Frist rebuts complaint,
denies he hid $1.44M loan
Tennessan.com
By BOB KEMPER
Cox News Service
WASHINGTON — In his first public comments about his
campaign finances, Senate Majority Leader Bill Frist yesterday
said he was not trying to hide a $1.44 million loan in 2000 and
2001, as a complaint filed with the Federal Election Commission
alleges.
Frist said the loan paperwork filed with the FEC "was all done
within the FEC guidelines."
The Tennessee Republican also defended his decision in 2000 to
invest $1 million of his contributors' money in the stock market
even though that investment lost hundreds of thousands of
dollars.
"Over time, money that is placed in markets will increase
faster than placed in banks," said Frist, who for the first time
addressed questions about his investment and the loan. He fielded
questions during a meeting in his office with regional
reporters.
Only $290,000 remains of Frist's $1 million investment, and
that money is being used to pay Frist's routine political
expenses, making it less likely that the investment could recoup
its losses.
The campaign also owes a $349,000 bank loan.
Frist would not identify the mutual funds in which he
invested.
He said the money was placed in "mutual funds, multiple
funds," but he did not elaborate. His claim that the money is in
more than one mutual fund contradicts campaign aides' claims that
the money is in a single fund managed by the Charles Schwab
Co.
FEC regulations allow such investments in the stock market and
do not require lawmakers to identify the stocks or funds in which
they invest.
Citizens for Responsibility and Ethics in Washington last
month filed a complaint against Frist with the FEC alleging that
he tried to hide the $1.44 million loan his campaign took out in
November 2000 so it could repay Frist for money he lent the
campaign six years earlier.
The complaint was based on an Atlanta Journal-Constitution
story disclosing Frist's campaign finances.
Frist's campaign committee, Frist 2000 Inc., is listed in bank
documents as the borrower of the loan, but Frist 2000 did not
report the loan to the FEC. Instead, the loan was reported by
another Frist committee, Bill Frist for Senate Inc., which was
set up in 1994 and was virtually dormant in 2000.
The effect was to make Frist's 2000 campaign looked
financially stronger than it actually was at a time when Frist's
$1 million investment was losing as much as $160,000 a month.
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