Colorado GOP Wadhams-Harvey feud now spotlighting Harvey finances
Monday, March 21, 2011 at 11:44 am
Colorado Republican Party Chair Dick Wadhams apparently isn’t the only one attacking the financial acumen of state Sen. Ted Harvey, who aims to succeed him. Obscure court records documenting a $49,000 note that Harvey paid to J.P. Morgan Chase are being shopped to reporters by an operative with past ties to the Republican National Committee.
Despite the fact Harvey avoided a judgment by paying off the note in 2009, the documents are being dished to Denver media outlets in an attempt to hammer another nail in the Highlands Ranch mortgage broker’s reputation that might be marred by a $19,000 unpaid debt from his failed 6th Congressional District bid in 2008
“I have no judgments against me and I have a perfect credit score,” declared Harvey. “Make sure you print that or I’ll sue you.”
He said it’s incredible that anyone would bother to uncover and circulate the court documents because he’d paid the note and avoided the judgment.
According to the document shopper, who claimed to have investigated Republican gubernatorial candidate Dan Maes last year for the RNC, the party bosses are concerned not only about the financial viability of the state GOP, but also the tone of the next party chairman – particularly as the 2012 presidential election looms.
The choice could unite or rip the party apart – creating divisions that could take years to heal.
“I am excited about uniting our party and I’m focused on beating the Democrats in 2012,” said Harvey of his campaign for state GOP chair.
Harvey admitted financial struggles in a tough climate for real estate agents, mortgage brokers and construction industry members since the financial meltdown in October 2008. He felt the chill winds blowing in 2005.
According to Douglas County District Court records, J. P. Morgan Chase Bank sought a judgment against the mortgage broker and his company, Metro Funding Corp. (also known as Metro Fund, LLC) for failing to pay a $50,000 Promissory Note dated Nov. 7, 2005, of which $49,000 was renewed on May 24, 2006. Chase filed legal action in March 2009, and it was satisfied within eight months.
“I personally paid it,” said Harvey, who was president of Metro Funding Corp., which went under in the economic downturn.
Harvey’s mortgage broker license expired in December – but the senator said that he doesn’t work during the legislative session because there is limited time to devote to clients. He’s also switching careers.
“I will no longer be a mortgage broker. I plan to work for a mortgage bank. Because of all the changes in regulations, it’s very hard to be a mortgage broker,” said Harvey, a broker for American Home Funding that is in the process of becoming a lender.
Mortgage brokers work with various lenders to arrange mortgage financing for clients. Lenders fund mortgages directly.
Harvey said there are too many regulations on the mortgage broker industry – and he personally does not want to pay for federal and state requirements of licensing, testing and taking courses each year.
Wadhams, among others, have questioned Harvey’s ability to raise money for the state GOP and mused that the state senator is motivated by the party chairman’s nearly $150,000 annual salary.
“I don’t think Ted Harvey has the foggiest idea of how to raise money,” said Wadhams, who vowed to expose “the little creep.”
Harvey laughed. He is not only undaunted by those slash-and-burn comments, the senator says he welcomes the fiery exchanges because he is running against the legacy of Wadhams, who declined to seek a third two-year term.
“I’ve picked up more supporters because of Dick’s tirade,” chuckled Harvey, who had dropped by the redistricting public meeting before appearing at a state party chair candidates’ forum in Pueblo last weekend.
“My goal is to raise money big time,” declared Harvey, echoing stump speeches that liberally criticize Wadhams for mishandling party finances and dribbling $500 or less to individual Republican candidates last year.
“We need a proven conservative to reach out to energized, passionate Tea Party folks,” said Harvey, who described himself as establishment and anti-establishment. “We need a targeted message – a passionate, conservative message – to raise money.”
“If Ted Harvey is an effective fund raiser, why doesn’t he pay off his $19,000 campaign debt from 2008?” sniped Wadhams. “He needs to sober up and realize the facts.”
Wadhams facts include correcting Harvey’s contention that the Republican National Committee bailed the state party out of a $600,000 debt. After winning the state GOP chair in 2007, Wadhams said he had the party books audited, discovered the awesome red ink and turned it black through his own fundraising efforts. The RNC money went strictly to the Victory (get out the vote) efforts in 2008 and 2010 that benefited all Republican candidates in the general elections.
Harvey raised $202,051 in his race for the 6th Congressional District seat and came in third behind Representative Mike Coffman and candidate Wil Armstrong, son of former Republican Senator Bill Armstrong.
According to Federal Election Commission reports, Harvey loaned his campaign $12,000, but left a $19,000 debt unpaid to his campaign manager Jon Hotaling, whose take-no-prisoners style had delivered Representative Doug Lamborn in the contentious 5th District primary in 2006. Lamborn, who was hobnobbing with Hotaling at the El Paso County GOP Central Committee meeting on Feb. 12, has endorsed Harvey for state party chair.
Harvey, who served three two-year terms in the State House, won election to the State Senate in 2006. In the first leg of his four-year term, Harvey initiated his bid for the 6th Congressional seat retired by Representative Tom Tancredo.
Harvey filed a statement of organization with the FEC on Nov. 30, 2007. Yet, questions also surfaced recently about why the candidate also registered a nonprofit corporation – “Ted Harvey for Congress” – with the Colorado Secretary of State’s office in February 2008.
The Ted Harvey for Congress nonprofit corporation didn’t declare its purpose and financial records are not required by Colorado.
Attached to the corporation filing was a dissolution decree that simply stated, “Upon dissolution all assets will go to W. Ted Harvey.”
Attorney Glenn Hagen, who was Harvey’s congressional campaign treasurer, said, “I have no idea why that account was opened … I have to say ‘no comment’ to all of your questions.”
“It was set up to process payroll taxes,” said Hotaling. The funds, he said, were reported on Harvey’s FEC reports as expenditures paid to CFO Today, an accounting firm in Highlands Ranch.
Hotaling said that CFO Today would not comment or verify how the funds were transferred through the Harvey for Congress nonprofit corporation to the accounting firm because that information is confidential. He also did not know if any money was still in the account when it was dissolved.
Colorado Springs accountant Eileen Warnock, treasurer for former 5th District Congressman Joel Hefley’s campaigns, said it was unnecessary to create a state-based nonprofit corporation for payroll taxes.
“We paid all payroll taxes – federal and state – through the account registered with the FEC,” said Warnock. “I can’t think of any reason for establishing a nonprofit organization at the state level for a federal campaign.”
In the field of party chair contenders, Wadhams said he prefers state GOP Vice Chairman Leondray Gholston or state party legal counsel Ryan Call over Harvey, newcomer Bart Baron and Matt Arnold, director of the failed Clear the Bench campaign to purge liberal judges.
The winner of the March 26 race must receive 50 percent plus one of the votes cast by the state GOP Central Committee. Several Republican members have predicted that the runoff will pit Harvey against Call.