White House: Loan guarantee on Clinton home 'perfectly legal'
September 13, 1999
Web posted at: 11:26 a.m. EDT (1526 GMT)
WASHINGTON (CNN) -- The White House said President Bill Clinton violated no laws when he allowed longtime Democratic fundraiser Terry McAuliffe to guarantee the first family's $1.35 million mortgage loan to help them purchase a home in New York's tony Westchester County.
"We did take steps to affirm that the mortgage was being handled in a completely lawful and appropriate way," said White House spokesman Jim Kennedy when contacted by CNN. "We have no reason to believe that there is any violation of law."
Kennedy's comments came in response to a complaint filed with the Federal Election Committee by the Conservative Campaign Fund. The complaint alleges the collateral from McAuliffe amounts to a personal loan and therefore violates the $1,000 limit on campaign contributions.
When asked if the loan guarantee might violate campaign law, Kennedy said "we have taken the appropriate steps to ensure that all laws have been complied with."
Officials from the Federal Election Commission were not available for comment.
The Clintons will pay $1.7 million for 5,200-square-foot home in Westchester County north of New York City, slightly more than the asking price of $1.695 million. Sources tell CNN they expect to close on the property November 1.
Purchasing the house would give first lady Hillary Rodham Clinton residency in New York, which she will need to run for the Senate seat being vacated by retiring Democratic Sen. Daniel Patrick Moynihan. The first lady has not formally declared her candidacy for the seat, but has established an Senate exploratory committee.
The $350,000 for the down payment will come out of the Clintons' blind trust, and the Clintons will borrow $1.35 million from Bankers Trust Co., which McAuliffe is guaranteeing.
Sources have told CNN the loan is a five-year, adjustable rate loan -- an indication that president may refinance his mortgage shortly after he leaves office when his income is expected to increase considerably.
The white colonial house, built in 1889, has five bedrooms, a swimming pool and an exercise room on the top floor. It sits on a 1.1 acre lot and has a barn that is currently used as a garage.