Emanuel Cleaver: Down at the Car Wash!
This has been developing for a few days, so I’ll throw my few cents in.
Last week, I found it quite amusing that Missouri’s Fifth District Representative Emanuel Cleaver is being sued by Bank of America. It seems that in 2002, he borrowed approximately $1.2 Million for the purchase of a car wash in Kansas City. And, so the story says, failed to keep up the loan payments.
Those of you in Kansas City may recall this car wash being a “headache” for him previously. In 2004, during his run for the 5th District seat, it was found that he owed about $36,000 in back taxes on the business. As memory serves, he did make the delinquent payments, and it obviously didn’t hurt that much politically.
Then, the other morning as I’m driving to work, enjoying the morning news on the radio, I hear a new twist to this loan that has had me livid for the last two days: Taxpayers may be on the hook for part of this loan.
It appears that Cleaver secured this loan from the Small Business Administration. Being the guarantors of the loan, the SBA becomes responsible for repayment in the case of default (similar to a VA mortgage, or a co-signer). As I am given to understand, the business and assets could be seized, then sold to cover as much as possible, but the difference may be made up by taxpayer money.
From the Kansas City Star article:
Officials cautioned that the exact amount of the SBA’s responsibility might not be known for months, and could be substantially less.
You know, I don’t care if it’s one dollar, or a hundred million. Taxpayers should not be responsible for any failed business. Especially that of a relatively powerful, and relatively well-off Congressman.
I may seem a bit bitter here, and you are probably right. No longer being a business owner, I can speak of this. When my partner and I assumed the ownership of the previous business, we had no loans, SBA or otherwise, except a small amount to our families. We were in fact turned down for a loan to cover operations, and had to rely on hitting the ground running.
After my partner moved on, as you know, I struggled to survive, and by the time I needed it to even stay alive, a loan from anyone was out of the question.
Yet this yay-hoo, because of his position and connections, gets 7 figures, backed by the hardworking taxpaying public. Every working American should be furious at the cronyism that has rotted the system to the core.
While searching for sourcing for this, I happened across this article. I’ll not comment much on it, as this is mostly new and unfamiliar to me, and I’m not sure of the source. I will leave the link, to make of it what you will. Here’s a taste:
On the $80,000 loan, state law makes no mention of such loans going to businesses outside Kansas City. A regulation also stipulates they cannot be used for “buyouts of existing businesses.”
Jim Grebing, a spokesman for the Department of Economic Development, defended the loan, saying it was not given to buy a business, but technically to secure a $1.3 million Small Business Administration loan. “I think that might make it a little bit different,” he said.
The loan summary from Douglass National Bank, however, says the money was needed “to complete the purchase of Grandview Auto Wash and Lube.”
This man needs to be voted out this November, and I will do all I can to help secure that goal.