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SALT LAKE CITY – The Salt Lake City, banker-backed businessman and chairman of the First National Bank of Layton who ran unsuccessfully in Utah’s GOP primary in June for a U.S. congressional seat against credit union-backed Rob Bishop, a one-time Utah House speaker and credit union lobbyist, accused the Utah credit union lobby of “buying and paying for a U.S. congressman.” In an article in the June 26th Salt Lake City Tribune, Kevin Garn, who is also a former Utah House Majority Leader charged that, “A special-interest group found a loophole in the (campaign finance) law and used it to manipulate an election.” Bishop won the election by a 60-40 margin (CU Times, July 3). Bishop admits that credit unions were pivotal in his primary victory and they played “a key role”, but he disputes that he is “beholden” to credit unions. Credit unions and other interested groups donated more than $20,000 in direct donations to Bishop’s campaign, but it was their additional $100,000 contributions as “independent expenditures” that has Garn riled. Campaign finance laws limit political action committees to $5,000 and individuals to $1,000 in contributions, but because credit unions targeted their campaign fundraising efforts at members, Garn argues they sidestepped campaign finance laws. Garn, a millionaire, reportedly put more than $700,000 into his campaign to defeat Bishop. Bishop’s primary campaign, meanwhile, cost $407,000. He was reportedly approved for a $40,000 loan from America First shortly before the primary election and he said he is paying 9.5% interest on the loan. Garn told Credit Union Times that he doesn’t intend to challenge CU election expenditures before the Federal Election Commission. But that doesn’t mean the issue has been put to rest. In June, Dale Gunther, president of the Bank of American Fork and chairman of the Utah Bankers Association, along with Howard Headlee, UBA president, mailed a “Dear Credit Union Member” letter to 25,000 credit union members in the state that explained the bankers’ position on credit unions’ tax exempt status. The UBA further charged that credit unions had waged a “mean spirited” campaign in June’s primary race. In July, Utah credit unions kicked off their own ad campaign (CU Times, July 31). Those ads, which were scheduled to run in newspapers and on the radio, focused on choice and urged consumers “whether you’re a bank customer or a credit union member, take a moment to find out for yourself which financial institution has your best interests at heart.” Travis Wood, vice president of government relations for the Utah League of Credit Unions called Garns accusations that Bishop “bought” the race, “totally absurd.” Commenting on Garns’ comments, Wood told Credit Union Times that, “It’s laughable that someone who spent $700,000 of his own money on an election should accuse credit unions that only spent a fraction of that amount, of buying a race. We’re hearing from a frustrated candidate who spent hundreds of thousands of dollars on an election race and still couldn’t win in part because credit unions conveyed to members that Garns was the bankers’ poster boy who opposed consumers being able to join the credit union of their choice and the possible dangers they faced if someone credit unions couldn’t trust when he served in the state House, was elected to Congress.” Woods also defended the loan Bishop received from America First CU. The loan, he said, was basically an unsecured loan that Bishop qualified for. “It’s not as if he got special favors,” said Wood. “The loan was made under perfectly fair and reasonable terms.” At press time, Wood said the Utah League had no plans to respond publicly to Garns’ accusations. “I don’t think we should feed into the blatantly absurd claims of a millionaire banker who thought he would win the election because his money would allow him to dominate the airwaves. Credit unions need to actively and continuously communicate the truth to their members, but to ratchet the debate up at this point would be unnecessary. “We will respond to the extent that we need to, but we will not engage in a public relations battle with selfish bankers,” said Wood. Note: Jim Rubenstein, CU Times Southwest correspondent contributed to this story. -

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