The Corner

Perry’s Loan Program

 

With Republicans busy criticizing President Obama over how much the loans to Solyndra are costing taxpayers, it could prove tricky for Rick Perry to brush over this story that he made bad loans to businesses with taxpayer money in the 90′s. From the Austin American-Statesman:

Over his eight years as Texas’ farmer-in-chief [agriculture commissioner], Perry oversaw a loan guarantee program with so many defaults that the state had to stop guaranteeing bank loans to startups in agribusiness and eventually bailed out the program with taxpayer money.

The state auditor panned Perry’s claims of creating jobs and criticized Perry and his fellow board members at the Texas Agricultural Finance Authority for not following their own lending guidelines.

In some instances, the auditor said, Perry and the authority guaranteed loans to applicants with a negative net worth or too much debt. Citing growing debts, the auditor finally suggested that state officials consider dismantling the program.

Even as the first alarms were sounded, Perry defended the program, saying no taxpayer money was at risk, blaming others and claiming he had fixed it. 

But he hadn’t, the piece argues:

By 2009 … Agriculture Commissioner Todd Staples, also a Republican, asked the Legislature to pay off the loan guarantees with a $14.7 million appropriation. The finance authority could no longer afford the $541,000 to cover the annual interest on the bad debts, almost all of which dated back to Perry’s tenure. …

In effect, Perry, as governor, signed his own government bailout when he approved the 2009 appropriations bill.

As governor, Perry created the Texas Enterprise Fund, which gives funds to companies that promised to bring jobs to Texas. Ron Paul’s campaign has attacked one recipient of a grant from the Texas Enterprise Fund as a “Texas sized version of Solyndra.” 

Katrina Trinko — Katrina Trinko is a political reporter for National Review. Trinko is also a member of USA TODAY’S Board of Contributors, and her work has been published in various media outlets ...

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