OT(?)
Friday April 13 1:46 AM ET
Cantwell Finances Take Hit
By KATHERINE PFLEGER, Associated Press Writer
WASHINGTON (AP) - Maria Cantwell has gone in a year from a mega-millionaire Senate candidate some accused of trying to buy a seat to a senator who needs help paying off campaign debts. Now there are questions about whether she bent campaign finance laws when she borrowed $3.8 million.
A former executive at Internet media company RealNetworks, the Washington Democrat's stock in the company has taken a huge hit on Wall Street, losing about 80 percent of its value in recent months. When a $3.2 million loan came due last month, she was unable to pay and had to renegotiate the terms.
Such a scenario would have been unthinkable last year, when Cantwell was worth as much as $80 million and was on her way to spending about $13 million of her own money in upsetting Republican incumbent Slade Gorton.
Campaign finance reform was her signature issue. Rather than take unregulated donations to the party from unions, corporations and individuals, she sold RealNetworks stock and filled her campaign coffers with $6.5 million. Her wealth also helped her obtain favorable interest rates on two credit lines from Minneapolis-based U.S. Bank.
Cantwell pledged as collateral her $375,000 home in Edmonds, Wash., to set up a $600,000 credit line with the bank, according to documents filed with the Federal Election Commission (news - web sites). However, FEC rules require that collateral for a campaign loan be at least as much as the loan.
Larry Noble, former FEC general counsel, said Cantwell could meet the ``fully collateralized'' standard other ways, such as guaranteeing the loan with another account or other assets. But loan papers filed with the FEC do not indicate Cantwell had any such arrangement.
``If she doesn't have those, it clearly raises a question,'' said Noble, now executive director of the Center for Responsive Politics, a government watchdog group.
Cantwell referred all questions about the loans to spokesman Michael Meehan.
``The bank takes a look at the financial assets of the borrower. Clearly, Senator Cantwell had assets anywhere between $40 and $80 million at the time of the loan,'' Meehan said. ``This is a judgment a bank makes.''
Meehan directed further questions to U.S. Bank, which for privacy reasons would not acknowledge Cantwell is a customer.
For a $4 million credit line last September, Cantwell pledged as collateral RealNetworks stock that at the time was worth $5.6 million. She ended up borrowing $3.2 million.
On both loans, Cantwell received the lender's prime interest rate, potentially saving her tens of thousands of dollars.
FEC rules prohibit candidates from receiving a more favorable rate than another bank customer would get for the same type of loan. Noble said the FEC could ask Cantwell to show she got the rate in a usual course of business.
``They are going to have to show that this is what other people are getting,'' he said.
Under FEC rules, Cantwell should have disclosed the complete terms of both credit lines by mid-October. But she didn't do so until Jan. 31, after getting two letters from the FEC.
``In a very basic way she cheated,'' Washington state GOP Chairman Chris Vance said. ``That gave her an unfair advantage'' in a race that was decided by just 2,229 votes.
Meehan denied the delay gave Cantwell any advantage.
``It was clear to almost everybody in the state of Washington that she was largely self-financing her campaign,'' Meehan said. In the year-end report, ``the campaign submitted amendments because it inadvertently had not filed a couple of the sheets of paper.''
The FEC can investigate campaign loans and impose civil penalties for violations on a ``case-by-case'' basis. It's not known whether Cantwell is under scrutiny because the FEC cannot reveal whether it is conducting an investigation until the case is finished.
Cantwell had gotten off to a rocky start. Aside from her finances, she was slow to hire a staff, including senior positions.
Now, Cantwell is working to eliminate her $4.2 million campaign debt and is getting help from Senate colleagues. She has about $1.25 million left to pay off as of April 1, Meehan said.
Sen. Hillary Clinton (news - web sites), D-N.Y., is opening her posh home on Embassy Row on April 25 for a Cantwell fund-raiser. Last month, Sen. John Edwards (news - bio - voting record), D-N.C., hosted a fund-raiser at his home, also on Embassy Row. Guests arrived with invitations directing them to ``Please make checks payable to Cantwell 2000 Debt.''
``We've made great progress,'' Cantwell said of her debt reduction. ``It is something that we will have taken care of in short order.''
dailynews.yahoo.com |
