Group claims Santorum broke ethics rules
Thursday, February 23, 2006

A liberal watchdog group has filed an ethics complaint against Sen. Rick Santorum claiming that he had violated Senate rules by the way he obtained a mortgage from a Philadelphia financial firm.

The campaign of his prospective opponent, Democratic Treasurer Bob Casey, joined in the criticism, contending that the loan "raises serious question about whether Mr. Santorum received special treatment in violation of Senate ethics rules."

Mr. Santorum and his campaign dismissed the criticisms as groundless, characterizing them as the product of partisan bias by the magazine that first published the details of the home loan.

The current issue of the American Prospect reports that Mr. Santorum refinanced his Virginia home with a $500,000 loan provided by the Philadelphia Trust Co., a firm that it said normally provides mortgages only to affluent customers of its overall investment services. A similar article by the same reporter also was published this week in the Philadelphia Daily News.

His campaign spokesman said that the interest-only loan was made in 2002 at a "market-driven rate," 5 percent annually over its five-year term, at the end of which it will have to be repaid or refinanced.

"I applied and filled out all the paperwork everybody has to fill out when they apply for a mortgage and got a market rate," Mr. Santorum said in a statement released by his office. At the time of the loan, I made it very clear that I don't want any special treatment ... I didn't get any special treatment."

Mr. Santorum told The Associated Press yesterday that he had become acquainted with the Philadelphia firm's CEO, Michael Crofton, through philanthropic work.

"One of the things about Mike is, in the years I've known him, he's never lobbied me for anything, never asked me for anything, never did anything that was related to my professional capacity," Mr. Santorum told an AP reporter.

While the interest rate the senator obtained does not appear to have been out of line with the general mortgage market, both the American Prospect article and the Casey campaign noted that the loan came from a firm that normally provides such loans only to customers with large investment portfolios rather than members of the general public.

In a statement, Citizens for Responsibility and Ethics in Washington, the group that filed the complaint with the Senate Ethics Committee, contended that the transaction violated the Senate ban on gifts "because Sen. Santorum did not meet Philadelphia Trust's client criteria and because the senator was not, in fact, a bank client at the time he received the mortgage."

The articles in the Daily News and the American Prospect, reported by Will Bunch, noted that officers of the Philadelphia firm had contributed to Mr. Santorum's campaign, but they also noted that there is no evidence that Mr. Santorum, who is a member of the Senate Finance Committee, had taken any official actions to benefit the firm.

"This is baseless," said Virginia Davis, press secretary for Mr. Santorum's re-election campaign. "This is a liberal magazine with an obvious bias against Rick Santorum."

Of the organization that filed the ethics challenge, she said, "CREW is a liberal front group that has made a career out of trying to discredit Republicans."

The organization describes itself as "a nonprofit, progressive legal watchdog group."

While echoing the criticisms of the Santorum loan, Larry Smar, Mr. Casey's campaign press secretary, released a statement saying that the Democratic treasurer had obtained a $120,000 mortgage in 1998, at an initial rate of 8 percent, subsequently lowered to a variable rate of 6 percent. Mr. Smar called on the Republican senator to release the full terms of his mortgage, although a copy of the Santorum mortgage agreement, from public records, is included in the CREW complaint to the Senate panel.

First published on February 23, 2006 at 12:00 am
Politics Editor James O'Toole can be reached at or 412-263-1562.
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