17TH DISTRICT FEC gets complaint about Ryan loan
The complaint was filed by the father of a former congressional candidate.
By DAVID SKOLNICK
VINDICATOR POLITICS WRITER
YOUNGSTOWN -- The Federal Election Commission didn't have to wait long to get a complaint filed about a questionable $50,000 loan from state Sen. Timothy Ryan, and co-signed by a friend, to his congressional campaign committee.
The complaint was filed with the election commission Wednesday, the same day an article about the loan appeared in The Vindicator. It was filed by Donald L. Walter, who lives in Rome in southern Ashtabula County, and serves as president of Don Walter Kitchens in Austintown. Walter is the father of Randy Walter, a former congressional candidate.
"I would like a full investigation of this matter and believe all appropriate penalties and sanctions should be applied," the elder Walter wrote in the letter to the FEC's general counsel. "All deliberate speed is asked because if these funds were obtained in violation of federal law, they should not be able to be used during the balance of the campaign."
At a press conference today, Ryan called Walter "a hatchet man" for U.S. Rep. Thomas C. Sawyer of Akron. Sawyer and Ryan are Democratic candidates for the 17th Congressional District. Ryan also accused Sawyer of "dirty politics" even though reporters told the state senator that neither Sawyer nor his supporters alerted them to the loan.
Co-signed by former coach
Ryan said he obtained the money from Second National Bank in Canfield, but because he had no collateral, he needed someone to co-sign the loan. Ryan had refused to state publicly who co-signed the loan until today's press conference, a day after Dennis Rossi, the co-signer, spoke to the press.
Rossi, an insurance salesman who was Ryan's junior varsity basketball coach at John F. Kennedy High School in Warren, said Ryan asked him to co-sign the loan. Because Rossi is completely unfamiliar with federal election rules, he asked the congressional candidate that everything be done properly.
"All of a sudden, this came out and I'm very surprised," Rossi said. "I trusted him to make sure everything was done right. As far as I'm concerned, I don't think anything is wrong."
Ryan and Julie Stitzel, his campaign treasurer, had insisted the co-signer's name does not have to appear on the campaign finance reports, but federal election rules say otherwise.
Also, because there was no prior written agreement between Ryan and Rossi about who was responsible for what amount of the loan, federal election rules say they are each responsible for $25,000.
$1,000 is limit
Election rules also say bank loans are considered campaign contributions, thus the loan is considered a $25,000 campaign contribution. Individuals are permitted to give only $1,000 per election to a congressional campaign.
Ryan filed a pre-primary report with the FEC today that shows that he repaid $25,000 of the $50,000 loan. Ryan said that was Rossi's share of the loan. But because Ryan and Rossi do not have a written agreement on the loan, election rules say they are each responsible for half. That means Rossi, whose name does not appear on any of Ryan's campaign finance reports, is considered to have contributed $12,500 to the congressional campaign.
Ryan said he is seeking a written opinion from the FEC about the loan.
"We're going to comply with the FEC," he said. "If the FEC says we're in violation, then we're in violation. We're not in violation because a reporter says so or because Don Walter says so."
Ryan said that before getting the loan his campaign had contacted the Federal Election Commission about it because he had questions and that he was told there was no problem. Ryan said that because he got prior permission the loan should not be an issue.
But a campaign guide issued by the FEC for congressional candidates and committees, which Ryan said he has, states that a loan "is considered a contribution to the extent of the outstanding balance of the loan. ... An unpaid loan, when added to other contributions from the same donor, may not exceed the contribution limit."
Letter to FEC
In his letter to the FEC, Walter wrote, "I believe this loan, with a single co-signer guaranteeing it, is a clear violation of the federal campaign laws."
Walter said he felt compelled to file the complaint because he is "interested in the truth, and we've had too many untruths in the Valley."
Walter said he offered to lend money to his son, Randy, who unsuccessfully ran for Congress in 2000, but his son declined, saying it would be illegal to do so.
Walter said Ryan, who has a law degree, should have a better understanding of the law than most people.
Walter's son, who withdrew as a Democratic candidate this year for the 17th District seat, said federal election rules about loans and contributions are crystal clear.
Statement from Sawyer camp
"Federal election law is very clear on matters involving loans and the requirement of securing and reporting them," wrote Mike Thomas, Sawyer's campaign manager. "So far, it appears Tim Ryan has not followed these regulations and has not given voters the full story. What is Tim Ryan hiding from the voters of the 17th District?"
Thomas wrote that Ryan needs to reassure voters that he has not broken the law by disclosing all pertinent information about the loan.
Ryan said Sawyer shouldn't throw stones at him because the congressman has amended his campaign reports 14 times between 1996 and 2000. Also, Ryan said Randy Walter has violated FEC rules.
Ryan could face a monetary penalty from the FEC if found to have violated election rules.
Kelly Huff, an FEC spokeswoman, had said the commission would not launch an investigation into the loan until someone filed a complaint. An investigation will begin if four of the agency's six commissioners agree to move forward.
Ryan's initial financial disclosure report listed the $50,000 as a contribution from the candidate. But a few days later, Stitzel amended the report and identified the money as a loan, but failed to include the name of the co-signer.
The $50,000 represents 76 percent of the money Ryan has raised for his campaign.
Also at the press conference, Ryan declined to discuss questions about who is the landlord of his campaign headquarters in downtown Warren or how much rent he is charged. There is no information about Ryan's rent expenses on his campaign reports.