You Should Watch the Political Conventions — You Helped Pay for Them!

by Amy K. Frantz, Public Interest Institute Vice President


Did you watch either or both of the major party conventions on television this summer? According to Nielsen, the company that measures television viewing and provides ratings, viewers for the Republican convention in Cleveland this July numbered from close to 20 million to just over 32 million over the four nights of coverage.[1] The following week, viewership of the Democrats in Philadelphia ranged from 24 to 30 million over four nights.[2] If you were one of those viewers, you may have been informed or entertained (or maybe not), but as you watched, did you ever wonder who was paying to put on those conventions? The answer, at least in part, was you, the taxpayer.

There are two separate funding portions of the conventions: putting on the convention itself and providing security for the convention, the candidates, and the attendees. Since the September 11, 2001 terrorist attacks, the Department of Justice (DOJ) has provided the funding for security for conventions through its Edward Byrne Memorial Justice Assistance Grant program. In 2004, 2008, 2012, and 2016, Congress appropriated $100 million, through the Department of Justice, for security for the conventions, with $50 million going to each party’s convention security costs.[3]

DOJ used most of this funding to reimburse state and local law enforcement entities for overtime costs associated with convention security . . . though DOJ administers the convention security funding, DOJ is not responsible for security at the 2016 presidential nominating conventions. Rather, the U.S. Secret Service (USSS) is responsible for planning, coordinating, and implementing security operations at conventions.[4]

As for the operations of the convention itself, beginning in 2016 those funds were raised by each party’s convention committee. The committees solicit private donations for the conventions, which are subject to Federal Election Commission (FEC) rules. However, those rules are somewhat different for convention donations than the rules for donations to candidates or national parties. First, in October 2014, “the FEC determined that the national parties could each establish a separate political committee for convention fundraising and that those committees enjoyed separate contribution limits from the national parties themselves.”[5]

Later that same year, Congress and President Obama further changed the rules for convention donations:

In December 2014, Congress enacted, and the President signed, H.R. 83, the Consolidated and Further Continuing Appropriations Act, 2015 (P.L. 113-235). The law tripled individual and political action committee (PAC) limits for contributions to national party committees and permitted those committees to establish new accounts, with separate contribution limits, to support party conventions . . . Overall, it appears that, at minimum, an individual could give $100,200 (triple the base $33,400 limit) to support convention committees in 2015-2016. Multicandidate PACs could contribute at least $97,200 to conventions.[6]

A major source of funding for the conventions is what is known as nonfederal funds. According to Congressional Research Service, “Nonfederal funds are generally not subject to the limits on contribution sources and amounts found in federal campaign finance law, although some FEC reporting requirements apply.”[7] Nonfederal funds include contributions solicited by a convention’s “local host committee,” which can include groups such as civic associations whose purposes include cultivating a positive image of the city they represent. “Permissible expenses,” by such a committee, “include, for example ‘use of an auditorium or convention center,’ promoting the convention city, and hosting receptions or tours for attendees.”[8]

Anthony L. Fisher of Reason Foundation discusses the reasons corporations make contributions to political conventions:

Emily Lauer — senior director of public relations and communications at Destination Cleveland, as well as the Cleveland host committee’s media liaison — says companies get three things out of sponsoring the events. The first applies primarily to enterprises based in Northeast Ohio, such as the Cleveland Clinic, KeyBank, and Ernst and Young LLP: pride in the fact that the city has “the opportunity to be on the international stage.” The second is “to support the political process of the United States” — demonstrated, Lauer says, by the fact that many companies try to avoid the appearance of partisanship by giving to both conventions. And the third is “access” to the convention and surrounding events.[9]

Funding for conventions may also come from state or local governments through “municipal funds,” which are funds or accounts “whose principal purpose is the encouragement of commerce in the municipality.”[10] Other sources of support for conventions include the following:

