Davis Seeking Release From Campaign Debt

Declaring that his effort to pay off the debt from his unsuccessful 1986 Republican U.S. Senate primary campaign has failed, state Sen. Ed Davis is seeking to ask his creditors to forgive most of the about $75,000 he owes them.

The Valencia Republican’s campaign treasurer, Elsie O. Olson, recently told the Federal Election Commission that the Davis campaign will be unable to repay its obligations unless creditors agree to forgive part or all of what they are owed.

“It is impossible for the Davis campaign to raise sufficient personal contributions to retire the entire $75,556 debt,” Olson said in a letter received by the FEC on March 27. The Davis campaign proposed a payment plan that calls for four creditors to forgive all that Davis owes them, a total of $8,095, and the remaining seven creditors to receive just 20% of the approximately $67,000 total they are owed.

“To accomplish the fund-raising goals of this plan, we would have to raise $13,592 in personal contributions during the next year, which we anticipate will be extremely difficult,” Olson wrote.

The FEC supplied the letter’s content to The Times.

Davis’ debt was $105,015 as of June 30, 1986. He has paid off about $30,000 of that total.

The remaining debt includes costs of polling, air travel, mailing, and staff salaries. The largest unpaid bill was submitted by New York-based poll service Arthur J. Finkelstein & Associates, which Davis owes $34,214. None of the creditors will be approached about the terms of the proposed settlement unless the FEC approves the plan, Davis said.

Some of the creditors are longtime Davis associates, such as administrative assistant Hunt Braly, who is owed $2,500, and treasurer Olson, whose company has unpaid billings of $8,000, according to Olson’s letter. They may be more likely to forgive the debt than some of the businesses Davis used for polling, mailing or other services.

The FEC has not yet considered the proposal, said spokeswoman Karen Finucan. She said the commission would have to determine that the campaign had undertaken all possible steps to repay the debt and that creditors had pursued all legal avenues available to recover their money. Otherwise, she said the debts could constitute individual contributions exceeding the $1,000 federal limit or corporate donations, which are prohibited.

She said the creditors must also agree to the settlement plan before the FEC will approve it. Settlement proposals of this kind are often submitted by former presidential candidates, she said. They are less common in congressional races.

Davis is permitted to raise money for his declared 1988 state Senate reelection bid even though the 1986 debt remains. He began holding fund-raisers for the upcoming campaign in March.

“Any deficit in any political campaign is a very difficult thing to pay off,” said Davis, a fiscal conservative. “It’s a very slow process.”