SACRAMENTO – Gov. Arnold Schwarzenegger broke a state law during the closing weeks of the recall race when he took out $4.5 million in bank loans to help his cash-starved campaign, according to a preliminary ruling from a superior court judge.
If Monday’s decision is upheld, the governor could be forced to pay back the loans out of personal funds.
”The judge has agreed with us in a strongly worded position that these loans were illegal,” said attorney Lowell Finley, who filed a lawsuit in October attempting to stop Schwarzenegger from funding his campaign with bank loans that could be paid back by donors after the election.
Finley said that the ruling from Judge Loren McMaster could spark sanctions from the California Fair Political Practices Commission – an agency that recently threatened Lt. Gov. Cruz Bustamante with a $9 million fine because of campaign infractions.