The innovative St. Paul strategy was to pass these costs, in the form of an insurance policy, onto the private Republican Party and by extension its corporate backers (for whom financing conventions "host committees" offers a way of neatly circumventing all laws limiting political contributions). In other words, the very people who would benefit from an atmosphere designed to smash political opposition could foot the bill. Such insurance policies, as noted above, are not new: Denver, for instance, also had such a policy, but they paid the tab themselves (albeit using some of the federal money they had received for convention-related security expenses.) While Amy Goodman reports that "According to a recent article in National Underwriter magazine, 'Both the Republican National Committee and Democratic National Committee refused to comment on their insurance purchasing decisions, or even reveal who was providing coverage for their respective conventions.'", an article in USA Today (9/5) states that

"Both cities purchased their polices through Boston-based Lexington Insurance Co."

Consider the implications here. Not only do such policies mitigate the financial risks of eliminating the possibility of public protest, they actually turn such antidemocratic strategies into a potentially lucrative source of private profit! Forget producing tear gas or other "non-lethal" weaponry —- the real money seems to be in helping city governments make tyranny a more manageable expense.

In a further twist, Lexington Insurance is a member company of AIG —- the very same AIG that was bailed out of bankruptcy by a $85 billion bridge loan from the Federal Reserve on September 16th, resulting in a 79.9% stake in AIG now being held by the federal government. In effect, the financing of repression has now been effectively socialized, but as with all of the recent federal interventions into the crumbling American economy, this is not the nationalization of a profitable enterprise, but the nationalization of risk and losses. And now we're apparently expected not only to have our margins for dissent narrowed to the point of irrelevance by an increasingly repressive police regime in the streets, but we're now paying the bill for this twice —- once as taxpayers financing the municipal police and their federal counter-summit expense grants, and again as taxpayers left holding the bag on the catastrophically-collapsing insurance company which has been facilitating these policies of repression by making them more affordable.

Appendix:

To get a sense for the flavor of repression-related expense insurance claims, I've included the following claims scenario, taken from the AIG website

Title: Bodily Injury Arising Out Of Public Uprising (CA) 
Injury: Bodily Injury 
Potential Liability*
(Above Attachment Amount) : $ 701,000 
Industry: Public Administration 
Attachment: $ 2,000,000 
Limit: $ 10,000,000 
Liability Type: Misc. 

Description: Over 100 of Insured's police officers were dispatched to disburse a crowd of 2000 protesters of the war in Iraq. Police used non-lethal devices to control crowd. Several witnesses stated that police were improperly using the devices. Fifty-nine claimants allege bodily injuries ranging from strains, sprains and bruising. 

*Calculations based on information in ISO Circulars General Liability Trend Data and Analysis and Commercial Automobile Trend Data and Analysis. An annual Excess Severity Trend of 7% was selected. Potential liability figure represents only the first layer of coverage above the primary. This data does not represent claims that exceed the lead excess casualty.