The low interest rate on a candidate's loan raises some eyebrows.
By DAVID SKOLNICK
VINDICATOR POLITICS WRITER
LIBERTY -- Anthony A. Latell Jr., is calling on Timothy J. Ryan to fully disclose all the details about a questionable $50,000 loan to Ryan's campaign.
The two are among a number of candidates seeking the Democratic nomination to the 17th Congressional District seat.
Ryan, a state senator from Niles, obtained a $50,000 loan from Second National Bank, but because he has no collateral he needed someone to co-sign.
The co-signer is Dennis Rossi, an insurance salesman who was Ryan's junior varsity basketball coach at John F. Kennedy High School in Warren.
What rules say
Federal election rules say a co-signer of a bank loan is considered to be a contributor to a congressional campaign, and that Rossi is responsible for half the $50,000. That means Rossi gave Ryan's campaign a $25,000 contribution, far above the $1,000 limit an individual can give to a congressional campaign.
Ryan has since paid back half of the loan, saying it was Rossi's share, but election rules still consider the balance to be a 50-50 split between the two meaning Rossi has contributed $12,500 to the congressional campaign.
New questions have arisen, specifically regarding the interest rate and the number of times Ryan amended his congressional campaign finance reports to correct errors about the loan.
Ryan amended his reports three times in four days, and he has to do it again.
This morning, Ryan's campaign acknowledged yet another mistake on his campaign finance report. Ryan's pre-primary filing lists a $10,000 expenditure to Julie Stitzel, his campaign treasurer. That was a typographical error and should be $1,000, said Patrick Lowry, Ryan's spokesman.
Stitzel is a paid staffer and the $1,000 is her salary, Lowry said. On the report, the only explanation for the money given to Stitzel is for "expenditures."
The report will be amended, Lowry said.
In his initial filing of the loan, Ryan said the $50,000 was a contribution from him.
In the next filing, he called it a loan, but he listed no co-signer.
The second amended filing listed Jeff Rossi, Dennis Rossi's brother, as the co-signer. In the third amended filing, Dennis Rossi is listed as the co-signer.
"We're human; we're not perfect," Ryan said. "We make mistakes."
Low interest rate
The interest rate on Ryan's loan of 6.25 percent has raised the eyebrows of Latell, a state representative from Girard, as well as Mike Thomas, campaign manager for U.S. Rep. Thomas C. Sawyer of Akron, another Democratic candidate in the congressional race.
According to Ryan's campaign disclosure form, nothing was pledged as collateral toward the loan. The Vindicator called Second National's main branch in Warren, and a loan officer quoted an interest rate of 14.75 percent for an unsecured personal loan with no collateral.
"That was the interest rate I was given," Ryan said when asked how he got the 6.25 percent rate. "There's nothing going on here. Why are you making a big issue out of this? I haven't done anything wrong. I've been completely honest."
Ryan then refused to answer any more questions.
Latell said Ryan has an obligation to fully disclose all information about the loan and questions how the candidate got such a low interest rate.
"I don't know how anyone could get a 6.25 percent loan with no collateral," he said. "That interest rate is not possible with no collateral. I know a lot of friends who would want to go to Second National Bank and get that interest rate."
Thomas said he is no expert on loans, but the interest rate Ryan got is much less than the mortgage interest rate he has on his home, which he used for collateral.
A complaint has been filed by Donald Walter, a Mahoning Valley businessman and Sawyer contributor, with the Federal Election Commission.
"There's still questions that need to be answered," Thomas said. "The FEC is not going to act in time for the primary. This is a back-door way to get money into his campaign. On the face of it, it looks like there is money in the race that shouldn't be there."
In light of the recent conviction of U.S. Rep. James A. Traficant Jr. on federal bribery and racketeering charges, integrity in this congressional race is a key issue, Latell said.
"We have to be totally confident that our next congressman tells the truth," he said. "Our future depends on voting for a person of the highest integrity."
Sawyer said he does not believe Ryan "willfully violated federal campaign finance laws, but the use of an unsecured personal loan is against the law in federal campaigns. "We must all be above reproach," he said.
Maridee Costanzo of Warren and Joe Louis Teague of Youngstown, two other Democratic candidates, said Ryan made an honest mistake and should be given the chance to correct it.
Ryan said that if anything was done wrong, he will fix it and that Latell and Sawyer are playing political games.
"I took out a loan because I don't want to be owned," Ryan said. "You can't take money from people from around here because the next day, they're in jail."
Ryan also said there are more important issues in the campaign that need to be addressed and that "for this loan to take center stage is an absolute tragedy. For this to be the central issue in this race is a sin."