Rick Santorum’s Finances

The American Prospect has a long cover story by Will Bunch examining Rick Santorum’s personal and public finances.

Photo Prospect Cover Rick SantorumIt 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:

Photo: Rick 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.

FILED UNDER: Congress, General, , , , ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. DC Loser says:

    This probably by no means is the only Santorum residence. What properties does he own in Pennsylvania and how does he make all those payments on his Senate salary? I’m just amazed he has the time to make that commute everyday from Leesburg.

  2. none says:

    I’m from PA. He owns a piece o crap house here. He also stuck the state with paying for online schooling and tutors for his six kids until the papers found out. He’s a bum and I’m glad he’ll be going this year.

  3. In fact, the five year loan probably makes a lot of sense for Santorum, given the natural uncertainty in politics.

    Another point, even if the bank would not have given the same loan to any average Joe … what’s wrong with this? Doesn’t his being a Senator count for anything? If I were a bank I’d give a Senator just about any loan he wanted knowing that, if nothing else, defaulting on the mortgage would be such bad publicity, he sooner go without electricity.

  4. Andy Vance says:

    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.

    That’s not the point, obviously. The question is, could a family with a combined income of around $100,000, or even $300,000, get a mortgage from Philadelphia Trust?

  5. James Joyner says:

    Andy: We really don’t have enough information to know for sure. Even if PT mostly deals with high rollers, I’m guessing they have other clients who are good to associate the firm’s name with. Presumably, someone in Santorum’s position is unlikely to miss any payments.

    The whole piece is innuendo with “the details are murky, so someone must be up to something.”

  6. Andy Vance says:

    We know this much:

    ∙PT isn’t in the business of financing home mortgages or any other loans; it’s a perk it sometimes grants investment clients

    ∙Santorum doesn’t meet even the minimum financial standards that would get his calls returned from PT, much less get a half-million-dollar advance

    IÂ’m guessing they have other clients who are good to associate the firmÂ’s name with.

    So, lending money to Santorum was a marketing scheme? If that were true, one would think they’d be a bit more upfront about it, no?

  7. yetanotherjohn says:

    My wife and I own a small company. Nothing dramatic or flashy, but it has generated positive income for 15 years. The last 7 have been very good income. The bank we use has made a strong push to “build a special relationship” with us. Nothing sinister, just good banking practices. We have lots of options in banking, Texas law means we can’t earn interest on our business checking account and the company generates income, so there is a growing amount of money in the account until we take a disbursement. And the program we “qualify” under targets small business owners, professionals (e.g. lawyers, doctors, etc) and the like. It’s not purely the money, but the what you do for a living.

    Now they offered me a “special home mortgage” when we bought our house. Does that make it something sinister?

    If a bank officer noticed that he had a US senator as a client and didn’t go to at least as much trouble as our bank does for us, he should be fired. There is value to the bank in developing that sort of relationship. Even if it is just the enormously cost effective lobbying that could be done by the “personal” bank executive.

    I hate innuendo stories like that. The editor should have told the reporters to find something definitive or spike the story for now.

  8. Andy Vance says:

    Does that make it something sinister?

    It does if you’re a public official in a position to reward the bank legislatively. Did your bank also dump 24 Gs into your PAC?

    There is value to the bank in developing that sort of relationship.

    Damn straight there is; that’s precisely the problem. This isn’t a matter of good customer service. It’s called influence peddling.

  9. McGehee says:

    Has Santorum actually done anything that could benefit Philadelphia Trust?

    The answer to that question is what determines whether influence has been peddled. All else is mere hyperventilation.

  10. Andy Vance says:

    Has Santorum actually done anything that could benefit Philadelphia Trust?

    See, that’s the thing. Are we to assume that he supported a given measure (say, big capital gain tax cuts that make investing more attractive for PT’s clients) out of principle, or because it was a sweet quid pro quo for his friends?

    Such entanglements are the reason Congress has ethics rules (or used to, anyway).

