Deal says bankruptcy not an option, obligations will be met

By Aaron Gould Sheinin

The Atlanta Journal-Constitution

Vowing that "I'm not about to file for bankruptcy," Republican gubernatorial hopeful Nathan Deal said Wednesday that he will meet his financial obligations.

But Deal did not provide specifics about how he would repay a $2.3 million business loan that comes due in February.

"We will cross those bridges when we come to them," Deal told reporters at a news conference at his Buckhead campaign headquarters.

The Atlanta Journal-Constitution reported Wednesday that Deal and his wife, Sandra, owe the money after they invested $2 million in 2005 with their daughter and son-in-law in a sporting goods business that went out of business in March 2009. Deal's assets, including his private residence in Gainesville, are not enough to cover the outstanding debt, the result of a series of loans that began with a $506,000 security deed leveraged against the property where the business was to be located.

But Deal said he does not regret investing in his daughter's business.

"It was an investment my wife and I made because we think that's what parents do," he said. "Parents help their children."

The impact of Deal's financial difficulties on his campaign against Democrat Roy Barnes and Libertarian John Monds likely won't be clear until the Nov. 2 election. Opinions from voters and political observers have ranged from sympathy for a father trying to help a child to outright dismay that the next governor of the state owes a bank millions of dollars.

Paul Rish of Macon, an entrepreneur and former chairman of the Bibb County Republican Party, said the situation puts Deal in a better -- not worse -- light for him.

“He wanted to help his family out, and I can’t fault him for that,” said Rish, who said his parents have helped his telecommunications business, which has been harmed by the economy. “He’s trying to honor his commitments, and I think that just shows that he has character.”

Milton Jones, a Democrat from Columbus, said he feels sorry for Deal.

“I was not going to be voting for him, but anytime you see somebody take a hit like that, that’s serious business, and my heart goes out to him and to his family,” said Jones, a retired attorney, former state representative and former chairman of the University System of Georgia's Board of Regents.

For now, both Barnes and Monds are keeping quiet about the matter. But the Democratic Governors Association recently put $1 million into Georgia to support Barnes on top of $500,000 sent in August. DGA spokeswoman Emily Bittner said Deal's financial problems must be addressed.

"[Deal's] personal finances are in no shape for him to run the state's finances," Bittner said.

Kerwin Swint, a political scientist at Kennesaw State University, said Deal was smart to frame the situation as a father helping his daughter.

"Some people will sympathize with that -- he's trying to help out his daughter, his family," Swint said. "That's the way to spin it to get the maximum benefit."

But Swint said it's still damaging.

"This kind of thing never looks good for a political candidate," Swint said. "It's one of the things that is a potential image problem."

Swint added, however, that Deal has been dealing with image issues nearly the entire campaign. He continues to face questions about his efforts to preserve a state program for inspecting salvaged automobiles that earned his company nearly $300,000 a year.

The AJC reported in August 2009 that Deal intervened with state officials when it appeared the salvage inspection program would be privatized. That led to a congressional ethics investigation that found Deal, who served in the U.S. House for nearly 18 years, appeared to have violated numerous ethics rules.

Deal has said he did nothing improper, and he resigned from Congress in March, before a final determination could be made.

"He's navigated several image problems that would have underminded other candidates," Swint said. "He seems to be Teflon so far."

Deal's campaign acknowledged Wednesday that it is somewhat relieved that the story about the loan is surfacing now, rather than during the fight for the GOP nomination. Deal won the Republican nod by just 2,400 votes in an Aug. 10 runoff against former Georgia Secretary of State Karen Handel.

With polls showing him with a comfortable lead over Barnes, another misstep by Deal has less chance of hurting him, Swint said.

Still, voters could begin to wonder whether they're comfortable electing a governor who would take office in dire financial straits, especially one who has been accused before of using his position for a personal financial benefit, Swint said.

"Just the facts and the circumstances make that question unavoidable," he said.

But Deal said the situation shows he has faced similar financial problems as many other Georgians.

"Like other Georgians, we will stand by our children," he said.

Mike Stucka of The Telegraph in Macon and Tim Chitwood of The Columbus Ledger-Enquirer contributed to this article.