When I first read Kevin’s post at blogHOUSTON, Houston mayoral candidate loans money to campaign, charges usurious interest rate, my first thought was, crap, I just endorsed Roy and now this. Leveling a charge at someone that they are charging “usurious” interest rates is very serious. That it came from a writer respected for his accuracy on a blog that strives for accuracy was unsettling. Heck, I didn’t even bother to check the veracity of the report before contacting the Morales campaign because I knew that the facts would be true. If you wish to check, you can click here to view the $100 loan Kevin references and here to view the $927.86 loan referenced. Just scroll to Schedule E in each filing.
As predicted, the basic facts are true. Mr. Morales did report each loan and he did report that the $100 was at 23{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} and that the $927.86 loan was at 15{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986}. What is not reported is that each of these transactions represent credit card purchases by Mr. Morales and that the credit card was not paid off. In other words, he was carrying a balance on those cards. And although 15{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} and 23{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} do seem extremely high when compared to today’s prime rate of 3.25{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986}, the truth is that many credit cards do have APR’s that high, even in today’s market.
Another thing that should be noted is that in reviewing Mr. Morales’ campaign finance reports over time, it doesn’t appear that he has ever repaid himself in full for the amount of personal money he has spent on his campaigns.
Obviously, there is legitimate debate on whether or not a candidate should be using credit cards to fund a campaign and if that candidate should then charge their campaign the interest incurred when carrying a balance. But I don’t think that when a candidate passes on those charges, that the term “usurious” should apply to the candidate. Perhaps to the credit card company but that is an entirely different debate. We often read about entrepreneurs putting large amounts on credit cards while building their businesses because there were no other options. Perhaps Mr. Morales feels strongly enough about public service that he is willing to go into debt to serve.
So, all in all, this isn’t a deal breaker for me and I continue to support Mr. Morales. Perhaps even a bit stronger given his personal sacrifice. Not everyone is as wealthy as Peter Brown and maybe politics should not be just for the wealthy. It’s a thought.