It began on a golf course.
That’s where textile executive George Moretz and now-Rep. Robert Pittenger, R-N.C., forged a friendship during the early 2000s. The two belonged to Grandfather Golf & Country Club in Linville, North Carolina, a club where elite clientele pay up to $65,000 for memberships.
In 2008, Pittenger ran for lieutenant governor. As election day loomed, Pittenger loaned his own campaign $1.2 million, on top of $500,000 his wife, Suzanne, had already sunk into his effort. It didn’t matter: He lost anyway.
Now, with more than $1 million tied up in a failed campaign, Pittenger seemingly needed money. But he didn’t go to a bank. Instead, he went to Moretz, who had already contributed $7,250 to Pittenger’s failed effort, and in 2009, he borrowed hundreds of thousands of dollars from him.
When Pittenger ran for Congress and won in 2012, he still owed Moretz between $250,001 and $500,000. (Loan values are reported in broad ranges.)
Pittenger isn’t the only member of Congress with such generous friends.
A review of mandatory personal financial disclosure forms filed by all current members of the House and Senate reveals at least 19 have accepted loans from organizations or moneyed individuals instead of a bank or traditional financial institution. Often, these organizations and individuals rank among the lawmakers’ key political supporters. In two of these cases, the loans were made to members' spouses.
Two of the loans were made in the early 1990s; the rest were made in 2003 or later. While two of the congressional members in question have recently paid off their loans, the other 17 or their spouses remain in debt to their benefactors. The loans range in value from $15,000 to $5 million.
Some of the members in question borrowed the money before being elected to Congress, effectively indebting them to wealthy benefactors during their initial days and months as elected federal officials.
There’s nothing illegal about such loans, even when the lender is also a campaign contributor. And there’s no explicit evidence of a quid pro quo in which legislative action was taken in exchange for the loan. But government watchdog groups and others say such arrangements raise serious concerns about possible conflicts of interest.
A review of campaign finance data revealed that at least seven of the members with non-bank loans also received campaign contributions from their lender.
That circumstance “raises the issue that this loan is no longer just an impartial business transaction,” said Craig Holman, government affairs lobbyist for Public Citizen, a non-partisan government watchdog group. “It strongly suggests that the source of a loan has a vested interest in the lawmaker.”
The practice is bipartisan: 13 Republicans and six Democrats (or their spouses) have accepted such loans, including two members who have guaranteed loans from a company or political committee.
Can money buy love?
Some of the loans identified during the review of the financial disclosure forms didn’t come from campaign contributors or others with clear business interests before Congress.
Some, such as in the case of Rep. Markwayne Mullin, R-Okla., came from family members; others came from businesses controlled by the members themselves, as in the case of newly-elected Rep. Roger Marshall, R-Kansas.
Mullin took out a loan in 2007 from his father, Jim Mullin, to purchase a plumbing business. The value of such loans is reported in broad ranges, and Mullin’s is valued at up to $1 million.
Marshall, a doctor, and his wife, took out two separate loans from businesses to which he’s tied.
His financial disclosure forms list him as the president of LVMC, Inc. and the chairman of Great Bend Regional Hospital. In January 2014, GBRH Properties 2009 LLC, lent Marshall between $15,001 and $50,000. The loan is not listed on his most recent filing, indicating it has been repaid. However, in April 2015 his wife received a loan of between $10,000 and $15,000 from LVMC, Inc. That loan is now listed as his own liability on Marshall’s most recent filing.
On the other side of the aisle, Rep. Jerrold Nadler, D-N.Y., borrowed somewhere between $50,001 and $100,000 from Gordon Kupperstein, a retired lawyer and actor, so that he could purchase shares in an upstate New York co-op of which Kupperstein is also a member.