Decision 2010: FEC investigating $250K bank loan made to Fincher - WMC Action News 5 - Memphis, Tennessee

Decision 2010: FEC investigating $250K bank loan made to Fincher

Stephen Fincher Stephen Fincher
Roy Herron Roy Herron

By Joe Birch - bio | email

DYERSBURG, TN (WMC-TV) - The bitter battle to follow retiring Rep. John Tanner in Tennessee's 8th District is the state's most expensive, and perhaps ugliest, race for congress.

The district rolls from the Memphis neighborhoods of Frayser and Raleigh to Kentucky, and reaches clear across into Middle Tennessee, Clarksville and the outskirts of Nashville.

The Federal Election Commission is now investigating complaints about a loan from a bank where one of the candidate's father sits on the Board of Directors. But in a recent interview with Action News 5, republican candidate Stephen Fincher defended the $250,000 he borrowed from Gates Banking and Trust in Gates, Tennessee.

"I made my campaign a loan in the primary of $250,000," he said. "The FEC said it's OK. The bank said it's OK. The bank's lawyer said it's OK, and I say it's OK. It's a legal loan."

But Fincher's opponent, State Senator Roy Herron, disagrees.

"He says he got this bank loan for $250,000 and the Federal Election Commission approved it," Herron said. "That's just simply not so. They didn't approve that loan and he didn't do it the way the law requires."

Herron points to his and other candidate's properly documented loans. For example, Diane Black, the republican running for congress in Tennessee's 6th district, clearly indicates the terms and interest rate of her loan as required by law.

The Federal Election Commission is now examining Fincher's loan because he failed to disclose the interest rate and terms. Fincher's father sits on the Gates bank's board. Herron contends that, lacking the legally required terms and interest rate, the loan could be an illegal contribution from the bank:

"He won't tell you how it's secured or whether it's secured," Herron said in a recent speech.

Action News 5 asked Fincher: If everyone says it's completely legal and he has nothing to hide, why not show the terms of the loan to quiet critics?

"We have disclosed everything that we're required to disclose," Fincher said. "We've broken no laws. He called me a felon in TV ads, really, a low blow."

But Herron contends that Fincher's omission of loan details constitutes failure to be truthful with 8th district voters:

"The first and most important issue for any public official is character," he said.

Herron, a Dresden lawyer, has also disclosed his $400,000 annual income and his tax records for the last 4 years, a tradition in Congressional races, as well as a detailed financial disclosure form mandated by Congress.  

"It's important for the American people to know when you have a conflict of interest," Herron said. "To know where your money came from, know what your assets are, know what your liabilities are, and know who you owe."

Fincher, who runs a multi-county farm operation based in Crockett County, listed his farm as his only asset and a 2009 income of $59,000 on his financial disclosure form.  

"He's violated the law in not disclosing his assets," Herron said.

"My opponent knows that personal assets are exempted from that disclosure statement: your home, your personal vehicles," Fincher countered.

Reached for comment, a spokesperson from Gates Banking instructed Action News 5  to call their lawyer, J. Robert Walker of the Baker Donelson law firm, about the Fincher loan.  Walker's secretary said he's out of town and won't be available for comment until Friday.

Fincher's campaign manager sent Action News 5 an e-mail Thursday that said regarding  Fincher's financial disclosure form, "if technical violations or omissions were made, we will correct them in due course" and that "campaign lawyers are reviewing the FEC complaint we received last week."

Fincher is the only 8th District candidate who will not be in Jackson, Tennessee Thursday for a debate. Fincher said he won't debate Herron until he apologizes for calling him a felon. Herron asked if Fincher won't stand up to him, how is he going to represent the 8th District in Washington?

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