Politician calls $2M loan he gave to Jack Johnson a ‘headache,’ and ‘hassle’
One of the parties involved in the Jack Johnson bankruptcy saga says the money he loaned to the Columbus defenseman has become a pain.
That’s what Iowa congressman-elect Rod Blum told The Gazette (Cedar Rapids) on Friday, saying the $2 million loan he gave Johnson in 2011 is “a headache, a hassle.”
The Johnson loan was a one-time investment, Blum said, but it has become time-consuming and “I don’t have time for that kind of stuff anymore”
That’s because Blum, a Dubuque Republican was elected earlier this month to represent Iowa’s U.S. House 1st District, which includes Cedar Rapids and Waterloo-Cedar Falls.
It’s not just a matter of time, but House ethics rules prohibit members from making or receiving loans that have terms more advantageous than someone not a member of Congress might expect.
According to the Columbus, Ohio, Dispatch and Washington-based The Hill, Blum loaned Johnson, then with the Los Angeles Kings, $2 million. The loan, which was intended to buy life insurance and disability insurance for Johnson, was made at 8 percent interest. It jumped to 12 percent after Johnson missed payments, according to court documents cited by The Hill.
“There’s always those opportunities always out there if you are like a business guy,” Blum said about loaning money to professional athletes, musicians and actors. Blum’s business interests have included starting a software development firm and a property development company. “It is not uncommon.”
According to the Dispatch, it’s unclear “how Johnson’s family came to know [Blum] or why he was making a personal loan at a high interest rate.”
Blum went on to tell The Gazette he feels badly for Johnson, and assumes the loan will eventually be repaid. The Dispatch reports that Blum sued Johnson within a month of the loan being signed and that, for most of the last two seasons, Johnson has had nearly $42,000 -- roughly 25 percent -- garnished from his bi-monthly paychecks from the Blue Jackets in order to settle the suit.