The Democratic National Committee has no plans to repay Duke Energy for an unprecedented $10 million line of credit it guaranteed to help the Democratic convention's local host committee put on President Obama’s three-day nominating convention in Charlotte, N.C., last September.
A Duke company official said the company was claiming the money as a business expense for tax purposes, meaning shareholders will foot $6 million of the cost, according to a report in the Charlotte Observer.
The large loan and the secrecy surrounding it have government watchdog groups deeply concerned. They say the arrangement raises serious conflict-of-interest issues for Mr. Obama and challenges his claim to be committed to disclosure and transparency.
Since guaranteeing the loan, Duke Energy previously had refused to disclose the payment terms or when it would come due. At the end of January a Duke Energy spokesman referred all questions about the loan to Dan Murrey, a surgeon in Charlotte who was chairman of the convention host committee.
Mr. Murrey told The Washington Times only that the line of credit was with two banks — Bank of America and Mechanics & Farmers Bank, which is headquartered in Charlotte. Duke Energy had guaranteed the line of credit.
“We are still finishing up some collections and disbursements related to the convention, and the account is still open,” Mr. Murrey wrote in an emailed response.
He did not respond to questions about the terms of the loan, how much had been paid off, or whether the host committee must make monthly payments with a deadline for full repayment.
A follow-up email restating the questions went unanswered.
The Charlotte host committee is a separate organization that is affiliated with the DNC.
The White House originally had banned any corporate donations to the convention, but with Democratic donors focused on giving to the most expensive presidential campaign in history, the Charlotte host committee organizing the convention struggled to raise money and reversed course.
Duke Energy is based in Charlotte and its CEO, Jim Rogers, has said supporting the convention helped promote the city before an international audience, and in turn, was good for Duke. He said he would have done the same for a Republican convention.
“At the end of the day, we’ll do our best to get our money back,” he told the Charlotte Observer in a January interview. “But if we don’t, it’s just a contribution we’re making I think for the greater good of our community.”
The company didn’t limit its convention financial support to the loan guarantee. It also donated $4.1 million to a separate fund formed to accept corporate money for parties outside the convention hall and $1.5 million in in-kind contributions to the host committee for office space, furniture and other expenses.
Mr. Rogers personally gave $339,000 in cash and in-kind services, including the hiring of a fundraising assistant, the Observer reported.
Republicans regularly accept corporate contributions for their conventions, but the Democrats made it harder on themselves by first barring corporate cash or individual donations of more than $100,000.