Dole Just Happend To Have A Few Bucks Lying Around
The big reason that former senator Robert J. Dole was able to loan Newt Gingrich $300,000 to pay the House speaker’s ethics penalty was because he was paid at least $500,000 recently to film a television commercial for Visa credit cards, sources said Thursday.
Two people with whom the former Senate majority leader spoke said he was paid the fee, which required two days of taping. In addition, Visa agreed to give another $250,000 in Dole’s name to several charities that Dole selected.
Dole declined to comment on the payment from Visa on Thursday. Associates said a confidentiality agreement between Dole and Visa requires that both parties not discuss financial or other details of their arrangement.
A Dole spokesman said the loan to Gingrich came from money “he earned and saved.”
The terms of the Dole loan appear to be more favorable to Gingrich than would be available from commercial lenders in today’s marketplace, according to several bankers.
The feature that sets the loan apart, these bankers said, is a provision that allows Gingrich to make no payments, principal or interest until the end of the loan’s eight-year term.
“We would generally have some sort of specified payment terms,” said one. “… We would consider it somewhat unusual if it were to balloon in eight years with no payment required” before then.
Typically, banks are willing to allow a wide range of payment schedules on such loans, but they require a payment schedule. It might be interest-only, paid monthly or quarterly, or the loan might begin to amortize, in which the principal begins to be paid off.
Several bankers and banking experts said they did not see the loan as excessively generous, and that a private lender such as Dole might find the terms attractive. “It’s 200 basis points (2 percentage points) higher than a corporate bond,” said one, and given the stock market’s recent behavior, the loan could make perfect sense to Dole on purely economic terms.
The bankers, none of whom wished to be quoted by name, said the other terms of the loan - its interest rate, term of years and collateral, or lack of it - are within the ranges that they would consider in today’s market conditions.