DEADBEAT CONGRESSMAN: Bank of America has sued Rep. Emanuel Cleaver (D-MO) and is seeking repayment of $1.5 million from the congressman, his wife, Dianne Cleaver, and The Cleaver Company, for a 20 year loan that was originated in 2002 at a 6.25% interest rate for his car wash in Grandview. Small Business Administration officials said the agency had guaranteed roughly 75 percent of the 2002 Bank of America loan to the firm that owns the business. Cleaver, who leads the Congressional Black Caucus, reportedly received three forbearances over the 10 year period. If this isn’t a disgrace, then I don’t know what else is. Another unscrupulous politician. CLICK HERE to read the Bank of America lawsuit document.
The Kansas City Star reports:
The bank that loaned the Kansas City congressman and his wife $1.3 million in 2002 to buy the Grandview Auto Wash at 12204 Blue Ridge Extension is now demanding payment of more than $1.5 million, after the Cleavers repeatedly fell behind on repaying the loan.
The suit, filed last week in Jackson County Circuit Court, said the demand for repayment came after three attempts to delay foreclosure. Bank of America also is seeking attorney’s fees and a receiver to protect collateral.
“The Cleaver Company failed and refused, and continues to fail and refuse, to pay the outstanding obligations due and owing … under the note and other loan documents,” the lawsuit said.
In an email statement, Cleaver said, “This is a business dispute. The business has been run by an outside manager for years.” He said because it was a legal matter, he would have no further comment.
According to court documents, the outstanding principal totals $1.2 million with interest totaling $240,545 as of March 6. Late fees have reached $54,587. Both Cleavers had personally guaranteed the debts, according to the suit.
The loan was originally part of a Small Business Administration program. It was not clear Thursday how much money, if any, taxpayers will have to provide if the loan defaults.
“I am saddened anytime a business fails, because I know from my experience how hard they are to own. But for Emanuel Cleaver to borrow $1.3 million from a lender, backed by a guarantee from U.S. taxpayers, and fail to pay that debt is unconscionable. How much of this money did Cleaver or his wife personally receive?Cleaver voted on September 23, 2010 for H.R. 5297 which ‘increases the government guarantees on SBA 7(a) loans from 75 percent to 90 percent’. Are we to pay 90% of Cleaver’s bad loan debt?”
It’s pretty shameful because taxpayers like you and I could be left holding the bag for Emanuel Cleaver’s bad loan. The reality is that Cleaver isn’t the first politician to take advantage of their position as an elected official.