Utility’s Role in Convention Tests Obama
CHARLOTTE, N.C.
— When Charlotte first emerged as the top contender to host the Democratic
convention, its lead cheerleader was James E. Rogers, the outspoken chief
executive of the hometown utility, Duke Energy. He
promised to be a public face and a private fund-raiser for the effort.
Mr. Rogers has
not only solicited donations but has also arranged for his company to donate
office space and guarantee a loan to the convention committee.
He cited local
pride as motivation, but Duke Energy, which became the nation’s largest utility
with its recent merger, also had a business incentive. The company, which has
supported the energy initiatives of President Obama and Congressional
Democrats, has received federal economic stimulus money and alternative-energy
grants. Its financial future stands to be greatly influenced by the sorts of
environmental proposals the president’s party has vowed to pursue.
The
intersection of Duke Energy’s interests and its support for the convention is
testing Mr. Obama’s pledge to free the party’s gathering from business and
lobbyist support.
The situation
is a microcosm of a larger issue that Mr. Obama’s campaign has faced. It has
tried to balance the president’s longtime pledge to reduce the influence of
special interests in politics with his real-world need to raise the huge
amounts of money that modern campaigns require, at times in ways that seem to
contradict those pledges.
Republicans are
accusing the convention organizers of hypocrisy. Some Democrats are saying the
White House set itself up for the charges by making a vow that was bound to be
difficult to keep and that would risk alienating its business supporters.
Duke has found
its task a thankless one. Some of its conservative shareholders have accused
the company of getting too cozy with the administration. Some Democrats have
complained that Mr. Rogers has not done enough to raise the money necessary for
the convention. And whatever Mr. Rogers’s fund-raising success, it was not
enough to stop a Democratic group from implying nefarious connections between
the utility and the Republican candidate for governor here, Pat McCrory.
It is hardly
what Obama campaign officials envisioned last year when they sent a note to
supporters from Michelle Obama promising “a different convention for a different
time.”
Some longtime
Democratic fund-raisers viewed the restrictions as naïve at best, given that
the sources of more than two-thirds of the money raised for the 2008 convention
would be banned now, based on a study by the nonpartisan Campaign Finance
Institute.
“There’s an
inconsistency in trying to be purer than Caesar’s wife by not taking corporate
money,” said Bob Farmer, a treasurer of Senator John Kerry’s 2004 presidential
campaign. “It just makes it harder on his fund-raising team, and maybe they
even have to cut some corners to make sure their coffers are filled.”
Campaign and
convention officials said that they had received money from an “exponentially”
greater number of individual donors to the convention as intended and that they
had indisputably reduced their reliance on corporate help.
Neither party
is reporting blockbuster convention fund-raising. Big donors now tend to be
less interested in giving money for what is viewed as a big party than in
giving it directly to the campaigns or to the outside groups playing such a big
role this year. Republicans and Democrats alike say that they will meet their
budgets but that they will probably have to continue seeking donations to the
end.
The parties
receive $18.2 million in public financing, but their programs are calling for
about triple that. Neither would share fund-raising figures or details, which
do not have to be made public until later this year.
Still, the job
is that much easier for Republicans, who have had no rules against accepting
corporate money for their convention in Tampa, Fla.
“From an
economic development perspective,” said Ken Jones, the president of the
Republican convention’s host committee, “this helps the community showcase
itself to the world and helps create jobs, and these are laudable goals,
whether it’s corporate or individual money.”
Duke Energy has
a lot riding on administration policy. The company was awarded $204 million in
stimulus money in 2010 to modernize its power grids and a $22 million grant in
2009 to develop wind energy technologies, following
similar incentives from the Bush administration. Far more important would be
any aggressive move to address concerns about global warming by
changing the way emissions are regulated.
Duke split with
much of its industry to support the “cap and
trade” system that House Democrats unsuccessfully sought to enact early in
Mr. Obama’s term. It was part of a coalition of like-minded corporate and
environmental groups that helped develop the approach.
Mr. Rogers has
said he joined the effort to protect the interests of his company and its
customers, arguing that he was compelled to do so given that Duke’s reliance on
coal would potentially increase its
exposure to the legislation’s costs. But at a meeting in May 2011, a
shareholder activist, Thomas Borelli, accused Mr. Rogers of “joining President
Obama’s war on fossil fuels” and suggested that Mr. Rogers was angling for a
job in the administration by helping the convention, which he denied.
In an
interview, Mr. Rogers said he expected to receive no favoritism in return for
Duke’s contributions. “I’m doing this because it’s great for Charlotte, and
it’s great for North Carolina,” he said.
His cooperation
was not enough to persuade a Democratic group, North Carolina Citizens for
Progress, to heed Duke’s call to drop an advertisement implying that Mr. McCrory inappropriately did the utility’s bidding while
splitting his time as Charlotte’s mayor and a Duke Energy development
executive.
Nor has it
insulated Mr. Rogers from Democratic criticism that a state investigation into
Duke’s recent merger with Progress Energy has distracted from his fund-raising
commitments.
Mr. Rogers’s
supporters insist that he has kept pace, even as they acknowledge that the
fund-raising restrictions pose challenges.
Mr. Rogers said
he did not learn about the rules until after Charlotte had been all but
announced as the host. “From the beginning of time, conventions have been
funded by corporations, by PACs, by lobbyists,” Mr. Rogers said. “And so we
went into this thinking we would do that in that traditional way.”
But, he added,
“we have taken the challenge, and we are working hard to raise the money under
this new set of rules.”
Yet those rules
have allowed Duke to contribute in other ways. The company guaranteed a $10
million credit line to the convention committee, money that would have to be
paid back but raised questions nonetheless. And it donated several floors of
prime uptown office space to the convention.
That sort of
“in kind” contribution is allowed under the Democratic guidelines. But
advocates for tighter limits on corporate influence question the difference
between donations of cash and real estate.
“I don’t see
the distinction,” said Melanie Sloan, executive director of the nonpartisan
group Citizens for Responsibility and Ethics in Washington. “It’s just a way to
try and have your cake and eat it too.”
Prompting
further charges of hypocrisy from Republicans, organizers started another fund,
New American City, that accepts direct corporate donations, including from
Charlotte companies like Bank of America and Duke itself. Planners said the
fund was primarily for events outside the convention hall, like the opening
party for the news media and a Labor Day festival open to the public, giving
local companies a role in promoting their city.
Mr. Rogers said
he could handle the 360-degree criticism.
“I kind of
understand the sport, and you know, no good deed goes unpunished,” Mr. Rogers
said. “I guess it just goes with the territory.”
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