Senate Majority Leader Bill Frist’s campaign committee lost more than $500,000 in the stock market since the 2000 election and could not cover a bank loan that came due in August, records showed.
Campaign treasurer Linus Catignani said U.S. Bank “rolled over” the $360,000 loan and the money is now due in 2007. U.S. Bank spokesman Steve Dale said the company does not comment on individual loans.
The committee had paid off about $10,000 as of Sept. 30, according to its federal campaign filing.
It had $362,000 at the beginning of July, enough to pay off the loan, but lost $32,057, or 8.8 percent, in the stock market in July and August, the records showed.
By the end of September, after paying other expenses, the campaign had $312,807, the Chattanooga Times Free Press reported this week after reviewing the records.
Altogether, the committee lost more than $524,000 on stocks since November 2000, the records showed.
A Nashville office of U.S Bank made the loan with a 4 percent interest rate in August 2001. Catignani told The Washington Post that the campaign committee took out the loan to pay various political expenses so it would not have to cash out its stock holdings.
Interest earnings will pay the loan off by its new due date, Catignani said.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, D.C., questioned whether the bank provided special privileges to Frist.
“Are the policies U.S. Bank used to extend his loan the same as what is offered to members of the public?” she said.
A Federal Election Commission audit approved in September found accounting mistakes and inadequate disclosure in reporting from Frist’s political action committee during 2002. The errors were not serious, the FEC said.
Frist, a heart surgeon before he turned to politics, was first elected to the Senate in 1994 and re-elected in 2000. He became majority leader in 2002 when his predecessor, Sen. Trent Lott, was forced to give up his leadership position after he praised Strom Thurmond’s pro-segregationist presidential run of 1948.