By J. Scott Trubey and Aaron Gould Sheinin
Atlanta Journal Constitution
ATLANTA —
Republican gubernatorial candidate Nathan Deal filed a new financial disclosure statement Thursday after a week of questions about his financial state, including questions about his personal solvency.
The latest disclosure, the second amendment in seven days for Deal, comes after media pressure to explain apparent omissions of assets and debts, and after a report in The Atlanta Journal-Constitution that Deal’s personal finances appeared to be in turmoil.
Deal’s campaign, which began 16 months ago, acknowledged errors in previous filings, saying that it was not familiar with state requirements after the former state legislator had spent 18 years in Congress.
Thursday’s release paints a brighter financial picture for the Gainesville Republican. Deal reports a net worth of $2.86 million, up 38 percent from his disclosure of just a week ago. Deal’s claimed real estate holdings jumped from $1.97 million a week ago to $5.66 million Thursday.
Deal reported substantially more assets and liabilities in the latest disclosure, which included business assets and debts previously not disclosed in congressional or state financial statements.
Jimmy Allen, a Tifton-based forensic accountant and Deal supporter hired by the campaign to review his finances, sat down with the AJC and The Associated Press on Thursday to explain changes to Deal’s financial reports.
The campaign called the meeting Thursday on short notice. Deal was not present.
Among Thursday’s revelations, Deal: Deal added his business assets, boosting his bottom line.
The candidate broke down $2.1 million in obligations related to his daughter and son-in-law’s failed business, Wilder Outdoors Inc., into $1.6 million in direct debt and $500,000 in indirect obligations. He also disclosed an ownership stake that had not been identified in prior statements.
He cut certain business liabilities in half to reflect liabilities he shares with his partner Kenneth Cronan.
The campaign acknowledged that Deal should have been mentioned as a creditor in the bankruptcy filing by his daughter and son-in-law in July 2009, just three months after Deal had launched his bid for governor.
It also said Deal would liquidate his IRA to help pay off debts.
Allen, who had done no previous accounting work for Deal, said the prior financial filings lent to the appearance that Deal would be in dire financial condition.
“The idea that he’s insolvent is laughable,” said Allen, a partner emeritus in Allen, Pritchett and Bassett CPAs.
The latest disclosure, Allen said, shows Deal has the means to repay his obligations.
The Deal campaign also said the candidate would liquidate his IRA, which the campaign said is now worth about $750,000, to pay down the Wilder Outdoors debt. The IRA was valued at $576,000 last year, though Allen said it has grown in value.
Deal’s campaign and Allen each acknowledged errors in previous filings, saying that they were not as familiar with state requirements after years of holding federal office.
“[The Deal campaign] did not understand what they were dealing with in state disclosures,” said Allen, who has experience filing campaign disclosures for state candidates.
“There’s a lot they were not used to,” Allen said, adding that omissions were “not intentional.”
“We’re trying to be as transparent as possible,” he said.
Kerwin Swint, a political science professor at Kennesaw State University and a member of the board of Common Cause Georgia, said there likely are legitimate differences between federal reporting standards and those required by the state.
But, he said, “at the same time, all the candidates are held to the same standard for truthfully reporting their finances.”
“At some point you have to hold them accountable for what they’re presenting the public,” Swint said. “I don’t indict him for intentionally flouting the law, but at the same time there is a certain due diligence expected.”
The State Ethics Commission offers training across the state on a regular basis for candidates to learn the Ethics in Government Act. There are also training videos posted on the commission’s website.
Changes
Deal now lists the former site of Wilder Outdoors, a commercial building in Habersham County, as an asset and debt on the business as money he owes.
Deal guaranteed loans for his daughter, Carrie Wilder Deal, and son-in-law, Clint Wilder, who started the business. It failed, and the couple filed for bankruptcy last year.
Deal still owes $2.1 million and now lists $1.6 million of it as direct bank debt. He also now lists the building as an $800,000 asset.
Deal elevated the value of his share of a salvage yard property he co-owns with a business partner in Metter. In the amended disclosure he filed last week, the 37.7-acre tract in Candler County was listed as being worth between $100,000 and $200,000. But in Thursday’s filing, Deal’s half of that property is now worth $300,000.
Candler County puts a 2010 value of the entire tract at just more than $300,000.
Allen said the estimation is based on more than $400,000 in improvements to the site, as well as zoning and use permits that add value. The site currently is not in operation, though Deal’s company, Gainesville Salvage and Disposal, intends to reopen it when the economy rebounds.
Six acres that Deal and his partner own off Athens Highway in Gainesville also grew in value from an estimated $100,000 to $200,000 to $300,000 for Deal’s share, alone.
Perhaps the biggest change in the disclosure released Thursday and the one released last week deals with how Deal describes and categorizes his liabilities.
Last week, he listed $4.9 million in loans as “contingent liabilities,” potential debts that would become actual debts under certain condictions, such as the failure of his business. In prior filings, he did not count such debts against his assets to determine his net worth.
In the disclosure released Thursday, Deal lists a total of $1.925 million in contingent liabilities, plus an additional $1.6 million in direct liability to a bank.
The difference is largely because Deal now counts half of the outstanding loans against his business as his own liability since he owns half the business. For example, the $2.5 million loan that Deal and Cronan’s business took in 2009 was counted in full against Deal in his disclosure last week. Now, however, he’s counting only $1.25 million of that.
Still, questions remain about apparent omissions to Carrie Deal Wilder and Clint Wilder’s bankruptcy filing that the campaign and Allen say are not intentional.
The Wilders were listed as the sole shareholders, however, Allen said the Deals held half the shares in the now-defunct company.
Bankruptcy attorney Richard Thomson with Clark & Washington, told the AJC earlier this week that Deal and his wife likely should have been mentioned at least as unsecured creditors in the proceeding.
Allen said the listing of the Wilders as sole shareholders was an error, not an act to conceal Deal’s involvement in the company.
