The nonprofit Idaho Water Users Association, partially supported by taxpayers, listed its assets last year as $453,906. More than one-third of that amount is money its executive director, Norm Semanko, owes the organization.

“This isn’t a new thing,” said Semanko of the loan, which was made a decade ago.

The money Idaho Water Users loaned Semanko — $136,000 in 2001 and an additional $40,000 in 2007 — was used for a downpayment on a home and to make home improvements, among other things, Semanko said.

The loan is entirely legal, said Semanko, an attorney. True, but the practice is illegal in New York, Tennessee, Illinois and other states.

After Enron and other accounting scandals a decade ago, the practice of making loans to directors or executives was outlawed nationwide for publicly traded companies and strongly discouraged for nonprofit organizations.

The Idaho Association of Counties, Association of Idaho Cities and Idaho Association of Highway Districts are three nonprofits comparable to IWUA. Their revenue consists primarily of membership dues paid by taxing districts.

All three organizations said making loans to officers or employees is strictly prohibited by their boards.

“It is not an allowed practice,” said Dan Chadwick, executive director for the Idaho Association of Counties.

“It has not been done, and it will not be done.”

‘WE WANT TO KEEP HIM HAPPY’

The Idaho Water Users Association lobbies for both public and private water interests in the state.

The group has about 300 members from whom it receives dues of about $330,000 annually, its primary source of income. The dues are partially tax-deductible. Members include such government entities as irrigation and water districts and cities, as well as private canal and water companies, businesses and nonprofits.

In 2000, the IWUA board offered Semanko, then an attorney in Twin Falls, its executive director position. He and his wife, Svetlana, had just purchased a home in Twin Falls. Semanko considered commuting to Boise for his new job, but his wife disliked the idea.

The Semankos moved to Boise and rented a house for several months while they waited for their home to sell. Frustrated with renting and not being able to sell their Twin Falls home, Semanko talked to then-IWUA board President Henry Weick.

“To make a long story short, they basically offered me a relocation loan, a bridge loan, to be able to get into a house,” Semanko said.

Bridge loans are temporary loans intended to help a homeowner buy a new place before the old one sells. Semanko’s loan was not temporary.

The IWUA board in spring 2001 approved a long-term, 30-year loan for $136,000, Semanko said.

In a March 2001 letter to the Semankos’ mortgage loan officer, Weick stated the Idaho Water Users loan was for a down payment on a house and to make the mortgage payments on the Twin Falls home until it sold.

“We appreciate your willingness to help our executive director and his family permanently relocate to the Boise area,” Weick wrote.

The Semankos purchased a 3,300-square-foot home in Eagle’s Two Rivers subdivision for about $300,000 in April 2001.

Semanko, who makes about $160,000 annually as the IWUA’s director, said the personal loan was an appropriate use of IWUA’s membership dues.

“The water association is a nonprofit private company,” he said. “There are dollars that come directly out of the public purse, but we are not government. The money we spend is not government money when we receive it. It is private nonprofit money.

“All of this was checked with the accountants,” he said. “It is not a prohibited transaction.”

The loan is an investment for the organization, Semanko said, because he is paying 6.25 percent interest on money that otherwise would be sitting in a savings account earning less interest.

According to Idaho Water Users’ 2004 tax form, the earliest IWUA form available online, Semanko owed the organization $136,262 at the end of 2004, three years after the initial $136,000 loan was made. Today, a decade later, he owes $161,305.

The IWUA loan was increased by about $40,000 in 2007 to $176,642, Semanko said, so he could make some home improvements including new hardwood floors and landscaping.

Dale Swenson, director of the Fremont Madison Irrigation District and an IWUA executive committee member does not remember all the details of the loan’s 2007 increase.

“I think part of it was that Norm needed the money,” he said. “Norm is a valuable employee. He does good work for the Water Users. We want to keep him happy.”

A year earlier, Semanko loaned his campaign $37,000 during his failed 2006 run for U.S. Congress. He said the campaign loan had nothing to do with his request to add $40,000 to his existing Idaho Water Users loan in 2007. He paid off the campaign debt this year, he said.

IWUA board President Marcia Herr said she supports the decisions made by her predecessors to loan Semanko money.

“They know a lot more about finances than I do. If they as a group made the choice, then I certainly trust them,” she said.

Herr reiterates the transaction was, and still is, legal.

“We certainly have passed it by our accountants and they said it was perfectly all right what we did,” she said.

Semanko said the house has been used as collateral on the IWUA loan since it was made in 2001, but the deed transaction was not recorded with the Ada County recorder’s office until April 2009, about six months after Semanko’s mortgage temporarily went into default.

“What if Norm had been killed in a car wreck and it wasn’t legally recorded? It would have been hard for the Water Users … It just makes good sense,” Herr said.

A BUSY MAN WITH SOME FINANCIAL ISSUES

Semanko, 45, says he has worked at least 80 hours a week since he was 21 years old.

His position as IWUA’s director is a full-time job. He is also chairman of the Idaho Republican Party, an unpaid position, and is an Eagle city councilman, which pays $5,610 annually.

He also is running for Eagle mayor. According to Eagle City Code, the mayor’s position is a full-time position. It pays $30,000 per year.

Semanko says he already spends about 40 hours a week on his Eagle City Council work, so the transition to mayor would not pose a problem timewise.

“I will set a new bar in terms of getting the job done for Eagle. I am a workaholic. I am task-oriented, and I get the job done,” he said.

When former Eagle Mayor Phil Bandy decided to accept a second job at Boise State University, it immediately triggered a debate over his ability to continue as mayor full-time. The controversy that ensued ended in his resignation in March 2010.

Semanko told the Idaho Statesman if elected he would, at some point, relinquish his Republican Party chairman position.

As for his full time IWUA position, he said if elected he would have to talk with the IWUA board about his future role with the organization.

“I’m hopeful we will be able to figure out some way to continue,” Semanko said.

This is not the first time Semanko’s personal finances have made it into the public realm.

In late 2008, Semanko’s mortgage, then up to $449,532 after borrowing against the home’s increased value — Semanko’s house had assessed at $519,400 in 2007 — went into default after he failed to make the $3,623 monthly payment for five consecutive months. Semanko said he told the bank he would miss the payments because he needed to pay his daughter’s tuition at Regis University in Denver. The loan was brought current about a month after the default notice.

Last year, two payday or instant loan companies filed small claims cases in Ada County court against Semanko. One claim was for $1,030, the other $900. Semanko explained he had questions about exactly how much was owed and refused to pay until each company could provide the necessary documentation. In the interim, each transaction went into default and the small claims cases were filed. Semanko satisfied the claims within weeks of their filing and both cases were dismissed.

Cynthia Sewell: 377-6428

Rocky Barker: 377-6484