Yu, who is in second place in the Republican race in the 12th District according to the latest poll, had loaned his campaign more than $736,000 as of April 30. But he did not list that much in liquid assets on his personal financial disclosure, and the income from his investments are a fraction of that amount.
After declaring bankruptcy in 2007, he might not be the model applicant for a bank, although he did list bank mortgages on his home and an Atlanta condo. The residence already had a second mortgage before he started his Senate campaign and later switched to the U.S. House race in the 12th District.
“I hope that Mr. Yu will operate with full disclosure and explain how he was able to loan his campaign over $700,000,” said William Perry, the executive director of the government-watchdog advocacy Common Cause of Georgia.
Yu, reached by phone Thursday, referred all financial questions to his campaign chairman, Wayne Brown. Brown has not returned messages left Thursday and Friday at the campaign; at his corporation, WayneWorks LLC; or at the telephone number Yu supplied for him.
WayneWorks gave $15,000 to the campaign in August even though federal law prohibits congressional candidates from accepting corporate donations. The campaign cashed the check instead of refusing it, even though it is in the same building as the company.
Federal election rules say that if a corporate gift is received, the campaign must refund it within 30 days of discovery, but the Yu campaign exceeded that period and appeared to have used the funds based on expenditures and the cash on hand at the time.
“They should have known that it was an illegal, corporate contribution,” said Bryan Tyson, a campaign attorney with Strickland, Brockington & Lewis.
The campaign lists its address as the corporate offices of WayneWorks but reported only token “rent and postage” for it, even though federal candidates must pay the fair-market rate to corporate landlords to avoid accepting discounted rent as a contribution.
Brown personally contributed more than the legal limit to the campaign, and the campaign was slow in refunding him, according to his campaign reports filed with the Federal Election Commission.
Yu’s financial disclosure included no more than $50,000 in cash in a money market account.
“I think it is reason to be skeptical. If you don’t have liquid assets and all of a sudden you have liquid assets,” Tyson said.
Campaign finance lawyer Stefan Passantino, the head of the political law team at McKenna Long & Aldridge, notes that Yu is not required to update his personal financial disclosure form because he filed it less than 12 months ago. So there is no reason for him to disclose any personal loans he might have gotten or the source until next year.
“I don’t know any facts that would indicate there was wrongdoing here,” he said.
Yu has an office building on Bertram Road that he rents for $100,000 yearly at most. The value of the building is between $1 million to $5 million on the federal forms, which don’t require more precise figures.
He lists stock in two companies, one of which has effectively folded. The other was listed at no more than $250,000.
“I don’t really consider that a lot of assets,” said Kent Balch, a veteran financial planner with First Fidelity Financial Group. “His ace in the hole could be that building. If he could sell it at any given moment, somebody might lend on that.”
Repaying it could be difficult because a 5-year loan at current rates on that amount would total 60 percent more than he lists as income from the rent and his other investments.
If Yu got a loan, it could only be for personal reasons and not simply to fuel the campaign through the back door, according to Tyson. The same with anyone making an outright gift to him personally, although there is no limit on what a candidate can lend or give to his or her own campaign.
The motives for making a loan or gift directly to a candidate could spur the curiosity the Department of Justice’s Public Integrity Section, which is charged with policing what are known as straw donors. Those could be put to rest if Yu has written arrangements or documentation of long-standing personal connections to his funding source.