Bank loan helped Wolf give $10M to his campaign
HARRISBURG (AP) – Some of the $10 million that Tom Wolf gave to his gubernatorial campaign came from a personal bank loan that he said he intends to repay.
The Democrat made the acknowledgment in a report by The Philadelphia Inquirer published Friday, saying he did not have the full amount in cash after investing heavily in a successful effort to save his building materials company from shutting down amid the recession in 2009.
Wolf’s campaign maintains he arranged the loan and the $10 million campaign contribution so that Wolf cannot be paid back by campaign funds.
“He made that donation as a contribution to the campaign, and not a loan, so he cannot get paid back himself through contributors after the fact,” spokesman Mark Nicastre said Friday.
Nicastre could not immediately provide the terms or amount of the loan. He also could not explain how Wolf would pay it back or how the candidate intended to prove that he, and not someone else, was repaying it.
Wolf has used at least some of the $10 million to air more than two months of campaign TV ads, blanketing the airwaves for weeks before any of his three Democratic opponents were able to establish a significant TV presence.
It has helped him seize an early and strong lead in independent polls.
The Inquirer also first reported that Pennsylvania’s State Employees Retirement System is an indirect investor in Wolf’s company.
The retirement fund is the largest investor in the Weston Presidio V buyout fund, which has invested $41 million the Wolf Organization, starting in 2006.
In reports to investors, Weston Presidio said the retirement system invested $50 million in the $1 billion fund. In its Dec. 31, 2013, report, Weston Presidio estimated that its investment in the Wolf Organization is worth just under $23 million, after saying the company had no resale value in 2009.
A Wolf Organization financial spreadsheet shown to the Associated Press last month showed the company made slightly more than $6 million in profits in 2013, up from slightly more than $2.1 million in 2012.
Wolf, 65, stepped down as the company’s chief executive officer Dec. 31. He currently serves as executive chairman and holds a 28 percent stake in the company, according to a campaign spokesman. After May 31, Wolf will become nonexecutive chairman, an unpaid position.
Wolf, along with two cousins, took out a loan and bought majority control of the company from their parents in 1986, according to the campaign. Over the next 12 years, the trio bought the remainder of the company’s ownership stakes before selling down their shares to 11 percent in 2006 and giving up managerial control as part of their retirement plan.
Three years later, Wolf re-entered the picture after a brief stint as then-Gov. Ed Rendell’s revenue secretary and considering a 2010 bid for governor.
The company had been unable to maintain payments on $64 million in bank loans, some of which had been used to buy out Wolf and his cousins, the Inquirer reported. To stave off bank foreclosure, Wolf invested $11 million of his own money and his two cousins and Weston Presidio each contributed several million dollars more to pay down the bank debt so the company could break even, Wolf told the Inquirer. Wolf also resumed control as chief executive.
Jessop Community Federal Credit Union