Archive for Sunday, July 16, 2000

Corporate giants boost political conventions

Firms, coincidentally, out to protect federal subsidies

July 16, 2000


— From AT&T; to General Motors, several companies hoping to save their federal subsidies from budget cuts are helping to pay for cocktail receptions, posh dinners and other glitz at this summer's Democratic and Republican national conventions.

Some of the donors have anted up as much as $1 million to each the Republican and Democratic host committees that are arranging the entertainment and transportation at the events.

One mans corporate welfare is another mans desperately needed government program.Rep. Joseph Hoeffel, D-Pa.

The donations allow them to sow good will among the federal, state and local officials who will attend the GOP event later this month in Philadelphia and the Democrats' bash in August in Los Angeles.

The companies' good deeds will not go unnoticed. Their names will be proudly displayed as "primary partners, "platinum and gold benefactors" and "trustees" in convention programs and on the literature and placards on display at the events where executives can hobnob with Washington's elite.

The companies say their motive is simply to advance democracy and help defray the cost of staging the massive events.

"We support the democratic process," Lockheed Martin spokesman James Fetig said.

Others locked in the battle to cut what they see as wasteful federal subsidies to wealthy companies -- the critics call it "corporate welfare" -- suspect another motive.

"One has got to be a moron and extremely naive to believe that the wealthy corporations are contributing hundreds of millions of dollars just for the fun of it," said Rep. Bernard Sanders, an independent from Vermont who has led the battle against the subsidies.

The Democratic and Republican parties each get $13.5 million in tax dollars to pay for their conventions.

But the government allows corporations, unions and individuals to donate unlimited amounts -- and get a tax deduction -- to convention host committees.

Eight of the 15 companies that have donated to both conventions' host committees benefit from the federal programs that some lawmakers are trying to kill. They also have substantial other business pending with the government, from contracts to regulatory issues.

GM and DaimlerChrysler have made sizable donations at a time when they are fighting efforts to trim programs that fund their research and development.

Last month, the House voted, 214-211, to cut $126.5 million, or about half the budget, from the Partnership for a New Generation of Vehicles, a joint venture between the government and the automakers to develop a car that gets 80 miles per gallon. The Senate has not decided yet whether to go along.

GM, which has received $8.7 million under the program, contributed more than $1 million to each convention's host committee. DaimlerChrysler, which has gotten $19.7 million, is supporting each to the tune of $250,000.

Both car companies also have received millions of dollars under the Commerce Department's Advanced Technology Program, which uses federal and private dollars to develop new products and is another target of the budget cutters.

GM donated 400 cars to each convention. "We consider that a marketing opportunity, making our vehicles available to an important group of people," spokesman William Noack said.

Several other beneficiaries of the Commerce program also are big givers to both conventions, including communications giants AT&T;, which has given $1 million to both conventions, and Verizon, the former Bell Atlantic, which has contributed $1 million for Philadelphia and $100,000 for Los Angeles.

Another target of the corporate subsidy cutters is the Overseas Private Investment Corporation, which provides loans and insurance for companies doing business in developing countries. One OPIC customer is McDonald's, which has contributed $50,000 to the Philadelphia convention and $25,000 for Los Angeles. Another is the insurance giant American International Group, a million-dollar donor for Los Angeles and a $500,000 donor for Philadelphia.

Keith Ashdown, a spokesman for Taxpayers for Common Sense, an advocacy group that supports cutting corporate subsidies, worries about the effect of such donations.

"It is no secret that money that goes to grease the wheels of these political conventions makes it difficult to stop the corporate welfare machine," Ashdown said.

But another opponent of the subsidies disagrees, saying constituent concerns often drive lawmakers' interests more than political money.

"Members don't look past the fact that a corporation might have employees in their district, might have subcontractors in their district," said Rep. Joseph Hoeffel, D-Pa. "One man's corporate welfare is another man's desperately needed government program."

The Web site for the Philadelphia host committee is; the Los Angeles host committee's Web site is

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