  11. Jim says:

    Interesting dicussion but it is getting dangerous…do we really want to investigate all our senators to determine how they are paying for their residences? I imagine that just about any bank would offer a loan to a sitting senator…its good business. Here is the question that really needs to be asked: are the terms he was given reasonable? i.e. interest rate close to stanard. Where I would be worried is if he was given an interest rate like 2%….

    For those in Northern VA: Remember Moran’s dealings about his home and MBNA…that deal was stunk far more then this one…but he was a democrat and that makes it ok.

  12. Andy Vance says:

    Jim, I think the standard is pretty simple: legislators shouldn’t bank with campaign contributors, and shouldn’t accept loans that for which they otherwise wouldn’t qualify (I think Santorum would have qualified for the loan, but certainly not at that bank; he’s nowhere near that financial league).

    Consider this: 77 U.S. representatives (mostly Democrats) were forced out in 1992 because of the House banking scandal -essentially for taking advances on their paychecks. My, how far we’ve come.

    Elected officials have been, and should be, held to the highest standards of ethical conduct and avoid even the appearance of impropriety or conflict of interest. Basically, if the average voter couldn’t get away with it, don’t do it.

  13. James Joyner says:


    I essentially agree with you on this. If Santorum did not reasonably believe that the deal was on the up-and-up, then there’s a problem. If he violated the rules, he should be punished. I’m just not yet convinced that he actually did anything wrong.

    The problem is that even Senators need home loans if they’re not independently wealthy. Senators, especially prominent ones like Santorum, have a lot of influence. Big banks and other financial institutions routinely donate to PACs, parties, and candidates. It’s just complicated.

  14. Andy Vance says:

    Well, color me… something. According to the Senate Ethics Manual, if I’m reading it correctly, senators do not have to disclose “Mortgages secured by a personal residence (including secondary residences)that are not used for rental purposes do not have to be disclosed.” I assume that if it doesn’t have to be disclosed, it doesn’t matter how the mortgage was secured or from whom.

    I stand corrected. I still don’t like it [the hapless goo-goo huffed]. It would be one thing if, say, GMAC made a contribution to Santorum’s PAC and later approved a mortgage application for which he clearly qualified. In this case, it’s apparent that Philly Trust went WAY out of its way – i.e., the same executives who personally pumped thousands into his PAC said “make this happen” – and bent its own rules to give Santorum a sweet deal.

    Ironically, reading further down in the rules it appears that the $338.87 Santorum or his better half spent at Giant Foods is a potentially bigger legal liability than the mortgage.

    2 U.S.C. § 439a. Use of contributed amounts for certain purposes
    (a) Permitted Uses.—A contribution accepted by a candidate, and any other donation received by an individual as support for activities of the individual as a holder of Federal office
    (b) Prohibited Use.—
    (1) In general.—A contribution or donation described in subsection (a) shall not be converted by any person to personal use.
    (2)Conversion.—For the purposes of paragraph (1), a contribution or donation shall be considered to be converted to personal use if the contribution or amount is used to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate’s election campaign or individual’s duties as a holder of Federal office, including—
    (A) a home mortgage, rent, or utility pagyment;
    (B) a clothing purchase;
    (C) a noncampaign-related automobile expense;
    (D) a country club membership;
    (E) a vacation or other noncampaign-related trip;
    (F) a household food item;
    (G) a tuition payment;
    (H) admission to a sporting event, concert, theater, or other form of entertainment not associated with an election

  15. James Joyner says:


    Could be. We don’t know what the food and coffee purchases were used for, of course. If it was Santorum feeding his family, then it’s an inappropriate use. I would think, though, of reasons one would buy things for campaign use (say, a barbecue for the volunteers) at a local grocery store.

  16. Jim says:


    I agree with you completly: A senator should not be able to get a loan that someone who isn’t a senator isn’t qualified for. In an ideal world, elected officals would have to make mortgage applications publically available (with personal information redacted of course). The chief problem I have with this entire issue is that unless there is evidence of a illegal/unethical relation between the senator and the lender there isn’t really a problem. Yes, in thoery he has/could vote on something that could impact the bank but that logic taken to an extreme would make it impossible for any elected offical to buy anything except with cash.