Duke Energy CEO Rogers Plays Politics With Shareholder Money; $10M Credit Line for Democrats
Well, the second-largest banking city in the nation won the rights to host the Democratic National Convention in 2012, so you think the big TARP beneficiaries based in Charlotte might be the ones to step up to guarantee the funds for DNC to do its thing. You know, maybe Bank of America, which is the largest financial institution by assets in the country. Or Wachovia, now Wells Fargo, which has a lot of civic pride and survived thanks to the government intervention.
But no, it's not the big bankers who have the Obama administration to thank for their survival who have offered to back his reelection party. Instead it's the carbon-capping man, that Climate Action Partnership legend, yes, it's Duke Energy's CEO Jim Rogers:
Fifth Third Bank has agreed to extend a $10 million line of credit to help Charlotte organizers host the Democratic National Convention in 2012.
Charlotte-based Duke Energy Corp. agreed to secure the loan on the organizing committee's behalf, Duke spokesman Tom Williams says. He says the host committee, known as Charlotte in 2012, shopped for the loan and then asked Duke to serve as the guarantor. Duke CEO Jim Rogers is leading fund-raising efforts for the convention.
News reports emphasize that if the DNC defaults on the loan, that Duke's shareholders and not ratepayers would be on the hook, as though it's better for those who invested their 401k to lose money for a political cause. But Williams justifies that by saying it's for the greater good:
"We stepped in to do it as a way to land this convention and support this community," Williams said. "When our region is successful, Duke is more successful."
Duke will soon be the largest utility in the nation, after its merger with Raleigh-based Progress Energy is completed. So not only has it ingratiated itself with the Obama administration and Democrat Senate and House (when Nancy Pelosi was still in control), but it is also angling to return the North Carolina General Assembly back into Democratic hands while keeping the party's governor, Beverly Perdue, in office. Before Nov. 2010 Tar Heel Democrats implemented some of the most aggressive renewable energy programs in the Southeastern United States.
Duke is also trying to build a new nuclear power plant in South Carolina that would require federal approval, and has plans for others. He told the North Carolina Chamber of Commerce two weeks ago:
"As we wait for Washington to break its gridlock and deflate its deficit bubble, we need to continue to modernize our power infrastructure and build more efficient sources of generation. We need to innovate and push ahead, and one of the keys to moving forward is new nuclear power.
"New nuclear generation is an important part of our decarbonization strategy because it's the only source of carbon-free, base-load power."
Taxing carbon dioxide via a cap-and-trade scheme, which Rogers advocates, puts Duke at a competitive advantage over other utilities that depend more on coal-fired power -- especially in the Southeast. So he still plays nice with the Obama Administration despite the president's waning popularity.
"Duke may not be angling for a particular payback, but certainly they are currying favor with the Democratic Party," said Sheila Krumholz, executive director of Washington's Center for Responsive Politics. "If it buys goodwill without having to spend a dime, Duke will feel it's been a good deal for them. Their shareholders may not like the risks."
Given what Rogers told the Chamber of Commerce about a "new" type of capitalism, shareholders may not like his leadership much anymore either:
"Purpose-driven capitalism is really an old-idea in a new suit. It's the recognition that business has a role to play in society beyond simply driving shareholder returns. Business serves a wide array of stakeholders, from customers and employees, to business partners, the government, and our communities. And I believe the true value of a business can only be measured in relation to its impact on its wide array of stakeholders, not just earnings per share."
The "purpose-driven" capitalism that Rogers espouses looks a lot like crony capitalism instead, which is the favorite kind the Obama Administration likes to practice.
Paul Chesser is an associate fellow with the National Legal & Policy Center and is executive director for American Tradition Institute.