Deal Amends Financial Disclosure

Jim Galloway over at the AJC brings us the latest:

While Nathan Deal on Thursday debated Democrat Roy Barnes about education policy, staffers for the Republican nominee for governor filed new financial report with the State Ethics Commission, acknowledging that Deal is carrying $2.85 million more in loans than he first revealed back in May.

After the education debate, Deal declared the omission to be an “oversight.”

See the report for yourself here.

Both newly disclosed loans are to Gainesville Salvage and Disposal, the auto salvage firm Deal owns with Kenneth Cronan.

Brian Robinson, spokesman for the Deal campaign, said money was for an expansion of the business, which is “in fine shape”, thanks to Deal’s past efforts (added by Tyler), and well within the capability of the firm to pay back.

Read the rest by Galloway HERE.

69 comments

  1. bluedogdem says:

    This is guy is toast. The funny thing to sit back and watch all of these GOP voters defend him. Everytime they defend him for something and it goes away something else pops right up…LMAO thanks GOP I needed a laugh.

  2. John Konop says:

    The note for the Salvage and Disposal business is not necessarily good or bad. As I have said in the past debt is neutral it is only relative to the ability to service the debt. And if the income of the business grew faster than the cost of servicing the note than this is good for the business and the economy ie expansion means more jobs. If the note is overwhelming the cash flow than it bad for the business and could be a real issue.

    In terms of the business viability and leverage issues with Nathan Deal this information means nothing without details. It could be the expansion via the note for this business is why Deal thinks he can pay-off the bad note.

    Some people are jumping to conclusions without the facts. Also even if Deal is in trouble with this business I never take joy kicking someone when they are down.

    • bgsmallz says:

      Fact #1- Deal didn’t disclose the $2.85 Million.
      Fact #2- AP runs a story disclosing that Deal has $2.85 Million in debt that he didn’t disclose.
      Fact #3- Deal disclosed the debt.

      Those are all the facts I need. The shape of his business to pay is minor compared to his ability to either (a) be truthful and forthcoming or (b) to be competent in running his operation.

      Because that’s the bottom line, take away from this story…you can speculate on what it means to his ‘ethics’…but the bottom line is that he is either a liar that feels he has something he has to hide or he is incredibly incompetent at getting his paperwork right/surrounding himself with people that can get it right…there really isn’t a “C” choice in this matter.

  3. fishtail says:

    Deal needs to come clean and release ALL of his tax returns, including the detailed schedules. Then the public can be satisfied he is not a sneaky guy.

  4. rightofcenter says:

    You really can tell that Galloway has no financial knowledge at all. Deal isn’t carrying these additional loans, he is a guarantor on notes that the business has. He only becomes liable for them if the business defaults on them. Hence the term “contigent liability.” Also, looking at the financial disclosure statement gives an incomplete look at his financial situation anyway. His business interests are not represented on the balance sheet, so to declare him “technically insolvent” as the AJC does is wildly inaccurate.

    I will give you naysayers this, though – he really should get his CPA or some financial expert to explain all this in a way that even Galloway can understand. He doesn’t do a very good job of trying to explain it himself.

    • polisavvy says:

      Thanks for the clarification, right. I’m sure a lot of people didn’t know what you just disclosed. You’re right about having an expert explain this to Galloway (and to us).

      • bgsmallz says:

        #1- You have no clue what you are talking about.

        “Deal isn’t carrying these additional loans, he is a guarantor on notes that the business has. He only becomes liable for them if the business defaults on them.”

        Wait…so they aren’t his loans, but he becomes liable if….hmmm…that sounds a lot like something I heard once. Never co-sign on a mortgage b/c it becomes your debt.

        Oh…and read the story…he invested his own money in the failed business of the daughter/son-in-law. The $2.3M comes due on that loan in Feb. He is worth…according to his disclosures, so I’m not sure how much stock to put in this…$2.1M.

        • rightofcenter says:

          I have no clue what I am talking about? Please point out specifically one thing I wrote that wasn’t completely accurate?
          Now hurry back over to the AJC blogs so you can earn your paycheck.

          • bgsmallz says:

            Request granted:

            Things in your post that aren’t completely accurate:

            1)”Deal isn’t carrying these additional loans, he is a guarantor on notes that the business has.”

            I’m not an expert by any stretch on loans and such…but my understanding of signing as a personal guarantor on notes is that you become personally liable. It is basically a situation where the business doesn’t have enough assets/revenues to assure the creditor to issue the loan to the corporate entity, so the business owner, Deal, puts a personal guarantee that the loan will not default. The loan in name is to Deal, LLC or Deal, Inc. or whatever, but if Deal, LLC can’t pay, Mr. Deal is personally liable. So, while the loan is to the business, Deal is absolutely personally responsible.

