Loan aided O'Malley

D.C. lawyer answered plea for $500,000 for TV ads

November 29, 2006|By John Fritze | John Fritze,Sun reporter

Short on cash in the waning days of the gubernatorial election, Baltimore Mayor Martin O'Malley reached out to a prominent Washington attorney for a $500,000 loan that paid for the Democrat's final television commercials - including an advertisement that featured former President Bill Clinton.

John P. Coale, a retired attorney known for his work on tobacco litigation and representing youth offenders in Maryland's now-closed juvenile boot camps, said yesterday that he agreed to provide the loan after campaign officials repeatedly made it clear that O'Malley might not win without the extra money.

The cash infusion kept O'Malley competitive despite dwindling reserves, but carried significant risk.

If O'Malley had lost to Gov. Robert L. Ehrlich Jr., his political future would have been in question, and he might have had a hard time raising money from donors for repayment. But after his victory last month, collecting donations as an incumbent chief executive will be much easier.

"The campaign made a strategic decision that additional funds were needed during the last week," said O'Malley spokesman Rick Abbruzzese. "We were in the midst of a constant barrage of negative attacks on television and in the mail. A decision was made to borrow this money to make sure that we weren't badly outspent."

Overall, O'Malley raised $14.9 million during the four-year election cycle that started in 2003, nearly $5 million more than the 2002 Democratic nominee, former Lt. Gov. Kathleen Kennedy Townsend, collected during the previous four-year cycle. The figures - and the loan - were disclosed on a campaign finance report that the candidates were required to file with the Maryland State Board of Elections yesterday.

Ehrlich and his running mate, Kristen Cox, raised about $17.9 million, had unpaid debts of $268,709 and a cash balance of $647,905.27, according to campaign fundraising chief John Reith.

An Ehrlich spokeswoman declined to comment on O'Malley's loan, but a spokeswoman with the Maryland Republican Party said it was indicative of broader problems with O'Malley's campaign.

"Marylanders will see, just like the way Martin O'Malley ran his campaign, he will spend money he doesn't have," said Audra Miller of the state GOP. "And Marylanders can look forward to their wallets next."

O'Malley's cash crunch was discernible in late October, when a report showed his campaign had $600,000 in the bank compared with Ehrlich's $2.4 million. At the time, O'Malley officials brushed the gap aside by claiming that they had pre-bought expensive television airtime.

Coale, who is married to Fox News personality Greta Van Susteren, said he first learned of the need for a loan when he was serving on O'Malley's campaign steering committee.

"I think the guy is doing it for the right reasons," said the lawyer, who has been named a member of O'Malley's State House transition team. "I love the fact that he's the only politician in America who can quote Irish poetry and get away with it."

State law allows campaigns to borrow an unlimited amount if the loan is from a bank or if repayment is personally guaranteed by the candidate. Loans must carry interest, or the campaign must record the lack of interest as an in-kind contribution.

In O'Malley's case, loan interest was set at 8 percent, Abbruzzese said. It must be repaid by the end of 2010.

O'Malley defeated Ehrlich by 116,740 votes in unofficial returns. With some polls, including The Sun's, suggesting that the race was close, both candidates stepped up their advertising late in the election. O'Malley unveiled two advertisements just before the election, including one that featured Clinton.

Coale has helped bankroll other prominent Democratic campaigns, including Massachusetts Sen. John Kerry's presidential bid. Campaign records show that Coale & Van Susteren Inc., based in Clearwater, Fla., contributed $4,000 to O'Malley in January. Records also list a John Coale, also of Clearwater, making a separate $4,000 contribution in October 2004.

In Maryland, Coale might be best known for representing juvenile delinquents held in state boot camps who were beaten by guards. In 2002, the state spent nearly $4.6 million to settle Coale's case, paying out almost $1.8 million to the 61 who were the most severely abused. He was a leading attorney on the landmark class action suit against the nation's largest tobacco companies.

Coale said he believes that O'Malley will pay back the loan in six to eight months, and early figures suggest that will not be a significant hurdle.

In an indication of just how much a governor can raise, O'Malley's campaign account has taken in about $136,000 since Election Day, said spokesman Abbruzzese.

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