Republican Mark Leyva is surprisingly optimistic – even chipper — in the face of terrible odds. He’s attempting to win Indiana’s 1st Congressional District seat, which has been occupied by Democrats since the 1930s.
Add that to a campaign debt equal to the price of a new Cadillac, and his uphill battle becomes that much more steep, although he vows to press on. But Leyva’s situation isn’t rare: The Indiana political hopeful is one of a several hundred federal candidates whose campaign committees are reporting some form of debt, according to a Center for Responsive Politics analysis of Federal Election Commission records.
The top holder of recorded debt that doesn’t involve a loan is freshman Rep. Blaine Luetkemeye
r (R-Mo.), who is more than $992,000 in the red. The congressman’s net worth, however, ranks 87th in the 435-member House, according to personal finance records
, making it plausible for him to pay it off.
Some candidates take out loans to finance the expenses of running for office, with the loans often from themselves. All of Republican candidate Linda McMahon
’s $20.7 million campaign committee debt has been from her own money.
Even notable names have made it on to the debt list.
Rep. Dennis Kucinich
(R-Ohio) and Sen. John McCain
(R-Ariz.) have six figures worth of debt, likely carried over from their presidential runs. While Kucinich only has a small fraction of his debt available in cash-on-hand, McCain has millions of dollars available in his campaign committee account.
(To view the full spreadsheet, download it here:Candidates_in_Debt_2010.xls)
Also appearing on the list is Rand Paul
, son of Rep. Ron Paul
(R-Texas), who is vying for a U.S. Senate seat in Kentucky and has more than $57,000 in debt — but nearly six times that in cash-on-hand. His committee is also financed by $615,000 in loans.
“Every time there is a debt, you have to look at where it comes from,” said Meredith McGehee, policy director at the Campaign Legal Center.
Giving a loan to someone running for office, McGehee said, is a “betting game… ‘Is this person going to be elected?’ If not, the possibility of getting repaid plummets significantly.”
If the creditor decides to forgive the loan, it becomes a campaign contribution, she added.
Campaign debt may also be carried over from previous campaigns.
With 435 congressional district seats and two senators for all 50 states, the money flowing into the 2010 midterm election has easily exceeded nine figures – with less than a month left until judgment day.
But what happens if a candidate doesn’t have the funds to adequately compete? Odds are, they probably won’t get elected. To add insult to injury, some candidates actually lose a fair amount of their own money while vying for office.
Rep. Laura Richardson
(D-Calif.) is running for her second term and has more than $425,000 in debt and no cash on hand. The congresswoman has a history of financial woes. Although she was cleared by the House ethics committee
of any wrongdoing in relation to the near-foreclosure of her Sacramento, Calif., home, the Los Angeles Times reported
Richardson began defaulting on loans for at least two homes. Capitol Weekly also reported
that Richardson said she renegotiated lending terms for her Sacramento home. (Richardson’s campaign did not return a request for comment.)
McGehee said that unless candidates have a tremendous amount of personal wealth to spend on campaigning — a la Republican gubernatorial candidate Meg Whitman in California — they stand to spend at least 80 percent of their time fund-raising to stay competitive.
While upward of 470 candidates are reported to have some type of debt – the amounts range from three digits to seven digits – 174 candidates have committees running negative amounts (when cash on hand and debts are subtracted). Fewer than 30 of these candidates do not have loans causing their debts.
For those who are utilizing loans, most of the lending comes from banks and are no different than any other commercial loan, McGehee explained. There are no special terms or agreements because the person is running for political office.
Native Washingtonian Deborah Katz Pueschel has run for Congress in Florida’s 4th District in 2000, 2002 and 2004. Her debt is modest relative to other federal candidates, and she said she owes all of it to herself.
This cycle, she is spending most of her energy gearing up for the 2012 election by running as a write-in candidate in the hopes of regaining some name recognition among her local electorate. Unlike Leyva, she doesn’t have a website, but both outsiders spend their money modestly.
“It costs at least $10,000 to run for Congress, that’s how I incurred the debt,” Pueschel said. “Never take a loan to run. Run by word of mouth.”
Although the Leyva has spent a fraction of the sum of his race’s incumbent, Rep. Peter Visclosky (D-Ind.), he believes that the Tea Party movement will give him the momentum to get elected — or at least make him serious competition. (Visclosky’s office did not return phone messages.)
“People are fed up,” Layva said of his opponent, who has been in office since 1984. “You cannot buy a disgruntled vote.”
Leyva, an Indiana native, has run for Congress in the past six election cycles, which is where his debt appears to have come from. But this time, the Tea Party has opened up new opportunity.
Although he has received no Republican financial support or responses to his solicitations of FreedomWorks, Dick Armey
’s arm of the Tea Party movement, Newt Gingrich
sent him an endorsement following a meeting with Leyva and 15 other Tea Party leaders in Indiana.
“He was there to listen to everything we had to say and take notes. Talked a little about… a plan for November and more about Tea Party movement — why is it working, what are we doing as leaders,” Leyva said. “I have nothing to lose, I have worked very hard for this position, and I believe God’s going to make it happen. The people that aren’t supposed to win are winning right now — [the Tea Party] is a network that’s so unbelievable… They’re scaring the heck out of both parties.”