Companies Pay $20 Million to Fund Democratic Convention

Companies including Bank of America Corp. and Wells Fargo & Co. (WFC) have contributed $20 million toward the cost of the Democratic National Convention, helping fund an event that Democrats initially said wouldn’t accept corporate money, according to two people familiar with the matter.

Organizers of this year’s convention in Charlotte, North Carolina, turned to corporations after the city’s host committee struggled to reach its $36.7 million fundraising goal, according to the people, who requested anonymity.

Last year, the Charlotte host committee set up a separate entity called New American City Inc., to take corporate cash and to which Bank of America and Wells Fargo contributed, according to the people. The two banks were on a list of corporate donors released Sept. 1 by the host committee that also named AT&T Inc. (T), US Airways Group Inc. (LCC), Duke Energy Corp. (DUK) and the law-and- lobbying firm McGuireWoods LLP.

After saying in February 2011 they wouldn’t take corporate money, Democratic Party leaders and convention organizers have grappled with how to cover the estimated $52 million cost of the event, which will culminate Sept. 6 in President Barack Obama’s renomination acceptance speech.

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Duke Energy Chief Executive Officer Jim Rogers, co-chairman of the host committee, “has said that he secured $10 million to $11 million from local corporations from Charlotte,” said Tom Williams, a spokesman for Duke. “He has been working hard to build on those numbers to bring in money” for the convention, Williams said.

Fundraising Target

“We hit our fundraising target and have the resources we need to host a successful convention,” said Kristie Greco, a spokeswoman for the Democratic National Convention Committee.

Suzi Emmerling, a host committee spokeswoman, didn’t respond to a request for comment. Larry DiRita, a spokesman for Charlotte-based Bank of America, declined to comment, while a Wells Fargo representative didn’t immediately respond to requests for comment.

Party officials met to discuss the convention’s budget on Sept. 1, three days before official programming began, in an indication of how cash-strapped the three-day event is, according to one of the people, who spoke on condition of anonymity.

One way to cut costs, said the people, would be to switch the final night’s event from Bank of America Stadium to the Time Warner Cable arena, where the first two nights’ events will be held. The arena is an alternate site for the Sept. 6 acceptance speech in case of inclement weather.

‘Rain or Shine’

The Obama campaign has insisted that possible severe weather won’t force them to move Obama’s acceptance indoors from the larger outdoor location of Bank of America Stadium, home of the National Football League’s Carolina Panthers.

“It will be there rain or shine,” Ben LaBolt, Obama’s campaign spokesman, told reporters yesterday in Charlotte.

Charlotte Mayor Anthony Foxx, co-chairman of the host committee with Duke’s Rogers, said while the group has had difficulties in raising money, the event will be fine.

“We can’t have it if we don’t have the resources,” Foxx said in an interview on Bloomberg Television’s “Political Capital with Al Hunt.” “So the fact that we’re having it, we’ll have a great convention.”

Rogers “has worked tirelessly to help us bring the convention to the city and to make it successful,” Foxx said.

Republican Convention

Republicans didn’t impose similar fundraising restrictions on the host committee raising money for their convention held last week in Tampa, Florida. The host committee’s website identified Chevron Corp. (CVX) and Microsoft Corp. (MSFT) among its corporate benefactors. The Tampa and Charlotte host committees must report all of their donors and the amounts to the Federal Election Commission after the conventions have ended.

In late June, Democratic convention organizers sought to contain costs by canceling a convention kickoff event at the Charlotte Motor Speedway. In January, Steve Kerrigan, chief executive officer of the convention committee, announced that the convention would be shortened from four days to three and that Obama would deliver his acceptance speech in the almost 74,000-seat Bank of America Stadium.

That decision, including the expense of busing in out-of- state Obama supporters to fill the stadium, added costs to a convention already struggling to raise money under restrictions imposed by the president’s campaign.

In February 2011, the Democratic National Committee announced that the Charlotte convention wouldn’t rely on corporate contributions, which is how conventions have traditionally been funded.

Convention ‘Ownership’

“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, to have ownership of this convention and help fulfill the president’s vision for moving the country forward,” said Brad Woodhouse, a Democratic National Committee spokesman.

In May 2011, Democratic convention planners registered New American City to “‘hire the staff and raise the funds necessary to support the two nonprofit organizations that have already registered with the commission as host committee for the 2012 Democratic National Convention to be held in Charlotte, North Carolina,’’ according to FEC documents.

New American City, which was initially charged with raising $13 million, was asked to find another $7 million, bringing its total to $20 million, according to the people, who requested anonymity.

Strict Rules

Foxx is president of the second committee and the treasurer is Dan Murrey, who also serves as executive director of the Charlotte in 2012 Convention Host committee, according to the FEC registration.

Democrats imposed strict rules on how corporations could contribute to the Charlotte host committee and barred donations from any banks that received, and failed to repay, bailout funds from the Troubled Asset Relief Program. It would accept in-kind contributions from corporations and cash from corporate foundations.

In May, the Democratic convention returned $50,000 in gift cards donated by Wal-Mart Stores Inc. (WMT) after the Bentonville, Arkansas-based company was accused of bribing Mexican officials to speed expansion there. The cards were supposed to be used for office supplies.

To contact the reporters on this story: Hans Nichols in Washington at hnichols2@bloomberg.net; Jonathan D. Salant in Washington at jsalant@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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