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DNC won’t repay Duke Energy for Charlotte convention costs

- The Washington Times - Friday, March 1, 2013

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.

The host committee struggled for more than a year to raise money, ultimately amassing $24.1 million, short of an already revised goal of $31.1 million. The original target was $36.6 million.

The only Federal Election Commission report available from the host committee dates back to October and shows $8.7 million in outstanding debts from loans.

Watchdog groups, which once lauded Mr. Obama's pledge to run "the most transparent government in history," say the loan shows that the president put political expediency above his transparency pledges.

"This is just a blank check for the party, and it undermines the whole [Obama] message of cracking down on special interests' influence in Washington," said Tyson Slocum, an energy specialist for Public Citizen. "It's clear the administration is hypocritical."

Mr. Slocum, and other left-leaning watchdogs, are particularly concerned about Democrats accepting large donations from Duke, the third-largest coal-burning utility in the country, and any favoritism and unfair influence with Obama administration officials that could result.

Although the Obama administration, through the Environmental Protection Agency, has cracked down on emissions from coal-fired plants, Duke is among at least a dozen firms the administration has exempted so it can pursue energy projects paid for by stimulus dollars, according to a report by the Center for Public Integrity.

Duke received $200 million in federal stimulus money for "smart-grid" improvements in 2009, and at least two of the company's power plants — one in North Carolina and another in Indiana — got hundreds of millions of dollars in "advanced coal" tax credits from the Department of Energy, as well as federal and local incentives.

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