Abe Hamadeh won't detail circumstances of loan that experts question

Congressional candidate Abe Hamadeh is declining to disclose details about a loan that experts question, based on a review of available records, as possibly unethical or illegal.

To help finance his campaign, Hamadeh, a Republican, took out a loan using a newly created LLC that is managed by someone who has donated the legal maximum to his U.S. House bid and who is business partners with Hamadeh’s brother, public records show.

“The optics of this situation involving Mr. Hamadeh's congressional campaign are not good," John Pelissero, a government ethics expert, wrote in an email to The Arizona Republic after reviewing the relevant records.

“A reasonable person might look at this situation and conclude that the candidate is accepting a campaign (contribution) from an individual who may have created the LLC to work around the campaign finance laws.”

Through a campaign spokesperson, Hamadeh’s lawyers said that the loan was made legally. The campaign repeatedly declined to provide evidence that could verify that assertion.

Hamadeh, who has been endorsed by former President Donald Trump, is running to represent much of the West Valley in Congress. He disclosed the recent loan in a campaign finance report that was made public several weeks before the July 30 primary. He reported loaning his campaign nearly $400,000, a sizable portion of his overall net worth .

He reported taking out a home equity line of credit to finance the campaign contribution. That is perfectly legal, experts said.

What’s unusual, experts said, were the circumstances of the loan. The beneficiary on the loan’s paperwork is an entity, “NN Lender LLC,” that had been incorporated days before.

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The LLC is managed by Nico Howard, an Arizona-based real estate developer who has made the maximum donation to Hamadeh’s campaign. Howard’s prior political giving includes donations to Democratic congressional candidate Yassamin Ansari, the Democrats’ 2024 presidential campaign, U.S. Sen. Kyrsten Sinema, I-Ariz., and U.S. Rep. Greg Stanton, D-Ariz.

Howard also runs a boutique lending firm with Hamadeh’s brother, Waseem. Howard declined to comment to The Republic.

Jim Barton, a campaign finance lawyer, said the situation "looks very strange" and may support a complaint with federal elections officials.

“Why didn’t he go to a regular bank? Why is he doing this weird lending, with his brother’s (business partner)? There’s a lot of questions here,” Barton said.

“It sure looks very strange, and peculiar, and they were only forthcoming in as much as saying, ‘No, we didn’t break the law.’”

Pelissero elaborated: “It is an ethical problem for the candidate because it suggests that personal political interests are more important to him than following the intent of campaign laws that were designed to serve the public interest and promote fairness in political campaigns.”

Timothy La Sota, a lawyer who has worked for Hamadeh in the past and still supports Hamadeh, took a different view. He said there are “any number” of legitimate reasons why an LLC might have been formed for the purposes of securing the loan, and that the firms involved are “sophisticated” operations, unlikely to sign off on a loan if it were illegal.

He said that if a formal complaint were filed, elections officials would likely seek to confirm that, per the relevant law, the loan was made under “commercially reasonable” terms.

Through spokesperson Erica Knight, Hamadeh’s lawyers wrote that the loan “has been reviewed by our compliance team and is consistent with the law.”

"It was made in accordance with applicable law, was made under commercially reasonable terms, and was made by a lender in their normal course of the lender's business."

Through Knight, the legal team repeatedly declined to provide proof or additional details that would back up those claims.

It is not the first time Hamadeh has faced questions over a campaign loan. Hamadeh drew scrutiny during his 2022 campaign for Arizona attorney general when he accepted a million-dollar loan from his brother and then reported returning it after securing an endorsement from Trump. Some in his party raised questions over whether the loan was misleading. Hamadeh’s brother has noted he still gave a significant sum to the campaign.

Under federal election law, candidates can donate an unlimited amount of money to their own campaigns. If someone loans a candidate money "for the purpose of influencing” the election, it would be subject to the ordinary per-election contribution limits, according to the FEC website .

Hamadeh is one of six GOP candidates running in Arizona's 8th Congressional District, which covers parts of Maricopa and Yavapai counties, including Glendale, Peoria, Sun City West and New River.

This article originally appeared on Arizona Republic: Abe Hamadeh won't detail circumstances of loan that experts question