Plenty of people running for public office in West Virginia loan their campaigns money to help get their message out to voters. But only a few hope to make a profit on that loan.
Of the more than 900 candidates who ran for office in West Virginia in the May primary elections, only three loaned their campaigns money with interest - expecting or hoping to get more money back than they put in.
Forty-three candidates (or candidates' spouses) loaned their campaigns money, according to records on file with the West Virginia secretary of state, but only Beth Walker, who was elected to the state Supreme Court, Delegate Michael Ihle, R-Jackson, and Rob Garcia, a Harrison County Democrat, loaned their campaigns money with interest, meaning they could end up profiting from the campaign.
A campaign can legally accept a loan only from the candidate, the candidate's spouse or a lending institution, like a bank.
During primary season, loans ranged from $100 that Rocky Seay, a Mercer County Democrat, loaned his state Senate campaign, to the nearly $2 million that Jim Justice has, to date, loaned his campaign for governor.
The median loan was $5,000.
Dozens, if not hundreds, of other candidates simply gave their campaigns money, rather than bothering with a loan.
Candidates often loan themselves money without the expectation that they will ever pay themselves back. Loaning a campaign money leaves open the possibility that a candidate could get his or her money back, but the loan can be written off at any point, and then becomes just a simple donation.
For instance, Justice, the Democratic candidate for governor, has loaned his campaign more than $1.9 million, the most by far of any candidate for any office in West Virginia.
Justice, the state's richest man, is sure to give or lend his campaign much more money during the general election, but has no intention of getting any of that money back, a campaign spokesman said.
And even when a candidate or official attempts to pay themselves back, it often proves difficult, with donors reluctant to give money to a candidate who has already won or lost.
Attorney General Patrick Morrisey ended his successful 2012 campaign with more than $1.4 million in campaign debt, money out of his own pocket that he spent on his campaign. Despite holding 14 debt retirement fundraisers since that election, more than $1.2 million of that debt remains and Morrisey gave his 2016 re-election campaign a new $250,000 loan in March.
But neither Justice nor Morrisey, even if they do pay themselves back, will make a profit on their loans.
Both men, like almost all other candidates in West Virginia who loaned their campaigns money, did so at a zero interest rate.
"It's legal to charge interest as long as it's in the range of normal commercial rates," said Bob Biersack, a longtime staffer for the Federal Elections Commission and now a senior fellow at the Center for Responsive Politics. "It doesn't happen often, but we do see it occasionally."
Walker, who handily won a seat on the state Supreme Court, had her candidacy boosted by $500,000 in loans from her husband, former machinery executive Mike Walker.
That money was loaned to Walker's campaign at an interest rate of 3 percent, meaning if the loan is paid back in full after one year, Walker would see a profit of at least $15,000.
Beth Walker said that she was not involved in the financial side of her campaign (judicial candidates in West Virginia are prohibited from personally soliciting donations) and referred questions to her campaign.
Joe Reidy, Walker's campaign manager, and Kent Gates, a campaign consultant, did not respond to requests for comment.
Walker will attend a debt retirement fundraiser for her campaign at a private home in Charleston's South Hills neighborhood on Tuesday evening.
Craig Holman, a public affairs lobbyist for Public Citizen, a consumer rights advocacy group based in Washington, said that candidates charging interest on campaign loans is uncommon and frowned upon.
"Candidates who charge interest on their personal campaign loans are essentially using their campaigns as an investment vehicle," Holman said. "Literally, making money off their campaigns."
Ihle, who came in second (qualifying for the general election) in his Republican primary, loaned his campaign $5,000 at 7 percent interest, making him eligible for a $350 profit if his debt is paid back after one year.
Ihle said that he didn't expect to be able to pay himself back after the campaign, but wanted to give himself the option. He said he picked 7 percent because he looked at it like a 401K, an investment.
"That's money that I otherwise would have used in savings and investing it in my retirement, so if I'm going to take money out of that, that's an additional 300 bucks or so," Ihle said. "If at the end of the campaign there's a little money left over, it's nice to be able to pay myself back."
Garcia, who came in fifth in his Democratic primary (the top four qualified for the general election) loaned his campaign $4,000 at 4 percent interest, with a potential profit after one year of $160.
Garcia, whose campaign didn't end up using the full $4,000, said that he didn't intend on collecting any interest from the loan and chalked up the interest rate to inexperience with campaign finance.
"That's not the intent, it was just kind of like an error," he said. "An ignorance of not knowing how to do it, like OK, so you go get a loan and that's the interest you pay on the loan."
The interest-bearing loans of the three candidates pale in comparison to some notorious examples.
Rep. Grace Napolitano, a Democrat from California, loaned her campaign $150,000 when she first ran for Congress in 1998. She charged her campaign 18 percent interest and collected at least $158,000 in personal income over the next 10 years.
"Personal campaign loans should be a vehicle for candidates to help boost their campaigns," Holman said, "not serve as a self-enriching investment vehicle by charging interest on those loans."
Reach David Gutman at david.gutman@wvgazettemail.com, 304-348-5119 or follow @davidlgutman on Twitter.