Mortgage Obtained By Santorum May Have Violated Senate Ethics Rules

This item first appeared at JABBS.

Sen. Rick Santorum (R-PA) and his wife received a $500,000, five-year mortgage for their Virginia home from a private bank which makes loans to those with at least $250,000 of investments, which the Santorums did not have at the time the loan was made.

News of the mortgage, reported simultaneously by the liberal American Prospect magazine and the Philadelphia Daily News, is raising eyebrows at a time when Santorum is the Republicans' point man on ethics reform in the Senate. Government watchdogs suggest the loan could be in violation of Senate ethics rules if Santorum received something a regular citizen could not.

Melanie Sloan, a former federal prosecutor who heads Citizens for Responsibility and Ethics in Washington, or CREW, told reporter Will Bunch that "anytime he gets something that a regular person couldn't get, that's an improper gift" - regardless of any fees or the interest rate.

Philadelphia Trust Co., a private Philadelphia bank run by a major Santorum campaign donor, advertises itself as working for investors with liquid assets of at least $250,000. On its Web site, it states that its "{b}anking services are available only to investment advisory clients whose portfolios we manage, oversee or administer."

But a review of annual financial-disclosure forms filed by Santorum showed that in 2002, the year he obtained the mortgage, his investments were less than $140,000. The same disclosure forms show he has never held an investment portfolio with Philadelphia Trust.

So how did he receive the mortgage?

A Santorum spokeswoman said Santorum "applied for the mortgage using the standard application process that Americans must go through when applying for a mortgage and received a market-driven rate for their second home in the Washington, D.C., area." But that doesn't answer the question of why.

A bank director, Karen Iacovelli, also would not answer questions in detail, but when pressed on whether the bank does loan business with non-investment customers, she said, "Yes and no -- it's a judgment call."

That "judgment call" may have been made because officials at Philadelphia Trust have been generous supporters of Santorum since the bank opened its doors in 1998.

Federal records show the company's executives, directors and their spouses have donated $24,000 either to the senator's campaign or to the America's Foundation PAC. Of that total, $13,000 came from Philadelphia Trust CEO Michael Crofton and his wife.