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Schwarzenegger uses loans to evade disclosure

AP reports:

Although he said he could pay for his own race and not take money from special interests, records show Gov. Arnold Schwarzenegger has a pattern of relying on bank loans and other credit, which some critics say disguises hundreds of thousands of dollars of special-interest donations.

Schwarzenegger's borrowing of millions of dollars before the Oct. 7 recall election was ruled a violation of state campaign law by a Superior Court judge last week because he could raise money to pay off the loans after the election.

That ruling may mean Schwarzenegger may have to pay back $4.5 million in loans with his own money.

Campaign laws compel candidates to disclose their financial supporters before an election. There is also a restriction that candidates cannot loan their campaigns more than $100,000.
While Schwarzenegger said Tuesday he never intended to repay the loans with contributors' money, he did just that with his campaign for Proposition 49, a 2002 initiative for state-supported after-school programs.