Brick City Blog has confirmed that State Rep. Ernie Leidiger’s business Jelco Parts, Inc., has defaulted on its $500,000 government guaranteed Small Business Administration (SBA) loan. Based on the information we already knew about Leidiger’s business troubles, this is not a surprising revelation. Under the terms of the Patriot Express loan program that Leidiger took advantage of, the federal government guaranteed up to $450,000 of the loan. The final amount that the government ended up paying related to this default was redacted by the SBA.
What is surprising is how quickly Jelco Parts went into default after receiving the loan. SBA documents show that Jelco Parts, Inc. was considered in default by its lender, Crow River Bank, by July 25, 2010. That’s only 11 months after the loan was finalized (August 26, 2009). Typically, loan payments have to be delinquent for at least nine months in order for a loan to be considered in default (closing the business can also trigger a default, and documents from the lender in March 2011 requesting that the SBA pay off the remaining loan amount indicate the business was considered closed at that time.
The question that arises out of this timeline is: where did all the money go? Jelco Parts burned through a substantial amount of money in a year, and didn’t pay its taxes or make its loan payments during that time. Interestingly, included in the SBA documents was information about a September 2009 fire at the Leidiger property in Camden Township. The house that was on the property was substantially damaged in the fire, and a new one was built in 2010.
Ernie Leidiger owes us a complete accounting of his business troubles, and give us a complete explanation of why we should trust him to responsibly handle the affairs of state government when he appears to be doing such a dismal job of keeping his own affairs in order. The Waconia Rotary Club, the Waconia Chamber of Commerce and the Waconia Patriot are hosing a candidate forum on Wednesday, October 24 for Leidiger and his DFL opponent Keith Pickering (as well as State Senate candidates Julianne Ortman and Jim Weygand). We hope Leidiger will use that forum to give a forthright accounting of the situation with a complete acceptance of personal responsbility, as opposed to continuing to blame others for his failures.