In Georgia, a Republican’s financial troubles recast the race for governor

By Shannon Mccaffrey, AP
Tuesday, September 21, 2010

Republican’s financial woes recast Ga. race

ATLANTA — In a Republican-leaning state in what’s shaping up as a Republican year, Nathan Deal was seen as a pretty sure bet to become Georgia’s next governor.

That was before revelations that the former nine-term congressman is so deeply in debt that he’s selling his home to stave off bankruptcy.

After a week of news about Deal’s deep financial woes, Georgia Republicans are growing anxious about their nominee, who’d already been battered by ethics allegations during the summer primary season.

Democrats are pouring money into the race — the Democratic Governors Association announced it plans to spend another $1 million in the state, on top of $500,000 it has already spent. Republicans are running a barrage of ads linking Deal’s Democratic opponent, former Gov. Roy Barnes, to President Obama.

A new poll taken even before revelations about Deal’s financial troubles showed the race to be a dead heat.

“He should step down as the nominee,” said Tom Perdue, a well-known Georgia GOP campaign operative who ran U.S. Sen. Saxby Chambliss’ re-election race in 2008.

“People in the party feel betrayed and they feel cheated because if they had known about all of this earlier, there would have been a different nominee.”

Still, the Georgia race suddenly seems to be a tossup following back-to-back news stories about Deal’s finances.

Last Wednesday, the Atlanta Journal-Constitution reported that Deal faces a Feb. 1 deadline to repay a $2.3 million bank loan for a failed sporting goods store launched by one of his daughters and her husband, who declared bankruptcy when the venture in north Georgia failed. Deal and his wife were guarantors on the loan.

The debt exceeds the total of Deal’s total assets — listed as $2 million on a recent state disclosure form.

Deal insisted he will meet the obligations and won’t declare bankruptcy. And he tried to turn the financial troubles to his advantage, arguing that they show he is facing the same economic woes as many Georgians.

On Thursday, The Associated Press reported that Deal had another $2.85 million in loans which he did not disclose on his required state financial disclosure form. Asked about the loans by The AP, Deal called them an “oversight” and within hours he amended his disclosure form to add them.

Deal’s campaign says he took those loans out to expand his business, Gainesville Salvage Disposal, which has been valued at $5 million. But the campaign declined to provide specifics.

But taken together, Deal has well over $5 million in loans outstanding, records show.

Jerry Luquire, head of the Georgia Christian Coalition, said Deal must do more to clear up the confusion surrounding his finances.

Luquire said voters — wrongly or rightly — have been left with the impression that “something is wrong.”

Deal, 68, survived a hard-fought Republican primary and runoff this summer to defeat Karen Handel by a little more than 2,500 votes. The race focused on ethics allegations involving Deal.

The Office of Congressional Ethics investigated meetings that Deal held with state officials in 2008 and 2009 about a no-bid arrangement that had been providing about $300,000 a year to Deal’s auto salvage business in north Georgia.

Deal resigned from Congress in March, effectively removing the panel’s jurisdiction. But the office, which makes referrals to the House ethics committee, released a report that found Deal’s conduct might have violated several House rules. He was never fined or charged with any wrongdoing and has maintained the meetings were proper, designed to ensure the safety of rebuilt car inspections — not for financial gain.

In late July — just before the Aug. 10 runoff — the Atlanta Journal-Constitution reported that the state’s revenue commissioner had received a subpoena to appear before a federal grand jury to discuss a conversation he had with Deal that was a subject of the ethics probe.

Deal has said he has not been told he is the target or the subject of a grand jury investigation, and his attorney Randy Evans has said a grand jury has not been convened to investigate his client. Prosecutors have declined to comment.

At a Republican rally on Saturday, Deal, who also faces Libertarian John Monds, acknowledged the issues swirling around his campaign.

“The press spent the first three-quarters of this campaign worried I was making too much money,” he told Republican faithful gathered at Wild Bill’s restaurant in Duluth. “Now they’re concerned I’m not making enough,” he said.

But the drumbeat of problems surrounding Deal seems to be taking a toll.

Kenny Burgamy, a conservative radio show host in Macon, said callers lit up his switchboard on Friday when he discussed Deal’s loan troubles. A number of them thought Deal should step aside as the party’s nominee.

“In everyday people’s minds I think some of this just doesn’t add up,” Burgamy said.


Nathan Deal for Governor:

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