Lowden attempts to put thorny debt issue behind her, files documents with FEC

Lieutenant governor hopeful Sue Lowden has informed the Federal Election Commission that she is paying half of her $500,000 debt from her U.S. Senate race and disputing the other half, according to documents filed this week.

Lowden has been pummeled over the debt since I first reported it last year and finally signaled last week that she had hired a DC expert to take care of it. The issue has been especially acute as filing approaches in March and with Lowden's first campaign report, which shows she has put in $100,000 of her own money.

To be competitive with state Sen. Mark Hutchison, who has raised $850,000, Lowden probably has to put in a lot more than that first contribution, but she is handcuffed until she can pay – or signal she is paying – that half-million dollar debt from her failed 2010 bid against Senate Majority Leader Harry Reid.

These documents indicate she realizes the seriousness of the issue, and I think if the FEC were to reject the debt settlement plan and accompanying report, her candidacy would be in grave jeopardy.

The documents show that Lowden retained Holtzman Vogel Josefiak to help her resolve this issue. Unlike past reports, this one tried to balance the books and clear up inconsistencies with what she has said to reporters.

There are several notations on still-outstanding debts, indicating she has negotiated settlements. Some not previously listed, including with ex-campaign chief Robert Uithoven, are now there.

The debt settlement plan attempts to resolve $555,411 in total obligations. It contains a series of signed agreements with creditors, including Uithoven. He is owed about $44,000, but agreed to quite a lengthy payoff scheme: $1,000 a month for 44 months. Others have accepted similarly small monthly payments.

More than a quarter of a million dollars is still in dispute, according to the document. Both cases have been in litigation – one in Ohio and one in Colorado.

The Ohio case featured an unsuccessful high court appeal by the vendor, but it's unclear whether the reduced amount ($190,000) awarded by a lower court is still outstanding. Lowden told me she “won” in the Ohio Supreme Court and no longer owes the vendor (she was dismissed personally from the case but the campaign could still be on the hook. I have yet to hear from her Ohio attorney, whom I called.)

That Ohio case is especially messy, as this document filed by Lowden’s attorneys shows, including an invoice filed with her Senate campaign that actually was intended for Kentucky Sen. Rand Paul.

The other case has gotten some media attention here lately, and Lowden clearly believes no payment is necessary.

So what now?

If the FEC accepts the plan, which Lowden may not find out before filing begins, most of the questions will abate. Yes, some may sneer that she should have just written checks to people such as Uithoven and been done with it. But as a debilitating political issue, it could be greatly mitigated.

If the FEC were to reject the plan for whatever reason, Lowden’s candidacy will be hobbled, and I believe she may not soldier on. But for now, Lowden seems confident this issue is in the past, despite any attempt by her adversarires, legal and otherwise, to keep it in the present.