McAuliffe Campaign Responds to Deeds' "Negative Attack Ad"

Friday, May 15, 2009

The McAuliffe campaign just sent out the following statement in reaction to the Deeds' camapaign's "negative attack ad" which falsely claims that Terry McAuliffe somehow "attacked" Mark Warner and Tim Kaine on the payday lending issue. As the Deeds campaign well knows, Terry McAuliffe was talking about the General Assembly's passage in 2002 of a bill allowing payday lending in Virginia, as well as the length of time it took the General Assembly to crack down on the payday lenders' predatory practices. The Deeds ad is particularly absurd - and disappointing, frankly - given that, as the McAuliffe statement points out, "all three of Terry's opponents allowed predatory lending to explode in Virginia and took thousands of dollars in campaign contributions from the industry." With that, here's the McAuliffe campaign's statement.
Statement from the McAuliffe Campaign on Creigh Deeds's Negative Attack Ad

In response to the release of Creigh Deeds's negative attack ad yesterday, McAuliffe campaign spokeswoman Elisabeth Smith released the following statement:

"It's strange that Creigh Deeds is attacking Terry on this issue. The fact is that as members of the General Assembly all three of Terry's opponents allowed predatory lending to explode in Virginia and took thousands of dollars in campaign contributions from the industry.

"It's an honest difference between the candidates. Terry wants to ban all predatory loans, and he's the only candidate who has pledged not to accept money from predatory lenders. He has also proposed a plan to replace predatory loans with a responsible alternative."

A fact check of Deeds' ad follows.
Please see the comments section for the fact check (it's excellent, I urge you to read it all!). And once again, I just want to express my disappointment in the Deeds campaign. To date, they have been running a generally positive campaign focused on Creigh Deeds' vision for the future of Virginia. This ad, unfortunately, changes that, as it is a completely false and negative attack on Terry McAuliffe. I also find it sad that, in these tough economic times, the Deeds campaign chose to fire several hard-working members of its field staff specifically in order to save enough money in order to run a false, negative radio attack ad against a fellow Democrat. I sincerely hope that in the closing weeks of the campaign, the Deeds campaign will return to a positive message and vision for Virginia's future, not attack politics as evidenced by this ad.


  1. Fact Check On Creigh Deeds' Negative Attack Ad

    DEEDS CLAIM: Terry McAuliffe is attacking his opponents, Mark Warner and Tim Kaine.

    FACT: McAuliffe is talking about issues, not attacking his opponents.

    McAuliffe Ad Talks About The Payday Lending Issue. In his radio ad, Terry McAuliffe talks about problems arising from predatory payday lending. He does not mention his opponents or Governors Mark Warner and Tim Kaine. Talking about issues is not a negative attack.

    FACT: Mark Warner and Tim Kaine have stated their reservations with the 2002 payday lending law.

    Governor Warner's Recommendation To Revisit Payday Lending Regulations Rejected By House Of Delegates. On April 17, 2002, the House of Delegates rejected Governor Warner's recommendation to allow state regulators to consider how the payday lending bill was affecting Virginians and advise the General Assembly to revisit the payday lending issue in 2003. The House rejected the recommendation 24-76. [Daily Press, 4/2/02; HB 940]
    Governor Kaine Said The 2002 Payday Lending Law 'Was An Error.' "'I think we made a mistake in 2002 or 2003 when we lifted the interest-rate ban [of 36 percent] and created a system where payday lenders were allowed to come in and actually flourish - I think that was an error,' Kaine said." [Richmond Times Dispatch, 2/27/09]

    FACT: Creigh Deeds has "attacked" Governors Warner and Kaine.

    Deeds Criticized Warner And Kaine On Higher Education Funding. At a campaign stop, Creigh Deeds criticized Governors Warner and Kaine on higher education funding. He said, "Lots of good things have happened while Governors Kaine and Warner have been in office. But there's one thing that's not been so good…The last 8 years, we have disinvested in higher education to the tune of over $3,000 per student. The result of that has been tuition in our four-year system has increased by 78 percent on average, and that was before last week a lot of schools announced increases...of 4 1/2 to 5 1/2 percent." Video of Deeds' remarks can be found here]

    FACT: Creigh Deeds is attacking his opponents.

