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Don't Tell Obama, McCain: Conventions Taking in Corporate Cash
2008-06-11
John McCain, who wrote the law banning corporate donations to the political parties, and Barack Obama, who refuses lobbyist money, will be nominated for president at conventions largely funded by industries whose Washington clout they've railed against on the campaign trail. Convention organizers in Denver and Minneapolis-St. Paul, hosting this year's quadrennial gatherings, are seeking donations of as much as $5 million each, part of an effort to raise $100 million between them from private sources. The corporate cash, from companies such as AT&T Inc. and Visa Inc., may undermine a central focus of the McCain and Obama campaigns. ``The conventions are a place where money and influence can flow,'' said Bob Edgar, a former Democratic U.S. representative from Pennsylvania who now is president of Common Cause, a Washington-based group pushing for tougher ethics rules. Obama and McCain ``have decided out of expediency that they'll be silent on some of these issues until they get elected.'' It wasn't supposed to work this way. The same Watergate-era campaign finance law that provides taxpayer money to presidential nominees does the same for national conventions. This year, each party will get $17 million from the government, plus another $50 million for security costs. Lobbyist Influence While Obama backed the Republicans' 2005 energy legislation that included $11.6 billion in taxpayer subsidies for oil and utility companies, he has taken aim at the influence of lobbyists from the energy industry as well as those representing health- care companies and Wall Street. ``We can't afford to settle for a Washington where our energy policy, and our health-care policy, and our tax policy is sold to the highest-bidding lobbyist,'' Obama said in a May 3 speech in Indianapolis. Xcel Energy Inc., which owns electric utilities, UnitedHealth Group Inc., the largest U.S. health insurer, as well as a law firm lobbying for private-equity firms and hedge funds, are all donors to the Aug. 25-28 Democratic convention in Denver. Lobbyists for those groups can get credentials to both conventions or related events, allowing them to mingle with lawmakers acting on legislation important to them. Farm Bill McCain has also pledged to curb the influence of lobbyists as president and has banished them from his paid campaign staff. ``I upset the special interests and Washington lobbyists when I fought for ethics reform and to stop union bosses and corporations from writing million-dollar checks to political campaigns,'' McCain said at a town-hall meeting in New Hampshire last November. Archer-Daniels-Midland Co., the world's largest grain processor, benefited from and lobbied on a just-passed legislation renewing farm programs for five years, a bill McCain criticized. ADM is supporting the Sept. 1-4 Republican convention in Minneapolis-St. Paul. AT&T and Visa are also among the 23 companies that are helping to fund both conventions, according to the host committee's Web sites. AT&T wants immunity from lawsuits for helping the government wiretap Americans without warrants. Visa opposes efforts to restrict its ability to raise interest rates. Xcel, UnitedHealth and ADM have also given to both conventions. Company spokesmen said the donations are given to participate in the political process, not because of pending legislation. The candidates declined to address the unrestricted convention donations. Obama on Lobbyists Jen Psaki, a spokeswoman for Obama, said ``Barack Obama has done more to curb the influence of special interests and lobbyists than any other candidate in this race.'' McCain spokesman Brian Rogers didn't respond to several requests for comment. Officials of the convention host committees say the donors are motivated by civic pride. ``They get that it's good for our cities and our state,'' said Cynthia Lester, president of the Minneapolis-St. Paul committee. The connections between the candidates and the companies go beyond the conventions. One of McCain's $250,000 fundraisers, lobbyist Wayne Berman, counts AT&T, UnitedHealth and Visa among his clients. In February, by a vote of 67-31, the Senate endorsed granting immunity to the phone companies. McCain voted in favor of immunity; Obama opposed it. Sidley Austin While Obama doesn't accept donations from lobbyists, he does from others in law firms that lobby. One of his biggest sources of campaign cash, Sidley Austin LLP, was paid $6.7 million last year to lobby by clients such as Eli Lilly & Co., which has given to both conventions. Obama's ban on lobbyist donations doesn't apply to convention contributors such as Brownstein Hyatt Farber & Schreck LLP, which lobbies for Apollo Management LP, a private-equity firm, and Citadel Investment Group LLC, which operates hedge funds. Both are fighting efforts to tax carried interest -- the fees received for managing investments -- as ordinary income. Lobbying expert Rogan Kersh, associate dean of New York University's Wagner School of Public Service, said the corporate money could muffle the candidates' campaigns against so-called special interests. ``Corporate underwriting has become as much a part of party conventions as funny hats and long speeches,'' Kersh said. ``But in a campaign devoted to change, both parties' much-proclaimed reform candidates will have their halos tarnished by the corporate largesse.'' To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net .
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