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Obama Campaign Asks Unions to Help Cover Convention Costs

April 25 (Bloomberg) -- Bloomberg's Hans Nichols reports that Democrats are pressing unions for cash donations to offset fundraising gaps to pay for the Democratic convention in Charlotte, North Carolina this summer. Barack Obama's campaign banned corporate and individual donations from their convention fundraising efforts. He speaks on Bloomberg Television's "Inside Track." (Source: Bloomberg)

President Barack Obama’s political advisers are pressing labor unions to contribute to the Democratic convention in September to cover a fundraising shortfall resulting from their self-imposed ban on corporate donations, according to two people familiar with the matter.

Democratic officials gave representatives of the major U.S. unions, including the AFL-CIO, the International Brotherhood of Teamsters and the United Auto Workers, a tour of the convention sites in Charlotte, North Carolina, April 23 in advance of a request for donations, according to the two people, who requested anonymity because they weren’t authorized to discuss internal strategy.

The three-day convention will culminate in Obama’s re- nomination in Bank of America Stadium on Sept. 6. So far, the host committee in Charlotte is roughly halfway to its $36.6 million goal.

Four years ago, unions contributed more than $8 million to the Democratic convention in Denver, according to financial disclosure reports.

“The AFL-CIO’s political focus is on empowering working people with the information they need at the ballot box by every grassroots means available, from old fashioned door by door, phone calls and community engagement to cutting-edge online organizing,” said Mike Podhorzer, the political director at AFL-CIO.

Republican Funding

The Republican National Committee has not imposed a similar ban on corporate donations for its convention, scheduled for Aug. 27-30 in Tampa, Florida. It has secured contributions from companies including AT&T Inc. (T), Microsoft Corp. and Coca-Cola Co. (KO), to meet their $55 million target, said Aileen Rodriguez, spokeswoman for the Tampa host committee.

“They are great supporters of the host committee,” she said.

As the Charlotte host committee struggles to raise money, some Democratic fundraisers are urging the Obama campaign to lift the restrictions on corporate cash. That would require the Obama campaign to amend the “master contract,” which also prohibits the Charlotte committee from accepting contributions from registered federal lobbyists and limits individual donations to $100,000.

The Obama campaign has told Democrats arguing to amend the rules that they won’t be changed, said Ben LaBolt, press secretary for Obama for America.

Political Priorities

While relying on the unions may help close the Democrats’ convention shortfall, it might siphon funds away from other Democratic political efforts.

“It’s a huge switch not to take corporate money,” said Anna Burger, a former Secretary-Treasurer at the Service Employees International Union. “I understand the president’s decision to do that, but it makes it that much harder to fund all the things that need to be funded.”

The convention’s predicament echoes the debate earlier this year when Obama reversed course and began encouraging his top donors to contribute to Priorities USA, a so-called independent super-political action committee backing his re-election. Obama campaign manager Jim Messina said in a Feb. 6 e-mail to supporters that Democrats can’t “unilaterally disarm” while the Republican candidate benefits from unlimited spending by super-PACs.

While Obama had a 10-to-1 campaign cash advantage over likely Republican nominee Mitt Romney at the start of this month, Republican super-PACs and other groups are out-raising Democrats with the help of multimillion-dollar donations from wealthy individuals and corporations.

‘Pretty Big Challenge’

Mike Dino, who was chief executive officer of the Denver convention host committee, said Obama’s donation rules hamper the convention organizers while providing little political benefit.

“I have a hard time discerning whether anyone really cares that the Democrats are trying to approach this in a different way,” Dino said in an interview. “As you look at what the parameters are for Charlotte and the limitations on the amount of money and who it comes from, that’s a pretty big challenge to overcome.”

When the Democratic National Committee signed the contract with the Charlotte Host Committee, it placed a $100,000 limit on and individual donations and on contributions from non-profit foundations attached to corporations. Companies that had outstanding loans through the Troubled Asset Relief Program are prohibited from in-kind contributions. Corporations are allowed to give unlimited in-kind contributions, such as telephone and technology services or gift cards.

Denver Precedent

Obama’s advisers considered similar restrictions in 2008. They eventually agreed to accept corporate and high-dollar contributions on their way toward raising $61 million for the event, Dino said.

A review of the 2008 donations reveals the magnitude of the challenge for Charlotte under the new rules, he said.

In 2008, donations of less than $100,000 accounted for five percent of total Denver receipts, according to the Campaign Finance Institute, a policy research organization in Washington. Almost three-fourths of the funding for the Denver convention came from contributions of more than $250,000 from individuals and organizations, and a quarter came for a dozen donors who gave between $1 million and $1.7 million, the group’s data show.

Corporate Funds

Corporate entities that contributed $100,000 or more, accounted for more than $33 million of the amount raised for the Denver convention, according to campaign finance reports.

Many corporations donate to both party conventions, when allowed. Sixty-eight companies gave both to the Denver convention and the Republican event in St. Paul, Minnesota, providing 50 percent of the Democratic budget and 72 percent of the Republican funding, according to the institute.

In addition to the host committee’s fundraising, conventions receive a contribution from the Federal Election Commission for staff salaries and a grant from the Department of Homeland Security to offset security costs. This year, the FEC grant is about $17.7 million and $50 million from the DHS.

To contact the reporter on this story: Hans Nichols in Washington at hnichols2@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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