    Deeds On Moran: 'The Only Thing Going From An F To An A To An F…Was Brian Moran's Rating With The NRA.' At the Virginia Tech blogger debate, Creigh Deeds attacked his opponent Brian Moran on his NRA rating. Deeds said, "Well its going to take more than 30 seconds to respond because the only thing going from an F to an A to an F, besides my high school calculus grade was Brian Moran's rating with the NRA. And I don't understand what set of principles guided him along that path." [Virginia Tech Blogger Debate, 4/29/09]

    Deeds Criticized Moran For Taking Donations From 'Tainted' Defense Contractors. At a debate, Creigh Deeds criticized Brian Moran for taking campaign contributions from "tainted" defense contractors. The Washington Post reported: "Deeds said yesterday that he was referring primarily to donations the Moran brothers have accepted from the lobbying firm Paul Magliocchetti Associates…The firm, which closed earlier this year after the FBI raided its offices, is also the subject of a federal investigation into contributions from people listed in campaign finance reports with PMA affiliations but with no obvious connection to the firm." [Washington Post, 4/21/09]

    DEEDS CLAIM: Terry McAuliffe is making it seem like Democrats went easy on payday lenders.

    FACT: Terry acknowledged that the General Assembly was finally working to address this issue. He also has proposed an outright ban on payday lending.

    McAuliffe Radio Ad: 'The Legislature Is Finally Working Towards Fixing This Problem.' McAuliffe's radio ad on payday lending acknowledged that the General Assembly was working to address payday lending. The script states, "In these tough economic times, the legislature is finally working towards fixing this problem; but why has it taken so long to stop these lenders from preying on Virginia's most vulnerable families?" The ad continues to say that McAuliffe proposed banning payday lending in Virginia. [McAuliffe radio ad, released 5/7/09]

    McAuliffe Proposed Ban On Payday Lending. "Terry McAuliffe is starting a pile-on by Democratic gubernatorial candidates of the high-interest instant-loan industry, proposing the state kick out payday lenders. 'We need to shut them all down; they only shove people into worse economic conditions,' McAuliffe said yesterday." [Richmond Times Dispatch, 4/3/09 ]

    FACT: Creigh Deeds voted to legitimize payday lending in Virginia.

    Creigh Deeds Voted For The 2002 Payday Lending Bill. On March 4, 2002, Creigh Deeds voted for the payday lending bill in the Senate. [HB 940, 3/4/02]
    2002 Act Caused Industry to Explode and Left Thousands of Virginians 'In a Cycle of Debt They Cannot Escape.' According to the Washington Post, after the Payday Loan Act became law, "critics say the industry has exploded, leaving thousands of Virginians in a cycle of debt they cannot escape because of the high interest rates." [Washington Post, 2/5/08]

    2002 Law Allowed Payday Lenders To Enter The State With Annual Percentage Rates That Was As High As 391 Percent. "In 2002, the General Assembly permitted the industry to enter the state when it began allowing lenders to make loans at annual percentage rates reaching as high as 391 percent, or $15 for every $100 loaned. By 2006, about 434,000 people in Virginia had taken out loans worth $1.3 billion, according to the state Bureau of Financial Institutions." [Washington Post, 4/21/08]

    DEEDS CLAIM: Terry "made millions in the high interest credit card business himself."

    FACT: Terry worked in the affinity market business. One of his business ventures was working with the AFL CIO on its affinity credit card. This card, Union Privilege, provides benefits to working families.

    McAuliffe Helped With The AFL CIO Union Privilege Affinity Card. Terry McAuliffe worked in the affinity market business. One of the organizations he worked with was the AFL CIO. John Sweeney said AFL's affinity card has benefited working families. In 1997, Sweeney said, "We negotiated a credit card deal that we thought was good for our members. Household competed with others for this program, and we negotiated the best possible deal for the members of the AFL-CIO." [CNN, 9/23/97]
    AFL Union Privilege Provides Discounted Products To Working Families. According to its website, "With Union Plus benefits, your union membership "pays" at work and at home. By using the collective buying power of unions, we are able to offer a valuable, discounted products and services exclusively to working families." [http://www.unionplus.or/about]

    Union Plus Offered Gold Service Which Provided Members Free Car Rental Insurance, Retail Purchase Protection And Other Benefits. "Household Bank (Nevada) and Union Privilege have launched a gold version of the Union Plus MasterCard issued by Household and promoted by Union Privilege, which negotiates discounts and special offers for AFL-CIO labor unions. The new card is being offered to one million of the three million holders of various Union Plus cards…The gold card offers a higher credit line than does the standard card, and throws in a laundry list of gold features like free car-rental insurance, roadside emergency auto service, a retail purchase-protection plan, and extended product warranties." [Credit Card News, 9/15/97]

    FACT: Creigh Deeds voted to deregulate the credit card industry.

