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December 21, 2014

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Cary Katz:

L.V. executive keeps low profile, makes big donations to Sandoval, far-right causes

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Ryan Frank

College Loan Corp.’s offices on West Charleston Boulevard in Summerlin.

Not many people in Nevada politics have heard the name Cary Katz.

But his political spending speaks volumes.

When the Center for Responsive Politics released its national list of top 100 donors, Katz ranked No. 37 nationally and No. 1 among Nevadans. In fact, his $858,200 in contributions nearly matched the combined amount given by casino moguls Steve Wynn and Sheldon Adelson.

The rankings are for individuals making federal donations in the 2014 election cycle.

Katz, who built a fortune making loans to college students, supports Republicans and Tea Party causes exclusively.

In state politics, Katz has given an additional $152,251 since 2011, with more than half going to Gov. Brian Sandoval, his candidates and causes.

In national politics, Katz backs groups far to the right of Sandoval. For this year’s election, Katz has donated more than $500,000 to groups that are pushing the GOP establishment to endorse more conservative causes, including the Tea Party Patriots Citizens Fund. Key issues for these groups: the repeal of Obamacare, gun rights and immigration.

Beyond business and politics

Katz is a well-known poker player, earning more than $1.7 million in World Series of Poker tournaments since 2009. One dramatic hand of his has been viewed on YouTube more than 6 million times.

Katz, a father of six, is chairman of Stop Child Predators, which advocates for stronger sentences and a nationwide registry for sex offenders. The group’s president, Stacie Rumenap, previously served as deputy director for the American Conservative Union, which publishes one of the leading political scorecards for conservatives.

Katz, a graduate of the University of Georgia, keeps memorabilia from Atlanta’s pro baseball and football teams on his office walls.

Who is Cary Katz?

Katz did not respond to a phone call or visit to his office. But interviews, published reports and campaign finance data provide a picture.

A 2004 profile of Katz, then 34, in the San Diego Business Journal described the rise of his company, College Loan Corp., after its 1999 launch. The company was headquartered near San Diego before moving to Las Vegas.

Katz’s father, Marcus, was a pioneer in the student loan industry in the 1990s, Marcus Katz’s business partner, Robert DeRose, told the Business Journal. Marcus Katz and his partner marketed loans directly to students and built three businesses with the model. They issued close to $10 million in student loans annually, DeRose said.

In the 1990s, Cary Katz worked in marketing for a student lender, Educational Finance Group. In 1999, he left to start College Lending Corp., entering a business primed for growth. The cost of college rose rapidly in the 2000s while family incomes stagnated, meaning students borrowed more to pay for college. Loans were guaranteed by the government through the Federal Family Education Loan program.

“I’m surprised more companies haven’t gotten into this industry because it’s a cash cow,” Mark Kantrowitz, whose FinAid.org became the go-to reference for college borrowers and industry leaders, told the Business Journal.

Even for a growth industry, College Loan Corp.’s success was eye-popping. The company made $16 million in loans its first year. After three years, it made $3.9 billion in loans. By 2003, it was the country’s seventh-biggest college lender by volume.

Kantrowitz now is publisher of Edvisors.com, a subsidiary of College Loan Corp. He works out of the company’s Las Vegas office. He told The Sunday customer service was the secret behind College Loan Corp.’s growth.

The company had a pledge to solve borrowers’ questions in a single call and worked hard to make financial aid counselors happy, Kantrowitz said. That earned the company priority placement on schools’ lists of preferred lenders. The company was so good at building relationships that one borrower invited a call taker to their wedding, Kantrowitz said.

“I’ve never heard a bad word about them, which is strange, because people usually don’t like their lender,” Kantrowitz said.

College Loan Corp. flourished through the 2000s, reaching $10.4 billion in loans in 2008.

But in 2010, Congress effectively killed the business model. In the wake of the late-2000s credit crisis, Congress voted to end the Federal Family Education Loan program. College loans now are made directly by the federal government.

College Loan Corp. services existing loans but has downsized to a fraction of its former size.

The company’s headquarters are in an unassuming Summerlin office park along West Charleston Boulevard. The company’s name isn’t on the sign out front, and the offices are tucked into the second floor behind closed doors.

Inside, the lobby is dark, quiet and empty except for two chairs, a phone and the steady hum of the air conditioner. A woman who emerged from two glass doors said Katz isn’t in the office much.

Katz and politics

Part of the wealth Katz built in the college loan industry has gone to Republican establishment candidates and groups in Nevada.

He maxed out his allowable donations to Sandoval, giving $10,000 for both his 2012 and 2014 campaigns. Katz also donated $60,000 to Sandoval’s political action committee, New Nevada.

Katz has given $15,000 since 2012 to Mark Hutchison, a state senator and Sandoval’s hand-picked candidate for lieutenant governor. And Katz donated to two candidates who have the best shot at swinging the state Senate to Republicans this year.

Nationally, Katz has focused on far-right causes. He has donated $235,000 this election cycle to the Senate Conservatives Fund, a group fighting to unseat mainstream Republicans, and related committees.

In 2010, he maxed out contributions to Tea Party candidate Sharron Angle when she challenged Senate Majority Leader Harry Reid.

Katz also supported the Special Operations Speaks political action committee, a pro-military, anti-Obama group. The group’s founder, Larry Bailey, is a former Navy SEAL who told Foreign Policy magazine that he thinks President Barack Obama is lying about where he was born.

“I have to admit that I’m a birther,” Bailey said. “If there were a jury of 12 good men and women and the evidence were placed before them, there would be absolutely no question Barack Obama was not born where he said he was and is not who he says he is.”

Staff writers Rebecca Clifford-Cruz and Case Keefer contributed to this report.

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