            2)”Deal isn’t carrying these additional loans, he is a guarantor on notes that the business has.”

            Point of fact…from the AJC article….the loans to his daughter are personal loans…”The couple invested $2 million of their own money in 2005 with their daughter and son-in-law in a sporting goods business that went bankrupt in March 2009. Deal’s assets, including his private residence in Gainesville, are not enough to cover the outstanding debt, the result of a series of loans that began with a $506,000 security deed leveraged against the property where the business was to be located.”

            3) His business interests are not represented on the balance sheet, so to declare him “technically insolvent” as the AJC does is wildly inaccurate.

            Huh? I thought earlier you were drawing a bright line b/w his personal and business debt? What gives?

            His business interests are not represented. But, his personal liabilities that come due in February are more than the estimated value of his liquidated personal assets by at least a couple hundred thousand. I would say that puts him in danger of facing insolvency…which is how the AJC phrases it…I can’t find the term ‘technically insolvent’ on there, which is weird because you put it in quotes. Anyway, technically insolvent means your liability are more than your assets, so that pretty much sums up Mr. Deal’s finances anyway.

            I’ve got another question for you about this quote…”His business interests are not represented on the balance sheet, so to declare him “technically insolvent” as the AJC does is wildly inaccurate”….it seems to imply that Mr. Deal should be able to tap into his business account to keep him from going personally bankrupt. But if the business is Mr. Deal’s personal piggy bank, shouldn’t he be disclosing his interests in it? You can’t on the one hand say ‘its his business, its off limits to disclosure’ and then on the other hand say ‘even if he is personally in trouble, his business assets will cover those liabilities.’

            My point all along is that if he is a personal guarantor of the loan, which by all accounts he is, that makes him personally liable and his personal assets collateral for the loan in the event of default. In my book, if you are on the hook for a loan, you are ‘carrying that loan’…unless you are one of the major financial firms not named Bear Sterns. Zing!

            • polisavvy says:

              Aren’t there a lot of prominent businessmen in this country who have come across bad times financially and had to file for bankruptcy? Aren’t some of these same people well-respected in the business community? I believe they are. I think you’re response to rightofcenter was pretty good.

              • rightofcenter says:

                The best part of his response was where he admitted he wasn’t an expert on such matters. And then he proves it. Banks typically get owners of closely-held corporations to guarantee a note as a standard practice. It is no reflection of the quality of the note or the underlying assets. The guarantor becomes liable only if the corporation defaults on the note. And I am an expert on this. But if you don’t believe me, read the AJC article that quotes the professor.

                On the question of the business: He is a part-owner of a business. That ownership has a value of some sort. On a complete balance sheet, that value would be represented somewhere as an asset, which would increase net worth correspondingly. My point is that it is not represented in the state’s form (there doesn’t appear to be a category for closely-held stock or investments). In other words, it gives you an incomplete financial picture that makes it impossible to judge solvency.

                • bgsmallz says:

                  Wait…so “The guarantor becomes liable only if the corporation defaults on the note.”

                  So Deal is personally responsible for the note if the corporation defaults? Yes or No?

                  • bgsmallz says:

                    My point is and remains…he is personally liable for the loan if the business defaults.

                    Period. End of story.

                    And while I’m not an expert, I am a transactional lawyer. I know what a personal guaranty is for and I know how to draft them and I know when they are required.

                    If the corporation’s assets and credit don’t meet the standard needed to get the loan by itself, you get corporate credit reports from D&B or another such company, you ask for a personal guarantee to secure the credit or you don’t issue the credit.

                    It isn’t a negative reflection on the business, this is absolutely correct. I’m not even implying that the loan might default.

                    What I am saying is that he is personally on the hook if the loan does default and he absolutely was required to disclose that in his filings and he absolutely did not disclose that in his filings.

            • John Konop says:

              ……It is basically a situation where the business doesn’t have enough assets/revenues to assure the creditor to issue the loan…..

              Not true most times: The banks want a personal guarantee to make sure you maintain the asset value. The personal guarantee in theory is an attempt to make sure you are in the game and or keeping an eye on your investment. The loan usually requires the business to maintain a level of business performance on top of the personal guarantee. Business loans usually are not like home and or car loan.

              ….My point all along is that if he is a personal guarantor of the loan, which by all accounts he is, that makes him personally liable and his personal assets collateral for the loan in the event of default….

              It is not that simple. It all depends on multiple factors from structure of the loan guarantee, the structure of his personal assets……… As I said this is why bankruptcy lawyers make the big bucks, if not they would be out of business! 🙂

        • polisavvy says:

          FYI, I was thanking rightofcenter for his explanation/clarification. I have been saying on here for days that I understand any parent wanting to help their child/children. I certainly didn’t say anything to rightofcenter that warranted your nastiness. I could never blame or fault a parent for wanting to help make things better for their own child/children. Crap happens! I also understand what a guarantor of a loan is and how the liability falls but thanks for the lesson anyhow.

