Monday, October 1, 2012

Frank Guinta and the $355,000 "loan"

Hi, and welcome to   For my first post, I thought I'd start with Mr. Guinta's campaign finance troubles stemming from his 2010 election campaign.   I've been compiling a list of topics to write about here -- please feel free to add your own ideas in the comments.

The Citizens for Responsibility and Ethics in Washington placed Representative Frank Guinta on their 2011 "Most Corrupt" list -- quite a distinction for a congressman in his first year in office.   In question is $355,000 in personal loans Mr. Guinta claimed to have made to his campaign.  As a congressional candidate, Mr. Guinta was legally required to disclose his assets and their disposition. In July 2010, the Nashua Telegraph pointed out that according to his disclosure, Frank Guinta didn't have the money to loan his campaign the amounts he claimed.   CREW documents the case in painstaking detail, with each claim carefully sourced.   I'm just going to hit the highlights here.

If you think this is just a partisan witch-hunt, you may be surprised to learn the charges were initially made by former New Hampshire Representative, Republican Jeb Bradley.  The Politico article begins,
Most people wouldn’t forget about a bank account with a quarter million dollars in it — and if New Hampshire GOP congressional candidate Frank Guinta doesn’t have an explanation for doing just that, he should drop out of the race, former New Hampshire GOP Rep. Jeb Bradley told POLITICO.
From what I can tell Rep. Bradley was not one of Mr. Guinta's opponents in the primary.  Jeb was running for NH state senate at the time.  In this bio, Mr. Guinta is described as having been Mr. Bradley's "former aide," so apparently they know each other quite well.  Referring to the primary, Politico helpfully reports, "Guinta is a favorite of the Washington GOP, taking in leadership PAC contributions from House Majority Leader John Boehner and Minority Whip Eric Cantor." 

When Mr. Guinta realized he was in trouble, he amended his financial disclosure to include a new account.   The Politico piece cites the Union Leader as the source of the "inadvertent oversight" quote.   
 Guinta, the former mayor of Manchester, included a bank account worth $250,000 to $500,000 on his most recent financial disclosure forms, the Manchester Union Leader reported Thursday. The bank account had never before appeared on his forms, a fact Guinta chalked up to an “inadvertent oversight.” 
Even the very conservative blog had a field day with this, comparing Frank Guinta to Charlie Rangel.   It's worth reading the whole thing -- the conservatives were much harder on Frank Guinta than I am.   Here are some samples:
Unless you are Charlie Rangel you do not wake up in the morning, slap your forehead, and remember a $500,000.00 bank account you have failed…twice…to disclose. This is, according to the Union Leader, exactly what has happened in the case of Frank Guinta. 
The Union Leader piece rightly asks why Guinta would even HAVE that much money in a single account given FDIC coverage when you consider his other disclosures which prove him to be fairly savvy in matters of investing money. I ask the same question. Politicians like this, the GOP absolutely does not need right now.
Having been a Mayor and needing to manage big budgets, and with a fairly extensive Political resume, I can’t be expected to believe a $500,000.00 memory hole is just an innocent mistake…especially when you do the math over the course of his campaign.

 The Union Leader noted that the account had been omitted from at least two disclosure forms.  Almost every article at the time talked about how unlikely it would be for anyone to forget an account of this size, especially when it was by far one's largest cash asset.   Said one NH Republican operative, 
It's very important for Republicans to be able to talk about ethics in the general election.  That can't happen if the hand-picked candidates of the NRCC are mysteriously rediscovering bank accounts with half-a-million dollars they forgot they had.

Mr. Guinta's campaign has had differing explanations for the source of the money.   The original Telegraph piece said: 
Mr. Guinta’s campaign manager, Michael Biundo, said Rep. Guinta had liquidated his stock market and mutual fund assets to amass the cash and those transactions would be detailed on a future disclosure report.   
Then Mr. Guinta contradicted that statement by amending his disclosure to include a second Bank of America account valued at between $250,001 and $500,000.   Here's were we get the Union Leader quote: 
In an interview Wednesday, Guinta denied that he has received any loan, maintaining that the savings accrued from years of work and frugal living. His previous reports listed three bank accounts with combined savings of between $17,000 and $80,000. Asked how he could have forgotten to list an account with $250,000 to $500,000 not once but twice in earlier disclosure reports, Guinta called the omission “an inadvertent oversight.”

  Mr. Guinta went on to say he had saved proceeds from successful investing and real estate transactions.  When asked about his campaign manager's statement, Mr. Guinta said Mr. Biundo had been mistaken, and Rep. Guinta himself had been out of town on vacation at the time and unavailable to provide the correct explanation.  The campaign said in a statement that the money for the loans “came from a series of accounts Guinta has had since March of 1996.”   

It's worth reflecting for a minute how hard to swallow Mr. Guinta's story is here.  In response to the gravest threat to his campaign, Mr. Guinta went on vacation, apparently away from all telephones.  We're asked to believe that because Mr. Guinta was unreachable, his campaign manager just made something up about liquidating stocks and mutual funds.   There's no indication the campaign manager was fired or even reprimanded for this egregious error.   And the past due real-estate taxes and water bills resulting in a lien on Mr. Guinta's house in 2007 (while he was mayor!) suggest some money problems that a quarter-million in the bank would have gone a long way toward alleviating.

His primary opponents pointed out that Mr. Guinta's new story could be easily verified by producing old bank statements from the newly disclosed Bank of America account.    I would have thought Mr. Guinta would have jumped at the opportunity to clear his name, while showing the world what a savvy investor he is, accumulating a nice fortune while living on his middle class income.  We're still waiting for these statements.

It was such an incredible year for Republicans that Frank Guinta, despite these serious questions, was elected to represent New Hampshire's First District.  There appears to be an Federal Election Commission investigation underway. 

Speculation on the true source of the money focused on Mr. Guinta's parents, who had sold a house for $800,000 just before the campaign began.   
By a weird coincidence, this topic has just heated up in the campaign.   Here's a letter Carol Shea-Porter just posted to facebook.

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