BOISE – Republican U.S. Sen. Mike Crapo’s campaign said Friday it lost $250,000 after a former campaign manager loaned the money to a friend who contends somebody else later stole it.
Crapo, who said he learned of the loan in 2010, two years after it was made, is amending his Federal Election Commission campaign finance reports for the third quarters of 2008 and 2009 to reflect the loan.
Until now, it hasn’t been reported separately in Crapo’s public FEC filings, a potential violation of the agency’s rules.
The loan was approved in 2008 by ex-Crapo campaign manager Jake Ball, who submitted his resignation Thursday as district director for Republican U.S. Rep. Raul Labrador. The money went to an Idaho-based company, Blueberry Guru, an investment company that’s now defunct.
Ball has known Blueberry Guru owner Gavin McCaleb for 16 years.
Crapo said Ball gave the money to McCaleb’s business, which reinvested it in a real-estate venture in California and Nevada. Crapo didn’t give details of the recipients of the money, but his lawyers say they’ve disappeared.
“The loan was never repaid,” Crapo said. “According to Gavin McCaleb … Blueberry Guru handed the funds over to a third-party venture that absconded with the money.”
Crapo, who sits on the Senate’s Banking and Finance committees, said he has approved other, federally protected investments in the past by the campaign but had no knowledge of this transaction until it was brought to his attention in 2010.
It’s been a difficult year for Crapo already since his driving under the influence arrest in December in Virginia followed by his January guilty plea.
He lost his driver’s license for a year.
Ball’s last day in Labrador’s office will be May 31. He said Labrador would have allowed him to stay on, but he elected to exit to pursue a personal business venture.
He said he didn’t try to keep the loan secret.
“We never generally discussed investments,” Ball said. “He trusted me to place cash and I did.”
He said he regrets the campaign lost money, but he calculated in 2008 that he’d done due diligence on his investment with his friend to conclude that the transaction was appropriate.
“I saw what Gavin was going to do on his end, I saw how the funds were going to be held, and I evaluated it to be safe,” he said.
Stephen Ryan, Crapo’s Washington, D.C., lawyer, said Ball is “embarrassed” by his poor business judgment, extending a loan to a friend without telling his boss.
“Mr. Ball made an error of judgment; there’s no evidence he intended to benefit personally in any way,” Ryan said, adding he’s uncertain how the FEC will proceed. “The FEC may want to take action against someone. They may want to investigate.”
An FEC spokeswoman in Washington, D.C., declined to comment on the case.
Ryan said Crapo was in transition between campaign treasurers in 2008, a situation that afforded Ball authority as sole signatory to withdraw the $250,000 from a bank and lend it to McCaleb without another campaign official scrutinizing the transaction.
McCaleb, who declined comment Friday, is listed on his website as a real estate salesman in Boise with 10 years of experience flipping houses.
He sought federal bankruptcy protection in 2011. The case was closed in 2012.
Crapo said he’s sought to resolve the matter since learning of the loan in 2010, including referring the case to the FBI and the U.S. attorney’s office. He said they concluded their investigation without filing charges.
Hired later, Ryan told the campaign that further efforts to recover the lost cash were neither cost-effective nor likely to succeed, in part because McCaleb is broke.
“He’s bankrupt,” Ryan said, adding McCaleb “took people’s money and invested it. Based on our experience, he didn’t do a very good job.”
Crapo now has $3.4 million in his campaign treasury, according to his most recent FEC filing, a figure that reflects the $250,000 loss. He faces re-election in 2016.