The Tipline brings us this gem, which Jim Galloway has also reported. The AJC updated its coverage today. Congressman and Candidate for Governor Nathan Deal, who last week revealed that his campaign had secured a $250,000 line of credit with undisclosed collateral, has revealed that his campaign used a certificate of deposit bought with campaign cash to secure the line of credit.
Explains spokesperson Harris Blackwood, via the Associated Press:
“It was just a way to keep money flowing without dipping into cash on hand,” Blackwood said.
Huh? Tying up $250,000 of your campaign cash in a certificate of deposit so that you can later borrow that same $250,000 if you need it is an effective way to not dip into your cash on hand?
That just doesn’t add up. The lib’ral AP has for us a possible alternate explanation:
“The maneuver effectively allows the Deal campaign – which has been among the fundraising leaders in the race – to appear to have more money on hand than it does. The $250,000 placed into a CD can still be counted as cash on hand even though it is being used to secure the line of credit, Blackwood said.”
Rick Thompson, former executive secretary of the state ethics commission, said the transaction appeared to be legal because Deal had collateral for the bank line. Thompson suggested the move was likely designed to artificially boost Deal’s bottom line.
“I can’t see why else he would do it,” Thompson said.
O.K., double counting the same dollar seems very Washington D.C., and I can buy that, but I don’t get the campaigns motivation or real tactical advantage to doing this. It seems to be a wasted effort and an exercise in futility. But then again, that also seems very D.C., I guess.
I would like Mr. Blackwood to explain how borrowing your own funds “keeps money flowing without dipping into your cash on hand”. Much like saying “Ghetto Grandmother” was taken out of context, this answer is laughable with any realistic followup question that can be added.
Because I tire of doubting the Deal campaign and their spokespeople at their word, I’ll accept that this maneuver somehow improved cash flow.
Except, that’s impossible. Other than that, it’s a good explanation.
I’m wondering if the Deal camp would like to take another stab at explaining why they felt the need to borrow their own money. I hope they choose their answer carefully. We would hate to take it out of context.