| I knew a guy in the Navy that would sometimes resort to what he called "creative financing". When his money ran out before payday, he'd go to the Food Lion and cash a check for $10 (which he spent on a Subway Cold-Cut-Combo and a twelve-pack of beer) and keep the money. Then next day, he'd go to Albertson's and cash a check for $20, put $10 in his pocket (which he spent on a Subway Cold-Cut-Combo and a twelve-pack of beer) and deposit $10 in his account to cover the original check to Food Lion. The next day, he'd be back at Food Lion, writing a check for $30 - $10 for him (which he spent on a Subway Cold-Cut-Combo and a twelve-pack of beer) and $20 to put in the bank to cover the check to Albertson's.
It was insane, but it worked. All he had to do was keep cashing larger and larger checks until payday, when a new wave of cash would largely get swallowed by his short-term debt. Meanwhile, he had sandwich and beer money that he wouldn't otherwise have. After reading this article I kind of wonder if my friend wasn't a Burlington County Republican. Click on through to the other side. |
| First, understand that the state limit on money that can be given to a county political party committee is $37,000 for an individual, a corporation or union, an association or group, a candidate committee, a political committee, or a continuing political committee. So, if you are the CEO for a corporation, you can give $37,000 of your own money, plus $37,000 of the corporation's money, plus $37,000 from a PAC that's run by the corporation. Now you understand why the County Committees are so important in New Jersey?
But what if you don't have the cash right now to max out on all of your potential donations? Never fear. You see, the Burlington Republicans will take out a loan from Sterling Bank and you can sign on as a guarantor. Legally, that means you accept the risk of the Burlington Republicans defaulting on their loan and losing whatever amount you guarantee. Realistically, however, it just ensures a circular transfer of cash.
It's a win-win-win situation for Burlington Republicans. Sterling Bank makes a ton of money on loan origination fees. The Burlilngton Republicans can make sure that they have tons of money to throw into the late election cycle. And the guarantors? Well, they aren't even playing with their own money. They've improved my Navy buddy's game.
You see, part of the game is that the guarntors get big county contracts. So, in return for putting their name on the dotted line, they get county money. Some of it is directed back into the Burlington County Republican Committee as donations. Some of it is set aside to give further loans - the only assurance that the game will continue - and the rest is put into the pockets of the guarantors.
It's a genius little game because it defeats the classic prisoner's dilemna. No one can pull out of the agreement without getting hurt. It ensures loyalty to the bitter end. If a "donor" backs out - and they are the most likely to end the relationship - then the party can punish them by defaulting on a loan and making them pay their guarantor pledge. Yes, other guarantors also have to pay, but the Party is going to give them money to do that anyway (you can learn about the guarantors here).
The Bank isn't going to ask a whole lot of questions because the practice isn't going to get them in trouble. They get a nice little predictable business client out of the deal.
And the Party? Well, they get money when they need it and that lets them keep winning, staying in office, and making sure that their guarantors get contracts as necessary.
Beer and sandwiches for everyone! |
