Sep 3, 2008 -- CQPolitics: GOP Convention's Money Man Defends the System
By: Tim Starks and Emily Cadei

Officials of the major political parties and the watchdog groups who monitor the flow of money into campaigns are, predictably, rarely in agreement. But this year they've ended up on the same page about fundraising for the political conventions: The system has to change, because the money is out of control.

But the man who led the charge to bail this week's Republican National Convention out of a last-minute $10 million funding shortfall says everything is just fine the way it is.

The watchdog groups say the need to pay for the conventions with private funds allows corporations too much influence over the process. Most party officials — including Jeff Larson, the chief executive of the GOP convention's organizing group — say the costs of staging the four-day extravaganzas has become exorbitant and that both parties should rethink the events in ways that would drive down their costs.

Wrong on both counts, asserts the man whose job it was to solicit the millions it took to pay for this week's GOP gathering in St. Paul.

Robert Wood "Woody" Johnson IV, the billionaire owner of the New York Jets and heir to the Johnson & Johnson fortune, takes a different perspective. "Bringing the delegates from all the states together every four years is a very positive event," he said. "If it takes a little extra fundraising, so be it."

And the Republican convention finance chairman is eager as well to rebut those who say the current convention money rules — which permit the creation of "host committees" that may raise unlimited amounts from corporations and individuals, with only limited disclosure — gives those donors undue influence on the political process. "Giving money at the convention is something a lot of people don't want to do," he says. "I don't know if they see the value."

As part of the public financing system for presidential campaigns, the federal government gives a grant to each party to fund their conventions, but also allows the host cities to form fundraising committees that are not subject to legal restrictions. This year the federal grant was $16.4 million; the Democrats sought to raise another $40.6 million in private funds for last week's convention in Denver. The Republicans sought to raise another $56.9 million. And, with weeks to go before each gathering, both host committees had raised $10 million less than their goal.

Johnson — who was brought aboard only in July to finish filling the coffers — had already been a big fundraiser this year, having brought in an estimated $7 million at a New York event this May that Johnson boasted was the biggest single-event haul for the John McCain campaign. Johnson has family in Minnesota, but believes he got the nod for the finance chairman job because of the May event. Most of his duties wrapped up a few weeks ago, although he is attending the convention and has been involved in discussions among Republican officials about how best to assist with Hurricane Gustav fundraising.

Most Donors Are Not Local

"The host committees are one of the last soft money loopholes and they've been allowed to persist mostly because the FEC has come up with an interpretation that somehow these host committees are not really connected to the election," said Meredith McGehee, Policy Director at the Campaign Legal Center, which advocates for fundraising restrictions. In reality, she said, contributions to these committees offer wealthy individuals and companies with political interests "additional opportunities to get special treatment and special access."

To underscore this point, watchdog groups point to the millions of dollars that companies such as AT&T, Boeing and Pfizer have poured into the conventions, in both Denver and St. Paul, even though they have little corporate sway in those cities.

The Campaign Finance Institute, a non-profit research group, estimates that more than two-thirds of the companies that have donated to the two host committees have headquarters outside of Minnesota and Colorado. It also estimates that donors to the two host committees have combined to spend nearly $1.5 billion on federal campaign contributions and lobbying since 2005 — clear evidence, the group's Steve Weissman says, that "they're involved in this game because they have national interests."

The Federal Election Commission permits liberal corporate, union and rich-person giving to the host committees because it views the donors as driven by local, civic interests rather than "political considerations." And Johnson made that a part of his bipartisan pitch to donors.

"I just tell them, the host committee is a bipartisan committee, it's been approved by the Federal Election Commission," he said. "It's very important to the process that both Republicans and Democrats put on these conventions."