On Thursday, Duke Energy announced that it would forgive a $10 million line of credit made available to the Democratic National Committee in support of its convention that was held in Charlotte, NC on September 3-6, 2012. Such a move was first hinted at on Nov. 8 in an earnings report to shareholders. The DNC used $7.9 million of the available $10 million.
Because Duke can claim the loan as a business expense on its corporate tax return, shareholders will end up losing $6 million on the deal, with the remaining amount potentially being paid for by Duke customers. Duke CEO Jim Rogers told the Charlotte Observer on Jan. 17, “At the end of the day, we’ll do our best to get our money back. But if we don’t, it’s just a contribution we’re making I think for the greater good of our community.”
Duke spokesman David Scanzoni said of the incident, “That’s a (large) sum of money, but it did not have a large impact to shareholders. For most stockholders, it’s not on their radar.”
The situation is exacerbated by the fact that Duke has received a sum of $204 million for smart grid improvements from the federal government during the Obama administration, leading to criticism from government watchdog groups who say that the arrangement between Duke and the DNC raises conflict-of-interest and transparency issues.