RNC convention host committee doles out millions in leftover cash with few restrictions

By: - October 22, 2020 6:00 am
RNC stage in 2008

Republican National Convention stage on Sept. 2, 2008. (photo by Nico Pitney, Creative Commons CC BY-NC-SA 2.0 CC BY-NC-SA 2.0

WASHINGTON — After the Republican National Convention pulled out of Charlotte earlier this year due to COVID-19 restrictions, the host committee pledged to give more than $3 million to local community groups by the fall. 

But a recent filing with the Federal Election Commission shows the committee has handed out less than $400,000 in cash so far, and the vast majority of the money leaders plan to dole out has yet to come in the form of grants reserved for unnamed economic development organizations. There are few restrictions on how host leaders can pay out the remaining millions at a time of intense economic need in North Carolina, since the group is regarded as a charity.

The area’s ailing tourism and hospitality industry was expected to be the big winner of more than $100 million in an economic boom that the RNC was predicted to bring to the region. 

Now, instead of cashing in on hordes of hungry and tired journalists, politicos and fans of President Donald Trump, restaurants and hotels are competing over a small slice of what’s left over. 

Just $500,000 of the money the Charlotte Host Committee will give out will be reserved for tourism and hospitality, in the form of grants directly to businesses suffering from the downturn.

It’s an unfortunate end for the RNC in Charlotte, where 10 days of festivities were expected to top the 2012 economic effect of the Democratic National Convention, which according to the mayor’s office brought in $162 million, the largest impact any single Charlotte event has ever produced.

Instead, the event was moved to Jacksonville, Fla., and then back to Charlotte when coronavirus cases spiked in Florida, as a dramatically scaled down event in a ghost town full of closed businesses. 

In advance of the convention, the host committee reported raising $44 million. It now has about $6.6 million left, and will distribute roughly half of that, keeping the rest in the bank “sitting in a reserve for any exposure risk or other matters that will present themselves,” said Charlotte Host Committee Chairman John Lassiter, a Republican.

“You only can do what you can do. A lot of funds were out the door,” said Lassiter, a former city councilman and mayoral candidate. “We were renting real estate, paying people and covering the cost for the RNC on the ground.”

Lassiter said the group will be announcing the recipients of the tourism and hospitality grants later this week. He said they’ve received dozens of applications already, and will reserve the grants for businesses with annual revenues of less than $5 million, with an emphasis on women- or veteran-owned businesses.

“We’re not putting any constraint on how they use that money, so they can manage their rent obligations, manage some of their payroll, pay for utilities, you know, keep the lights on while we’re waiting for the opportunity to reopen at full scale,” Lassiter said. 

“Trying to help people in that space is difficult, because their hotels are not fully open, their restaurants are not fully open, bars and entertainment spaces are still operating at reduced capacity. So we’re trying to provide a little bit of a security net.”

Lassiter said rather than releasing information about the tourism and hospitality grants broadly to the public, the committee sent information about them directly to the vendors who registered on the host committee website to participate in the RNC festivities.

DNC host committee will spend all its money

The host committee for the Democratic National Convention, whose presence in Milwaukee was downsized to a mostly virtual event, will still spend all of the $41.8 million it raised and is using a donor’s line of credit for an additional $1.6 million to pay all of its bills, Rich Kirchen of the Milwaukee Business Journal reports. 

The top two expenditures were $9.26 million to event production company Kirshner Events Inc. and $5.5 million to the Milwaukee Bucks’ arena arm Deer District at $5.51 million, Kirchen reports.

The Host Committee raised $41,758,084 in cash and $988,201 in in-kind contributions according to the committee’s report with the FEC. Total expenditures so far add up to $38.4 million, with more bills coming in.

“Perhaps the most unfruitful payment was the $5.5 million for rent at Fiserv Forum,” Kirchen reports, “a venue the DNC decided not to use as the size of the convention continued shrinking.” 

Instead of an estimated $200 million in economic impact, Milwaukee Mayor Tom Barrett and VISIT Milwaukee estimated that the DNC brought about $3 million into the city. Barrett has said he hopes for a “do over,” when the city has another shot to host the convention in 2024.

Restaurants, hotels take a hit 

Due to coronavirus lockdowns, the restaurant and hotel industry in Charlotte bottomed out in mid-April with weekly spending at 70% below the baseline. The industry has recovered slightly, with consumer spending hovering around 36% below average in September, according to research from the Charlotte Regional Business Alliance.

The largest cash donations from the Charlotte Host Committee since the event’s cancellation came in the form of $50,000 each to three groups: the Charlotte-Mecklenburg Police Foundation, Habitat for Humanity of Charlotte and Good Friends Charlotte, a women’s group that gives financial support to the needy.

Other groups like Purple Heart Homes, The Green Chair Project, the Nest Academy, and Leadership Charlotte took in more modest sums ranging from $10,000 to $45,000, according to the group’s FEC filing. The group also gave away $155,000 worth of furniture to Beds for Kids and gave smaller donations of furniture and supplies to other organizations.

One reason to donate leftovers: Host committees are categorized as 501(c)3 charity organizations because they drive spending and publicity to the host city. But there are really no FEC laws regulating how the money can be doled out, whether by grant, cash or donations of items like leftover furniture, said Brett Kappel, a D.C.-based lawyer and campaign finance expert.

“The whole charade with these host committees is that they’re supposed to be for economic development of the host city,” he said. “So, you know, if they don’t follow through on their commitments, they usually get the attention of people locally.”

The vast majority of the money the committee will be giving away — $2 million — is reserved for local economic development organizations. Lassiter said that will be given out by the end of the year. 

The group sent the criteria and call for applications directly to economic development organizations they’ve partnered with, rather than casting a wide call for applications.

Though the criteria are vague — ideas must be scalable, repeatable, collaborative and measurable —  Lassiter said the group is interested in funding job-creation and workforce training programs, for instance ones that could help teach people how to perform work in small manufacturing or the trades.

Ruth Conniff contributed reporting from Wisconsin.

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Daniel Newhauser
Daniel Newhauser

Daniel Newhauser reports for States Newsroom, of which Wisconsin Examiner is a part.