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The Rick Perry bailout

I don’t think I’d ever heard about this before.

Over his eight years as Texas’ [Agriculture Commissioner], [Rick] 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.

It only got worse.

By 2002, Perry’s successor, Agriculture Commissioner Susan Combs, a Republican, stopped making loans as the percentage of bad loans neared 30 percent.

By 2009, her successor, 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.

“It’s bad,” Staples told the American-Statesman at the time. “Unfortunately, taxpayers are on the hook for something that happened as long ago as 1987.”

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

Read the whole thing, it’s quite interesting. The amount of money needed to close the books on this program wasn’t very much, but it’s clear that it was entirely Perry’s responsibility as Ag Commissioner, and that he spent a lot of effort defending his sinking ship. And I’m amazed that I’d never heard of this before now. You wonder how the 2010 campaign might have proceeded if “Rick Perry authorized his own bailout” had been part of it. Maybe we’ll get some idea about that next year.

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One Comment

  1. Brad says:

    No surprise. Perry is always full of bs.

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