A local committee in St Paul hosting the US Republican National Convention (RNC) says it is disappointed that state of Minnesota has failed fulfil its promise to provide letters of credit (L/Cs) as financial guarantees for the host city.

In a 21 May letter obtained by the Associated Press, chief executive of the host committee Jeff Larson told Governor Tim Pawlenty and political leaders that the state's failure to offer financial backing in the event of a cash flow shortage "creates a serious risk of breach of our agreement with the RNC".

Lack of guarantee

As the host committee was trying to lure either the Democratic or Republican convention to St. Paul, it was negotiating a package to include a state commitment to back the committee's fundraising with a L/C guarantee.

The state would only pay out under the terms of the L/C should the hosts' experience a cash flow shortage.

No legislation

According to the Associated Press report, Larson says a bill authorising a US$39 million L/C in 2007 did not become law. In 2008 a smaller amount of US$14 million was not approved.

Larson has asked state and local leaders to find alternative ways to fulfil the state's commitment.

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