08/27/2010 03:35 pm ET Updated May 25, 2011

Congressional Candidate Questioned About Mysterious Quarter-Million Dollar Campaign Loan

NASHVILLE, Tenn. (AP) -- A prominent Democratic lawyer is asking federal prosecutors to investigate whether Republican congressional candidate Stephen Fincher omitted debts and assets in financial disclosures maintained by the U.S. House.

The Fincher campaign dismissed the allegations brought by Covington attorney J. Houston Gordon, a former state Democratic Party chairman, as a political stunt on behalf of Roy Herron, the Democratic nominee in the open 8th District race in northwestern Tennessee.

"Stephen Fincher filled out all required disclosure forms honestly and in good faith," Paul Ciaramitaro, Fincher's deputy campaign manager, said in an e-mail. "Roy Herron's camp is using one of his political hatchet-men to gin up a sideshow."

Fincher in the disclosure statements said his only assets were about $60,000 in farm income last year and another $124,000 through May of this year. That led Gordon to question how Fincher could round up $250,000 to lend his campaign in the closing weeks of the tumultuous GOP primary.

"Mr. Fincher indicated that he and his spouse have no liquid assets of any kind no checking accounts, no savings accounts, no money market accounts, no stocks, no bonds," Gordon said in a letter sent this week to the U.S. attorney in Memphis.

"It seems somewhat improbable that Mr. Fincher can loan his campaign a quarter million dollars in July 2010 without having any money in any bank account," he said.

Warren Nunn, chairman of the Gates Banking and Trust Co., said his bank was the source of the loan to Fincher, a longtime customer.

"We did advance Stephen a loan," Nunn said. "Stephen's always handled his business satisfactorily, we've never had any problems. I wish we had more like him."

Nunn, who has given the Fincher campaign $4,800, declined to say what kind of collateral Fincher put up for the loan, and the campaign didn't immediately respond to questions about the terms of the loan.

Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, said it is highly unusual that Fincher has reported no assets. Candidates are required to report most types of income and assets, although personal homes and non-interest bearing checking accounts are excluded.

"It's impossible to know, but in modern life it would be unbelievably rare for somebody to have no accounts, not a single savings account," she said.

Herron's financial disclosure statement is far more detailed. Herron, who has also loaned his campaign $250,000, disclosed $564,021 in income from his Dresden law practice last year, plus another $28,654 from his legislative work.

Herron also lists 27 assets and areas of income, including retirement and investment accounts, a rental home in Nashville and Herron Farms Inc.

Fincher's disclosures also don't list any liabilities, though Gordon in his letter cited filings with the Tennessee Department of State that show he co-signed for $416,626 worth of loans in the last two years, and had another $748,094 worth of secured debt outstanding in 2008.

The congressional disclosures allow candidates to exclude liabilities by businesses, and the state filings show that Fincher's debts while in his personal name include farm machines like tractors, plows and cutters.

The House ethics office, which oversees the disclosures, declined to comment about whether Fincher should have included the liabilities on the form.

Sloan, of the CREW watchdog group, said she doesn't see anything wrong with that part of Fincher's disclosure, saying the complaint looks more like a political gambit by Fincher's opponents.

"It's obviously for his business, and the rule says filers need not report liabilities of a business," she said. "He has a really good-faith argument that he filed it all correctly."

Even if there is a violation, she said, it's probably just a technical error that would almost certainly not be prosecuted or investigated by the House ethics committee.

"To have a prosecutable violation you have to have a willful, intentional failure to disclose," she said. "You have to be trying to hide something. I don't know what evidence they think they have of that."

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