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Members of Congress have discovered another way to err on their annual financial disclosure reports.
More than a dozen Members have failed to disclose personal loans that they made to their campaigns — often omitting tens of thousands of dollars in assets from their reports in the process, a Roll Call analysis found.
The review, which relied on campaign finance reports and financial disclosures filed with the House and Senate, included only current Members.
According to an instruction manual published by the House Ethics Committee that accompanies the annual disclosure form, Members and candidates must disclose whether they have issued any loans valued at more than $1,000 to their election campaign.
“Loans to a campaign committee must be disclosed if interest is being charged,” the manual states. The loans are categorized as assets, and Members list such loans along with items such as saving accounts, stocks, bonds and investment real estate.
The Senate Ethics Committee’s version of the instructions does not include a specific reference to campaign loans, although Members are instructed to disclose any “accounts receivable,” which include such loans.
It is not unusual for candidates to loan their campaigns money, and records provided by the Federal Election Commission show nearly 1,000 candidates did so in the 2010 cycle, including about 80 Members of the 112th Congress, whose loans ranged in value from $600 to almost $600,000.
Most of those lawmakers did not charge their campaigns interest for the loans, which is not required when the Member makes the loan, rather than a bank. Among the handful that did charge interest, however, a half-dozen failed to report those loans on their financial disclosure forms as required.
More than a dozen additional Members had similar reporting discrepancies based on FEC reports and financial disclosures filed with the House or Senate for elections dating to 2002.
Rep. Laura Richardson reported issuing her campaign three loans totaling $77,500 in 2007. Campaign finance reports show each loan carried a .0775 percent interest rate, and the California Democrat received $9,542 in interest payments when the loans were closed in 2009.
The loans do not appear on her financial disclosure reports for any of those years.
FEC records indicate Rep. Paul Broun’s campaign paid the Georgia Republican nearly $29,000 in “operating expenses/loan interest” in 2010. Although that income would not appear on his most recent financial disclosure, which covers calendar year 2009, the loans that he made should have appeared on a prior financial disclosure if he was charging interest.
According to FEC records, Broun made at least three loans to his campaign in the 2008 cycle, although those files indicate that Broun did not charge interest on those loans, so he was not required to disclose them on his personal financial report.
Broun’s office did not respond to telephone calls or an e-mail for this article.
Freshman Rep. Larry Bucshon loaned his campaign $55,000 in March 2010, which has since been repaid along with $1,500 in interest.
The Indiana Republican did not list the loan on his most recent financial disclosure, which covered January 2009 through April 2010.
“It was an unintentional mistake that has been reconciled and clarified in an amended disclosure form that has been submitted to the Office of the Clerk,” Bucshon spokesman Matthew Ballard said.
Although the details about candidate-funded loans and related payments are publicly available via campaign finance reports, Campaign Legal Center Policy Director Meredith McGehee said omitting such information from personal financial reports is troubling.
“You’re not really getting a full picture of the magnitude of the assets that a Member of Congress or a federal official has,” McGehee said of the financial disclosures. “It is often a tool of those who want to muddy up the picture to keep those pieces in as many places as possible.”
Members offered a variety of explanations for the omissions, and several cited errors on their campaign finance reports, stating that they should have listed a zero percent rate or that they had no intention of paying interest to themselves.
In his most recent campaign finance report filed in January, Rep. Francisco “Quico” Canseco reported outstanding loans worth more than $900,000 from the 2008 election cycle, each with a .05 percent interest rate.
The Texas Republican reported no loans on his most recent financial disclosure report. But a Canseco aide said that the FEC reports were filed in error and that the interest rate on those loans should be zero.
Members are not required to disclose loans to their campaigns on their annual financial reports if they do not receive interest from the loan.
Rep. Lou Barletta similarly reported nearly $88,000 in outstanding loans from the 2002, 2004 and 2006 cycles, each with interest rates of .0525 percent. The loans did not appear on the Pennsylvania Republican’s most recent personal financial disclosure report.
But Barletta’s campaign manager, Lance Stange, said no interest has accrued on any of the loans and cited the reported interest rates as a “clerical error.”
“Congressman Barletta’s financial disclosure statement is correct as it is written,” Stange said.
Rep. Michael McCaul (R-Texas) also reported making a $500,000 loan to his campaign in September 2009, all but $50,000 of which had been repaid at the end of the 2010 cycle, according to an FEC report filed in January.
Although the interest rate for that loan is listed in the FEC report as “floating,” McCaul spokesman Mike Rosen said, “The McCauls don’t charge interest when they loan money to the campaign.”
Rep. Mike Capuano (D-Mass.) made four loans totaling $90,000 to his now-defunct Senate campaign committee in late 2009. Although each of the loans lists a 4 percent interest rate, they did not appear on his financial disclosure for that year.
“Congressman Capuano properly lists the outstanding loan he personally made to his campaign and lists an interest rate simply because FEC rules require it,” said his spokeswoman, Alison Mills. “He has never intended to pay himself interest, has not done so and will not do so in the future.”
An attorney who specializes in campaign finance, who asked not to be identified, said Members do not have to accept interest, even if they list it on their campaign finance reports.
“My experience is that many candidates don’t actually pay the listed interest to themselves — they just forgive it after their last campaign, which is a personal contribution to their campaign,” the attorney said.
But individuals familiar with the House ethics process said the disclosure process is not triggered by whether a Member actually receives interest payments, but merely by whether the lawmaker charges an interest rate.
Correction: March 21, 2011
The article incorrectly stated that Rep. Lou Barletta (R-Pa.) did not report personal loans on his campaign finance report. He did not report them on his most recent personal financial disclosure report.