          • Poli, I feel we’re being a little naive here. He has a responsibility to himself and his children to act in a responsible manner in regards to his and their finances. These were obviously irresponsible business practices designed to keep afloat an obviously failed business. You don’t get to stiff a bank “for your kids”

            • polisavvy says:

              I get that. He has acted quite irresponsibly, to say the least; however, I guess what we need to ask ourselves is did he act irresponsibly intentionally? If so, he deserves whatever happens. We would do whatever to help our children. Would we intentionally make a bad decision? Probably not.

              I have said since the get damn go that I did not vote for him in either the primary or the runoff — voted for Handel. However, having said that, I certainly don’t wish all the ill on Deal that the vast majority of posters on here wish on him. The ones who are so full of “sour grapes” that they actually seem to be enjoying his misery. I plan to skip the Gov. and Lt. Gov. on my ballot. Think the selection sucks!

              • Doug Grammer says:

                I don’t buy that he acted irresponsibly, just yet. There may have been a good business plan to warrant the investment. Businesses fail in this economy, sometimes, though no fault of their own. I think a lot of Georgians will relate to him on this.

                • polisavvy says:

                  True. I guess we should all quit second guessing. We need to hear from the horse’s mouth and quit speculating.

                  • Doug Grammer says:

                    Buckhead,

                    Sometimes I think you post just to see your own typing. You may “say” what you like, but you don’t “know” anything; at least in regards to a business plan that you have never read.

                • bgsmallz says:

                  Wait, Doug….wasn’t it irresponsible to ‘forget’ to disclose that you personally guaranteed a $2.8 Million loan last year.

                  I don’t know a lot of Georgians who can relate to personally guaranteeing $2.8 Million dollars and then forgetting that such guarantee existed.

                  Seriously…this isn’t an indictment of his business abilities as much as it is an indictment of his transparency and/or competence.

        • Doug Grammer says:

          “Never co-sign on a mortgage b/c it becomes your debt.”

          Technically, that is not correct. It can become your debt. If lenders see that someone has cosigned on a loan, but that person can produce checks to show that at least the last year has been paid by someone else, the lender will not count that cosigned note as their debt.

          • bgsmallz says:

            “Never co-sign on a mortgage b/c it becomes your debt.”

            Technically, that is not correct. It can become your debt.

            Tomatoes/Tomahtoes

            If the business defaults, it is on Mr. Deal.

            I wonder if the bank knew that he already had a $2M loan out to his daughter or if he ‘omitted’ that, too.

    • Romegaguy says:

      Deal should also find a CPA or other financial expert that doesnt “overlook” things that are required to be disclosed on tax forms, forms for Congressional forms and forms for running for state offices in GA

  5. sybase46 says:

    Hummm I was thinking Deal is, Financially insolvent or perhaps ethically insolvent over “technically insolvent”.

  6. sybase46 says:

    I’m still scratching my head why Ga. GOP voters chose Deal over Handle? I mean Handle didn’t have any ethics probe dangling over her head and from her voting record seemed to always vote in the best interests of what was good for the people over party?

      • CobbGOPer says:

        It’s stupid, I know, but I’ve been involved with too many Republican candidates in this state who aren’t white males, and we’ve never had much success at the higher levels (unless you count state school superintendent)… I can only chalk it up to ingrained, but never acknowledged, prejudice. I don’t think it’s necissarily malicious prejudice in all cases, but if you’re a woman or a minority Republican in this state, it’s a metric frak-ton more difficult to gain the GOP nomination for higher office…

        • Doug Grammer says:

          I think the immediate past SOS might disagree with you. She was elected SOS, over a white male in the GOP primary.

          • CobbGOPer says:

            I never said we had NO success. But it’s still extremely difficult for women and minorities to be elected Republicans in this state. And I think some ingrained prejudice is at the very least partly responsible for that.

  7. center5 says:

    It’s not the specifics that are troubling. Its the fact that this guy is drowning in debt AND failed to disclose it all. And we aren’t talking minor debt here; we are talking serious stuff to the point that you have to question this guy’s decision-making ability. You don’t get yourself into this much debt by mistake.

    With his own house in absolute disorder, why would he even put himself forward for the job of governor? He literally is bankrupt.

    Sadly, though, people who wouldn’t trust Deal with their own checkbooks will still vote for him and defend him simply because he is a Republican and this is Georgia.

  8. Jane says:

    This is an interesting story, but has no real meat to it. On the other hand it is good to see a politicians who is doing it for the money, because he really needs a paying job and a house to live in.