The FEC has also permitted corporations and labor unions, which may not provide direct financial support to federal campaigns, to make certain contributions of goods or services to host committees and municipal funds . . . In addition, “commercial vendors” may provide goods or services to convention committees “at reduced or discounted rates, or at no charge” in certain circumstances.[11]

This highlights how political conventions are now funded, but previous conventions received funding from taxpayers, albeit somewhat voluntarily. Beginning with the 1976 election cycle, public funding was provided to party conventions from the Presidential Election Campaign Fund (PECF). Generally, the funds were only provided to the Republican and Democrat parties, however, in 2000, the Reform Party received about $2.5 million for its convention. This was because the Reform Party candidate in the 1996 election, Ross Perot, received 5 percent or more of the vote in the general election.[12] See the chart below indicating the funds received by each party for conventions from 1976 through 2012.

The funds in the Presidential Election Campaign Fund were not appropriated by Congress. Instead, PECF funds come from the check-off on the federal income tax form. Taxpayers are given the option to check the box to provide three dollars (this amount was increased from one dollar in 1994) to the PECF. You may recall that box toward the top of your 1040 form that asks if you want three dollars (or six dollars, if filing jointly) to go to the Presidential Election Campaign Fund. As the 1040 states, “checking a box . . . will not change your tax or refund.” However, participation by taxpayers in the check-off program has declined “from a high of 28.7% for 1980 returns to 5.4% for returns filed . . . in 2015.”[13]

These funds were used not only for convention funding, but were primarily for public financing for presidential candidates. However, participation in public funding has also declined in recent election cycles. Candidates must follow certain rules to receive matching funds from the PECF during the primary and general elections, so the major party candidates have chosen to forgo public funding recently. No major party candidate in the general election accepted public funds in 2012 or 2016; additionally, the Democrat candidate did not accept public funds for the general election in 2008. For the 2016 primary election, only Democrat candidate Martin O’Malley and Jill Stein from the Green Party accepted public funding.[14]

Political parties are now required to fully fund their conventions through other contributions rather than receiving any funds from the PECF due to a change in the law. In 2014, Congress and President Obama passed H.R. 2019, which “terminated convention funding and directed that PECF amounts reserved for conventions be transferred to an unrelated health research account, the ‘10-Year Pediatric Research Initiative Fund.’”[15]

Do the political parties need public funds to help finance their conventions? Probably not. Is the Pediatric Research Initiative Fund a worthy program? Probably so. But using check-off funds designated for one purpose for another purpose altogether is not very transparent.

Endnotes:
[1] “Fourth Night of 2016 Republican National Convention Draws 32.2 Million Viewers, ” Nielsen, July 22, 2016, <http://www.nielsen.com/us/en/insights/news/2016/fourth-night-of-2016-republican-national-convention-draws.html> accessed November 4, 2016.
[2] “Fourth Night of 2016 Democratic National Convention Draws 30 Million Viewers,” Nielsen, July 29, 2016, <http://www.nielsen.com/us/en/insights/news/2016/fourth-night-of-2016-democratic-national-convention-draws-viewers.html> accessed November 4, 2016.
[3] R. Sam Garrett and Shawn Reese, “Funding of Presidential Nominating Conventions: An Overview,” Congressional Research Service, May 4, 2016, pp. 2-3, <https://www.fas.org/sgp/crs/misc/R43976.pdf> accessed November 8, 2016.
[4] Ibid, p. 3.
[5] Ibid, p. 6.
[6] Ibid, p. 7.
[7] Ibid.
[8] Ibid.
[9] Anthony L. Fisher, “Who Paid for the Conventions?,” Reason Foundation, September 3, 2016, <http://reason.com/archives/2016/09/03/who-paid-for-the-conventions> accessed September 8, 2016.
[10] Garrett and Reese, p. 8.
[11] Ibid.
[12] “Presidential Election Campaign Fund,” Federal Election Commission, May 13, 2016, <http://www.fec.gov/press/bkgnd/fund.shtml> accessed November 8, 2016.
[13] Ibid.
[14] Ibid.
[15] Garrett and Reese, p. 8.

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