Lt. Gov. Jeff Colyer’s $500,000 loan to Brownback campaign ignites debate

02/26/2014 7:23 PM

08/08/2014 10:21 AM

Kansas Lt. Gov. Jeff Colyer’s recently revealed $500,000 loan to Gov. Sam Brownback’s re-election campaign has been seen as a sign of confidence, desperation or the times.

Republicans and Democrats spent the past week arguing over the first two possibilities.

National campaign finance experts, though, said Colyer’s New Year’s Eve loan – which appears to be a modern record for a Kansas campaign – reflects the common and growing use of personal fortunes to finance political ambitions.

It’s entirely legal. The Supreme Court has upheld unlimited personal candidate spending in federal races. Most state laws place no direct limits on what candidates can spend on their own campaigns.

But it’s also politically significant, experts said. Not counting the loan, Brownback’s 2013 fundraising total was $1.1 million, roughly equal to the cash raised by Democratic opponent Paul Davis in the past four months.

Brownback may have sought the loan, some experts said, to avoid the appearance of any problems with his campaign.

“When you’re in Brownback’s position – a Republican governor in a Republican state – the perception that a Democrat has pulled even with you is no good,” said Michael Smith, a political science professor at Emporia State University.

Brownback supporters insist the campaign is not in trouble. The loan, they said, simply allows the governor to take his message to voters this winter and spring.

“I am committed to Kansas and doing everything I can to serve this state,” Brownback told the Star in a brief interview about the loan. “We’re going to run a strong campaign to continue to serve the state of Kansas.”

Experts said Brownback and the campaign may think the advantages of extra advertising and travel now outweigh any negative perception that follows the loan. With arguably weak poll numbers for an incumbent, Brownback could use the loan to help convince potential donors that his campaign remains formidable.

“The Colyer contribution was an effort on the part of the Brownback campaign folks to plump up his war chest and make clear that Davis’ efforts weren’t going to upset the re-election apple cart,” said Washburn University political science professor Mark Peterson.

Such loans have become commonplace.

In 2012, for example, federal candidates spent $130 million of their personal fortunes on their campaigns, according to the Center for Responsive Politics.

In 2010, according to the National Institute on Money in State Politics, the top 10 self-funders in state races spent a quarter of a billion dollars on their campaigns. That’s an average of 83 percent of all the funds those candidates were able to raise.

Colyer’s $500,000 loan, by contrast, represented 33 percent of all 2013 fundraising by the Brownback-Colyer ticket.

Some critics worry about the growth of self-funded campaigns.

Additional donors are often asked to repay outsized campaign loans, they say, making lobbyists and special interests the guarantors of an office-holder’s personal debt.

Congress tried to limit the practice in the McCain-Feingold campaign finance law for precisely that reason, said Michael Malbin of the Campaign Finance Institute.

“Contributions, in effect, were going directly into the candidate’s pocket,” he said. “They were being given by donors who were not interested enough in the election to give to the campaign – they were only interested in giving to a winner after the fact.”

Under current law, federal candidates can lend themselves as much as they want. But they can raise only $250,000 after the election to repay those loans.

“Outstanding personal loans worth more than that must be settled with the FEC’s approval,” the Center for Responsive Politics says.

Other critics worry huge personal fortunes can distort campaigns, making it harder for less wealthy candidates to keep pace.

“The self-funder has all this money to run attack ads on the other candidate, which puts pressure on the nonself-funding candidate to spend even more time raising money,” said Viveca Novak, a spokeswoman for the CRP.

Others, though, say unlimited self-funding can actually help democracy by allowing wealthy candidates to challenge well-financed incumbents and by freeing them from dependence on – and at least the appearance of an obligation to – special-interest groups.

“This person is not beholden to any campaign donors except themselves,” said Mary Boyle, a spokeswoman for Common Cause, a campaign finance watchdog and public interest group.

Kansas law doesn’t limit what a candidate can give or lend to his or her own campaign, and some candidates have been eager to spend. In 1990, for example, Wichita Realtor Nestor Weigand provided more than $300,000 to his losing primary campaign for governor.

The Brownback campaign committee isn’t required to publicly disclose the terms of the Colyer loan – its length or any interest rate. Had the loan come from a bank, the terms would be public.

In other states, candidates have loaned themselves money at substantial interest, essentially earning money on their self-financed campaigns. But David Kensinger, a spokesman for the Brownback campaign, said no interest will be paid to Colyer.

“This is,” the aide said in an e-mail, “part of his commitment to the campaign.”

Additionally in Kansas, if an outsider loans money to a campaign committee, it must be repaid before the election or it becomes a contribution. Contributions are capped at $2,000 for the primary and another $2,000 for the general election for statewide offices in Kansas.

Any unpaid loan in excess of those limits would be illegal, said Kansas Ethics Commission director Carol Williams.

But because Colyer is a lieutenant governor candidate, linked with Brownback by law, his loan to the campaign committee can be carried without penalty until the committee closes.

Until the committee closes, though, Brownback and Colyer can raise money to help retire the debt. And if the ticket is re-elected, contributors would know their money isn’t going for campaign signs and TV ads but to repay the campaign’s debt to the lieutenant governor.

Boyle, with Common Cause, called that troublesome.

“When people give money to a candidate, they generally believe in that candidate,” she said. “Giving someone money to pay back a loan, after they’re in office, is a very different story.”

Colyer could forgive the debt and take the loss. Again, because he is on the ticket, the remaining principle would be considered a self-contribution and therefore would not be limited.

The conversation surrounding the Colyer loan did prompt Democrats and Republicans to scour both candidates’ latest financial disclosures, seeking patterns from the donations each received.

Paul Davis reported raising a little more than $1 million in 2013 for his race. No loans were reported, although Jill Docking, his pick for lieutenant governor, gave $2,000. Other members of the extended Docking family contributed to the campaign as well.

He did raise significant contributions from the legal community and from organized labor, including the Teamsters, Locomotive Engineers and the Plasterers and Cement Masons, who gave the maximum $2,000.

Major individual donors include Tom McDonnell, president and CEO of the Kauffman Foundation; and former U.S. Rep. Jim Slattery, who each gave $2,000. Alan Rupe, a lawyer representing students suing the state for inadequate funding, gave $1,000, and former U.S. Rep. Dennis Moore gave $250.

The campaign, though, said voters should focus on the smaller donations. “Paul has very strong support early in this campaign,” campaign treasurer William Kassebaum said.

Brownback reported bringing in $1.1 million from a variety of sources, including doctors, lawyers, accountants, real estate developers and business executives. And he took in money from drug companies, construction companies, wind energy interests, railroads and the aerospace industry.

The state Republican Party also dropped $30,000 into the governor’s campaign.

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