Blum expects loan to hockey player to be repaid

CEDAR RAPIDS — Iowa congressman-elect Rod Blum is pretty sure the $2 million loan he made to a hockey player who had just signed a $30.5 million contract to play professionally will be repaid in full.

He's even more sure that he won't be making any similar loans.

'It's just a headache, a hassle,' Blum said Friday about his personal loan to the National Hockey League Columbus Blue Jackets' Jack Johnson Jr., who has filed for bankruptcy claiming his parents borrowed millions of dollars in high-interest loans against his future earnings.

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 also 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 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.'

His loan was made through a Dubuque investment firm whose founder and president is a registered financial adviser for the National Football League Players Association.

Such loans are 'a little higher credit risk,' Blum said, 'so you can get a higher interest rate and that part is attractive — assuming one gets paid.'

He's assumes he will be repaid in full by Johnson, who already has repaid about a half-million dollars of what he owes Blum.

'I really feel bad for him,' Blum said. 'It appears his parents mismanaged his money. He's busy playing hockey and trying to have a great career in the NHL, and his parents were taking advantage of it.

'It's sad thing,' he added. 'He seems like a pretty good guy and his parents really did a number.

As a result of the bankruptcy filing, Blum said, 'he finally has the help he needs.'