When he was governor, Sonny Perdue liked to tell Georgians that he was a businessman long before he was a politician. That attribute appealed to President Donald Trump, who nominated Perdue to be his agriculture secretary.
The former governor’s cousin, U.S. Sen. David Perdue, built his fortune as a corporate turnaround specialist, helping revive struggling companies like Dollar General.
But a business venture by the politically powerful cousins ended badly in 2015, leaving behind millions of dollars in debts and thousands of dollars in delinquent taxes, according to a review of records by The Atlanta Journal-Constitution.
With Sonny Perdue preparing for confirmation hearings in the U.S. Senate, the AJC’s findings undercut what is seen as a key strength of Perdue: his business acumen.
Sonny Perdue did not comment for this article; inquiries about his business affairs were directed to the Trump transition team, which refused to make him available.
A spokeswoman for the transition team argued that Perdue was only an investor in Benton Global LLC, a trucking company that went out of business in early 2015.
Update March 13, 2017: As Sonny Perdue awaits his first Senate confirmation hearing, Perdue said in federal ethics filings that he plans to step down from his business holding company and restructure his family trusts in order to avoid potential conflicts of interest should the Senate confirm him to be secretary of Agriculture. As part of an agreement struck with the Office of Government Ethics, Perdue would resign from positions as manager of Perdue Management Holdings LLC and as a board member of Perdue Business Holdings Inc. Under the ethics deal, a routine part of the confirmation process for senior executive branch nominees, Perdue would put his assets into a blind trust in order to avoid any real or perceived conflict of interest, according to an official with President Donald Trump’s transition team who was not authorized to speak on the record.
Original story continues: Records show that a Sonny Perdue holding company had a $1 million stake in Benton, which was run by two top former Perdue aides who later became his business partners. The Trump transition spokeswoman, who said she was not authorized to speak on the record, said Perdue has not reclaimed the money he invested in the trucking company. It is not clear whether he could yet recoup his $1 million.
A spokeswoman for David Perdue said he was “a passive investor in Perdue Partners.”
“He has since severed all business ties and is solely focused on serving the people of Georgia in the U.S. Senate,” Megan Whittemore said.
‘They did not pay us’
Benton closed its doors with 577 unsecured creditors. Some were owed less than $100, and some were owed tens of thousands of dollars, court records show. They ranged from mom-and-pop operations to large trucking parts and fuel companies.
Asked whether she recalled Benton, Marcia Gray, office manager for Kram Tire Service, had a ready reply: “$34,753.11.”
“I remember that number exactly because they did not pay us, no,” Gray said. “We had to write that off as bad debt.”
Her boss, she said, was convinced Benton would eventually pay up because the deep-pocketed Perdues were involved.
“But that never happened,” Gray said.
Gray said Kram, which sells tires and provides roadside assistance to trucks that break down, had a long-standing relationship with Benton. Suddenly, she said, they stopped paying their bills even as they continued to take delivery of tires.
“We are a very small business,” she said of the company, which is based in Conley. The money Benton owed, she said, would cover roughly a month’s worth of Kram’s payroll or a year’s worth of its employees’ health insurance.
“This was a huge deal for us,” she said..
The Trump transition team spokeswoman said she conferred with the former governor and his associates and told the AJC that Perdue never got his money back. She declined to be identified for this article and did not provide documents to back up her responses to the AJC’s questions.
But the case is not closed. Benton hired a company to liquidate its assets, and debts still owed to Benton could be used to repay creditors, including Perdue.
A Perdue pipeline to the port
After leaving the Governor’s Mansion in 2011, Sonny Perdue returned to his Middle Georgia home. He remains a managing member — with an ownership interest and day-to-day responsibilities — of his grain shipment and storage business, AGrowstar. But he also set up a shop in Atlanta. He and David Perdue established Perdue Partners in the same Buckhead office plaza that houses the state Republican Party.
Both had considerable wealth. Sonny Perdue’s net worth stood at some $6 million when he ran for re-election in 2006, records show. David Perdue had assets totaling at least $17 million when he ran for the Senate in 2014. OpenSecrets.org, a nonpartisan website that tracks money in politics, lists him as having the eighth-highest net worth in a U.S. Senate full of millionaires.
“I’ve spent my career running toward burning buildings.” David Perdue told the AJC in a 2014 interview. “I’ve taken risks. They haven’t all been five-star successes.”
Sonny Perdue’s former budget chief, Trey Childress, joined Perdue Partners, as did his former head of economic development, Heidi Green.
The company billed itself as a “global trading company that facilitates U.S. commerce.” It promoted Sonny Perdue’s international contacts, including his work opening state offices for Georgia in Hong Kong and Beijing while he was governor, according to company promotional materials.
In late 2012, Perdue Partners acquired Benton Express, a family-owned regional trucking company that had been in business for 78 years, and renamed it Benton Global.
Sonny Perdue said at the time that the intent was to build on Benton’s “strong legacy.”
