Tuesday, February 26, 2008

Risch's finances

Candidates filed their campaign finance reports at the end of 2007. A look at Jim Risch's is interesting. First, look at the year end filing for 2006. (Click any to enlarge.) You'll note that Risch hadn't paid down his debt from his 2002 Lt Gov race. It was still at $360,000, "plus accrued interest," which his finance guy didn't bother to figure.

By May 30, 2007, 5 months later, the debt was down by $125,000, to $235,000. Still no interest shown.

As you can see below, a payment of $125,000 on campaign debt was made on May 4, 2007. This was a month before Larry Craig was arrested for lewd conduct. At that point, Craig hadn't announced whether he would run for another term, but there was speculation that he might not.

Risch's year end report for 2007 shows some movement. The debt is now shown as $337,872.33. How'd he get to that figure? He finally added interest.

As you see below, Risch paid the debt down an additional $10,000 on October 18, 2007, when he transferred the money to his debt from his Lt Gov campaign cash on hand. He then added in $112,872.33 in interest figured over the life of the loan. Note that Risch announced his US Senate bid on October 9, 2007, 9 days before the paydown of the Lt Gov debt.

This debt might come in handy. Under Idaho law, contributions by a person or PAC to a candidate are limited. However, the same amount that can be given to the campaign for an election can also be given to retire debt. Thus, a person came effectively double a contribution to a candidate if it is to retire debt. As here, where Risch loaned himself the money, any debt retirement goes right into his pocket. He can then use that money for whatever, including self-funded campaign expense.

So, if a person were so inclined, the person (or PAC) could give Risch the maximum for his Senate bid, could donate the max to Risch's campaign for Lt Gov (if he loses the Senate he may well run for Lt Gov again), and could donate the max to Risch's debt retirement. Risch could use the debt repayment to fund his Senate bid, and (I think) his Lt Gov campaign could donate its funds to the Senate campaign. Or, the Lt Gov campaign could just continue to pay down the debt, thereby giving the money to Risch to spend on his Senate bid. Pretty slick, eh?

Update: It occurred to me that this post could be taken as an accusation against Risch, so I thought I'd clarify. I don't see any evidence that Risch is doing anything improper. Even if he were to do as I described, it would be legal. The point is that our campaign financing laws have a large loophole.

Later update: Another point of the post is just to reveal some of the maneuvering a candidate, in this case Risch, does regarding financing.


slfisher said...

awesome analysis. Hope this gets wider distribution.

alan said...

Thanks. I never know what seems to spark interest. I've put up a number of posts about finances, but they don't seem to draw many comments. Of course, I've never had a real "gotcha" either.

Sisyphus said...

If nothing else it discloses the loophole large enough to drive a truck through. Its newsworthy, especially since you did all the work. Good job.

Julie Fanselow said...

Ditto the above. Send a copy of this to Popkey. The traditional media needs to be aware of this and spread the word.