Last year's Republican Convention was supposed to put San Diego on the map and boost Mayor Susan Golding’s political aspirations. But a little more than a year after the delegates departed from what turned out to be the most expensive political. convention in the nation's history, auditors for the Federal Flections Commission (FEC) have accused city hall, the Republican convention committee, and the convention’s San Diego host committee of skirting or breaking the law. Fueling the fire is the fact that the convention’s largest benefactor — with a gift of S1.5 million — was tobacco giant Phillip Morris, and the executive director of the host committee was Jack Ford, son of ex-President Gerald Ford and a longtime Golding friend and political ally.
If draft allegations of improper disclosures and violations of federal prohibitions against out-of-town contributors are upheld by the full commission during a meeting next month in Washington, D.C., San Diego taxpayers may have to foot the expense of legal bills and fines that could he imposed by the FEC for flouting federal campaign financing laws. At the very least, the national Republican party may be forced to refund to the government S3.7 million in allegedly misspent federal funds, and the charges could prove an unwelcome diversion for Golding's senate campaign, already facing rocky times in the wake of a California poll showing a slip in her statewide support.
The alleged shenanigans by San Diego and Republican party officials harken back to 1972, when Richard Nixon was forced to move the GOP convention from San Diego to Miami after revelations that Nixon justice department officials cut deals in exchange for convention cash from IT&T, the conglomerate that owned Sheraton Hotels. That scandal rankled San Diego Union-Tribune publisher and Nixon intimate Jim Copley, who long had coveted the chance to be the hometown host of Nixon’s renomination. Copley died two years later.
Many of the current allegations center around a city-run, tax-deductible foundation intended to allow Copley’s widow Helen to donate $500,000 to defray expenses of the 1996 GOP convention. Copley — famous for hosting elaborate parties for political insiders and the media at each quadrennial GOP convention — had, like her husband, aspired to bring the Republicans to San Diego, at least in part to exorcise the ghost of the 1972 debacle. Copley’s oldest lieutenant, Union-Tribune editor-in-chief Herb Klein, a one-time Nixon staffer, also held a fierce desire to have the convention here. Their aspirations coincided with Golding’s wish to turn the national spotlight on herself prior to making a bid for the U.S. Senate. Thus, the stage seemed set for success when, in the fall of 1994, Golding announced that she was going to Chicago to cut a deal with Republican officials to bring the convention to San Diego.
But in the frantic bidding war between cities for convention hosting rights, San Diego had always been regarded by most outsiders as an underdog. Contrary to what Republicans said in public, it wasn’t just that the city’s convention center was too small. Although party officials complained to reporters that the hall’s ceiling was too low, in private they were more worried about whether the city could come up with enough money to provide the kind of extravagance they and the Democrats had become accustomed to every four years. Under federal law. Democrats and Republicans each receive about $12.4 million of taxpayer money to pay for their respective conventions. By accepting federal funds, the parties are supposed to agree that they will spend no more than that for the conventions. In reality, however, $12.4 million is just the beginning.
The law has a loophole allowing cities that play host to the conventions to establish host committees, which hit up private donors for additional convention support. Money for the host committees is supposed to come only from local sources — corporations and individuals who have direct ties to the community. The restriction is supposed to ensure that donors are opening their wallets to promote the city where the convention is being held, not seeking to buy the favors of the political party that is holding it.
Cities like New York, Chicago, San Francisco, and Los Angeles are filled with big companies and wealthy individuals who can legitimately meet the law’s residency test. San Diego, on the other hand, is not as flush. Much of the local industry here is made up of small companies and speculative start-ups that can’t be counted on to ante up amounts of cash that both Republicans and Democrats demand as the price of bringing their conventions to town. The big savings and loans, including Home Federal and Great American, once the financial stalwarts of Ronald Reagan’s rise to the presidency, were wiped out in the scandals of the 1980s.
Thus, when Susan Golding, accompanied by then-City Manager Jack McGrory and a contingent of San Diego dignitaries — including then-City Attorney John Witt and then-Assistant City Attorney Curtis M. Fitzpatrick — and Mark Braden, a Washington lawyer hired to represent the city in its convention bid, traveled to Chicago in December of 1994 to negotiate the city’s proposed financial package to GOP bigwigs, skeptics abounded. But after a six-hour bargaining session, Golding emerged to tell a Union-Tribune reporter that “things went well. We even laughed some of the time.”
Others were not as sanguine. The Union-Tribune reported at the time that the deal with the Republicans called for the city to come up with $20 million, more than $16 million of that to be from private donors, to be solicited by the host committee. Golding said that the cost was “capped” at $23 million. But that price would prove badly underestimated. If San Diego were restricted to gathering money from local sources, where would all that private money come from? That dilemma would later lead host committee fundraisers, led by Golding, to stretch the definition of a San Diego company to include Manhattan-based Phillip Morris.
By the time the final balloon had dropped, total convention costs had grown to more than $47 million, including the $12.4 million in federal funds. The balance of about $35 million consisted of $23 million raised from private donors by the host committee and $12.8 million more from city taxpayers. $5.2 million of the host committee’s take was channeled to it through a tax-exempt foundation the city council established called the ”Special Events Fund.”