Stacey Abrams got special treatment in the office and even got rich at taxpayer expense


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Just three years after it was reported that taxpayers had bailed out bad loans from Stacy Abrams’ fintech firm NOW Corp. 2021.

Interestingly, in 2018 Abrams net worth was only $109,000. However, just like the fortunes of NOW Corp. changed in three years, Abrams reported that his net worth had grown to $3.17 million over the same period.

While most media outlets attribute significant increases in Abrams’ net worth to speeches and advancements for book projects, his investment in Now Corp. received little attention, although she still has a financial stake in the company.

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What happened with Now Corp. when Abrams was elected to the Georgia House of Representatives has been painstakingly pieced together by the Government Accountability Institute, where I am a Distinguished Fellow, through review of registration applications and financial records.

Stacey Abrams speaks onstage during the 2021 Robert F. Kennedy Human Rights Ripple of Hope Award Gala on December 9, 2021 in New York City.
(Slaven Vlasic/Getty Images)

Abrams, who is running again for governor of Georgia and has openly acknowledged his intention to run for president by 2040, has been somewhat coy about his role in a sweetheart deal his company signed with Georgia State in 2013.

Abrams told a reporter in 2018 that she “isolated herself” from the relationship between her company and the state government office that did business with NOWacount. However, according to documents reviewed by GAI, Abrams was an integral part of the application process related to a state government small business loan program that would benefit NOWaccount.

In 2013, when NOWaccount had just $100,000 in revenue, Georgia’s Ministry of Community Affairs (DCA) helped the company design a federal loan program that was supposed to make the business more profitable. When NOWaccount then tried to persuade other states to adopt a similar agenda — states where Abrams was not in the legislature — no other state offered the same approach.

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Essentially, Abrams’ company was allowed to act as a private lender and implement NOWaccount’s unique business model.

NOWaccount’s model was to buy receivables from companies that had not yet been paid for the service provided. NOWaccount provided the company with cash in exchange for the right to collect the funds owed, charging a fee to the company. The financial success of Abrams’ business relied in part on reducing the number of customers who defaulted on loans.

And that’s where the relationship with the Georgia DCA helped NOWaccount.

The unique relationship with the Georgia DCA has blamed taxpayers for loans approved by NOWaccount that have not been paid. This benefited NOWaccount’s bottom line and Abrams’ investment in the business.

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Abrams and his partners in 2013 and 2014 used two entities to facilitate the use of the federal loan program enacted by President Obama to help small businesses after the Great Recession. The program distributed $1.5 billion to state governments to create federally guaranteed loan programs.

One of the NOWaccount entities was backed by non-profit credit unions and another was backed by “a large private equity firm”. Presumably, the second entity would have to earn higher returns to attract private capital.

These entities – created and controlled by NOWaccount – would be reimbursed by the government program with taxpayer funds in the event of default.

Unsurprisingly, the private equity-backed entity, Small Business Credit Cooperative (SBCC), reported three times more defaults than the other entity, Trade Credit Guaranty Corporation (TCGC), which was backed by cooperatives. non-profit credit. One explanation for the discrepancy may be a desire to take on riskier (and more profitable) loans to satisfy private equity.

Abrams’ business partner admitted in a Harvard Business School case study that NOWaccount’s use of the federal loan program “allows us to scale faster because the government is in the first loss position, not our lenders”. In other words, with taxpayers responsible for bad debts, the company could more easily attract investors.

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According to state officials, the program was halted by the Georgia DCA in 2017 before the program officially ended, in part due to mounting losses.

Now, as Abrams prepares to run for governor again, his campaign website promotes his priority of “putting money back in the pockets of families.” But it is evident that during her tenure as a Georgian lawmaker, she managed to devise schemes to put money back into her pockets and those of her partners.

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