Rick Santorum’s Finances
The American Prospect has a long cover story by Will Bunch examining Rick Santorum’s personal and public finances.
It is here, some 43 miles by car and a world away from Capitol Hill, that Pennsylvania’s junior U.S. senator, Rick Santorum, and his wife, Karen, bought a home on November 14, 2001, for $643,361 (now assessed by Loudoun County at $757,000). It is here that the most outspoken social conservative in the Senate is raising his six children in the manner he described in his book last year, which caused so much controversy back in the state where he is seeking a third term this fall. And it is here that Santorum departs most mornings for his newest mission: crafting a package of Senate ethics reforms aimed at removing the stain of the Jack Abramoff lobbying scandal.
The Santorums bought their oversized Shenstone “estate” even though his financial disclosure forms since 2001 have shown little family income beyond his Senate salary, now $162,100, and he admits that life hasn’t been financially easy.
Courtesy Will Bunch‘s blog, here’s a photo of Santorum’s house:
This is a rather typical upper middle class home in the Loudoun County suburbs–and a typical middle class home outside a few high cost urban centers. A typical single family home starts at $800,000 around these parts, with even a decent condo going for $350,000. And that’s in the suburbs. It would be much, much more expensive in the District, let alone on the Hill. And it wouldn’t have a yard nearly that big, either, at any price.
Certainly, a United States Senator’s salary is more than adequate to obtain financing for it. Families with a combined income of around $100,000 often live in single family homes, even in this market.
The Prospect‘s editors, who live in the area, nonetheless thought it inconceivable that a Senator could afford to buy such a home. So they dug into Santorum’s finances and discovered that he was spending an unusually high amount of PAC money on incidental expenses like groceries and coffee. And that his mortgage was held by a company that normally catered to clients wealthier than Santorum. And here’s the kicker:
The 12-page deed on file in the Loudoun County courthouse does not provide much information about the loan, although it does state that the term is just five years, with repayment of the $500,000 due by November 1, 2007. That would be 11 months after the end of Santorum’s current six-year Senate term.
How sinister! Who ever heard of anyone getting a good loan by agreeing to make a huge balloon payment in a short period of time? Oh, wait. It happens all the time. (Full disclosure: I had an Adjustable Rate Mortgage plus an interest-only second trust on my Loudoun County townhouse. I have no knowledge of the wealth distribution of the bank’s typical customer base. )
Scenario 1: Santorum gets re-elected. He refinances the house. (Full disclosure: Kim and I refinanced her house when we got married. No PAC money was used.)
Scenario 2: Santorum does not get re-elected. He sells the house and pays off the note, pocketing the difference.
Scenario 3: Santorum does/does not get re-elected. Sinister forces pay off the $500,000 loan and no one is the wiser.
The plot thickens. It turns out that some guy from the Prospect called and was unable to get a similar loan over the phone without having a prior relationship with the bank. Hmm.
It may well turn out that Santorum spent PAC money on personal expenses beyond that permitted by campaign finance laws and Senate ethics rules. The piece, though, offers only conjecture on that score. It is also quite possible that the investment company that handled his mortgage thought that having a relationship with a powerful Senator was a good business practice. That does not mean that Santorum did anything untoward or that he provided any benefits in return.
I’m no fan of Santorum but there’s not much here that indicates sinister behavior.