Pajamas Media reports today:
Shortly after Labor Day, as polls continued to sink, the Democratic National Committee (DNC) realized it needed a cash infusion for the upcoming midterm elections. Its chairman, former Virginia Governor Tim Kaine, turned to the Bank of America to secure a $15 million revolving credit line. Then, in the middle of this month, the Democratic Congressional Campaign Committee (DCCC) got another loan from BofA for an additional $17 million.
The loans might be illegal. A key question is whether adequate collateral was posted for the loans. The DNC says it pledged its donor mailing list but:
“Donor lists do have value, but very fleeting value,” Ken Boehm, chairman of the National Legal and Policy Center, told Pajamas Media. “Lists do deteriorate and $15 million is an awful lot of money. So if the bank ends up with the list because the party is broke, where are they going to get their money?”
Regardless of the legality, the appearances are terrible. These are large sums of money that will no doubt be immediately poured into political ads and other campaign activities.
The Federal Reserve Bank of New York is currently attempting to get Bank of America to buy back billions of mortgage-backed securities. The Bank was the recipient of two TARP infusions of $20 million and $25 million, and taxpayers guaranteed another $118 billion in potential losses.