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Morgan has charged his campaign interest of 8 to 9.5 percent, according to his finance reports. That's a rate of return on a relatively risk-free, liquid investment that's hard to find in the current market, said Bill Dix, president of Fortune Management, a Raleigh investment management firm.

"If I knew where I could get 8 or 9 percent on a relatively risk-free basis, I'd be all over that," Dix said. "That just ain't out there."

Campaign finance experts say other candidates have charged interest on money they loaned to their campaigns, but not at that high a rate. They also say that those loans often are repaid quickly.

State election law does not prohibit candidates from charging interest on loans they make to their campaigns. It also does not say how much interest a candidate can charge.

"To keep the money in when it's not really needed, and also to charge a higher-than-market interest, just raises serious questions about how proper that is," said Bob Hall, research director for Democracy North Carolina, a campaign finance watchdog.

Disclosure spotty

Morgan's reports show that he did not always disclose loans that carried over from one election to the next, or the interest he charged when they were made. Kim Strach, the State Board of Elections' deputy director for campaign finance, said she contacted Morgan on Thursday and he told her he plans to provide the missing information.

If he doesn't, she said, he could face fines from the board.

Contributors to Morgan's campaigns had mixed reactions to what he did with his political money.

"It's not my cup of tea," said Zeb Alley, one of the state's top-ranked lobbyists and a former lawmaker. Alley gave $500 in the 2006 election.

"There's no way I could have known that he was going to do that," he said, "and I don't know what I would have done if I had known that."

Sherry Leigh Thomas, senior vice president for the Association for Home & Hospice Care of North Carolina, gave $2,500 to Morgan in the 2006 election.

"That's really up to that person running for office, what they do with the campaign donation," she said.

Morgan's latest campaign finance report showed that he had $35,500 left in his account, and another $100,000 loan that has yet to be repaid. The report indicates he plans to pay himself back plus 9.5 percent interest. But for that to happen, he would have to raise more money.

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