Santorum Surge Brings Ethics Questions
Santorum got special mortgage from bank run by campaign donors.
Jan. 4, 2012 — -- Rick Santorum's powerful finish in the Iowa caucus is bringing fresh attention to his tenure in Congress, including ethics questions that dogged him about a preferred mortgage he received from a bank run by campaign donors, and federal funds that went to a real estate developer who backed his charity.
One of the top donors to Santorum's charity was also the beneficiary of an $8 million Santorum-sponsored federal earmark, according to published reports. Melanie Sloan, a former federal prosecutor who filed an ethics complaint against Santorum in 2006 on behalf of a watchdog group, said her organization's website received a tidal wave of visitors in the past 24 hours, and in an interview she said she believes people will discover that the GOP presidential contender is "hardly the moral paragon he purports to be."
"There were several instances in which Santorum appeared to have taken campaign contributions in direct exchange for legislative assistance," said Sloan, whose organization, Citizens for Responsibility and Ethics in Washington (CREW), spent months investigating Santorum's activities while he was in office. "He violated Senate gift rules by accepting a mortgage from a bank in which he had no interest and which otherwise made loans only to its own investors."
Santorum has rarely responded to such attacks, but at one point he wrote a letter to a Philadelphia newspaper criticizing the ethics complaints as a series of "disingenuous innuendo and half-truths." The Senate Committee on Ethics never responded to CREW's complaint, and the two-term senator left Congress in 2007 after losing a reelection bid. A Santorum campaign spokesman has not yet responded to phone messages and email requests for comment.
For months, Santorum's record and background have escaped presidential-caliber scrutiny from rivals and reporters because he never appeared to have traction with voters in the early Republican contests. But as Santorum's GOP rivals have learned, the national spotlight can be searing. Questions about Newt Gingrich's consulting work for Fannie Mae surfaced in attack ads against him. Herman Cain bowed out of the race after reports of sexual harassment complaints dogged him for weeks. If the pattern holds true as the winnowed GOP field heads from Iowa down the rural roads of New Hampshire, Santorum will be the latest to undergo intensified scrutiny from rival campaigns and from the national media.
Perhaps the most jarring detail from his tenure in office is the unorthodox $500,000 mortgage that Santorum and his wife secured on the home in rural Virginia they had purchased for $643,361. According to a series of reports in the Philadelphia Daily News, the mortgage came from Philadelphia Trust Company, a fledgling private bank catering to "affluent investors and institutions" whose officers had contributed $24,000 to Santorum's political action committees and re-election campaign.
In advertising, the lender said it only offered its preferred rates to well-heeled borrowers who also used their investment services. But Santorum's public disclosure forms showed he did not have the required minimum $250,000 in liquid assets and was not an investor with Philadelphia Trust. His ability to secure the five-year loan led Sloan to file a complaint under a Senate ethics rule that specifically prohibits members from accepting a loan on terms not available to members of the general public. At the time, a Santorum spokeswoman told the Daily News that the mortgage terms were set at "market rates," but did not provide further comment.
After leaving Congress in 2007, Santorum sold the house for $850,000.
O'Neill has not committed to supporting Santorum's presidential bid, saying he is waiting to see if Santorum can focus on more mainstream economic issues, rather than social issues.
"If he doesn't win it won't be because of his ethics," O'Neill told ABC News. "What's going to kill him is, this country wants someone down the middle."
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