Goldwater Institute "Lends" $1.9 Million to Rich Guy on Its Board
Barry Goldwater: Even dead, keeping Clint Bolick flush to the tune of $300K-plus
The eyebrow-raising part of the newly-released "Reporter's Guide to the Goldwater Institute," isn't that GI's executives make lavish six-figure salaries working for a non-profit 501c3, or that the Goldwater Institute is, according to the report, a tool of the Koch bothers and the American Legislative Exchange Council.
It's not even that the organization itself is a pillar of hypocrisy, arguing against the perils of intrusive government and opposing the expansion of social-welfare programs such as AHCCCS, while feasting on the public tit in the form of tax-deductible donations.
That we all know. Or we should know. For the most part GI's philosophy is the traditional Republican one, which says the rich should rule, and government is bad, unless it's helping the wealthy get wealthier, and then it's A-OK.
No, the most intriguing revelation of this new report released by the Center for Media and Democracy (itself a 501c3, natch) and the AFL-CIO-backed group Arizona Working Families is that the Goldwater Institute has "loaned" close to $2 million to Shamrock Foods Co., a privately held company, owned by one of GI's board members, Norman McClelland.
Indeed, GI's 990 form, the "return" filed by non-profits, states that GI has chosen to invest its "excess cash" in "two promissory notes with a privately held corporation owned by a board member."
The first "unsecured revolving promissory note" is for $200,000, and "bears interest at 10 percent annum" paid monthly to the institute.
The second note is far more generous, a whopping $1,700,000 at a rate of 2.25 percent. Both notes come due in 2015.
The report claims that "McClelland has donated an untold sum of his personal fortune from his business endeavors to help the Goldwater Institute," and notes that McClelland helped found the institute in 1988 and chaired GI's board from 1992 to 1994.
GI's close ties to McClelland are not hidden. In fact GI's website states,
"Through the generous contributions of 48 friends and Goldwater Institute supporters, the Norman P. McClelland Distinguished Fellowship was established [in 2008] to ensure Mr. McClelland's legacy will continue in the next generation of young conservative leaders."
The report itself does not imply that there is anything illegal about this arrangement, and most of the info about the loans is available on GI's website for anyone curious enough to read through it.
Still, I'm guessing those promissory notes are not part of the pitch to potential donors.
GI spokeswoman Lucy Caldwell quibbled with calling the promissory notes "loans," and preferred seeing the notes as investments.
"The Goldwater Institute...is not `loaning' Shamrock money, as the report suggests," said Caldwell."The Institute invests its idle cash in promissory notes with Shamrock and while they are holding our cash, we earn an above market interest rate. We draw the funds down as we need them throughout the year. Investing idle cash where it can earn interest is a prudent financial strategy."