When Duke Energy extended a $10 million line of credit to the committee organizing the Democratic convention in Charlotte, N.C., last summer, it seemed to be a sign that President Obama would not make good on his pledge to keep his party’s nominating festivities free of corporate favor banking.
The money would have to be paid back, organizers said.
Except that so far, it hasn’t been. The Los Angeles Times reports that the loan remains outstanding, with just a couple of weeks left until it is due to be paid back.
Democrats acknowledged over the summer that the president’s pledge had set a very high bar and that without corporate giving, they were having a hard time coming up with enough small-donor financing to fill the void. And the host committee had already begun to break the pledge by setting up a nonprofit corporation to collect corporate dollars for events outside of the convention hall – like a big welcome party for the news media showcasing Charlotte businesses and a Labor Day festival.
But the nonprofit corporation – called New American City and financed by companies including Duke and Bank of America – wound up paying $5 million for the convention hall itself at the Time Warner Cable Arena, as The Charlotte Observer reported last fall.
The newspaper also caught the first warning sign that the committee would default on the line of credit, noting that Duke had listed it as a loss in its third-quarter report.
Tom Williams, a spokesman for Duke, said that the loss of $10 million was recorded as an accounting requirement and that the company was still hopeful the committee would repay the full loan before it comes due Feb. 28. “We still hope there’s some chance to recover part or all of that money in some fashion,” he said. But, he acknowledged, a company generally counts a loss on a loan “when you think there’s a real likelihood it may not be repaid.”
With a default, the loan would effectively become a donation — a fairly large one given that the total budget for the convention was roughly $31 million.
The Democratic National Committee had no comment.
