Public Lives and Private Business

The private dealings of political figures can expose them to public criticism. Fiscal conservatives need to be especially careful about their own spending, as Newt Gingrich has discovered. The Atlanta Journal-Constitution reports on another recent example:

While U.S. Rep. Tom Graves was calling for fiscal responsibility in Washington his attorney was arguing in a lawsuit that a North Georgia bank is at fault for issuing Graves a $2.2 million loan the bank knew he could not repay.

Graves was fighting a lawsuit along with business partner Chip Rogers, the state Senate majority leader. The two Republicans, through a limited-liability company, used the loan to purchase and renovate a Calhoun motel that quickly went under.

The bank sued, alleging the two defaulted on the loan. The politicians filed counterclaims against the bank, accusing it of improperly declaring the loan in default after reneging on a promise to refinance it at more favorable terms. Both parties dismissed their claims Wednesday, a day before they were scheduled to attend a hearing on the case in Calhoun. Graves said through a spokesman that the case has been "fully resolved in an equitable and fair manner." An attorney for the bank declined to comment.
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Kerwin Swint, a political science professor at Kennesaw State University and a former GOP consultant, said charging Graves with hypocrisy could be an easy case to make.

“I can see how it can be interpreted that way,” Swint said. “But I’m sure from Tom Graves’ point of view he’s talking to his attorneys and like any good lawyer they’re going to make a case that helps the most.”

Still, Swint said, “I can also see how people would take him to task for saying on one hand government has to be responsible [for its debts] and then pulling that kind of thing.”

Mark Rountree, a Republican consultant and pollster, said Graves’ situation upsets voters.

“It makes normal people shake their head and not have faith when you have politicians whose actions don’t meet their words,” he said. Rountree worked for Lee Hawkins, Graves’ challenger in last year's GOP primary, but said this isn’t about past elections. “This problem is real,” Rountree said. “It’s not political.”