Brown took out $500,000 loan from union

Is Brown's $500,000 loan from union a sign of desperation or routine practice?

Democratic gubernatorial candidate Anthony G. Brown has taken out a $500,000 loan from the Laborers International Union in a move the rival campaign of Republican Larry Hogan called a sign of desperation.

Brown campaign manager Justin Schall said Saturday that the borrowing was simply a matter of cash flow. He said it would be paid in full by Election Day.

“We will not have any debt after the election,” Schall said.

The campaign announced early Sunday that it will receive some help from Hillary Clinton, who is scheduled to appear on Brown’s behalf at a late-afternoon event Thursday at the University of Maryland, College Park. Typically such events are preceded by a “meet and greet” that raises funds for the campaign.

The loan was listed in the campaign finance report the Brown campaign filed late Friday night. It shows that Brown’s campaign committee took out the loan from the Laborers Political League Education Fund on Oct. 6 at an interest rate of 4.25 percent.

“We took out the loan to give us some flexibility in spending in the final week of the campaign as we raise over $1 million in the next 10 days,” Schall said. He explained that such expenses as TV, mail and payroll need to be paid in advance.

“This is a very common practice in campaigns because you can’t spend money before you have it,” he said.

Hogan’s campaign saw the move in a different light.

“They are up against the ropes. The momentum continues to move in Larry’s direction and they are clearly doing everything they can to eke out a victory,” said Hogan spokesman Adam Dubitsky. “It’s probably too little, too late for Anthony Brown.”

Large loans to Maryland gubernatorial candidates are not unprecedented. In 2006, Martin O'Malley took out a $500,000 loan from Washington lawyer John P. Coale in the final weeks of his campaign against Gov. Robert L. Ehrlich Jr. The victorious O'Malley repaid the loan after the election.

The Hogan campaign is also carrying $500,000 in loans on its books, but those all came from Hogan himself during the primary campaign.

The watchdog group OpenSecrets.org lists the Laborers union as the 11th-largest donor to political spending groups.

Bevin Albertani, political director of the Laborers union, said the group has known Brown a long time and shares his commitment to investing in infrastructure. She said she did not recall the union extending such a loan before in her decade with the Laborers but expressed no misgivings about Brown's ability to repay.

"We felt this was a good investment for Maryland," Albertani said.

The disagreement over the meaning of the loan was part of a series of squabbles between the Brown and Hogan camps over which campaign was in better financial shape heading into the home stretch.

The Hogan campaign issued a news release boasting that it, along with the Maryland Republican Party, held an almost $100,000 lead over Brown in cash on hand as of the end of the filing period last Sunday. As of that day, it said it had more than $440,000 to spend.

“People who were on the sideline are now breaking our way, and I think the cash on hand reflects that,” Dubitsky said.

Schall, however, put the combined cash-on-hand figure of Brown and the Democratic Party at about $900,000. He said Hogan’s calculations don’t take into account the two campaigns’ federal accounts.

The Republicans have a little more than $40,000 in their federal account, while the Democrats have more than $480,000. Schall also counts some miscellaneous cash that the Republicans do not.

Brown’s fundraising is going well, Schall said.

“Oh my God, it’s flying in,” he said. “Absolutely, I couldn’t ask for more.” 

The visit by Clinton, regarded as the front-runner for the Democratic nomination for president in 2016, will come on the last day of Maryland’s eight-day early voting period. Schall said Clinton would help Brown give his supporters a final push to cast their votes early.

Clinton had been scheduled to appear at a Brown fundraiser in Potomac on Sept. 30 but canceled because of the birth of her first grandchild. Former President Bill Clinton filled in for her.

The fundraising in the governor’s race has fueled a seemingly nonstop barrage of campaign ads. Brown reported media spending of almost $3 million since late August, while Hogan listed almost $2 million.

Brown reported combined fundraising of $4.1 million over the two months since the last reporting period. Schall said that did not include the loan but did include gifts to the federal Democratic account.

The Hogan campaign did not raise funds toward the Nov. 4 election because it is barred from doing so under the law that granted it $2.6 million in public financing. However, the state Republican Party told the Maryland State Board of Elections it has taken in almost $770,000 that it can spend on Hogan’s behalf. A federal filing Oct. 15 showed the GOP raised another $150,000 since the June primary.

michael.dresser@baltsun.com

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