Georgia has been an exceptional state for Nathan Deal to do business.
When Nathan Deal walked into the governor’s office in January 2011, he had just quit Congress to avoid penalties for using his office to strong-arm an exclusive state contract for his Gainesville junkyard.
Without that exclusive government contract, his junkyard started losing money and was in debt by about $2 million. The governor needed to sell it.
His other business — a sporting goods store — was also in bankruptcy.
The struggling junkyard took a little more work.
It must be tough to find a buyer for an indebt junkyard. Public records reveal a shocking sequence of events.
Gov. Deal did what most public officials would never do: he got rich from a business competitor that has a massive tax dispute with the state and then left taxpayers on the hook.
Early in Deal’s administration, the governor’s new appointee at the Georgia Department of Revenue launched an audit of the governor’s biggest competitor in the junkyard business.
The governor’s revenue boss used the power of his public office to open the books on the corporation that would eventually purchase the governor’s struggling and scandal-scarred junkyard.
Big surprise! Deal’s revenue boss found that the auto salvage company, Copart, Inc., owed Georgia $74 million in unpaid sales taxes on auto parts.
This is where being governor really paid off for Nathan Deal.
That company didn’t want to pay the $74 million in back taxes. They told investors that this huge penalty would have a “a material adverse effect on our consolidated results of operations and financial condition.”
After being hit with a bill for all those unpaid sales taxes that threatened the company’s operations and financial condition, Copart immediately started the process to buy the governor’s indebted junkyard.
Public records filed — and signed by — Gov. Deal, show that Copart first surveyed the land in preparation for negotiations just after it became clear they owed the state tens of millions of dollars.
Because Nathan Deal has not been honest with voters, it’s unclear whether this business transaction occurred for Copart to gain leverage with the state as it tried to negotiate its tax dispute or whether Nathan Deal used the tax dispute to unload his failing business.
But we do know for a fact that Copart hired lawyers and lobbyists.
We also know that Gov. Deal signed legislation to change the way salvaged vehicles are taxed.
And just before Deal’s re-election campaign started, he sold his share of the junkyard for $2 million upfront, plus $10,000 per month for 10 years.
We learned only after an extensive open records search that Gov. Deal used his taxpayer-funded staff to try and hide the sale — even going so far as to tell the buyer to strike the word “Gainesville” from the press release.
Better Georgia wanted to know more but Deal’s revenue boss told Better Georgia that it would cost $4 million to look at the public records that would shed light on the deal.
Sometimes, however, understanding the reasons for actions is as simple as looking at the result.
As of today, Copart, Inc. still owes the State of Georgia $74 million, and Gov. Deal made out like a bandit.
That is, indeed, an exceptional state for doing business if you’re the governor.
Meanwhile, Georgia’s middle class struggles as the state brings in low wage jobs at a snail’s pace, adding fewer jobs than any state other than Mississippi.
Gov. Deal owes the people of Georgia an explanation, but he’s failed to provide one.
While many details of this deal are still shrouded in secrecy, the results are clear: Nathan Deal got rich, Copart got off and Georgia taxpayers got stuck, again.