The Democratic National Committee will not have to repay the full $10 million line of credit from Duke Energy -- the country’s largest electric power company -- used to fund the 2012 Democratic National Convention, contradicting the committee’s self-imposed prohibition on corporate funding for the Charlotte-based event.
Duke Energy, which is headquartered in Charlotte, announced Thursday that it would forgive the Democratic Party of its unpaid loans, instead leaving shareholders to cover $6 million, according to the Charlotte Observer.
Duke spokesman David Scanzoni defended the company’s move to the Charlotte Observer, explaining that the impact on stakeholders was minimum at best.
“That’s a (large) sum of money, but it did not have a large impact to shareholders,” Scanzoni told the publication. “For most stockholders, it’s not on their radar.”
Scanzoni told The Huffington Post Friday that Duke’s involvement in the DNC was an “economic development event” for Charlotte.
The DNC did not respond to a request for comment from The Huffington Post.
In 2011, the DNC made an unprecedented decision to ban direct corporate donations to the host committee -- co-chaired by Duke CEO Jim Rogers -- in an effort to reinforce the party’s middle-class, grassroots messaging.
“This convention and the new way it is being financed will allow more people from all over the country to be involved in this historic event,” Brad Woodhouse, the Democratic Party communications director, said in a 2011 statement. “This unprecedented step is another sign that things are continuing to change under President Obama’s leadership and that this will, in fact, be the ‘People’s Convention.’”
After struggling to raise money, the DNC backed away from its corporate contribution ban, using the host committee to establish a separate -- but closely affiliated -- entity named New American City, Inc. The new entity openly solicited high-dollar donations, including corporate contributions, to cover convention costs. Duke Energy was one of the three largest donors to the group.
Although it is legal for corporate donors to give financial and in-kind contributions to convention host committees, Duke’s decision to dismiss the DNC’s massive debt brought accusations of political hypocrisy and corporate favoritism.
Reince Priebus, chairman of the National Republican Committee -- called out Democrats over Twitter on Friday, calling the loan forgiveness a “$10 Million Payday” for the DNC.
Watchdog groups are also skeptical of the once-loan-turned-gift, claiming that the $10 million line of credit gives the company, including Rogers, unfair influence in the Obama administration.
Their skepticism is not unfounded: last fall, The Huffington Post reported that, “If the convention goes without a hitch, it would go far to solidify Rogers’ position within the ranks of the political elite -- and help him leapfrog onto the shortlist of potential administration officials Obama could appoint in a second term.”
The report continued, “All of this rubbing elbows provides Duke Energy with enormous intangible benefits. As Rogers told the Wall Street Journal this spring, ‘If you’re not at the table, you’re going to be on the menu.’”
Scanzoni told HuffPost that the company was not attempting to win favor with the Obama administration via its involvement in the convention.
“It was an economic development investment with great dividends for the city -– no political connections at all," he said.
In addition to the $10 million loan and $4.14 million contribution to New American City, the Charlotte Observer reported that Duke Energy also donated $1.5 million in in-kind contributions toward the Democratic convention. Rogers personally gave $339,000 -- which included a fundraising assistant marked as an in-kind donation.
Will Wrigley contributed reporting.