WASHINGTON -- When his poll numbers were looking down, Sen. Edward M. Kennedy turned to Bank of Boston.

And the bank was only too happy to help. The Massachusetts Democrat pledged his $6 million McLean, Va., home as collateral and Bank of Boston advanced him $2 million. Sen. Kennedy then lent the money to his campaign, which is now looking like a winner.

"We did not have a banking relationship with Sen. Kennedy before this," said Karen Schwartzman, Bank of Boston's director of media relations. "It was. a good opportunity for us to do so."

The loan wasn't unusual. A number of banks and thrifts have made campaign-related loans to congressional candidates this election cycle.

California-based First Republic Thrift and Loan, for example, refinanced a loan in August secured by Sen. Dianne Feinstein's San Francisco home, according to reports filed with the Federal Election Commission.

The $2.2 million adjustablerate loan matures in 30 years and initially has a 5.95% interest rate.

Sen. Feinstein, who is running just ahead of Rep. Michael Huffington, lent $940,000 of the proceeds to her campaign.

In contrast to Sen. Kennedy and the Bank of Boston, Sen. Feinstein had a banking relationship with her lender for nearly 10 years. And Edward Dobranski, general counsel for First Republic, said there was nothing preferential about the loan terms offered to Sen. Feinstein.

"This loan was made under the same terms and conditions as for other qualified borrowers," Mr. Dobranski said.

Loans to political campaigns are not a new phenomenon. Ohio Sen. John Glenn, borrowed $2 million from four Ohio banks for his 1984 bid for the Democratic presidential nomination.

Former Colorado Sen. Gary Hart had over $500,000 in bank loans for the same campaign. Paul Tsongas, Bob Kerrey, and Tom Harkin each borrowed money from financial institutions for their unsuccessful 1992 presidential campaigns.

Adams National Bank in Washington, D.C., has provided financing to presidential candidates for several years, including to Sen. Kerrey and Sen. Harkin.

Adams' vice president Devin Blum said the bank makes the loans in hopes of developing a long-term banking relationship with the candidates and their staff. Mr. Blum added that these loans are always backed by federal matching funds, which are available only in presidential contests.

FEC regulations require that loans to candidates be made on essentially the same terms as those made to other bank customers. Just as important, the bank must be able to assure itself that the loan will be repaid, usually by demanding collateral of some kind.

Loans that are not repaid can be considered corporate contributions, which are illegal under federal law.

Susan Brooks, a Republican who is running for Congress in California's 36th district, personally signed a $50,000 line of credit from the Bank of California on April 7. She made three draws totaling $50,000 between May 27 and June 3. They are to be paid back in November after the election at the prime rate plus 2%.

However, reports filed on July 15 with the FEC show that the draws were to Ms. Brooks' campaign. The California Democratic party filed a complaint with the FEC on Oct. 26, charging that these loans were illegal because they lack collateral, a personal guarantee, or a dedicated account for the receipt of specific fund-raising proceeds that would be applied to repayment of the bank loan.

David Bohline, deputy campaign manager for Ms. Brooks, said the Democrats' complaint is a "blatant political posture."

"There is no FEC violation. The loans are certainly not preferential in treatment," Mr. Bohline said.

Chris Stuart, manager of communication services for Bank of California, said that Ms. Brooks was a long-term client of the bank who had an excellent credit history.

"We do very few campaign-related loans. We have a relationship [with Ms. Brooks] that is extremely solid. I don't know if we would do a similar loan in a new relationship," Ms. Stuart said.

Similarly, Doug Daniel of the Star Bank in Gallipolis, Ohio, said his bank's long-standing relationship with Frank Cremeans was a principal reason for the personal loan of $80,000 advanced to Mr. Cremeans on Sept. 30. Mr. Cremeans, a Gallipolis resident running as a Republican for Congress from Ohio's sixth district, lent $59,852.64 of these funds to his campaign.

Another Ohio institution, Banc One Corp., is still owed money by the 1984 Glenn campaign. However, that unpleasant experience has not deterred Banc One of Cleveland from doing business with Ohio Democratic Rep. Louis Stokes for about 10 years, according to Bracy Lewis, senior vice president of community development.

However, Mr. Lewis said this past banking relationship was not the main reason the bank made a $15,000 loan to Stokes' campaign committee in December 1993. Stokes' $54,000 certificate of deposit at Banc One sealed the deal.

"It was a no-brainer," Mr. Lewis said.

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