Checkered Financial Past Dogs Tea Party's Christine O'Donnell in Senate Bid

Delaware's new Republican candidate calls accusations a smear.

September 15, 2010, 3:57 PM

Sept. 15, 2010— -- Allegations of a checkered financial past were not enough to keep Christine O'Donnell from a surprise victory in Tuesday's Republican Senate primary in Delaware. But as the Tea-Party-backed candidate enters the general election and the national spotlight, the trickle of accusations, from unpaid student debts and income taxes to IRS liens and improperly used campaign funds, has become a steady stream.

O'Donnell, a former marketing executive and conservative pundit, has twice before run for Senate and lost, leaving in her wake a lengthy paper trail. Her defeat of Mike Castle, a longtime Republican congressman heavily favored to win, has earned her enemies in both the Democratic and Republican parties, all of whom are digging into her financial history looking for mud to sling.

Just before voters went to go the polls, Delaware residents received a robocall, paid for by the state's Republican party. It was a recorded message from O'Donnell's 2008 campaign manager, Kristin Murray, alleging that O'Donnell "was living on campaign donations -- using them for rent and personal expenses, while leaving her workers unpaid and piling up thousands in debt. She wasn't concerned about conservative causes. O'Donnell just wanted to make a buck."

Those were the most recent in a string of accusations that suggest financial irresponsibility dating back to O'Donnell's graduation from college and first campaigns.

O'Donnell raised eyebrows with one of her first acts as a new candidate, when she officially disclosed her finances. In a Senate financial disclosure report from July, O'Donnell reported just $5,800 in earned income between March 2009 and July 2010. She says she worked for two companies, one a marketing firm and the other a conservative political action committee.

According to Federal Election Commission data, O'Donnell contributed $3,026 of her own money, or more than half her reported "earned income" to her campaign.

In interviews, O'Donnell has said she earned more than that $5,800 but was not required to disclose it. "The only thing they can use against me is that I'm not a multimillionaire," she told the Weekly Standard before the election.

That answer falls short for some ethics watchdogs – and voters.

"Every candidate should at the minimum follow the law. If the public has questions beyond that, questions about a candidate's private interest that could have ties to her public work, it helps that they go beyond the minimum required d by law. She needs to provide additional details," said Dave Levinthal, spokesman for the Center for Responsive Politics.

O'Donnell rose to national attention in the 1990s as a social conservative, appearing on shows like Bill Maher's "Politically Incorrect" to campaign against pornography and masturbation.

As her political star began to rise, public documents show, so too did a string of financial issues.

Christine O'Donnell Senate Victory Dogged by Financial Questions

In March, the IRS initiated an audit and placed a lien against her for $11,744.59 in taxes and penalties from the 2005 tax year.

"They made up an accusation about an IRS tax lien," O'Donnell said today on "Good Morning America," hours after winning the primary. "The IRS said it was a mistake. They cleared it up right away. We gave my opponent and the Republican administration, showing them that the IRS had admitted to a computer error. They chose to ignore the truth because they don't have a record to stand on."

Since 1994, Farleigh Dickinson University, in New Jersey, has sued O'Donnell five times for outstanding debts of about $5,000.

O'Donnell claims to have graduated from the school 17 years ago -- and claimed to have a degree during her 2006 Senate campaign -- but the school said she did not officially graduate until two weeks ago. In previous interviews, O'Donnell said the school withheld the diploma because of the money. But a school official interviewed by said the degree was not conferred because she had not completed her coursework.

"It took me 12 years to pay off my college loans," she told "GMA." "I'm not a trust fund baby. Most Delawareans can relate to having to work hard to pay for their own college education. I was never dishonest about that."

In a March interview with Delaware's News Journal, O'Donnell admitted to living in a three-bedroom home with David Hust, a campaign staffer and Christian rock musician and paying half her rent – between $1,645 and $2,020 a month – with campaign donations because she uses the home as a campaign office as well.

"I am renting from the campaign," she told the paper. "I'm an unconventional candidate because I believe that we have to make sacrifices."

O'Donnell, who previously owned a home, was also sued by her mortgage holder in March 2008 at the height of her campaign against then-Sen. Joe Biden.

The company secured a mortgage default against her for $90,421 and the house was to be foreclosed and sold at auction. Instead, O'Donnell told the News Journal, she sold the house to a campaign lawyer. She said she intended to buy the house back, but decided instead to run again.

When asked on "Good Morning America" about her financial past, O'Donnell said, "We've addressed all of this stuff on our website."

Anyone looking for that information on the site today, however, would be unable to find it.

Visitors to were given just one option when they visited the site today, the chance to donate money. No other pages or information were available on the site except for the link allowing one to donate to the campaign.

A goal of raising $50,000 on the site was updated later in the day to $750,000.

Calls to the campaign from seeking further comment were not returned.

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