Lawmaker Defaults on Three Morgtage Loans

Rep. Laura Richardson (D-CA) has been defaulting on her mortgage payments, but that hasn’t stopped her from loaning her campaign cash.

She had three homes in default and has been renegotiating at least one loan with her lender, Washington Mutual, to stop foreclosure.

A spokesman for the freshman lawmaker said it was unclear whether she used money from the mortgages to fund her Congressional campaign. But she did use precisely that tactic last year to obtain $100,000 to loan to her campaign for the California General Assembly, the spokesman told The Hill.

A third home that Richardson borrowed heavily to move into in Sacramento was sold at auction earlier this month — at a $150,000 loss to the bank that issued her the $535,000 loan. …

Even as that was happening, ethics watchdogs were crying foul over Richardson’s personal finances and questioning how she was able to lend her campaign to Congress $77,500 in the midst of multiple home loan defaults. …

Federal Election Commission (FEC) reports show that Richardson loaned her campaign a total of $77,500 — in three installments — between June and July of 2007.

Richardson’s year-end FEC filing showed that her campaign still had $331,000 worth of debt but $116,000 cash-on-hand. …

Meredith McGehee, policy director for the Campaign Legal Center, said it would be reasonable for the FEC to look into the timing of the loan against the timeline of Richardson’s home loan defaults.

“In situations like this it’s very important for whoever loaned her the money to demonstrate that they treated her equitably, not favorably,” McGehee said. “Otherwise, you’re getting into a situation of a corporate underwriting of a campaign.”

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