    Deeds Voted To Deregulate The Way Banks And Retailers Calculated Credit Card Interest. He Said Credit Card Deregulation Was 'One Of The Most Important Bills' Passed In 1997 But Wished He Had More Time To Study And Think About It. "The legislature ended current restrictions on the way banks and retailers calculate interest on credit-card balances. The aim was to bring Virginia law in line with such 'free market' states as Georgia, Delaware and South Dakota, where many national credit card companies base their operations, said state Sen. Walter Stosch, R-Henrico County, the bill's sponsor…The credit-card bill sailed through with little debate. 'You know, that's probably one of the most important bills we did this session,' said R. Creigh Deeds, D-Bath, a member of the Corporations, Insurance and Banking Committee. 'I guess it makes sense, with all the deregulation in other states,' said Deeds, who voted for the bill even though he said he wished he'd had more time to study and think about it. 'I just wish I felt a little more sure.'" [Richmond Times Dispatch, 2/24/97]

  2. Lowell - I hope to respond to this in more detail tomorrow, but this is some serious overkill. Not every critique is an "attack."

    Anyway, as a former consumer columnist here in C'ville, I wrote fairly extensively about payday lending -- in fact, I interviewed Creigh on the issue in early 2008. so, in that spirit, here are a few quick points:

    1. I have no problem with Terry's desire to want to end payday lending, but it is false that he is the only candidate who wants to do so. I can't speak for Brian Moran on this issue, but I believe Creigh is on the record of wanting to basically cap rates and fees at around 30%, which would effectively kill the industry.

    2. Did Lis Smith really say that Creigh took thousands in contributions from the industry? That is one of those technical truths, I suppose, that is at best, a unfair error on Lis' part, and at worst, an intentional lie.

    As I have reported, since 2002, Creigh has received $6,750 in contributions from the industry. $3,000 of that was in connection with his campaign for AG (something for which I critcized him, BTW). This is a de minimus amount considering the fact this industry has made nearly $2 million in donations in Virgnia over that period.

    Furthermore, Lis' statement doesn't make this clear, but in the Gubernatoiral election, Creigh has recieved ZERO dollars from the industry. That's right - ZERO!

    So, I ask you, is the McAuliffe campaign statement an attack? Or is it simply sloppy research that just happens to paint a deceptive picture?

    3. Speaking of donations, hasn't terry accepted a $25,000 donation from Catherine Reynolds of EduCap. I believe her husband gave Terry $25,000, too. They are not a payday lender, so when I wrote about the candidates and payday lending, I didn;t pay much attention to it, but I seem to recall some predatory lending issues in their past -- I need to take a little closer look at that in light of this charge that Creigh took thousands. I mean, it sure would be wierd if it turned out that Terry took $50K from predatory lenders! I'll be back to you on that one.

  3. There is little doubt that Democrats and Republicans are to blame for the payday lending fiasco. It makes more sense to say we made a mistake and we need to fix it--as Warner and Kaine seem to be saying. It makes no sense to me, to get defensive about it and say you are attacking Democrats.

    It needs to be fixed but not with phony reforms. We need a return to usury caps that the Payday Loan Act exempted the payday lenders from. Go back to a 36% cap on all small loans and if payday lenders can't stay in business, that just shows their business model is flawed. The government is not responsible for keeping them in business.

  4. Ok, so to set the record straight, an "attack" on your candidate is bad, but when you go WAY overboard to the point you have to erase what you wrote, it's ok. Check.

  5. Right, Colin, nailed it!!! *snark*

  6. Ooo, ooo, ad hominem attack, ad hominem attack. *snark*

    You know you went over the top, apologize and admit it.