The Democratic National Convention is in debt.
And that could cost President Barack Obama or his party some needed campaign cash.
Democrats ended their convention in Charlotte $5 million short of their budget even after being forced to draw down a $10 million line of credit from Duke Energy Corp., according to a Democratic Party fundraiser. That will leave a $15 million bill that eventually will have to be paid by Obama’s campaign or the Democratic National Committee, according to the fundraiser, who spoke on condition of anonymity to discuss internal deliberations.
The Charlotte Host Committee ended the convention with more than $5 million in immediate obligations and may require a direct cash infusion from the Obama campaign to pay vendors, said the fundraiser. The $10 million line of credit to Duke Energy will need to be repaid next year, said a second person familiar with the matter, who also spoke on condition of anonymity. Duke Energy Chairman and Chief Executive Officer Jim Rogers is co-chairman of the host committee.
Those debts could siphon off advertising money in the campaign’s final months, as Democrats face a cash disadvantage.
Republican presidential nominee Mitt Romney, the Republican National Committee and two allied super-political action committees reported a combined bank account balance of $169 million on July 31. That compared with $107 million for Obama, the Democratic National Committee and the pro-Obama super-PAC Priorities USA Action, according to disclosures filed Aug. 20 with the Federal Election Commission.
“It is always easier to raise corporate dollars in advance of a convention because of the visibility and profile that corporate sponsorship can offer,” said Tony Corrado, a professor of government at Colby College in Waterville, Maine, who specializes in campaign finance. “After a convention, once the signs are down and the politicians have left, raising money is a much more difficult task.”
The host committee failed to reach its $36.7 million fundraising goal because the DNC banned direct cash contributions from corporations, which have traditionally underwritten presidential nominating conventions. Republicans didn’t have a similar prohibition for their convention last month in Tampa.
“If they got within five million, considering that they used the line of credit, I think that’s awesome, given the restrictions they had to deal with, ” said Mike Dino, who served as executive director for the host committee in Denver, where Democrats held their nominating convention in 2008. “They should be relieved to be in that range.”