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Clinton forgives loan to campaign

| Tuesday, Dec. 23, 2008

WASHINGTON -- Hillary Clinton formally wrote off the $13.2 million she lent her presidential campaign, closing a chapter on her failed race for the White House and helping to ease the way for her Senate confirmation as secretary of State.

Forgiving the loan takes Clinton's personal debt off the books, a step toward shutting down her presidential campaign committee as she prepares to become the top U.S. diplomat.

"If you're going to go into a position like that, you want to try to clear away whatever you can," said Larry Noble, a former general counsel to the Federal Election Commission.

Clinton started lending money to her campaign in January while competing in Iowa and New Hampshire as she tried to keep pace financially with Barack Obama, who was on his way to raising more money than any candidate in history.

"It allowed her to stay alive in those final months when she really found her voice with the American public," said Julian Zelizer, a professor of history and public affairs at Princeton University. "That, combined with future accomplishments at State, could be pivotal in the long run to how the public and historians talk about her role in contemporary politics."

Clinton, a New York Democrat, also wrote off $77,900 in interest on the loan, according to a filing with the FEC on Dec. 20.

Clinton, 61, had said she didn't expect to be repaid. The money will be considered a campaign contribution, which isn't tax-deductible, FEC spokesman Bob Biersack said.

Even after writing off the loan and interest, she reported owing $6.4 million to vendors as of Nov. 30, including $5.4 million to former chief strategist Mark Penn. That's down from $7.5 million at the end of October.

She did pay off a $200,000 debt to spokesman Howard Wolfson and $58,000 owed to media consultant Mandy Grunwald.

The senator and her husband, former President Bill Clinton, released income tax returns during her presidential campaign that showed the couple earned $109 million in eight years. Their annual income rose to $20.4 million in 2007 from $420,000 in 1999. Almost half the Clintons' income during those years, $51.9 million, came from the former president's speeches.

Bill Clinton was paid $29.6 million in royalties and an advance for his autobiography, and Sen. Clinton received $10.1 million in book royalties and advances.

Bill Clinton, 62, last week released the names of his foundation's contributors, fulfilling one of the conditions he agreed to for his wife to receive the secretary of State nomination. He also agreed last month to have the State Department vet all of his speeches and business endeavors.

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