Wednesday, August 23, 2006

Payday Loan Contributions in NY Congressional Race Raises Questions

By J.J. Cameron
Payday Loan Writer

It's not unusual for any campaign to field questions about just who is donating to it. It's a free country, this is how our elections are run and there are few rules in place for what sort of individual or company can help someone such as Sue Kelly maintain her congressional seat in New York.

The Times interest was piqued, however, by the attention paid to this race by fast payday loan companies.

Sue Kelly

First, some background: Kelly is facing her toughest competition in 12 years. As usual, the representative is receiving money from many industries she oversees in Congress. It's the status quo.

A handful of government watchdogs say the practice is bad for democracy because elected officials may find their loyalties divided on issues where the interests of large donors conflict with those of the voters.

"Money buys access in Congress, and often influence," said Massie Ritsch, spokesman for the Washington-based Center for Responsive Politics. "Members of Congress won't necessarily vote your way, but at least they listen. The less well-funded don't have that at their disposal."

The case becomes more interesting in New York because a fight is on to rid the state completely of predatory lenders and payday loans.

The Katonah Republican, Kelly, has raised about $1.4 million. Four Democrats are vying to unseat her, mainly on the basis of her support of Bush administration policy, including the war in Iraq. of course, Kelly wants to remain in office so she can continue working to keep the tax burden down and to improve the environment, educational opportunities and access to affordable health care, her campaign manager, Jay Townsend, said.

According to the June 30 Federal Election Commission filing, $766,942 of Kelly's contributions - or 54 percent - came from political action committees. Many of these special-interest donations come from businesses Kelly oversees through the House Financial Services Oversight and Investigations Subcommittee, which she leads.

"The fact that Sue Kelly takes money from the very same industries and companies that she has oversight responsibility for is ethically questionable and downright inappropriate," said Mike Morey, spokesman for Take19, a group organized to defeat her.

Since January 2001, Kelly has led the subcommittee with the power to investigate all matters that come under the jurisdiction of the House Committee on Financial Services, formerly known as the Banking Committee. Now, perhaps you can begin to see where receiving money from no fax payday loan firms becomes questionable.

After all, this committee oversees the securities, insurance, banking and housing industries, along with financial services regulators including the Federal Reserve, the Treasury Department and the Securities and Exchange Commission.

During her congressional career, Kelly has received more than $3.2 million in PAC money, with insurance, securities and investment, real estate, banks, accountants and credit companies among her biggest contributors, the nonpartisan Center for Responsive Politics said.

However, Kelly's 2006 election cycle contributors also included the lesser known QC Holdings Inc. and Cash America International Inc., payday advance companies that offer small, short-term loans.

"Neither company has been charged with wrongdoing," Townsend said. "Both are publicly traded companies listed on either the American or Nasdaq Stock Exchange."

That's true. But, as often happens during tense elections, campaign contributions are placed under a microscope and it's easy to see why these could raise financial flags.

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