In Georgia, home is where the fight is
By Eileen McGuire-Mahony
ATLANTA, Georgia: Georgia's governors reside in a regal Greek revival home set on several well-tended acres in northern Atlanta. The mansion's 30 rooms are furnished with one of the finest collections of Federal era furniture to be found anywhere, each piece a museum-quality treasure. In the spring, visitors approach under the budding limbs of cotton blossoms. When the air turns cooler, there is a greenhouse full of orchids. The library boasts, among other gems, a signed first edition of Gone With the Wind. The entire first floor is sumptuously appointed for formal entertaining and no fewer than five heads of state have stayed in the home. At this point, it is probably the least discussed house in the Peach State's gubernatorial battle.
Republican Nathan Deal, formerly of the U.S. House, and Democrat Roy E. Barnes, who began his political career in the state House, are sparring over anything they can think of in a blistering race. It would seem that in this race, the home is decidedly not so sacred. Both gentlemen have seen their own private castles laid siege over questions of judgment and financial handling.
Deal took the first blow when he had to confirm reports that his home is on the market for $985,000 in a furious attempt to pay off a $2.3 million note that comes due in February 2011. Deal signed on as the guarantor for a $2 million initial loan to help his daughter and son-in-law start a sporting good store. Unfortunately, the business failed after accumulating $1.8 million in debt and taking out multiple additional loans. Deal has admitted that in addition to losing the entirety of the $2 million he invested, he is liable for as much again in outstanding debts.
Democratic operatives had a field day with the story, initially reporting that Deal had been threatened with foreclosure before Deal's campaign clarified that he was trying to repay a business debt. The immediate and obvious accusation was that someone with such poor personal financial management was a questionable choice to oversee a multi-million dollar statewide budget. For good measure, pundits raised questions of Deal's ability to meet the demanding job of a governor while sorting out his bleak personal finances.
In response, Deal's staff requested privacy for what was, they conceded, a painful and sensitive matter for the family. The candidate also stressed his personal commitment to repaying the entire debt rather than looking for a legal avenue to void the debt. As one journalist put it, Deal's "daughter and her husband declared bankruptcy, leaving the Deals solely responsible for an obligation that exceeds the net value of everything they own." According to financial disclosures Deal completed prior to his gubernatorial run, the total value of all assets he and his wife, Sandra, have, total $2.1 million.
Democrats hadn't long to gloat, however. Their nominee, Roy Barnes, has already had one turn in the governor's lovely home and is an extraordinarily successful attorney who owns multiple homes. On October 14th, his campaign was forced to admit that he had, in fact, taken even more tax breaks than his substantial real estate portfolio legally entitles him to. A campaign spokesman confirmed that in 2008 and 2009 Deal reported mortgage interest to the IRS and took the deductions on his own taxes for a house, worth some $300,000, he had legally signed over to his own daughter in 2007.
Emil Runge, a Barnes spokesman, characterized the deductions as a mistake and said they amounted to $7,500 in improper deductions. Runge also said that Mr. Barnes' personal accountant has formally reported the error and is correcting it. However, Barnes is also claiming his accountant found a second mistake in the candidate's 2008 tax returns, one which works out to a $30,000 refund owed to Barnes.
The campaign's announcement that it had discovered the $30,000 refund would be requesting the amount drew a fresh round of scorn from political commentators, who eagerly pointed out that Barnes was actually set to clear a profit on his improper mortgage deductions.
This time, the gloating was coming from the right, with Deal campaign spokesman Brian Robinson quipping, "We forgive Roy for his 'accounting' error." Robinson added that Barnes' income from his successful law practice "makes it difficult to keep track of your kingdom and how many houses you own."
Barnes' campaign fired back that he had released his entire tax returns even if they did contain grave mistakes. Speaking for Barnes, Emil Runge pointed out that Nathan Deal has indeed released 29 years of tax returns but only the cover sheets, choosing to withhold schedules and details; "(t)he voters of Georgia sure would like an opportunity to review Deal's complete tax returns to learn what he's hiding."
The overt bitterness comes as Georgia Democrats already have an active complaint lodged against Mr. Deal alleging that he accepted donations over legal limits and took money from improperly affiliated groups and individuals.
Showing that electoral politics can go at a break neck pace even in the genteel South, the warring politicos were, at least temporarily, off of housing and onto television by the afternoon of October 22nd. Specifically, the Georgia Republican Party filed an official complaint of its own with the State Ethics Commission alleging that the Democratic Party bought television advertising for Barnes at a special rate legally available only to the actual candidate.
Barnes has replied that the Deal campaign is in fact guilty of the very thing they filed their ethics complaint on. The Democratic party also points to a complicated section of campaign finance law which they claim allows them to buy ads at the candidate rate if the ad time is to be used directly and exclusively for the candidate.
There is no official comment from either candidate regarding personal television watching habits or ownership of said television sets.
- The Wall Street Journal, "Slump Hit Candidates, Too: Politicians Facing Debt and Foreclosures Say They Can Feel Voters' Economic Pain," September 22, 2010
- Democratic Governor's Association Blog, "Georgia's Christine O'Donnell," September 15, 2010
- Atlanta Journal-Constitution, "Deal could face financial insolvency after backing family business," September 15, 2010
- Tax Proof Blog, "Georgia Candidate for Governor Admits He Claimed Depreciation Deductions on Home He Gave to His Daughter," October 22, 2010
- Yahoo, "Barnes got tax break for property he didn't own," October 14, 2010
- Associated Press, "What I Think About Barnes Taking a Tax Break on His Daughter's Property and Now 'Finding' Another Error (in His Favor)," October 15, 2010
- Atlanta Journal-Constitution, "Republicans file ethics complaint against Democrats, Barnes," October 22, 2010