Get It in Writing
If there's one lesson to be learned about lending money, it's "get it in writing." But people lend money without written contracts all the time. Parents lend to their children. Friends lend to friends. And some people even lend money to politicians who are friends of friends, thinking it will be paid back. Take the case of Alan Winters, a Houston lawyer who gave state Senator Buster Brown of Lake Jackson a check for $10,000 made out to Brown's 1990 campaign for Texas attorney general.
Six years later, Winters would like his money back. He says he was making a loan. Brown's campaign filings with the state list the $10,000 as a loan. Even Brown's campaign manager at the time acknowledges it was a loan.
But Winters apparently was unaware of the fine print, or rather, the unspoken subtext of campaign loans made without written contracts, at least those made to Buster Brown. That subtext, says Brown's lawyer, Jerry Payne, is that loans made by individuals to a political campaign are paid back only if the candidate wins, which Buster Brown did not.
This unspoken understanding seems to have been lost on Winters and his wife Janet, who have badgered Brown for the past several years for repayment. They say they never understood that their loan would become a donation if Brown lost. Instead, they contend that for the last several years, Brown's office has strung them along with promises that Brown would retire the debt through funds from his state Senate campaign account.
Alan Winters says that he is going public with his problem because his legal alternatives are "zilch." His only recourse now, he says, is the pressure of public opinion on "Brown's word. I guess I trusted him. It sounds stupid, I know."
Winters, a New York physician turned medical malpractice lawyer, was drawn into Texas politics through his friendship with his dentist, John Perel. Perel had become a supporter of Brown in part because for years he dated Marianne Payne, the ex-wife of Brown's longtime friend and legal adviser, Jerry Payne. Jerry and Marianne Payne's son, Steve Payne, managed Brown's campaign for attorney general and persuaded both Perel and Winters to each loan the campaign $10,000. Brown and his son collected Winters' check personally at Winters' office in the Lyric Centre building on October 16, 1990. It was a matter of trust, Winters says. "I figured Marianne knew him, and her son was running the campaign ...."
Winters did want something for his money, however. He had hopes of landing a federal judgeship, and wanted Brown to introduce him to U.S. Senator Phil Gramm. Brown delivered, Winters says, introducing him to Gramm at a political function.
"I met Gramm for two-tenths of a second," Winters says. "I figured if I could talk to Gramm for a few minutes I might get somewhere, but it was over in the space of one breath. It was 'Hello, good-bye.' He wasn't even looking at me."
If Winters sounds hopelessly naive about how money and connections work in politics, he was in for further education. His wife Janet kept pressuring Brown. Both she and John Perel say that Steve Payne reassured them that Brown would repay the loan from his state Senate fundraising efforts, but nothing ever happened.
Steve Payne, who has long since left Brown's staff and is working for the Dole-Kemp campaign, says his recollection was that "we would make some attempt to pay it back."
"But it was a risky deal" he says, "and I think they understood that. Investing in a campaign is investing in an idea, and you're hoping that the idea you are promoting will prevail."
Janet Winters says that when Brown failed to repay the loan after his fall 1994 fundraising cycle, Brown's office referred her requests for payment to Jerry Payne. On February 7, 1995, Payne wrote her that "Senator Brown was under the impression that the $10,000 was a contribution and not a loan." He asked Janet Winters to provide "a note or other written indication that this was a loan."
Janet Winters blew her stack and wrote Payne back reminding him that his own son and ex-wife knew that it was a loan. Why should there be any question now? she wanted to know. Payne scrawled a reply across a copy of her letter, saying her tone "was aggressive and offensive to me. If you want my help, I suggest you try a different approach."
The Winters moved and it took them a while to get their financial records out of storage, but this fall Janet Winters took up her cause again and obtained Brown's campaign finance disclosures from the Texas Ethics Commission. Both her husband's check and that of John Perel were listed as loans. She faxed the documents to Brown's office on September 25 with a tart note signed by her husband that he expected a response within ten days. "Repayment is long overdue," Winters wrote, "and any further disregard, denial or delay will be greeted unfavorably."
Buster Brown did not return phone calls from the Press about the matter, but Jerry Payne has been voluble about Winters' demands.
"If Buster wanted to do something personally, I would advise him not to," Payne says. "It's like blackmail to the media. I remember he [Winters] was hot and bothered to get appointed as a judge .... He was trying to get influence, and now he is trying to back out."
Both Steve and Jerry Payne point out that Winters' money did not go to Brown personally, but to his campaign committee, and once the election is lost that committee "goes out of business." No entity exists to pay the money back.
Republican political consultant Allen Blakemore says that while some political losers do walk on their debts, "It is particularly unusual for a politician who is still in office to welsh on his debts. Buster is a sitting state senator and still has the ability to raise money. You see that often: Jack Fields paid off all his U.S. Senate campaign debt by raising money as a sitting U.S. congressman. Joe Barton did the same thing. Campaign debt is no different from any other. There are those who pay their bills and those who don't."
Democratic political consultant George Strong echoed Blakemore. He points to losing Democrats such as Bob Krueger and Mike Andrews who are still paying off their Senate campaign debts.
"It would be easy for Brown to have a fundraiser and send out a letter that would generally bring in about 50,000 bucks," Strong says. "I would be happy to head up the fundraiser myself."
Brown probably doesn't need much help in fundraising. In January 1995, his campaign treasurer and wife, Jill, filed a report dissolving the attorney general's campaign account. The report states that at the same time Texans for Buster Brown was avoiding paying Winters and Perel, it paid $91,334.69 of Brown's attorney general campaign debts to Post Oak Bank and Victoria Bank and Trust. The source of the money? The Senator Buster Brown Committee.
Jerry Payne says there is no comparison between a bank loan and the loans of Winters and Perel. In the case of bank loans, there would be collateral, or a co-signer or a guarantor, Payne says, "otherwise there wouldn't have been a loan."
John Perel says he thinks that Buster Brown is okay politically, but he still wants his money back. The largest gift he ever gave before Buster Brown converted his loan into a gift was $200. His problem, he admits, is that he "went by the shake of a hand."
Janet Winters, meanwhile, says her husband was a Republican when all this started, but not anymore. And all of them admit that before they ever lend a politician money again, they'll get it in writing.
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