How Politicians Make Money: Loan Their Own Campaigns Money with Interest
Congressional Representative Grace Napolitano, who represents various cities in LA County, is under fire today for personally earning over $200,000 in campaign donations because she has been charging an up to 18% interest rate on a loan she personally made in 1998, finds Bloomberg News:
The suburban Los Angeles Democrat made the $150,000 loan in 1998, when she was first elected to the U.S. House of Representatives. Through Dec. 31, her campaign committee has used donations to pay Napolitano $221,780 of interest while reducing the principal by just $64,727, a review of her Federal Election Commission filings shows.
Candidates are not supposed to personally benefit from campaign donations, but the Federal Election Commission in 1999 ruled that the loan and interest did fall within the law.
Napolitano's 38th Congressional District covers Norwalk, Pomona, Santa Fe Springs, the City of Industry, Montebello, Pico Rivera, Avocado Heights, La Puente, Hacienda Heights, West Puente Valley and parts of East Los Angeles, Whittier, Rowland Heights, South San Gabriel, Valinda, and other unincorporated areas.