Former Gov. John Kitzhaber is facing questions about a 1999 home loan provided to him by a Portland investment firm founder.
PORTLAND — Former Gov. John Kitzhaber is facing questions about a 1999 home loan provided to him by a Portland investment firm founder.
The $306,000 loan during his second term as governor came from Bidwell & Co., a Portland stock brokerage founded by Jerry Bidwell. It was first reported by Willamette Week.
The Oregonian reported Thursday that Kitzhaber, now seeking a third term as governor after eight years out of office, said there was nothing irregular about the loan.
Kitzhaber said he paid 8.25 percent interest and also paid off the five-year loan early.
"This week's Willamette Week raises a question of whether or not I received a VIP home loan in 1999," Kitzhaber said in a written statement. "The answer to that question is absolutely not."
By comparison, 15- to 30-year loans carried interest rates of about 7 percent to 7.4 percent at the time, according to The Oregonian.
The newspaper noted that Kitzhaber had an investment account at the brokerage firm that was founded by Bidwell.
"I borrowed against my own savings in order to purchase a home in 1999," Kitzhaber said. "I paid interest on the loan and, in fact, paid it off early. This story has been a distraction from the very real issues Oregon faces. I now hope we all can turn back to those issues."
The newspaper reported the loan was unusual in a number of respects.
As a discount brokerage, Bidwell & Co. was in the business of buying and selling stocks, not home loans. Property records indicate Bidwell & Co. had just one other Multnomah County home loan on its books at the time it was owed money by the Kitzhabers.
The brokerage agreed to loan the full purchase price of the home, meaning Kitzhaber and his former wife, Sharon, needed to pay no money out of pocket. Such financing became common during the wild housing boom of 2005-2007 but was far from the norm in 1999.
Officials with the campaign of Kitzhaber's gubernatorial rival, Republican Chris Dudley, declined comment.
Kitzhaber's staff confirmed that he did not disclose the Bidwell loan to the Oregon Ethics Commission while he was governor, saying it was not required.
State law requires public officials and candidates to include in annual statements of financial interests any debt exceeding $1,000 owed by them or their family, as well as the date and interest rate of the loan.
The one exemption for the disclosure requirement is debts to "any federal or state regulated financial institution or retail contracts."
The language refers to banks and other traditional lenders, but could apply to Bidwell, which was regulated by the Oregon Division of Finance and Corporate Securities. Kitzhaber's loan is likely a non-issue for the Oregon Ethics Commission, which operates under a four-year statute of limitations.
Bidwell could not be reached for comment. He moved to California after selling his company to AmeriTrade Holding and resigning from the Oregon Investment Council in 2004.