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GOP congressional candidate Derek Smith has put more than $831,000 of his own money into his race so far, all of it proceeds from stock sales from his successful iEngineer.com Internet firm.
Thursday morning Smith released the names of the people who purchased his stock.
  Chart: Campaign financing for primary electionRequires Adobe Acrobat. | |
He spent some $665,500 on his convention and primary races. Smith beat Rep. Merrill Cook, R-Utah, in a June Republican primary and now faces Democrat Jim Matheson in the final election, Nov. 7.
Smith also said that since his primary victory he's sold "about" another $165,585 in iEngineer.com stock and put that money into his race this summer. Combined, that's more than $831,000 the Internet executive has put into his campaign this year, nearing early record-level self-funding in a U.S. House race in Utah.
Smith said his outside fund raising is going well and he hopes he won't have to sell more stock and put more of his own money in the race. "But I will if I have to," Smith said.
A personal financial filing Smith made with the U.S. House earlier this year shows he is worth from $4.93 million to $25.85 million, indicating he has the means of putting considerably more of his own cash into his race. House rules only require candidates list a broad range of assets.
Cook and others questioned the propriety of Smith's campaign contributions when Smith declined, during the primary campaign, to name those who bought his stock. He said then iEngineer.com was in negotiations and federal law wouldn't allow him to name the investors without their permission.
Smith promised then that he would reveal the investors after iEngineer.com business dealings settled down. Last week the firm announced that several high-tech firms had put $24 million into the firm. He said it took longer to get the permission from those investors to make their names public "than I'd hoped." And lining up new investors at iEngineer.com, where Smith remains president, also took longer than hoped, he said Thursday.
Releasing the names of the iEngineer.com investors "is really a non-event. I said all along that none of these people had anything to do with politics or this race."
During primary debates, Smith accused Cook of floating rumors that longtime Cook foe Rep. Chris Cannon, R-Utah, or others politically opposed to Cook had either bought Smith stock or arranged for others to buy Smith stock so the money could fund Smith's challenge to Cook. "That never happened — it is completely false," Smith said. He termed Cook "delusional" over his concerns about Smith's private stock dealings.
The individuals who purchased Smith's stock "had some connection to company officers or the company itself. One is an employee. We decided to sell the stock (at $1.25 per share and $2.65 per share) because that was the price set by the board of directors at a previous stock sale. There were more people, and those who bought wanted more stock, than was available. I didn't even decide who could buy how much stock. That was determined by our security attorneys," Smith said.
As Smith declined to name the buyers during the primary campaign, Cook and others charged that without full disclosure 2nd District voters could be in for another Enid Greene/Joe Waldholtz-type scandal.
Greene, a GOP candidate then married to Waldholtz, won the 1994 2nd District seat after pumping more than $1 million into her own campaign. Greene, now divorced from Waldholtz, refused to say at the time where the personal money going into the campaign came from. Later it was learned that Greene's father had loaned the couple more than $2 million over several years and at least $1 million of that went illegally into the race. Greene blamed Waldholtz, saying he deceived her in putting the money into the campaign without making sure that such donations were legal. Waldholtz went to prison on fraud charges. Ultimately, Greene was fined $25,000, her father $25,000 and two of her campaigns $50,000 for Federal Election Commission violations. The scandal drove Greene from office. Cook won the open seat in 1996.
Matheson, who only had a cursory look Thursday morning at those who bought Smith's stock, said he didn't see any real problem with them. "Others will probably go over that list."
But he is concerned "about the growing trend in Utah and the nation to self-fund campaigns." Matheson has raised around $900,000, he said, from 3,000 individual contributors and hasn't given his money to his campaign.
"It's getting to the point where it is difficult for average people who aren't millionaires to participate in a campaign (as a candidate). And as part of general discussions of campaign finance, which is certainly an issue this year, we'll probably be talking about" Smith's self-financing of his race, Matheson said.
Smith said Thursday he understands the public and media interest in where his campaign money came from, although he was surprised "it became a major issue. I'm happy to release all the names of stock purchasers, both for the money that went into the primary campaign and since. I understand people's interest in making sure our campaign finances are as complete and appropriate as possible. I've done that today."
E-MAIL: bbjr@desnews.com