Federal Politics

Published — August 24, 2012 Updated — May 19, 2014 at 12:19 pm ET

Bailed-out banks, Freddie Mac, AIG gave $6 million to 2008 conventions

Republican National Committee Chairman Reince Priebus, left, and convention CEO William Harris unveil the stage and podium for the 2012 Republican National Convention in Tampa, Florida. Scott Iskowitz/AP

Economy still reeling four years later

Introduction

The Republican nominating convention that kicks off this week in Tampa has been funded by tens of millions of dollars in corporate contributions, the exact source of which won’t be known until after the party is over.

But it’s a sure bet that there are at least two big donors from the 2008 event that won’t be giving this time around — American International Group and Freddie Mac.

The two institutions together gave $1 million to the Republican convention host committee. A few months after the conclusion of the convention they were in danger of collapse, and would ultimately receive a combined $139 billion taxpayer bailout.

The donations are possible thanks to a loophole in campaign finance rules that allow corporations, unions and wealthy individuals to give unlimited sums to support the conventions.

It is “absolutely ridiculous” that corporations are able to make such donations, says Craig Holman, a lobbyist for the consumer advocacy group Public Citizen. He calls it “nothing but throwing money at the feet of congressional and White House leaders, presumably with the assumption of getting something in return.”

The two groups were bipartisan in their giving.

AIG gave $750,000 to both the Republican and Democratic host committees. The government would eventually sink $71 billion into the insurance giant. Mortgage buyer Freddie Mac gave $250,000 to both committees. Three days after the close of the Republican event, the government took it over along with Fannie Mae. Taxpayers ultimately sank $70 billion into the floundering institution.

In all, $6 million was donated by financial institutions that received bailout money to both party conventions, according to a Center for Public Integrity review of Federal Election Commission filings — $3.4 million to Republicans and $2.6 million to Democrats

The total raised for the previous conventions is likely much higher than what we will see this year.

Through the end of 2008, the Republican host committee collected more than $65 million for the event, conducted in Minneapolis, while the Democratic convention in Denver drew about $63 million.

Festivities for the opening day of the Republican convention were postponed due to the approach of Tropical Storm Isaac, which as of Monday morning appeared to be headed northwest toward New Orleans. A full convention schedule is planned for Tuesday starting at 2 p.m.

Republicans aim for $50 million while Democrats, meeting in Charlotte, N.C., a week later, set a relatively modest goal of $37 million, having refused to accept direct contributions from corporations.

It wasn’t supposed to be this way. Reforms in the 1970s were meant to keep corporate money out of conventions. In 1972, as Republicans were trying to decide where to host their national convention, International Telephone & Telegraph offered $400,000 if the GOP would bring it to San Diego. Eight days later, the administration of President Richard Nixon dropped antitrust litigation against IT&T and offered a settlement that was favorable to the corporate giant.

After details of the apparent deal appeared in the press, Republicans tried to save face and moved the convention from San Diego to Miami Beach.

The scandal prompted Congress to enact a new law that would provide taxpayer funding for the parties’ conventions, thus removing the need for private contributions — in theory, anyway. For 2012, each party has received $18.2 million from the U.S. Treasury to help defray costs.

But both parties are permitted to operate nonprofit corporations known as “host committees” set up as charitable organizations to offset the financial burden on local governments associated with hosting the conventions.

Democrats have struck a populist note this year, prohibiting direct corporate, political action committee and lobbyist donations. The party has also restricted individual donations to $100,000.

Campaign finance reformers still see loopholes — corporations are allowed, for instance, to make “in-kind” contributions.

During the Democrats’ 2008 convention in Denver, companies provided the host committee with about $5.8 million in in-kind contributions, including $1.7 million in “network equipment” from the tech giant Cisco System, which, records show, was the No. 1 corporate donor to the host committee.

Yet still, “it’s a very significant departure from the past,” Holman said.

The No. 1 corporate supporter of the Republican’s host committee was Qwest, now CenturyLink, which provided nearly $5 million. About half of that was donated directly to the committee and about half was from in-kind contributions. The telecommunications firm also gave roughly $840,000 to the Democratic host committee.

The top individual donor to the Republican committee was Raymond T. Dalio, founder of Bridgewater investments, the world’s largest hedge fund. He gave $2 million.

Overall, companies contributed more than $40 million to the Democratic host committee in Denver and unions donated about $9 million, according to federal records. And companies contributed roughly $52 million to the Republicans’ host committee in Minneapolis-St. Paul.

The Republicans’ Tampa host committee website lists more than two dozen companies and trade associations as “our sponsors.”