  9. Three Jack says:

    after looking over the updated financial disclosure, it is difficult to imagine how a person could forget about his single largest liability. but i guess old congressional relics like deal and rangel know best how to play the ‘it was an oversight’ card.

    these two ethically challenged congressmen are absolutely comparable. both think they are owed an elected office and will stop at nothing to get a seat at the power table. there is one slight difference; rangel at least stuck around congress to fight the charges against him instead of resigning in shame as deal did. debt ridden deal had to seek an office with a higher salary and more access to special interest ‘contributions’ (not hard to predict a sweetheart loan coming from a loyal supporter in the near future).

    deal / rangel…scoundrels of the highest order.

    • ZazaPachulia says:

      I like the phrase “it was an oversight” because it falls into that “half lie” category politicians like Deal and Rangel love to use.

      Notice, Deal did not say “It was an accidental oversight.” It very well could have been “an intentional oversight.”

  10. bgsmallz says:

    Here is my question…

    “This is not more personal debt. It was for business expansion,” Robinson told the AJC. “It was to create jobs. This is what we need in Georgia.”

    The loans are current and being paid monthly, Robinson said, adding that the capital helped the business add up to 10 employees over the past few years.”

    Ok…so the loan is a business loan that helped him add up to 10 employees over the past few years and that is what Georgia needs…got it.

    “According to an amended filing with the State Ethics Commission, Gainesville Salvage and Disposal took out a $2.5 million loan with BB&T in May 2009.”

    DOH!!!!

    May 2009??? That is interesting….’add up to 10 employees over the past few years’…..????? Or was the loan in May of 2009? What the hell is going on over there?

  11. Doug Deal says:

    So he “amended” his filing, or admitted he intentionally lied on it?

    Deal needs to resign his nomination and allow someone else on the ballot. I was going to bite my tongue this election season, but I am fed up with corrupt pieces of trash like him and his supporters running this party into a ditch.

    Any Republican who wants to turn the Georgia GOP into the Ohio GOP (look up Taft, Bob) or the Illinios GOP (look up Ryan, George), be my guest. You can do it without me.

  12. inlimine says:

    Early voting has begun in many counties already. The majority begin on Monday, September 20. This “Deal” is sealed. It’s only gonna get worse with such asinine spin about this “oversight” (aka COVER UP) and how it somehow relates back to “jobs” and “family” (aka “FOR THE CHILDREN”).

    I still can’t believe the lowly choices we have to be our next Governor. It’s disgusting.

  13. If these were all typical above board business loans, why didn’t he disclose them right up front? That’s the pertinent question right now. “Oversight” is a lame excuse at best and a blantant lie at worse.

  14. btpull says:

    The reason people commit fraud is financial pressure, opportunity, and rationalize or justification. If elected Governor it seems Deal would have two of three the elements that lead to fraud going into office. Do GA voters trust Deal enough not to obtain the third one?

    • ZazaPachulia says:

      Well, we apparently trusted Sonny, but look what’s happened to that state road and his property values down near Warner Robbins.

  15. James Fannin says:

    I’m guessing Nathan Deal also failed to disclose these loans on his annual federal financial disclosures in Congress. I’ve said it before and will again. I don’t believe Nathan Deal is a bad man or corrupt on the same scale as a Charles Rangel but there are some very close similarities between the two. Both served in Congress for far too long and have come to believe all the hype their staff and their constituents in their “safe seats” feed them. Both believe that anything they do can be explained away and it is a personal attack to question their integrity. Both profit personally from their public service and believe that it is appropriate to do so. I

    • polisavvy says:

      For many of the same reasons you stated, I think that it is time to seriously start looking at term limits.

        • TPNoGa says:

          As much as I don’t care for Deal, I just don’t know if I can vote for a Democrat. Ugh. This year should have been so much fun for Georgia Republican voters, but Deal had to go and mess it all up. In a pro-GOP year, I may still have to hold my nose and vote for someone I don’t want as Governor.

          • CobbGOPer says:

            I concur heavily with you there, Poli. I think 12 years (two terms for a Senator, six for a Rep) in Congress is long enough. We term-limit the President so we don’t end up with an elected dictator (benevolent or otherwise), yet we let these people build power bases in Congress for decades. It’s completely illogical.

            • polisavvy says:

              It definitely escapes all logic to me, CobbGOPer. What’s the point in term limiting one office (President) and not Congress? Too many years in D.C. has proven to be the unraveling of many Congressmen (scandals, ethics violations, etc.).

  16. Charlie LaFountaine says:

    If I were Roy Barnes right now, I would consider sending Georgia Right to Life a huge thank you basket for making it easier for him to win in November.

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