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Democrats question loan in '97 Rossi didn't reportBy CURT
WOODWARD
The Associated Press
OLYMPIA For several years while he served in the state Senate,
Republican gubernatorial candidate Dino Rossi
didn't tell state regulators about a $50,000 loan from a
real-estate investor a misstep that Democrats are using
now to question Rossi's integrity in the final days of a heated
election.
Rossi acknowledged the error when it was brought to his
attention by The Associated Press, which learned of the
error from state Democrats.
But Rossi also characterized his failure to disclose the loan as
a minor, unintentional oversight.
His campaign correctly pointed out that much larger real-estate
transactions were disclosed on his personal
financial-disclosure form, which government officials and
candidates are required to file with state regulators.
Rossi spokeswoman Jill Strait suggested that a decade-old
bookkeeping problem being raised by his political
opponents so close to the election was evidence of
desperation.
"I mean, an 11-year-old oversight is the best they can come up
with a week before the election? Really?" Strait said
Friday.
Rossi and Democratic Gov. Christine Gregoire are locked in a
rematch of their extremely close 2004 race.
Public documents show that Rossi borrowed the money in question
in October 1997, when he was a state senator,
from Michael Mastro, a real-estate developer. A Seattle property
that Rossi owned at the time served as collateral.
The $50,000 was used as part of the down payment when Rossi and
other investors, including two lobbyists,
purchased a Mastro-owned Federal Way apartment building that
year. Documents show Mastro loaned the investors
$2 million to buy the apartment from him, with a sale price of
$2.5 million.
Mastro was an early donor to Rossi's 2004 and 2008 campaigns for
governor.
Gregoire defeated Rossi in 2004 by just 133 votes, and polls
show the two running another tight race.
State Democratic Party Chairman Dwight Pelz called the overall
apartment purchase "shady," and implied that
Rossi's failure to disclose the loan was part of an overall
reluctance by Rossi to reveal the details of his private
finances.
"Rossi still refuses to come clean with Washingtonians regarding
his tax returns and the full details of his
questionable finances," Pelz said in a statement.
Strait, Rossi's spokeswoman, noted that in 1996, then-attorney
general Gregoire was fined by the state Public
Disclosure Commission for failing to report income from a law
firm and using state facilities for politics, among other
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offenses. The commission found the violations were minor or
unintentional.
Debts are part of the financial information that state
legislators must disclose in regular filings to the PDC.
Rossi's 1998 financial disclosure, which covers the period in
which he obtained the loan, does not note his $50,000
debt to Mastro.
Subsequent financial reports submitted before Rossi settled the
loan in 2001 also do not reference the $50,000 debt.
Incorrectly filling out a financial-disclosure form can result
in a relatively light punishment, if the matter is taken all
the
way to a formal agency hearing, which is rare.
In the case of Rossi, it's unlikely that action could be taken
now, because mistakes are not punishable after five
years. Documents show Rossi and Mastro declared the $50,000 the
loan settled in 2001, after the Rossi company
sold the Federal Way apartments.
Copyright 2008 The Seattle Ti mes Company
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