Monday, 19 February 2007
Democrat's Financial Shenanigans?
Pol Watcher's have an interesting tid-bit on the Democratic financial situation. It starts out sounding sweet.
The Kentucky Democratic Party starts the gubernatorial race with about a half-million dollars in the bank, although it still has to pay back most of a line of credit the party took out last fall.
But then we learn the true state of affairs.
Party treasurer David Tandy of Louisville reported that the party's account balance is $495,629.06 and the party's finance committee authorized the party to pay back $250,000 of a $500,000 "line of credit that the party took out late last year." UPDATE: As of the party's 2006 year-end finance report filed with the Federal Election Commission, the state Democratic Party still had a debt on that credit line of $502,989.75. Once the party makes that payment of $250,000, it would still owe $252,989.75 (plus whatever additional interest) and would have $245,629.06 still in its accounts.
The Democrats have no money. In fact, they have a negative balance when the party loan is taken into account. Wait a minute! I remember writing about the Democrats taking out a $500,000 loan last year. I went back to the source article and found these interesting morsels.
An infusion of $500,000 could help the party back its candidates as the Nov. 7 election nears. Much or all of that money could be paid back with proceeds from an Oct. 24 fund-raiser in Louisville, featuring former President Bill Clinton.
Hmm, that is interesting? The Democrats borrowed a half million dollars as a bridge loan until the Hillary fund raiser. But they didn't pay back the loan after the fund raiser. Which meant they carried the debt through the election. Does that mean that the loan was a campaign donation by whoever cosigned the loan? If so doesn't that break the legal donation limit of $1,000 a person. The original article brings up additional questions about the legality of the loan.
"I kind of understand the strategy for needing the money," said O'Neil, who sits on the central committee but does not vote. "But I would be curious to see the legality of a state party taking out a loan that might be signed for by one person."
For example, if the party defaults and that one person is liable, $500,000 is well more than the state contribution limit of $1,000, he said.
Does anyone else think this smells? It might be worth an investigation to determine the legality of such a move.
