Personal Loans Back Political Campaigns
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UPDATED: Nov 2, 2012
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Statewide and national political campaigns remain strong due to lucrative backings from personal loans.
Gubernatorial elections in Montana are nearing the end and they are being fueled by personal loans from their supporting donors. Democratic Attorney General Steve Bullock reported raising $74,891 between Oct. 18 and Oct. 27. During the same period, Republican Rick Hill reported raising $145,754. Hill’s campaign fund was denied a $500,000 donation from the state Republican Party after a state judge ruled it out. Hill funded his campaign with a $100,000 personal loan from the former congressman.
Both politicians used some of their funding to air advertisements. Some of Republican Hill’s ads were canceled due to the lawsuit, which took away a majority of his funding.
In some local elections, the campaign funds are fueled by small personal loan donations, but in other areas, rich politicians donate large portions of their own funds towards campaigns.
In Michigan’s Third Congressional District, Democrat Steve Pestka outspent his Republican opponent Justin Amash. Democrat Pestka loaned more than $1 million of his personal wealth towards the political cause. The funding was made in an effort to unseat the first-term congressman Amash. Pestka has received a total of $31,000 in contributions, on top of his million dollar donation.
Federal Election Commission (FEC) reports show the disparity of wealth in the election.
Amash has gone into debt trying to remain in office. He donated $164,300 attained from personal loans he made during the 2010 election cycle. A total of $14,300 in unpaid bills remains.
Although political campaigns seem to be part of a larger business model, when the campaigns conclude, all that is left is a single politician. For smaller statewide elections, funding comes slowly from local donors. In many cases, as represented in Montana and Michigan, the primary donors are the politicians themselves.
For larger campaigns, such as the presidential campaigns, the funding is received from a larger donor pool, and can near the billion dollar mark. According to national figures, The Democratic Party and the Barack Obama campaign raised a total of $934 million, and as of Oct. 17, have spent $852.9 million. The Republican Party and the Mitt Romney campaign raised a total of $881.8 million, and as of Oct. 17, have spent $752.3 million. Both parties have millions of dollars remaining for the final days of the campaign.