Former governor Blunt forgives loan to Kinder campaign, clears way for Kinder gubernatorial run

JEFFERSON CITY, Mo. -- Missouri Lt. Gov. Peter Kinder has received a $300,000 gift from former governor Matt Blunt -- just in time for the new political year.

Blunt has forgiven a large loan he made to Kinder's 2008 lieutenant governor's campaign. The decision frees Kinder to focus on fundraising for his likely challenge of Democratic Gov. Jay Nixon in 2012 instead of on paying off his past political debt.

Jefferson City lawyer Jared Craighead, who handles campaign finance issues for Kinder, confirmed to The Associated Press on Thursday that the debt had been canceled. He provided a letter dated Wednesday from Blunt's brother and campaign treasurer -- Andy Blunt -- informing Kinder's committee of the loan forgiveness.

Blunt and Kinder are both Republicans and served together when Blunt was governor from 2005 to 2009. Blunt decided not to seek re-election in 2008 but has held onto his campaign money, making occasional political contributions and -- in Kinder's case -- a loan.

The former governor waited until almost the last moment possible to forgive his loan to Kinder.

Kinder created a debt service committee for his 2008 campaign on June 30, 2009. Missouri law requires those committees to be shut down within 18 months.

Blunt did not respond to various requests for comment made over the past several weeks by the AP by e-mail or through his associates. Kinder told the AP recently that he didn't know whether the loan would be forgiven.

Craighead, a close political ally of Blunt who served in his gubernatorial administration, said Thursday that Blunt originally loaned the money to Kinder -- instead of simply giving it to him -- as a way of keeping open the political options for each of them.

"I don't think at the time Matt knew exactly what his future held in politics or that he knew what Peter's future held," Craighead said.

Why did Blunt wait so long to forgive the loan?

"We all need deadlines to force us to make decisions," Craighead said.

Had Blunt not forgiven the $300,000 loan, Kinder would have had to scramble to come up with the money to pay it back and could have faced an even larger financial disadvantage to Nixon. Kinder's campaign committee for the 2012 elections reported having $372,967 at the start of October. Since then, Kinder has reported receiving $35,000 in contributions of more than $5,000 each, according to online records of the Missouri Ethics Commission. Smaller contributions do not have to be reported to the Ethics Commission until the next regular quarterly report.

By contrast, Nixon already had more than $1 million in his campaign account at the start of October and has since reported an additional $725,567 of contributions of more than $5,000 each.

One reason Kinder's campaign account is lower is that he gave $220,000 to the successful 2010 auditor's campaign of Republican Tom Schweich. Kinder played a role in persuading Schweich to run for auditor instead of challenging Matt Blunt's father, U.S. Rep. Roy Blunt, in a Republican primary for U.S. Senate. Roy Blunt ultimately won Missouri's 2010 Senate race.

"It is now crystal clear that Peter Kinder, Tom Schweich and the Blunt family participated in a backroom deal to clear a U.S. Senate primary," Missouri Democratic Party spokesman Ryan Hobart said in response to Kinder's forgiven loan.

Kinder's loan forgiveness from Blunt takes care of most of his remaining debt from his 2008 campaign. Craighead said Kinder also owed $15,000 to Thompson Communications Inc. for media work and was still trying to determine whether that would be repaid or forgiven.

Kinder's lengthy debt retirement process is not a first for Missouri politicians.

Democratic Claire McCaskill had $1.6 million in debt from personal loans after her unsuccessful 2004 gubernatorial bid. McCaskill moved the debt to her state auditor campaign committee in 2005, giving her extra time to repay it, then restructured her auditor committee into a debt service committee in 2006, giving her additional time. After winning election to the U.S. Senate in 2006, she raised around $500,000 to repay her personal loans but ended up writing off the rest and shutting down her debt service committee in June 2008.