“We will invest energy and infrastructure in Benton to support the logistics needs of current and future customers, and we look forward to being directly involved in the company’s day-to-day operations as we seek to exceed customer expectations,” he said.
Benton trucks began to haul cargo from the busy Port of Savannah. At the time, David Perdue sat on the board of the port. In 2014, David Perdue’s aides told The Atlanta Journal-Constitution there was no conflict of interest in the arrangement because the trucking company’s contracts were with the companies importing the goods and not with the port.
But even though the port was booming, Benton struggled. And in early 2015, the company went out of business. It had about 500 employees. Press accounts of Benton changed as well.
A press release from 2012, when Perdue Partners acquired Benton, described the trucking company as having “a leading market position in the Southeast” with 20 terminals, some 300 trucks and a diverse base of over 600 customers.
But by 2015, a spokesman for Benton told Transport Topics, an industry publication, that Benton was purchased as a “distressed asset.”
‘Low pay and aging equipment’
The Trump transition said two of Benton’s top customers unexpectedly went bankrupt and the company never recovered. Leading Edge Logistics filed for bankruptcy in May 2014, records show, and both Benton Express and Benton Global are listed as creditors owed nearly $190,000.
New Century Transportation, the other Benton customer that failed, filed bankruptcy in June 2014. Bankruptcy records show that New Century paid Benton nearly $495,000 within 90 days of filing for protection from creditors but that Benton still was owed another half million dollars.
Still, analysts who studied Benton’s failure chalked it up to bad leadership.
“Benton’s closure appears to have been the result of poor management that manifested in low pay and aging equipment, among other things, while the industry has just enjoyed two prosperous years,” Jason Seidl, an analyst with the financial research firm Cowen and Co., said in a report.
The transition team spokeswoman told the AJC that Sonny Perdue “was really an investor” with Benton Global. She said Perdue gradually pumped more and more money into the company.
“He kept investing in an effort to give it life support and keep it alive,” the woman said. “And, after that $1 million threshold, that was it.”
She said Perdue did not have an operational role at Benton.
“He was not on the ground as far as day-to-day operations,” the spokeswoman said. “There were four of them at Perdue Partners. He and his cousin, David, were investors and Heidi and Trey were on-the-ground folks.”
One former Benton executive confirmed that description of the company’s operation. The executive, who asked not to be identified because she still works in the logistics field, said she interviewed with Green and Childress — not with the Perdues — when she applied for a key job at Benton in 2014.
Sonny Perdue, she said, might have visited the Benton office a few times, but he was not involved in day-to-day operations, she said.
The former executive said she enjoyed working for Benton and was surprised when it went under.
“I had no idea,” she said.
Millions in debts, thousands in taxes
In March 2015, Benton filed legal paperwork in Fulton County Superior Court listing its creditors and naming a collection firm to liquidate its assets to pay them off. The legal filing listed debts totaling at least $5.5 million and assets of $3.5 million.
The filing identified two secured creditors — meaning they are first among all creditors to be paid. One is Birmingham, Ala.-based AloStar Bank of Commerce. The other is Perdue Holdings LLC, a holding company of Sonny Perdue’s.
Transition officials said Perdue Holdings has yet to be repaid, although AloStar Bank has been.
“Sonny Perdue has never received any money back from Benton Global,” the transition spokeswoman said.
One of the creditors, Infiniti Employment Solutions, a Florida temp agency, won a $157,000 judgment against Benton in court six months after Benton filed the liquidation paperwork in Atlanta.
Another, Tampa Service Co., won a $21,260 judgment in Hillsborough County, Fla., courts in 2015. It is unclear whether Benton ever paid up, although a transition official said the company Benton contracted with, Asset Recovery Associates of Atlanta, is still collecting money owed Benton.
Additionally, records show Benton still has unpaid tax liens totaling several thousand dollars with Fulton County, the City of Atlanta and the state of Mississippi. There is also a lien pending with the state of Tennessee, although officials there would not provide details, citing taxpayer privacy protections. The Trump spokeswoman said Tennessee officials have acknowledged Benton actually had a credit with the state after a miscalculation.
Another lien filed in South Carolina in 2014 was paid off in late 2015, officials there said.
Why not file for bankruptcy?
Gus Small, an Atlanta attorney who specializes in business bankruptcy and debtor-creditor issues, said Benton’s use of an “Assignment for the Benefit of Creditors” is unusual in that the procedure isn’t well-suited to handle the liquidation of a debtor with secured creditors as well as so many unsecured creditors.
“This would’ve worked out much better for the creditors if a Chapter 7 or 11 had been filed in federal bankruptcy court, which is much more well-equipped to handle a case like this one,” Small said.
He speculated that Benton may have avoided a bankruptcy filing “because there is a stigma attached to such a filing and some risk to the owners of the company.”
But the Trump spokeswoman said Asset Recovery Associates determined filing in Fulton County Superior Court was the better option because it “maximize(d) the return to creditors and close(d) the company in an orderly fashion.”
Staff writer Tamar Hallerman contributed.
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