What were major corporations such as AIG, Ford, Citigroup and Freddie Mac doing in the weeks before they asked Washington for taxpayer-funded financial bailouts?
They were donating millions of dollars to underwrite the Democratic and Republican Party conventions.
According to a new report released today by the Center for Responsive Politics in conjunction with the Campaign Finance Institute, the companies were some of the largest sponsors of the political conventions that resulted in the nomination of Barack Obama and John McCain for president.
In the two years spent fundraising for the conventions, CFI claims the two parties only provided the names “they elected to disclose. The institute announced today that the first official host committee reports have been released, and it now has a complete list of donors.
“The two convention host committees raised $118 million, virtually all of it in private funds: $61 million for the Democratic conclave in Denver and $57 million for the Republican one in Minneapolis-St. Paul,” it reveals. “The latter figures are almost four times the separate $16 million each party received from the federal government to support its convention.”
Key industry actors in the current financial crisis gave $14 million to conventions, CFI reports. The following are some of its findings:
- Freddie Mac gave $500,000, half to each committee.
- Ford Motor Company donated $200,000 for the conventions, half to each host committee (Also, Kirk Kerkorian, Ford’s largest shareholder with ties to GM and Chrysler, gave $3.5 million).
- General Motors provided 735 new cars to the Democratic and Republican Party convention committees for elected officials’ use.
- American International Group, or AIG, gave $1.5 million split evenly between the two committees
- Hedge funds and their managers gave $3.9 million – $2.7 million to Republicans and $1.2 million to Democrats.
- Investment companies including Goldman Sachs, Morgan Stanley, J.P. Morgan Chase, UBS and Lehman Brothers, gave $1.5 million.
- Other financial institutions that have received or are eligible for bailouts, such as Citigroup, U.S. Bancorps, Wells Fargo and Bank of America, donated $2.9 million – much of it was given to the Republican committee.
Finance, insurance and real estate companies gave $24.6 million toward the conventions, according to Center for Responsive Politics, or CRP.
“If the executives who have come to Washington, hat in hand, looked familiar to members of Congress, maybe it’s because they met over the summer at the conventions,” CRP Executive Director Sheila Krumholz said in a statement. “The conventions provided representatives of major corporations and industries with many opportunities to interact with Washington’s decision-makers. Those conversations may have paid off just weeks later, when the government started handing out money to those companies and industries that are struggling.”
The study also found that the drug industry gave $9.8 million to the parties, Internet companies donated $4.1 million to Republicans and $3.1 million to Democrats, while unions representing government employees contributed all of their $2.7 million to the Democrats’ convention in Denver.
Krumholz said, “By taking advantage of the false distinction between a political party and the committee hosting the party’s convention, unions were able to support the Democratic Party in a way that hasn’t been allowed since the days of soft money, when labor was among the biggest givers.”