Monday, January 26, 2009

Georgia governor gets $21 million loan from farm credit bank with relatively little collateral

Georgia Gov. Sonny Perdue is facing questions over his personal finances and his political relations with a lender, after the Atlanta Journal-Constitution reported a multi-million-dollar loan he got from a farm credit bank. On less than 20 percent collateral, the governor received a $21 million loan for himself and his two agribusinesses last September. Standard collateral for such a big loan is at least 50 percent, the AJC's Alan Judd reported.

"The bank, AgGeorgia Farm Credit, focuses on real estate lending and carries just $55 million in business loans on its books, according to its latest quarterly report," Judd wrote. "Now a large proportion of that portfolio is devoted to the governor, who is a familiar figure to AgGeorgia’s leaders: Eight of the bank’s 23 directors contributed to Perdue’s re-election campaign in 2006." The loan, due March 1, is more than three times the net worth of $6.1 Perdue reported in 2006 financial disclosure papers.

Perdue's finances do not have the transparency normally required of governors, since he cannot run for a third term. He is also unusual in his approach to business throughout his gubernatorial career. While previous governors have put their holdings into a blind trust during their term of office, Perdue has retained control of his businesses, Houston Fertilizer & Grain Co. and AGrowStar LLC.

The governor has remained silent on the subject, except in a statement from his spokesman, Bert Brantley, who said: “He’s a small businessman. As small businesses and small business owners around the state know, sometimes you have to personally sign for loans for your business.” But others say the size of the loan coupled with the small amount of collateral calls for explanation. “I don’t care if you’re Citibank,” said Wendell Brock, a banking consultant who has worked with banks in the state, “$21 million is a big loan.” (Read more)

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