Duke Energy wont be repaid the $10 million line of credit it guaranteed for Charlotte to host last years Democratic National Convention, the company confirmed Thursday.
As the credit line came due, Duke made official what it had signaled to shareholders in an earnings report last November. Because Duke can claim the money as a business expense for tax purposes, shareholders will foot $6 million of the cost.
The DNC host committee struggled to raise money under fundraising rules set by the White House that banned corporate cash contributions. By last October, a month after the convention, it had raised $24.1 million of the original $36.6 million goal.
Dukes financial support of Charlottes biggest event became a political football soon after the credit guarantee was announced in early 2011. Sidewalk protesters from FreedomWorks, a conservative group, waved Fire Jim Rogers signs as Dukes CEO presided over the companys annual meeting that spring.
Some shareholders also objected.
Concord stock owner Bonny Stilwell questioned Rogers, who led fundraising for the host committee, about the line of credit at an August 2011 meeting to vote on Dukes merger with Progress Energy.
If it was something he wanted Duke Energy to do, she said then, it should have been his $10 million and not the shareholders.
Duke spokesman David Scanzoni said the company heard from few shareholders. The $10 million took 1 cent off Dukes 2012 earnings, when the nations biggest utility earned $1.7 billion.
Thats a (large) sum of money, but it did not have a large impact to shareholders, Scanzoni said. For most stockholders, its not on their radar.
Rogers has maintained Dukes financial support was for the good of a city making its star turn before an international audience, and so good for Duke. He has said the company would have also supported a Republican convention.
At the end of the day well do our best to get our money back, he said in a January interview. But if we dont, its just a contribution were making I think for the greater good of our community.
Dan Murrey, the host committees executive director, could not be reached for comment.
Dukes convention support wasnt limited to the credit line.
The company donated $1.5 million in in-kind contributions to the host committee for office space, furniture and other expenses. Rogers personally gave $339,000 in cash and in-kind services, including the hiring of a fundraising assistant.
Duke also gave $4.1 million to a separate fund that could accept corporate money to put on parties boosting the city.
Its legal for corporate donors to give cash or in-kind contributions to host committees, Federal Election Commission rules say. The rules define the committees purpose as encouragement of commerce in the convention city, as well as the projection of a favorable image of the city to convention attendees.
At the end of the day, it is legally a contribution the entity can accept, said Paul Ryan, senior counsel at the Campaign Legal Center, a Washington, D.C., nonprofit that analyzes campaign finance issues.
The Democrats made it harder on Charlottes hosts by banning the corporate donations that normally support conventions. Conventions have little appeal to individual donors other than hometown boosters or corporations seeking access and good relations with political officials, experts say.
Some watchdog groups charged that Dukes money would buy the highly-regulated company unfair influence with Obama administration officials.
Duke and Progress Energy each got $200 million in federal stimulus money for smart grid improvements in 2009. Dukes Cliffside power plant won a $125 million advanced coal tax credit from the Department of Energy, and a plant under construction in Indiana got $460 million in federal, state and local incentives.
Duke said it expected no favoritism from the administration, noting it had agreed with Democrats on some issues but sided with Republican positions on others.
Henderson: 704-358-5051 Twitter: @bhender
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