Bank Gives $250K Unsecured Loan to Super PAC (Updated)
In an unusual transaction, a Super PAC has reported receiving an unsecured $250,150 loan from a financial institution to use for making independent expenditures in the 2014 primary elections.
The Mississippi Conservatives , a Republican-oriented Super PAC supporting Sen. Thad Cochran, R-Miss., in the June 3rd Republican primary, reported it had receipts of $717,993 during the first quarter of 2014, including a $250,150 loan from Trustmark Bank in Jackson, Mississippi. Trustmark (NASDAQ:TRMK) is a publicly traded corporation.
The report, signed and filed by treasurer Briuan Perry, indicates Harry Walker, a regional President of the bank, signed the agreement on January 29, 2014. The loan is due on June 3, 2014, and the interest rate (APR) is 2.86%. The forms indicate on page 26 there are no other parties secondarily liable for the debt incurred, and there is no pledged collateral for the loan.
The most unusual aspect of the loan is there are no future contributions or future receipts pledged as collateral for the loan. This may be the first reported unsecured bank loan to a Super PAC, especially to one that was only two weeks old. With no committee track record, and no collateral, it is hard to understand how this loan could have been made in the normal course of business. The committee has only repaid $20,000 of the loan, leaving $230,000 outstanding. Individual donors to the Super PAC include Joe Sanderson (chairman and CEO, Sanderson Farms, MS) $100,000; and Richard Wax (the Wax Company, MS) $50,000.
Donors giving $25,000 each include James Barksdale (President, Barksdale Management Corp., MS); Bollinger Shipyards (LA); Crest Investment Co ., TX); Robert Day (founder, TCW Group, CA); Ergon (MS); Howard Leach (President, Leach Capital, NY); W.D. Mounger (oil and gas investor, MS); Donna Roberts (retired, MS); and Warren Stephens (President, Stephens Inc, AR).
Other selected donors include Haley Barbour (founding partner, BGR Group, MS) $10,000; and Larry Mizel (executive, MDC Holdings, CO) $10,000; among others.
During the quarter the committee spent $591,631 on independent expenditures, all opposing Republican Christopher McDaniel, R-Miss.
5/13 PM Update: A Daily Beast posting indicated Trustmark’s Harry Walker stated this afternoon that there was collateral, and the PAC treasurer Brian Perry stated they were looking into amending their FEC report.
5/14 PM Update: The FEC website does not show any new filings by the PAC. The Trustmark loan is the first and only known bank loan (either secured or unsecured) to a Super PAC (a non-party committee that makes independent expenditures only.)
5/15 PM Update: The treasurer of the Super PAC now says the bank loan was backed by a certificate of deposit, but would not disclose who owns the certificate. see new Political MoneyLine posting.