- The Washington Times - Wednesday, January 30, 2013

Five months after President Obama’s made-for-media convention in Charlotte, N.C., the host committee for the three-day Democratic bash still has not paid off an unprecedented $10 million loan secured by Duke Energy, and there is no way of knowing whether it will ever be paid back.

Government watchdog groups, which once lauded Mr. Obama’s pledge to run the most transparent government in history, say the loan raises serious conflict-of-interest issues and shows that the president has abandoned his commitment to disclosure.

“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.”

The Charlotte host committee is refusing to provide details about the terms of the loan, how much has been paid off or the deadline for repayment.

Because no other convention committee in history has taken out a similar loan, no laws force Mr. Obama to publicly disclose it to the Federal Election Commission or any other agency, the watchdogs say.

The only FEC report available from the host committee dates back to October and shows an outstanding $8.7 million in debts from loans. Since then, the host committee has closed up shop and is not required to make any more FEC reports.

Mr. Obama could direct the host committee to produce the information voluntarily, but there is no indication he has any intention of doing so.

“We have to ensure going forward that we have far stricter disclosure laws associated with loans to conventions, if months can go by and we have no idea if the loan was paid off or not,” Mr. Slocum said.

When The Washington Times contacted Dan Murrey, a surgeon in Charlotte who was chairman of the convention host committee, he said the loan was a line of credit with two banks — Bank of America and Mechanics & Farmers Bank, with headquarters in Charlotte.

“We are still finishing up some collections and disbursements related to the convention, and the account is still open,” Mr. Murrey wrote in an email response.

He did not address questions about the terms of the loan, how much had been paid off, whether the host committee must make monthly payments and the deadline for repayment. A follow-up email restating the questions went unanswered.

Duke Energy spokesman David Scanzoni stressed that his company served only as the loan guarantor and wouldn’t disclose which banks had made the loan or the repayment terms.

“I can’t comment on who the institutions were,” he said, referring the questions to Dr. Murrey.

The White House also did not respond to a request for comment.

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

Restrictions initially imposed by the White House barred the committee from raising individual donations of more than $100,000 or accepting any corporate money.

Republican conventions, including Mitt Romney’s in Tampa, Fla., last year, make no bones about accepting unlimited donations from corporations.

Small, individual Democratic donors were so tapped out toward the end of the campaign that Mr. Obama’s finance team started accepting millions of dollars in corporate cash for the convention in August. The decision was made after Democratic National Committee Chairwoman Debbie Wasserman Schultz swore off doing when she was named to the post a year earlier.

Mr. Obama’s advisers then opened a separate fund, called New American City, which was under no restrictions and could take corporate cash and loans. In addition to the $10 million line of credit, Bank of America and Mechanics & Farmers Bank gave another $1 million loan to this outside convention fund. It’s unclear from the FEC records whether Duke Energy secured that loan as well.

Duke Energy is the third-largest coal-burning utility, and its role in guaranteeing the $10 million line of credit spurred criticism from the left, angry that a big fossil-fuel company was helping underwrite Mr. Obama’s nominating convention.

Duke CEO James E. Rogers also regularly gives tens of thousands of dollars to Republicans and Democrats each cycle, and he led the Democratic convention finance fundraising team’s efforts to raise $36.6 million.

Although the Obama administration, through the Environmental Protection Agency, has cracked down on emissions from coal-fired plants, it has taken Duke Energy money on a number of occasions over the years.

According to a Center for Public Integrity report, nearly half of Duke’s plants use coal, and such Obama-touted green-energy technologies as solar and wind power account for only 9 percent of its power generation.

The company also is among at least a dozen firms that the Obama administration has exempted from basic environmental oversight so they can pursue energy projects paid for by stimulus tax dollars, CPI reported.

Meredith McGehee, policy director at the Campaign Legal Center, called the Duke-secured loan one more example of Mr. Obama talking a good game when it comes to trying to weaken the grip of special interest power in Washington.

Over the past four years, she said, in the name of political expedience or winning elections, Mr. Obama has repeatedly joined the money-in-politics system instead of trying to reform it. As a result, she said, he has frustrated his substantive policy goals.

“Here’s where I think the political calculation is wrong: So many things Obama wants to do on the substance side — if you don’t deal with the money in politics issue, they’re only going to tackle issues around the edges. They are not going to be able to make the bold changes they would like.”

• Susan Crabtree can be reached at scrabtree@washingtontimes.com.

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