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Anthony Brown’s Campaign Didn’t Repay Labor Group’s Loan On Time

Failed Democratic gubernatorial candidate Anthony Brown has more trouble than just losing the election—he has an extant loan that he failed to pay by the deadline.

On Oct. 6, the Brown campaign took out a $500,000 loan from the Laborers Political League Education Fund at an interest rate of 4.25 percent, according to the Baltimore Sun. A copy of the loan agreement  shows that Brown agreed to pay this loan, with interest, back in full by Nov. 7, three days after the election.

This promise was backed by a guarantee to the Laborers International Union that they had the right to sue Anthony Brown personally for the unpaid portion of the loan. The agreement also shows that the union was allowed to raise the interest to a ten percent rate once the loan defaulted on Nov. 7, and that a five percent late charge would be added if the loan was not paid by Nov. 22.

The Baltimore Sun writes that, as of Nov. 11, “Brown had $137,497 in his campaign account.” This leaves hundreds of thousands of dollars unpaid by Brown, along with the possibility of a lawsuit. If Brown had won the election, he may very well have been able to use fundraisers to gain back that extra cost to pay off the loan to the union. Instead, Brown lost, and the loss of political capital jeopardizes his access to sources of economic capital.

These sort of loans are allowed under Maryland election law, although they would not be permissible in federal elections. Maryland law limits campaign donations—businesses and individuals can give $4,000 and PACs can give $6,000. Borrowing by campaigns, however, has no limits under state law.

The catch is that candidates have to personally guarantee the loan. If the loan isn’t paid back by the end of the next four-year cycle—in this case Dec. 31, 2018—then it counts as a contribution in excess of $4,000 and thus violates the law. Forgiving the loan altogether also violates Maryland state election law.

The Sun says that Brown has few assets to recover. According to a filing Brown made with the Maryland State Ethics Commission, “he owns no real estate and rents his home in Bowie. He listed no debts and reported owning less than 100 shares of stock and no interest in any business.”

The union, at this point, does have the clear legal grounds to sue Brown for however much money they are still owed. Nonetheless, one would think that, even with his failure in the election, Maryland’s Democratic establishment would not leave Brown out in the cold. One also has to wonder what the union will do- this is an ally of theirs, after all.

The campaign of Governor-elect Larry Hogan (R) had also taken a $500,000 loan from Hogan himself; presumably, Hogan’s victory will allow him to raise the funds to pay back those loans.

Featured image from Shutterstock

Brad Matthews

Brad Matthews is the Digital Content Coordinator intern for Watchdog Wire. Twitter is @bradmatthewsDC

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Categories: Budget and Finance, Elections, Must Read, Transparency

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