Stacey Abrams Private Firm Questioned
Georgia gubernatorial candidate Stacey Abrams has recently come under fire for potential misuse of taxpayer funds related to her loan firm NowAccount.
From Just the News. Stacey Abrams’ net worth skyrocketed over 2,800% in just three years thanks in part to her holdings in a company called Now Corp. (previously called NowAccount or “Now”), a Government Accountability Institute study has found.
In 2018, Abrams reported a net worth of just $109,000 in her personal financial disclosure ahead of her failed 2018 gubernatorial bid in Georgia. Now, as she heads into the 2022 gubernatorial race, Abrams’ campaign filings show her net worth is more than $3.17 million after making more than $6 million in book advances, speaking deals and growing corporate investments like NowAccount.
Abrams cofounded the NowAccount financial technology (“fintech”) start-up in 2010 with business partners Lara Hodgson and John Hayes. Their business got off to a slow start, but NowAccount was able to pay Abrams $80,000 in salary in her first year as senior vice president and $60,000 per year in subsequent years.
In 2013, Abrams’ fintech company pulled in just $100,000 in annual revenue, but thanks to a federal small business loan program overseen by the state of Georgia, NowAccount would soon have the power to distribute nearly $10 million in taxpayer funds to its network of applicants. By 2016, NowAccount’s applicants were defaulting on their loans, and taxpayers were left to bail out more than $1.5 million in bad loans….
NowAccount’s value spiked in October 2021 after a $29 million financing and investment deal that the company made with two private equity firms. Abrams, who has owned as much as 16% of NowAccount, announced her 2022 bid for governor on Dec. 1 — less than eight weeks after the $29 million windfall.
Abrams was the minority leader of the Georgia House from 2011 until she resigned ahead of her 2018 run for governor. The fact that her business got federally backed state contracts while she held high-level positions in the state Legislature drew sharp criticism during her first gubernatorial campaign in 2018….
The decision to apply for taxpayer funding under the 2010 Jobs Act was Abrams’ idea….
The Jobs Act program was administered in the state by the Georgia Department of Community Affairs (DCA)….
By 2016, the DCA was growing frustrated with the Now Account contract, which restricted the DCA to a five-day approval window after which the loans would be approved automatically. The DCA’s deputy director met with Abrams’ and Hodgson’s cofounder, John Hayes, regarding the DCA’s growing backlog of applications from Now Accounts clients.
“While our backlog is unacceptable, it is still necessary that we approve the loans they make,” the DCA deputy wrote in an email, noting that Hayes “sees things differently and acts entitled to these funds, which may play an important role in the business model.” According to the DCA deputy, Hayes “advanced several challenging points of view, as well as threats to engage the legislature, his high-profile board, and his attorneys….”
Other DCA emails and public records show that Abrams’ company was recommending ineligible companies for loans, including at least one company that had multiple tax liens and an open court judgment. “This loan is a classic example of files we received that are incomplete,” one DCA email says. “You can see that once the business owner was asked for proof of payment, he withdrew the loan.” The DCA “spent valuable time with research and internal documentation on a loan that was obviously not eligible to begin with.”
Given just five days to approve or deny the loans to Now Account’s applicants, the DCA understandably made loans to companies that could not pay them back, and taxpayers were left holding the bag. All told, the total losses incurred by Abrams’ Now Account network exceed $1.5 million….
What do you think of Abrams’ actions? Share your thoughts and prayers in the comments.
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