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House speaker’s disclosure omits $1M debt
By JIM WALLS
House Speaker David Ralston, for the first time in five years, has disclosed his wife’s ownership of an undeveloped 10-acre tract in Dawson County. The speaker, who last week added the property to his financial disclosures, said he’d simply forgotten.
What he still hasn’t reported is the more than $1 million he’s borrowed, using collateral that’s valued at less than half that much. Real estate records show the speaker posted the Dawson County property, as well as his home and a Blue Ridge office building, as security for a $1,052,024 loan last November.
Tax assessors have valued the real estate used to secure Ralston’s debt at about $465,000. Pledge documents that might be filed with the bank to post other assets as security are not public record.
Ralston’s spokesman did not respond to several e-mail and voicemail messages inquiring about the loan.
State law does not require Ralston or other state legislators to disclose their debts. That fact underscores the capriciousness of Georgia’s “transparency” law, which requires financial disclosure so the public may decide whether public officials’ private interests “have influenced [them] to the detriment of their public duties and responsibilities.”
Candidates for statewide office, such as the labor and agriculture commissioners, must disclose loans, unpaid taxes, annual income and personal assets even before taking office. But lawmakers with far more clout — such as Ralston, Senate President Pro Tem Tommie Williams and other legislative leaders — do not.
William Perry, executive director of Common Cause Georgia, said he believes legislators should “absolutely” be required to disclose the same information — such as debts, assets and tax liabilities — as the state’s constitutional officers.
“It would allow the citizens to decide if they have a conflict of interest,” Perry said. “As a citizen, I would wonder whether the person has an interest in getting assistance with their debt by using their position … and what conflict of interest that might present.”
Gov. Nathan Deal’s personal finances threatened to dominate the 2010 campaign season, as he twice amended his disclosures to report more information, including $2.4 million in debts. Last week, Deal’s accountant said the governor had reduced his obligations to $1.3 million by cashing out his retirement accounts.
Ralston’s current debt issues began in March 2006, when the IRS and Georgia Department of Revenue lodged the first of what eventually became $445,687 in liens against him for 10 years of unpaid income taxes. He has blamed the non-payment on a bookkeeper who was later convicted of embezzlement.
Property records show Ralston borrowed about $425,000 from United Community Bank on Nov. 9, 2007, signing a security deed for the real estate as collateral. A second security deed signed the same day adjusted the loan amount to $632,000. Six days later, the IRS certified that he had paid off the bulk of the tax debt; most of the remainder was satisfied a couple weeks after that.
Both deeds contained a clause stipulating that the properties would secure “all future amounts Lender in its discretion may loan to Borrower.” Initial terms called for Ralston to pay off the loan within a year. That deadline was extended three times, most recently to October 2013.
Last November, roughly a year after Ralston had become speaker, the bank modified the loan to reflect that he now owed principal of $1,052,024, with no interest rate specified. The new security deed noted that the original debt from 2007 “remains outstanding and unpaid.”
The three properties posted as collateral are appraised at $465,000 — less than half the amount of the loan, tax records show. Assessors value his home at $147,000, his office building at $229,000 and the Dawson County property at $89,000 — the latter about 30 percent lower than last year.
Ralston listed the Dawson tract on his annual disclosure form filed in 2006, but not on subsequent disclosures. His wife’s ownership of the land surfaced last week when The Atlanta Journal-Constitution reported the Ralstons had not paid their 2010 property taxes to Dawson County.
The lender, United Community Bank, is the third-largest in Georgia with 106 branches here and in North Carolina and Tennessee. It has posted operating losses of $543 million since late 2008, when it borrowed $180 million from the federal Troubled Asset Relief Program (TARP).
The bank has been among Ralston’s top campaign donors, with $9,000 in contributions to Ralston’s campaigns from 2002 through 2009, campaign finance records show.
Since 2006, the Blairsville-based bank has retained lobbyist Wayne Garner, formerly a state senator and commissioner of Georgia’s prison system, to look after its interests at the state Capitol. He and Ralston served together in the state Senate for two years in the 1990s.