Feds flag Hern campaign loan
The Federal Election Commission on Tuesday flagged a bank loan taken out by U.S. Rep. Kevin Hern and asked his campaign to provide more information about why it appeared to be overdue on a report filed in July.
The commission sent Hern for Congress a notice asking the committee to amend its July 15 campaign Hern finance report
“to clarify the current status of this loan and disclose the current terms and conditions if the loan was renegotiated.”
“Note that an overdue bank loan may be considered a prohibited contribution by the bank or lending institution,” the FEC wrote.
Her n' s campaign treasurer responded to the FEC on Tuesday that Hern for Congress “has renegotiated the terms of the bank loan in question” and would provide the information in October.
The Oklahoman reported early last month that Hern, R-Tulsa, had taken out a $650,000 campaign loan in 2018 from Firstar Bank, which he helped create and govern.
The loan, taken out on June 26,2018, was tobe re paid by June 26, 2019. However, through June 30, Hern had paid only $30,000 toward the principal. He made $26,000 in interest payments.
Hern was not required to pledge any collateral to receive the loan. He was serving on the bank's executive committee of shareholders when he received the loan, and his wife owned a 4% interest in the bank.
Hern's campaign provided The Oklahoman a document showing the loan was restructured on June 25, a day before its due date. The principal is now due in June 2020.
The interest rate was raised from 5% to 6%.
Under campaign finance reporting requirements, that information should have been included on the FEC report Hern's campaign filed in July.
Hern's office in July declined to answer specific questions from The Oklahoman about the terms of the loan and plans for repaying it.
“Kevin He rn and the campaign have been fully transparent and compliant with all applicable FEC rules and guidelines,” campaign spokesman Cameron Foster said then.
Federal election law allows candidates to take out bank loans to finance campaigns if the terms are no more favorable than loans to other borrowers of comparable creditworthiness and repayment is assured.
In addition to the bank loan, Hern made about $800,000 in personal loans to his campaign.
The campaign has repaid Hern $25,000 from campaign contributions.
The report filed in July with the Federal Election Commission shows Hern's campaign with $1.39 million in loans outstanding. The campaign had $105,163 in cash at the end of June.