Kerry loan to campaign questioned

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Sen. John Kerry was asked yesterday to make public all documents involving the emergency $6.4 million bank loan he secured on his Boston town house late last year to finance his then-sagging presidential campaign.

At issue is the Mellon Bank's $12.8 million appraisal of Mr. Kerry's house on Boston's Beacon Hill -- substantially higher than the city's $6.95 million property-value assessment. That has raised questions from the Massachusetts Democrat's critics about whether he has loaned far more to his campaign than his assets justified and thus violated, or at least stretched, campaign-finance laws.

"If there is a serious question about the value of the house for the purpose of the loan, then he should release the appraisal documents. What seems to be happening is that there is some concern that the house is not valued at $12.8 million," said Lawrence Noble, executive director and general counsel of the Center for Responsive Politics, a public-interest advocacy group.

"The only way to resolve that question and the issues of the loan is to look at the [bank's] appraisal" records, Mr. Noble said yesterday in an interview.

Presidential candidates are allowed by law to borrow against the value of their property and other assets. In this case, Mr. Kerry owns the house with his wife, ketchup heiress Teresa Heinz Kerry. After obtaining the 30-year mortgage loan in December, he turned around and lent the $6.4 million -- representing his share of the house -- to his campaign.

The infusion of funds allowed him to jump-start his cash-strapped campaign at a critical point in the Iowa caucuses and New Hampshire primary campaigns in late December that helped him to surge into the lead and win both contests.

"The reason the value of the house is so important is that his wife cannot make more than a $2,000 contribution to his campaign. If she pays off the loan, that is a $6 million contribution, which is against the law," Mr. Noble said.

The Kerry campaign says the senator has other substantial assets of his own, though his last financial-disclosure statement in 2002 put the value of those personal assets at between $409,000 and $1.8 million, along with joint holdings with his wife that he valued at $300,000 to $600,000. His wife's personal fortune is estimated to be worth about a half-billion dollars.

The question of the loan appraisal and whether Mr. Kerry should release all of the documentation associated with it were raised anew yesterday in a public letter to the senator from an anti-Kerry Internet group (www.crushkerry.com) that is supporting President Bush's re-election.

"This appraisal is important because under the [Bipartisan Campaign Finance Reform Act of 2002], you are only permitted to use 50 percent of jointly held property to finance your campaign. Thus, an inflated appraisal of that home would allow you to obtain more money for your campaign coffers and skirt the intent of the CFR law," the letter said.

"If the fair-market value of your home is less than $12.8 million suggested by Mellon, your wife Teresa would be considered to have made an illegal contribution," the letter said.

Last year, the group reminded the senator, when former Vermont Gov. Howard Dean was under fire for sealing most of his state papers for 10 years, Mr. Kerry criticized the action, saying, "The highest office in the land requires the highest level of openness for the American people."

"We asked you to release all documentation concerning the loan from Mellon of New England, and, most importantly, the appraisal," the group said.

The Kerry campaign says it has complied with all election-law requirements in its reporting of the loan, but has not said how the senator, who earns $158,000 from his Senate salary, intends to pay the roughly $200,000 in annual interest payments.

"Sen. Kerry is a man who has considerable assets," campaign spokesman Michael Meehan told reporters.