Utah GOP officeholders like to say they are pay-as-you-go fiscal conservatives. But Republican Gov. Jon Huntsman Jr. is running part of his 2008 campaign on borrowed money.
And even though he's raised nearly $2 million since he took office in 2005, he still owes $200,000 in bank loans from his first campaign four years ago.
Huntsman has a $500,000 line of credit at Zions Bank. He used all $500,000 in his 2004 election some went to his inauguration costs and other post-election purchases and, as best as the newspaper can determine, has paid off just $300,000 of that since.
In June he borrowed another $70,000 from that Zions Bank credit line leaving $230,000 that he could still borrow this year. His campaign has been paying interest on that fluctuating loan amount over the past four years, one-month hitting a high of $3,900, his campaign reports show.
"The governor has not been focusing on fundraising" for himself, said his spokeswoman, Lisa Roskelley, on Wednesday. In fact, he's actually been doing more fundraising for GOP presidential nominee Sen. John McCain than for himself this year, she added. "All the money (borrowed from Zions Bank) will be repaid in time. He's not interested in stockpiling money just to have it, not interested in getting donors to just give."
Despite some heavy fundraising in 2005 and 2006, Huntsman didn't pay back any of the loan's principal until December 2006, when his campaign wrote a $200,000 check to Zions Bank. He paid back another $100,000 last February.
Huntsman, who has already announced his second, four-year term would be his last as governor, has only $55,000 in cash currently in his campaign account, the latest finance report shows. And he has drained his political action committee of nearly $286,000 to pay campaign costs over the past two years. That PAC has only $7,000 in it now.
And while he's spent $394,000 on his race against Democrat Bob Springmeyer so far this year, campaign aides say Huntsman is looking to spend between $800,000 and $900,000 on his re-election. That means Huntsman could need around $400,000 over the next two months until Election Day.
In April he held a small get-together with Utah ski resort officials and raised $11,500 in one pop. He's held other small fundraisers as well. "His priority has not been fundraising, but governing the state and working for all Utahns," Roskelley said.
Don't worry. Huntsman's good for the money. He's proven himself a prodigious fundraiser, she said.
But even if he were to lose to Springmeyer not likely, a June Deseret News poll by Dan Jones & Associates found the popular Huntsman ahead of Springmeyer 78-11 percent Huntsman could pay off any debt himself.
Several years ago the governor divested his shares in the huge family business, Huntsman Chemical, the largest privately held chemical firm in the world. His spokesperson at the time said the governor was worth between $12 million and $15 million. The money is held in a blind trust, but Huntsman can withdraw funds as needed he has several children in college, for example.
Roskelley said Wednesday the bank loans are unsecured, but the governor personally guarantees them. The interest rate fluctuates it is currently 5.25 percent and is set at 0.25 percent above the prime rate.
Roskelley said that Huntsman does plan to conduct heavy fundraising over the next two months. His main annual PAC fundraiser the Governor's Gala will be held this fall, before the election. "And the governor will continue fundraising through his next term," she said (anticipating a good election outcome for her boss), and can pay off any campaign debt with that money.
It is not now known how much more campaign money will come from the Zions Bank line of credit, aides say. As of his latest filing, his borrowed money makes up just over 15 percent of his 2008 campaign contributions. (Fifty-three percent comes from his own PAC, records show.) But if he hadn't taken $70,000 in new bank loans in June, and if he'd continued spending over the summer as he wished, his campaign would be $15,000 in the red. That's never a good thing for a campaign to do looks bad on the finance reports.
To show Huntsman's ability to raise money even though he has chosen not to fully pay off his loans he has raised just under $2 million since he took office four years ago through his PAC, which is separate from his election committee. However, only about $286,000 of that PAC money has gone into his campaign account, which officially owed the $500,000 to the bank.
Instead of using it to pay off his line of credit or putting more into campaign spending, Huntsman has spent much of his PAC's money on fundraising, travel and even Christmas cards.
For example, since January 2007 he's spent $140,000 to use the Grand America hotel for his annual gala; at least $66,000 for entertainment at that gala; $9,200 for gifts given at that gala; about $35,000 on Christmas cards; more than $20,000 in donations to other politicians and party groups; and about $18,000 in travel by him and his staff.
In just the past two years, Huntsman's PAC raised about $760,000. His election campaign raised another $137,500 (not counting the nearly $240,000 transferred to it from the PAC this year, nor the $70,000 newly taken from his line of credit). That means he has raised just under $900,000 total in donations in 2007 and so far in 2008.
Meanwhile, Democrat Springmeyer said he has raised only $45,400 meaning Huntsman has raised nearly 20 times more through his PAC and election fund.
In fact, just the top two donors for Huntsman provided him more money than all of Springmeyer's donors combined. For example, Micron Technology/IM Flash Technologies (the single largest donor to Huntsman and his PAC) gave him $35,000 in 2007-08, and four different donors gave him $20,000 each (including Zions Bank president A. Scott Anderson, Reagan Outdoor Advertising, Marc Bingham and Jeanne Sorenson-Leff)."I don't expect I'd qualify for a $500,000 unsecured loan from Zions Bank," said Springmeyer, who owns an economic development/city consulting firm. "I'm running a modest, fiscally responsible campaign. I won't be borrowing any money. If elected, I'll run a fiscally conservative, socially responsible administration."