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Lenders Help Fund Inauguration

$1.6 million in mortgage industry contributions to Bush gala

January 10, 2005


Well-heeled members of the mortgage industry are helping throw an expensive inaugural party for President George W. Bush.

Operators of some of the nation's largest mortgage lenders and originators have contributed hundreds of thousands of dollars to help pay for the $50 million inaugural on Jan. 20.

The money, all of it raised privately through mainly corporate donations, pays for the inaugural parade, parties, balls, security and more.

A review by MortgageDaily.com of contributions posted on the 55th Presidential Inauguration Web site indicates mortgage companies, their top executives and trade-related lobbying groups have given more than $1.6 million to the inaugural committee.

The giving follows a pattern that the mortgage industry has established in giving campaign contributions to Washington politicians.

And while certainly many of the donors are civic minded, the industry may also be looking for some payback for its benevolence.

Several issues of concern to the mortgage and lending industries will confront the White House, Congress and federal regulators this year. While giving money to politicians and political causes doesn't guarantee the donor will get his or her way, the money has typically resulted in giving a voice to an industry's concerns in Washington as well as influencing decisions and actions.

According to the Center for Responsive Politics, which tracks the money trail of federal politics, "although contributions to federal candidates are capped by law, inaugural donations may be given in unlimited amounts."

"And though corporations and labor unions cannot give money directly to federal candidates or parties, they can help to fund inaugurations," the center said in a posting on its Web site.

Topping the list of inaugural donors are Ameriquest Capital of Southern California and NVR, a mortgage banking firm operating out of McLean, Va.

Ameriquest Capital and three of its subsidiaries -- Argent Mortgage Co., Town and Country Credit and Long Beach Acceptance Corp. -- gave a total of $1 million for the inaugural.

Ameriquest CEO Roland Arnall and his wife, Dawn, are members of the official Inaugural Committee. Members not only give money but also raise it from others.

Such in the case of another committee member, Dwight Schar, who heads NVR Inc., a homebuilder and mortgage lender.

Schar and his wife, Martha, gave $100,000 for the inaugural. But Schar also raised more than $300,000 for Bush's 2000 and 2004 campaigns, according to the Center for Responsive Politics.

Other givers include GMAC, $100,000; Bank of America, $250,000; New Century Mortgage Corp., $100,000; and the National Association of Realtors, $50,000.

So what do donors get for their money?

The center, citing Associated Press dispatches, reported that inaugural "underwriters," who contribute $250,000, will receive tickets to a number of events over the four-day inaugural celebration, including the swearing-in ceremony, the inaugural parade and an exclusive luncheon with Bush and Vice President Cheney. They also will be given tickets to one of three "candlelight dinners" on Jan. 19 at locations throughout Washington and one of the nine official inaugural balls.

"Sponsors" who contribute $100,000 will be admitted to many of the same events but will receive fewer tickets.

The mortgage banking industry was busy giving money to federal candidates in 2004, but not as much as it has doled out in past campaigns.

The center reported that total contributions from those in the mortgage banking industry totaled $6.4 million last year, with $4.1 million going to Republicans and $2.3 going to Democratic candidates.

That was down from 2002, when the industry gave $12.6 million total ($6.6 million to Republicans, $6 million to Democrats) and 2000, when the total came in at $7.7 million ($4.3 million to Republicans, $3.4 million to Democrats).

So what has the industry so interested in helping elect candidates to office?

The federal government is dealing with several issues that would impact the mortgage industry.

Just last week President Bush announced formation of a committee that will study simplifying the tax code. The committee is expected to examine the possible elimination of the mortgage interest tax deduction, which the mortgage industry, the National Association of Realtors and others in the industry oppose.

Realtors are also fighting the banking industry's proposed move into real estate operations, which would require federal government approval.

Frustrated by a patchwork litany of state regulations, the Mortgage Bankers Association of America has lobbied Congress to enact national standards governing predatory lending.

And there is bound to be some fallout over the shakeup at Fannie Mae and the accounting problems at Fannie and its sister, Freddie Mac. Congressional oversight is likely to intensify.

Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at: [email protected]

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