This year, companies ranging from Coca-Cola and Wells Fargo to Xerox and UPS are working to ensure that they have a presence at both conventions.

“There’s a lot of cost around the convention,” said Wells Fargo spokesman Kathy Harrison. “It is important as a good corporate citizen to support the host city.”

Wells Fargo was one of the banks that benefited from the government’s bank bailout, though it has paid the $25 billion equity investment back, plus a $2.3 billion profit.

In 2008, the Republican host committee received $3.4 million in donations from banks that received investments from the U.S. Treasury. Donations came from U.S. Bancorp ($1 million), Goldman Sachs & Co. ($255,000), Wells Fargo ($250,000), J.P. Morgan Chase ($100,000) and Morgan Stanley ($100,000) and others.

The Democratic host convention collected $2.6 million, including nearly $330,000 from Wells Fargo and its foundation; nearly $317,000 from U.S. Bancorp; $250,000 from both Goldman Sachs and Citigroup; $150,000 from Morgan Stanley and $100,000 from Bank of America.

Most of the banks and other institutions that made contributions to the conventions have recovered nicely from the recession, once again posting healthy profits — with at least one major exception. Lehman Brothers, whose bankruptcy filing in 2008 spun the global financial markets into a panic, gave $100,000 to the Democratic convention.

Update (Aug. 27, 10:26 a.m.): Convention events postponed until Tuesday due to approaching storm.

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Mark Sullivan
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Mark Sullivan

Trump needs to conduct these activities because the entire MSM media, excluding Fox, is campaigning against him 24/7/365.

Didn’t Monica’s boyfriend’s wife and various criminal enterprises outspend Trump by almost 2-1?

CapitalistRoader
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CapitalistRoader

Why wouldn’t he get an early start on fund raising? Hillary outspent him two-to-one in 2016. The Dem’s are the party of big money. The President knows this and is attempting to get a jump on it. Of course the Dem candidate will outspend him in 2020 so it’s only rational that he starts fund raising now.

George Young
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George Young

Oh brother. We just 8 years of the Campaigner – in – Chief. Where was this journalistic rectal thermometer then. Just another article about 2000 words too long that merely takes another slap at Trump for something he far from initiated.

j stevenson
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j stevenson

The big difference between Trump and all the rest is his refusing to accept funds from lobbyists, so they don’t have the White House access they are used to. These are the donors who buy the presidency and are as pixxed off that he won the election as are the media and the Dems. Lobbyists have never been shut out of the WH and Trump has told them he is not for sale.

Anonymous
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Anonymous

Trump needs to be impeached and tossed in prison. Then have the key thrown away so he will never be free. Then he can see how it feels not to have freedom.

Mark Sullivan
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Mark Sullivan

Thank you for the usual insightful leftist low IQ Snowflake response.

barney
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hes not imprisoning them hes sending them back to their country chill tf out

SOUTH JERSEY
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SOUTH JERSEY

WHY DONT YOU HAVE FREEDOM?

Tom Larkin
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Tom Larkin

First, something positive. I was happy to learn of empirical information in article. BUT, the article was so slanted against President Trump as to be deemed fake news (“Perhaps Trump just lied.” (Two different issues)). The article mentions that President Trump raised over $67 million, but ended 2018 with $19 million. President Trump spent over $40 million 2016 and 2017. President Trump conducted 57 political rallies. The article notes the hats and T-shirts sold, but NEVER MENTIONS THE INCREASE IN THE NUMBER OF REPUBLICAN SENATORS during a mid-term election that lost the House and the number of political rallies in… Read more »

Ted Sirois
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Ted Sirois

At least Trump is getting donations from willing donors. Fresh from his first election, Obama used billions of our children’s tax dollars to save thousands of union jobs in the car industry and bailed out the banks and many Wall Street businesses. This secured his source of reelection funds for his reelection four years later.

South Jersey
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South Jersey

TRUMP 2020; IS AN AMAZINGLY SMART MAN! VERY ORIGINAL & CREATIVE. I AM HAPPY TO HAVE HIS AS POTUS.

SOUTH JERSEY
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SOUTH JERSEY

THIS ARTICLE WAS OBVIOUSLY WRITTEN BY, A TRUMP-HATE-GROUP. THAT FEELS; IT IS NOT NORMAL TO BE SUCCESSFUL WITH YOUR OWN BRAND NAME. WHEN, IF FACT, IT IS NORMAL! >>>>> THIS IS >>> FAKE NEWS!!! <<<< ie: A PACK-OF-LIES; SPUN INTO; DEFAMATION OF CHARACTER. FOR A SINISTER-AGENDA OF; FASCIST DEMOCRATIC SOCIALIST, COUP D'ETAT