Bloomberg News

Obama Carolina Convention Plans Going Awry for Democrats

May 15, 2012

President Barack Obama with students at the University of North Carolina April 24, 2012 in Chapel Hill. Photographer: Brendan Smialowski/AFP/GettyImages

President Barack Obama with students at the University of North Carolina April 24, 2012 in Chapel Hill. Photographer: Brendan Smialowski/AFP/GettyImages

President Barack Obama’s decision in February 2011 to hold the Democratic National Convention in North Carolina looked like a bold move to reclaim a state he’d won in 2008. Today, it’s more like an awkward fit.

The state’s Democratic Party is mired in a sexual harassment scandal. Voters just approved a state constitutional amendment to ban gay marriage, which conflicts with Obama’s view on the issue. Convention fundraising has been slow, and labor unions tapped to fill the financial gap are angry the convention will be in a city -- Charlotte -- with no unionized hotels and in a state where compulsory union membership or the payment of dues is prohibited as an employment condition.

North Carolina’s 9.7 percent unemployment rate is above the national average and one of the host city’s top employers --Bank of America (BAC:US) -- has announced job reductions. Obama is scheduled to accept his party’s nomination at Bank of America Stadium in September.

“It’s inconceivable that they would move the convention,” said Don Kettl, dean of the school of public policy at the University of Maryland. “But they may wish that they had placed their chips on another swing state.”

North Carolina is one of about a dozen states that Democratic and Republican strategists say are likely to determine the outcome of the presidential election.

Gay Community Protests

Last week’s vote to approve a state constitutional ban on same-sex marriage has triggered calls from gay rights activists to move the convention. Some Democrats also want to include same-sex marriage in the party platform that will be approved at the convention, a potentially headline-grabbing debate.

Former Massachusetts Governor Mitt Romney, the presumptive Republican nominee, is also courting the state’s voters. He visited Charlotte last week and declined to comment about the same-sex marriage constitutional ban. Romney opposes gay marriage.

Obama won North Carolina four years ago, just barely. The state, which hadn’t previously backed a Democrat for president since it went for Jimmy Carter in 1976, gave Obama 49.9 percent of the vote, compared with 49.5 percent for Senator John McCain of Arizona. The margin was about 14,000 votes out of 4.3 million cast.

The decision to hold the convention in Charlotte was meant to signal that Obama planned to compete in some southern and western states that had traditionally voted Republican. Obama, 50, has visited the state 11 times as president, according to a database of his travels maintained by Bloomberg News.

Association With Bank

There are political downsides for Obama in delivering his acceptance speech in a stadium named after a bank at a time when he’s championing the need for tighter regulations and more robust consumer protections.

Last October, Obama criticized a planned $5 dollar monthly fee that Bank of America was going to charge its debit card users. He said that while companies have a right to set fees, he questioned the bank’s explanation for the new charge.

“People have been using financial regulation as an excuse to charge consumers more,” he said at a White House news conference on Oct. 6. Following complaints from consumers, the bank shelved its plans to impose the fee.

Preparations for the Sept. 4-6 convention come as the Democratic Party in North Carolina is dealing with fallout from a sexual harassment accusation.

Sexual Harassment Allegations

State Democratic Chairman David Parker submitted his resignation over the weekend following complaints about his handling of allegations by an ex-worker against a former party director.

Party members rejected his resignation and Parker says he plans to remain in his post, even though he’s been encouraged to leave by Democratic Governor Bev Perdue, who isn’t seeking a second term, the Democratic gubernatorial nominee Walter Dalton and state elected officials.

Also playing out in the state is the federal trial of the state’s former Democratic U.S. senator, John Edwards, who is accused of a scheme to use almost $1 million in campaign contributions to help hide an affair with his pregnant mistress while running for president in 2008.

Brad Crone, a Democratic strategist in North Carolina, called the situation within the state party “disconcerting to a lot of people at the national level and the state campaign” at least in the short term.

“I don’t think the shadow is going to be cast very far in terms of what’s happening today in the first week of September,” he said. “That doesn’t mean that Obama doesn’t have a whole lot of work to do in the state.”

Standing By Charlotte

Obama’s re-election campaign stands by its decision to locate the convention in Charlotte.

“The president won in 2008 by expanding the electorate and expanding the map, so that Democrats would never go back to 2000 or 2004 when all the chips were laid on one state,” said Ben LaBolt, Obama’s re-election spokesman. “Our decision to base the convention in North Carolina is an extension of that vision - a state where no Democrat had won prior to 2008 for decades but all the polls show the president and Mitt Romney tied.”

Unlike previous conventions, the Democrats are trying to fund this year’s gathering without million-dollar donations from corporations. They’ve pressed labor unions to fill in the fundraising gap as part of an effort to raise $36.6 million.

Money Woes

Convention planners are expecting to receive, at most, $4 million from unions this year, less than half of the $8 million contributed by organized labor in 2008, according to a person familiar with the funding strategy who wasn’t authorized to speak on the record about fundraising. The number could eventually be less than $1 million and the Charlotte host committee, the main vehicle for funding the convention, is still short more than $20 million, the person said.

Obama’s campaign is working to connect Jim Rogers, the host committee co-chairman and chief executive officer of Duke Energy Corp. (DUK:US), with Obama’s wealthiest supporters. Rogers has accompanied Obama on his last two $35,800-per-person fundraisers in New York City, most recently last night at the home of Tony James, the president of Blackstone Group LP, according to a person familiar with the matter who wasn’t authorized to speak on the record.

Republicans have no such ban on corporate donations. The host committee for that party’s Aug. 27-30 convention in Tampa, Florida, is taking corporate donations as part of a $55 million fundraising goal.

Crone, the North Carolina Democratic strategist, said the decision to hold the convention in his state doesn’t look as smart as when it was first announced, given the controversies that have erupted since then. Still, he said it was important for the Obama campaign to show its commitment to southern states traditionally dominated by Republicans.

“The gateway to the presidency has to come through North Carolina and Virginia,” he said. “You have to have some states in the South that you’re going to fight in.”

To contact the reporters on this story: John McCormick in Chicago at jmccormick16@bloomberg.net; Hans Nichols in Washington at hnichols2@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net


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