Queen City DNC: Broken Promises And Loads Of Debt
Despite repeated assurances from party leaders that fundraising for the Democratic National Convention would meet its budget, coupled with endless promises and pledges to steer clear of corporate cash and lobbyist loot, reports filed with the Federal Election Commission show the Queen City bash came up woefully short on both fronts.
More to the point, it’s become increasingly obvious that two of the local chieftains behind the convention push, Mayor Anthony Foxx and former Mecklenburg County Commissioner Dan Murrey, ran the DNC like a failed bunco scheme from nearly the moment Charlotte was tapped as host city.
That’s when the Democratic National Committee, in tandem with the Obama administration, called for a self-imposed ban on corporate contributions to help fund convention operations. Convention officials, however, found and exploited a loophole in the edict, creating what was essentially an offshore shell account able to tap the deep pockets of big business titans.
Here’s how the flim-flam worked: Parallel to the formation of the DNC host committee, called the Committee for Charlotte and charged with convention fundraising subject to the corporate cash ban, officials created the New American City fund, which was billed as a separate entity and permitted to raise money from corporations for expenses not directly related to the convention, such as promoting the city of Charlotte, funding community projects, and bankrolling parties for delegates and the media.
Yet the two entities were rife with overlap: New American City and Committee for Charlotte shared the same office space, provided rent-free by Duke Energy, and corporate money was used to pay the salaries of the 41 fulltime host committee employees.
The conflation of the two entities reached the highest ranks of oversight: Foxx was both president of the New American City venture and also co-chair of the host committee, while Murrey served as both executive director of the host committee and also treasurer of the New American City fund, which reaped a veritable windfall of corporate cash totaling nearly $20 million with donations from, among others, Bank of America ($5 million), Duke Energy ($4 million), Steven Spielberg’s DreamWorks Studios ($2 million), and AT&T ($1 million).
And at least $5 million from the New American City fund was used to pay for the rental of Time Warner Arena, the main site of the convention and where President Barack Obama delivered his party’s acceptance speech, in blatant violation of DNC officials’ self-imposed ban on corporate money.
But that’s a fuzzy line of distinction, according to Murrey, who earlier this year told the AP that, “I guess it comes down to how you define ‘the convention.’ The distinction we’ve drawn is that there are official convention activities that are in the program, that are gavel-to-gavel, have minutes, the whole bit. And then there is all the stuff that happens outside of that.”
Murrey has since changed his tune, now pointing to an obscure clause in the host committee master contract that allowed for the mixing of funds.
The Charlotte host committee was contractually obligated to raise $36.6 million for the convention, although that number was reduced, officials said, after cost-savings trimmed the budget to just over $31 million. Not that it mattered; the committee was short about $12.5 million of its original benchmark, raising only $24.1 million in cash and in-kind contributions. To make up the balance, the host committee was forced to draw down nearly $8 million of a $10 million line of credit provided by Duke Energy, whose chief executive, Jim Rogers, served as co-chairman of the host committee.
In addition to the Duke Energy loan, DNC officials repeatedly reneged on vows to forgo corporate cash. The host committee exempted millions in donations from unions, millions more worth of in-kind contributions from corporations, and received substantial backing from donors who were anything but “grassroots,” with more than $7 million coming from foundations supported by corporations and from individual donors who gave $100,000 or more: Farallon Capital hedge fund manager Thomas Steyer, for example, kicked in $500,000, five times more than the host committee’s self-imposed limit on contributions; Ogden CAP Properties principal Constance Milstein gave $300,000; eScription CEO Paul Egerman gave $200,000; the Xerox Foundation gave $100,000; and four Indian tribes that run large casino operations – the Eastern Band of Cherokee Indians, the Chickasaw Nation, the Muckleshoot tribe and the Sycuan Band of the Kumeyaay Nation – each gave $100,000.
Fundraising woes and broken promises aside, the host committee didn’t do itself any fiscal favors with the way it mishandled and bungled the money it did raise. Nearly a million dollars was squandered on rent for Bank of America stadium, the venue that went unused when Team Obama decided to move The One’s acceptance speech indoors; while another nearly $400,000 was frittered away for rent on Charlotte Motor Speedway to host the Labor Day CarolinaFest, an event that was moved to uptown Charlotte and which cost another half-million dollars to organize.
All of which helps to explain why the host committee finds itself in an ugly debt hole. The committee has until Feb. 28 to repay its nearly $8 million loan marker from Duke Energy, of which about $7.4 million is owed to Bank of America. The host committee also still lists about $1.8 million in other debt, including about $161,000 owed to the city of Charlotte for convention center operations and shuttle vans for volunteers.
How it intends to square its outstanding debt is anybody’s guess. Ranking party officials have said that neither the Obama campaign nor the Democratic National Committee will help foot the bill, while Duke Energy’s Rogers still contends the company’s shareholders and ratepayers won’t be impacted.
Other than explaining how the debt won’t be paid, officials have gone into virtual hiding, releasing only general statements to the media that focus on what they say was a tremendously successful convention. Foxx, for example, is distributing this gem:
The 2012 Democratic National Convention put Charlotte and North Carolina on the world map, exposing our city and state to thousands of delegates and media, and billions of people around the globe. We promised that the event would be a positive turning point for our city, and it has been. Through the work of thousands and thousands of people, and many partner organizations, we delivered — an event hailed by many as the best convention ever, one that put our community on an international stage, enhanced our ability to recruit new industry and jobs, and came at no expense to city taxpayers.
So relax, citizen, our mayor again promises that local taxpayers aren’t on the hook. And it’s not like, as an integral part of a wholly duplicitous DNC cabal, Foxx has broken any convention promises or pledges in the past.
Right?
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