ending federal funding for conventions entirely, starting in 2016. Although the Senate quickly passed the measure, the proposal is still pending on Capitol Hill.