Fincher updates information on controversial campaign loan
Posted: Thursday, January 13, 2011 9:03 pm
JACKSON (AP) — U.S. Rep. Stephen Fincher has filed new information about a $250,000 campaign loan that was under scrutiny during the election.
The Washington correspondent for The Jackson Sun reports filings with the federal election commission show Fincher obtained the loan in July 2010 from Gates Banking and Trust Co. They say it was secured with $600,000 in collateral, and Fincher paid 6.5 percent interest. He had initially reported the money as a personal loan with no collateral and no interest.
During the campaign, critics questioned how Fincher could have qualified for such a large loan when his financial disclosure statement showed no assets and only $60,000 in farm income. They noted that Fincher’s father served on Gates’ board and that the bank’s chairman had contributed to Fincher’s campaign.
Fincher’s attorney, Elliot Berke, called the problems “honest technical reporting errors.”
He said the loan was initially reported as a personal loan because the bank made it to Fincher, and he then lent the money to his campaign.
He said Fincher initially failed to file the required form explaining the underlying source of the money.
“This whole matter came up at the height of the campaign season and was used to attack Mr. Fincher for political gain,” Berke said. “We immediately began reviewing both the terms of the loan and how it was disclosed to the FEC, and unfortunately that review took time.”
Joseph Sandler, an attorney for Fincher’s Democratic challenger, state Sen. Roy Herron, said the filings substantiate the allegations made by Herron’s campaign.
“The whole idea is to inform the voters of where your money comes from,” Sandler said. “He hid the ball from the electorate, and it’s not chump change.”
Sandler also noted that the loan agreement filing doesn’t include details of how the collateral was secured and how it would have been forfeited had Fincher defaulted.
The agreement says the collateral included Fincher’s 2010 crops, his personal residence and a “non-interest-bearing deposit account.”
A candidate’s personal residence is excluded from disclosure on the annual forms, as are non-interest-bearing accounts. Fincher’s home was appraised at $250,300 last year, according to assessment data available through the state’s Comptroller of the Currency.
An FEC investigation into the loan is still open, but no details are available. Federal law requires such investigations to be kept confidential until a case is resolved.
Information from: The Jackson Sun, http://www.jacksonsun.com
Published in The Messenger 1.13.11