Giffords, Paton trade allegations, downplay ties to payday industry

2010-06-06T00:00:00Z Giffords, Paton trade allegations, downplay ties to payday industryAndrea Kelly Arizona Daily Star Arizona Daily Star
June 06, 2010 12:00 am  • 

Two congressional candidates with arms-length ties to the payday loan industry are swapping allegations about who has closer ties to what are often referred to as "predatory" lenders.

U.S. Rep. Gabrielle Giffords' re-election campaign and the Democratic Party accused Republican Congressional District 8 candidate Jonathan Paton of not being honest about his past work for the industry after Paton announced a fundraiser co-hosted by Stan Barnes, the payday industry lobbyist.

Paton responded that Giffords has no room to talk, charging she has not been upfront about her financial ties via her family's property rental businesses, which have payday lender tenants.

The two campaigns have sent sparring press releases targeting each other as a benefactor from an industry shut down by overwhelming statewide vote in 2008.

In fact, both candidates have political connections to Barnes, the payday industry spokesman during the 2008 campaign to reform or eliminate the industry. Barnes donated $1,000 to Paton's campaign earlier this year, and has given Giffords $2,000 for her previous congressional campaigns.

The allegation against Paton

The Pima County Democratic Party called him "Payday Paton," and Giffords' campaign staff accused him of not publicly addressing his role or his former job as a lobbyist for payday lenders. He also was associated with the voter-defeated proposition in 2008 to allow the industry to keep operating in Arizona past this summer, they say.

The facts

Paton did work for the Community Financial Services Association, the payday lending industry association, in 2004.

He said he set up a charity to award scholarships to students in Southern Arizona, working for about a year and earning less than $10,000 for the work. He stopped working for CFSA before he was elected to the Arizona House of Representatives in 2004, he said.

Paton said he registered as a lobbyist during that job as a safeguard because he interacted with Southern Arizona legislators, but said, "I didn't lobby on any legislation."

He said he worked for Barnes' Copper State Consulting Group for a time after the 2008 legislative session, but worked directly for Barnes helping the company form connections with media and important community leaders, and did not work with any clients of the consulting firm. That was his only stint with the company. He was paid less than $24,000, he said.

Paton also wrote a ballot argument urging voters to approve reforms for the industry rather than forcing it out of business this year. He said he wrote and paid for it himself because he thought the industry needed to be better regulated rather than shut down because there are people who need its services.

The allegation against Giffords

Paton's campaign calls her the "Payday Loan Heiress" and says she has profited from a family-owned shopping center in Tucson, where one of the tenants is an Ace Cash Express payday loan store. He says she was property manager at the site when the lease was signed or renewed, and notes the rent checks are sent to the same address as Giffords' campaign contributions.

The facts

Giffords' parents own the shopping center at 3030 E. 22nd St. and lease to Food City, which sub-leases space to Ace Cash Express. There is no direct lease between Giffords Land and Cattle, her parents' company, and the loan store. The Ace Cash Express rents from Food City, her chief of staff said.

Her parents also own a 50 percent share of another shopping center at 8095 N. Oracle Road, which has Quik Cash as a tenant. Both locations are former El Campo Tires stores, one of the family's former businesses.

The Giffords family maintains a trust, which includes her as a beneficiary. But she said she gets nothing from the trust while her parents are alive.

Giffords said she has never worked for Giffords Land and Cattle and is not familiar with the company's financial arrangements. She said she has no connection to the store and has not been involved in the property.

"I had no idea there was such an entity there," she said of Ace Cash Express.

However, the post office box used for contributions to most of Giffords' political campaigns is the same address as Giffords Land and Cattle.

Giffords has used her father's post office box for her personal mail since college, when she was traveling and couldn't always pick up her own mail, said campaign spokeswoman Anne Hilby.

Giffords used it as the campaign mailing address though 2006 as a matter of convenience, but switched some time during the 2008 election cycle, Hilby said, although she was uncertain exactly when. Some political fundraising websites still list the company address as the place to send contributions, though Giffords' re-election site lists an updated address.

Her financial disclosure statement shows no income from her parents' companies.

Contact reporter Andrea Kelly at akelly@azstarnet.com or 807-7790

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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