Mr Welters shared loan documents dated December 6, 1999, in response to questions from the Finance Committee, which showed he had lent the entire purchase amount to Justice and Mrs Thomas at an annual interest rate of 7.5 per cent. Although the rate was in line with market rates at the time, what made the arrangement unusually favorable was that over the course of the five-year loan, Justice Thomas did not make any principal payments.
Instead, he just had to make annual interest payments of $20,042. The principal amount borrowed will come due in a balloon payment on the loan’s maturity date in December 2004. Such vehicle loans are very unusual, experts said, because the risk for the lender is: The value of the collateral securing the loan – in this case, the value of a motor coach – declines rapidly, while the outstanding principal balance remains stable. Is.
In a handwritten note to Mr. Welters on Supreme Court letterhead the same day the loan documents were signed, Justice Thomas said the loan agreement should accurately reflect his understanding, and according to the Senate, the letter Promised to follow. Report.
But according to records obtained by the committee and cited in their report, in 2004, when the principal became due, Justice Thomas did not repay his loan. Instead, Mr. Welters gave them a 10-year extension with the same interest terms. This is despite the fact that last year Justice Thomas collected $500,000 of a $1.5 million advance for his autobiography, according to his financial disclosures.
Then, according to the committee report, in late 2008, Mr. Welters forgave the balance of the loan.