Picking Up the ($300K) Tab
Blackwell, Rob, American Banker
Rep. Paul Kanjorski, the House Financial Services Committee's second-highest ranking Democrat, was standing next to Boston Harbor, flanked by old ships and modern yachts, at a gala thrown by six large companies and trade groups.
The hosts, like the many other financial firms spending hundreds of thousands of dollars to throw invitation-only receptions and other get-togethers at the Democratic National Convention, hoped that the event would help enhance their clout with lawmakers like Rep. Kanjorski.
But if that was the purpose, it was lost on him.
"Quite frankly, we don't know who the hell throws" the parties, the Pennsylvania lawmaker said. "It doesn't make any real impression."
That does not stop companies from trying. From Fenway Park to Faneuil Hall, banks and other financial services firms were funding and hosting parties at all hours -- many of them at the same time -- during the convention. The groups involved said they are a way to participate in the political process and build bonds with important players.
But that opportunity comes at a hefty price for many.
The National Association of Federal Credit Unions' bash for Sen. Tom Carper of Delaware on Monday night, paid for by Fannie Mae, Freddie Mac, MBNA Corp., HSBC Holdings PLC, and Visa International, cost about $300,000, knowledgeable sources said.
A similar price tag hung on an event hosted the next day by Fannie, Freddie, the Independent Community Bankers of America, the Mortgage Bankers Association, the National Association of Home Builders, and the National Association of Realtors.
A Financial Services Roundtable brunch hosted by some of the nation's largest banking companies was relatively inexpensive at about $60,000. Sources said the trade group asked 29 of its members to kick in $2,000 each.
None of those costs include donations to the convention host committee. Bank of America Corp. and State Street Corp. were the only financial services companies listed as "platinum" sponsors -- meaning they each gave more than $1 million. Citizens Financial Group Inc., a subsidiary of Royal Bank of Scotland Group PLC, and Sovereign Bank contributed at least $500,000; Citigroup Inc., Fannie, and Freddie gave more than $250,000.
What does all this cash buy? That depends on whom you ask.
At a brunch hosted by important members of the Financial Services Roundtable, the guest of honor, Rep. Barney Frank of Massachusetts, did not mince words when asked about what companies get in return. He leaned in and mouthed, "Nothing."
Then he reconsidered.
"You know what? I take it back," Rep. Frank said. He proceeded to dispute and turn around a view, often repeated in the news media, that the parties are a donation to the lawmakers.
"Frankly, we do them a favor by showing up," he said. "They are not doing us a favor. They get to show their members how they are regarded or how important they are."
Both he and Rep. Kanjorski eventually acknowledged that the parties might make some impact -- even if it is a subtle one.
"Here you get national input," Rep. Kanjorski said. "A lot of people who are movers and shakers from all over the country who want to talk to you about something or remind you of something. You record that, and it has an effect on what you do when you are back. It's very helpful. Without it, we would be very isolated."
Several lawmakers brushed aside criticism that the parties are tantamount to political contributions that do not have to be disclosed.
"There is nothing sinister about it that goes on," Sen. Tim Johnson of South Dakota said during an interview at a party hosted in his honor by the Securities Industry Association and the Bond Market Association. "It is just interacting in a very casual atmosphere. There are no long, substantive policy talks that go on at these kinds of things. ... …