If this is even close to true, Bud Chiles needs to end his independent bid for governor of Florida now:
When Lawton "Bud" Chiles, III, independent candidate for governor of Florida, filed his financial disclosure form last month, he listed his annual income as $143,000, his net worth as $1.3 million and an additional $1,763,546 in assets as of Dec. 31, 2009. But in the six months since that reporting date, his fortunes threaten to decrease sharply. The latest of several foreclosures on investment properties he owned has diminished his holdings by $150,000. And a development company he lists as a $550,000 asset is in default on an $11.5 million loan for which Chiles may be personally liable.
In all, if creditors in six pending lawsuits prevail, the man who wants to lead the state could end up owing more than $19 million. His aides say Chiles is not in danger of personal bankruptcy.
You couldn't ask for a clearer difference between Alex Sink and Bud Chiles. 20-plus years of experience in business, on top of being the state's widely-praised Chief Financial Officer, versus a guy that essentially amounts to Reverse King Midas.
Chiles, his wife Katherine and eight other people are all part of a company called the Moorings at Carrabelle, Inc.
On May 31, 2005, each of them signed contracts personally guaranteeing a $12 million loan the Moorings took out from Wachovia Bank, National Associates. The money was intended to develop a condominium and marina project on nearly 10 acres of land in Carrabelle, Franklin County. In 2006 the Moorings renewed the loan, paying it down by $500,000 in the process. But the project struggled as the economy plummeted. In 2008 several of the shareholders formed a company called the Moorings Second Lien Lender, LLC, specifically to loan $2.5 million to the company in an attempt to "move the development forward," according to McClellan.
It didn’t work. Wachovia claims the company stopped payments and defaulted. In September 2009 Wachovia sued Chiles and his partners, as the personal guarantors of the loan, for the principal, as well as accrued interest and attorney’s fees. Because the loan was a personal "guaranty," each individual is technically responsible for the full amount. The case is pending. Moorings Second Lien Lenders, meanwhile, foreclosed on their mortgage and now owns the development property.
It gets worse:
Katie Ottenweller, communications and policy director for the Chiles campaign, says that the Florida real estate crash hit many people hard. "These are investments for him that have gone south," Ottenweller says. "They did not turn out the way he thought they would. But when you put these things in perspective, there are so many Floridians who are in a worse place. And he feels some of that pain, and understands the difficulties they are going through."
"This is just a small part of the picture of his overall success in business throughout his life," she adds. "Bud has acted ethically. He is not ashamed of anything he has done, and he has tried to do right by his investors."
First of all, Katie is Bud's daughter (family members as campaign staffers equals bad idea, Bud). What would you say if someone was asking about your father's failed investments? You'd say what Katie said in defense of your father, not as a staffer in defense of a candidate. None of what she says makes any real sense. "These are investments for him that have gone south." No kidding. "They did not turn out the way he thought they would." Well, that's a relief of sorts.
"But when you put these things in perspective, there are so many Floridians who are in a worse place." Um, yeah. That's the point, Katie.
First, "the perspective" is a race for governor, not my neighbor up the road with a foreclosure on his two-bedroom one-bath on a half-acre. This person has the top job in an economically troubled state. Do I want him working on our perpetual economic and political crises, or do I want him worrying about falling as much as $19 million in the hole? And second, Katie, you kind of negate the idea that "there are so many Floridians who are in a worse place," when you and his advisors say he can take at $19 million hit and not even come close to bankruptcy. Are you trying to identify with Floridians in economic peril? Or are you trying to belittle them?
Furthermore, how can he list his net worth as $1.3 million, with $1.7 million in assets as of 2009, and not be in danger of personal bankruptcy if he were to suddenly owe his investors and others as much as $19 million? You guys filed the paperwork, didn't you?
I don't know what this means: "This is just a small part of the picture of his overall success in business throughout his life." Really? A $19 million real estate boondoggle is just a lark? It's just "a small part"? You'd better start talking about that "overall success" -- I still don't know what "international charity" he worked for in New York; no one seems willing to say -- because when you don't, bloggers like me write about stuff like this.
Katie finishes digging the hole with: "Bud has acted ethically. He is not ashamed of anything he has done, and he has tried to do right by his investors."
Bud has acted ethically. Whoo, boy. Whenever you proclaim "ENTER CANDIDATE'S NAME HERE has acted ethically," you know you're playing defense... at best. Bud has been in this race how long? A few weeks, now? And already it's definitive statements about how he's acted ethically, even though many would argue not making your mortgage payments -- especially when you're apparently a multi-millionaire -- is in and of itself unethical.
Her last sentence is almost the worst part. Why isn't Bud ashamed? He may well owe $19 million bucks because he made terrible investments. If I owed that much money to anyone -- much less a pissed off investor -- I would be beyond ashamed. I'd never show my face in public again.
I don't know what Bud Chiles is doing. I really don't. It may have something to do with trying to fill the shoes of his much beloved father, Lawton Chiles, the late State Representative, State Senator, U.S. Senator, and governor. Maybe it's that he really thinks he can make a difference. Given his egregious mishandling of his personal finances, it's hard to see how he makes that difference.
Who knows his real motivation. At this point, his motivation is really secondary. All we can say for sure is, he needs to gracefully bow out, endorse Alex Sink, and handle his personal business.
cross posted at
The Spencerian