Posted on Tue, Feb. 21, 2006 Santorum's mortgage raises interest By WILL BUNCH SEN. RICK SANTORUM and his wife received a $500,000, five-year mortgage for their Leesburg, Va., home from a small, private Philadelphia bank run by a major campaign donor - even though its stated policy is to make loans only to its "affluent" investors, which the senator is not. Good-government experts said the mortgage from The Philadelphia Trust Co. raises serious questions about Santorum's conduct at a time when he is the Senate GOP's point man on ethics reform. They said it would be a violation of the Senate's ethics rules if Santorum received something a regular citizen could not get. A campaign spokeswoman for Santorum, who is seeking re-election, said the couple's mortgage interest rate was "market-driven," but she refused to offer specifics, as did officials from Philadelphia Trust. A probe into Santorum's personal and political finances also found: â¢ A political-action committee chaired by Santorum, America's Foundation, spends less money on direct aid to GOP candidates - its stated purpose - and more on expenditures than similar PACs. And its expenditure reports are littered with scores of unorthodox expenses for a political committee, with charges at coffee and ice cream shops and fast-food joints as well as supermarkets and a home-hardware store. For example, America's Foundation made 66 charges at Starbucks Coffee, almost all in the senator's hometown of Leesburg, Va., and 94 charges at another D.C.-area vendor, HMSHost Corp. Virginia Davis, the campaign spokeswoman, defended all the charges as campaign-related, saying the senator prefers to meet political aides in coffee shops rather than on Senate property. â¢ A little-publicized charity founded by Santorum in 2001, the Operation Good Neighbor Foundation, is not registered in Pennsylvania, even though the majority of its fundraising and spending takes place here. What's more, three years of public tax returns show the charity spent just 35.9 percent of the nearly $1 million it raised during that time on charity grants, well below the 75 percent threshold recommended by experts. The group's Web site says it has distributed a total of $474,000 to groups, many faith-based, that fight social ills and urban poverty. The mortgage It appears that Santorum's unconventional mortgage deal could pose the biggest problem for the senator, who consistently has trailed his likely November rival, Democratic state treasurer Bob Casey Jr., by double digits in the polls. Unlike longtime Washington pol Santorum, Casey does not maintain a so-called "leadership PAC." Melanie Sloan, a former federal prosecutor who heads Citizens for Responsibility and Ethics in Washington, or CREW, said that "anytime he gets something that a regular person couldn't get, that's an improper gift" - regardless of any fees or the interest rate. Officials with Philadelphia Trust have been generous supporters of Santorum's campaign since the private bank opened its doors in late 1998. Federal records show the company's executives, directors and their spouses have donated $24,000 either to the senator's campaign or to the America's Foundation PAC. Of that total, $13,000 came from the man who signed the mortgage papers - Philadelphia Trust CEO Michael Crofton - and his wife. Crofton also has been chairman of the board of advisers for Operation Good Neighbor, and records show the bank has donated at least $10,000 to the senator's charity. Philadelphia Trust advertises itself as an independent private bank for "affluent investors" - who have liquid assets of at least $250,000 - and for institutions. On its Web site, it states that its "anking services are available only to investment advisory clients whose portfolios we manage, oversee or administer." A call to the bank confirmed that its mortgages are only for investors and not for the general public. According to a review of the annual financial-disclosure forms that Santorum files, he has never held an investment portfolio with Philadelphia Trust. And in 2002, the year he obtained the mortgage, the value range he gave for his small number of investments could not have exceeded $140,000. The Pennsylvania senator bought the Virginia home, 43 miles from Capitol Hill, a year earlier for $643,361, and - according to Loudoun County property records - had received a $405,000 mortgage from a traditional lender. The 2002 refinancing with Philadelphia Trust exceeded the initial loan by $95,000. The chairman of Philadelphia Trust - George Marlin, a one-time Conservative Party candidate for mayor of New York - said discussing any customer's transaction would violate bank privacy laws. Crofton did not return phone calls. A bank director, Karen Iacovelli, also would not answer questions in detail, but when pressed on whether the bank does loan business with non-investment customers, she said, "Yes and no - it's a judgment call." There is no evidence that Santorum - who sits on the Senate Banking Committee - took any official actions on behalf of Philadelphia Trust. The senator's campaign said no special treatment was involved. "Sen. Santorum and his wife, who is an attorney and a nurse, applied for the mortgage using the standard application process that Americans must go through when applying for a mortgage and received a market-driven rate for their second home in the Washington, D.C., area to house them and their six children when the Senate is in session," said Davis, the campaign spokeswoman. She would not answer follow-up questions. This is not the first time that Santorum's Virginia residency has posed political problems. In late 2004, the senator came under fire when it was revealed that the school district in Penn Hills, Pa., had paid roughly $67,000 to cyberschool the Santorums' six kids, even though the children are residing in the Leesburg home full-time. Santorum owns a much smaller home in Penn Hills and keeps his voting residence there; the home has most recently been occupied by Karen Santorum's niece. Santorum also made a surprising admission to The New York Times Magazine last year, telling the magazine that "[w]e live paycheck to paycheck, absolutely." He said that his parents - retired Veterans Administration employees - send him money every now and then.