NEWS

Carr lent money to supporter's company

Chas Sisk
csisk@tennessean.com
State Rep. Joe Carr

State Rep. Joe Carr lent a company affiliated with a prominent supporter $200,000 in campaign funds last year — a transaction that campaign finance experts said appears to be extremely unusual.

Life Watch Pharmacy, a Nashville company led by venture capitalist and conservative fundraiser Andrew Miller, was given the sum last year and paid it back this spring, the Carr campaign said Tuesday after updating filings with the Federal Election Commission. The campaign, Joe Carr for Senate, received $9,564.54 in income off the loan.

Campaign finance records show that Miller gave a total of $5,200 in contributions to Carr for the 2014 election cycle last June, the maximum allowed.

The transaction was odd in that it reversed the usual flow of money between supporters and campaigns. Although campaigns often borrow from banks or put money in accounts until needed, campaign finance experts said they could not recall having seen a campaign lend to an outside firm.

"You definitely don't see a transaction of this sort every day," said Dave Levinthal, a senior political reporter at the Center for Public Integrity. "This is definitely not a common arrangement."

Money repaid

Carr has been waging a tea party battle to defeat U.S. Sen. Lamar Alexander, who is seeking a third term. The campaign has trailed far behind in fundraising and in the polls, but it has amped up its activity in recent weeks, frequently hitting the incumbent on the issue of immigration just before voters go to the polls.

Don Rickard, Carr's campaign manager, said in an email that the campaign made the loan to Life Watch in the fourth quarter of 2013 and it was repaid in May. In March, it received income from the loan. Rickard did not respond when asked whether the payment consisted solely of interest or included some of the loan principal.

That March payment caught the attention of FEC officials. In early June, the agency contacted Carr's campaign and asked officials there to explain the transaction, noting that it could violate federal campaign finance limits if considered a campaign contribution.

A corrected report, filed last week, makes clear that the transaction is income from a loan, rather than a donation from Life Watch or Miller. Rickard said Tuesday that the deal complies with federal law and earned money for the campaign.

"This is a transparent and fully disclosed activity allowed within campaign finance regulations," Rickard said. "The campaign did not see any purpose in letting the money simply sit in our checking account."

Miller said the Carr campaign was part of a larger group of lenders that gave Life Watch cash up front while it awaited the settlement of legal claims by pharmacies against health insurers, a standard part of the company's business model. He said no other campaigns were involved.

"This is a pretty safe situation," he said.

Politically active

The Middle Tennessee businessman has played a prominent role in Tennessee politics in recent years. He has been a major supporter of tea party candidates, including Lou Ann Zelenik, who ran unsuccessfully for Congress in 2010 and 2012, and U.S. Rep. Scott DesJarlais, an incumbent who faces a primary challenge this summer from state Sen. Jim Tracy.

Miller gave Carr $2,600 for his primary and general election campaigns, federal election records show. He also has been the largest donor to the Real Conservatives National Committee, giving $22,500 to the Spring Hill-based super political action committee.

That group has been behind the "Beat Lamar" campaign that has proved to be one of Carr's most consistent supporters. On Tuesday, the group announced radio host Laura Ingraham would appear at a "Restore America" rally for Carr next week in Nashville.

Ingraham said earlier this week that she's "all in" for Carr, urging her nationwide listening audience to get behind his campaign.

The Carr campaign has touted the endorsement, saying in a message to supporters that "Ingraham's support was critical for Dave Brat in his successful campaign to unseat the ultimate Washington insider, Eric Cantor," the House majority leader earlier this summer.

Reach Chas Sisk at 615-259-8283 and on Twitter @chassisk.