Hypocrisy, eviction, lawsuits and porn: what does the business career of Rep. Ernie Leidiger mean?

Government is the problem, not the solution.  — Ernie Leidiger, Chaska Herald, 2010

One of the consistent building blocks of State Rep. Ernie Leidiger’s political ideology has been his call that government (at the federal and state level) needs to get out of the private sector’s way, cut spending, and let the “job creators” do their work.

How has that ideology played out in Leidiger’s life and business career?

Rep. Leidiger hasn’t been the most ardent supporter of public education in his career in the legislature.  Leidiger has voted against the last two bonding bills in the State House, both of which had vital projects in both the MnSCU and University of Minnesota systems.  He also flip-flopped on a campaign promise and voted in favor of shifting $700 million away from our K-12 schools.  Leidiger, it should be pointed out, graduated from the most public of public schools — the U.S. Naval Academy and U.S. Naval War College — with all tuition expense paid by taxpayers.

Rep. Leidiger often trumpets his private sector experience as the head of Brothers Office Furniture.  In fact, Leidiger has a number of business entities registered with the state of Minnesota, most of which lead back to a company called Jelco Parts, Inc. — these include Brothers LiquidationBrothers Office InstallersBrothers Office PartsBrothers Office ServicesBroBid.com, and Brothers Recycling.  Brothers Office Furniture and Brothers Office LLC are registered under Leidiger’s business associate Mike Soderquist at the same address as the other Brothers businesses.  Then, there’s Brothers Liquidation & Recycling LLC, registered at the same address as Brothers Office Furniture, but with no listed contact.

Leidiger and Soderquist are also involved in a venture called SJK International, a nonprofit that works to bring foreign students to the United States to work on J-1 visas.  J-1 visas were originally designed for cultural exchange, but have come under fire for increasingly being used by employers as a cheap way to supplement their workforces or worse. [EDIT:  Let me make it perfectly clear that I have no knowledge of SJK International being involved with such abuse.]

The extent to which Leidiger wants to be known as being associated with his businesses seems to vary, as well.  His original economic disclosure form didn’t include Brothers, then was amended during the 2011 session to include it, and the most recent revision excludes it.  In fact, his July 2012 economic disclosure form shows no sources of income for Leidiger outside of his position in the legislature, despite the long list of companies he has registered.

Leidiger’s business receives federal stimulus dollars

Setting the conditions for private sector growth and reducing government spending is the answer to economic stimulus. One only needs to see what has happened to the failure of the federal stimulus plan to realize that more government spending is not the answer.  – State Rep. Ernie Leidiger, “News and Views“, February 2012

According to Leidiger, the federal stimulus plan was a failure and claims that more government spending is not the answer.  It’s an interesting perspective, given that Jelco Parts, Inc. received a $500,000 Patriot Express loan from the Small Business Administation in July 2009 as part of the federal stimulus plan.

While the Patriot Express program began before the stimulus plan, under the stimulus bill several key changes were made to the program.  First, the SBA guarantee on loans like Leidiger’s increased from 75% to 90% and eliminated the 3% fee on the guaranteed portion of the loan.  On A $500,000 loan, that’s a savings of $13,500.

So the taxpayer — you — paid the fees to originate Leidiger’s loan.  And if Leidiger’s business fails, the taxpayer — you — are on the hook to help cover his losses.

SBA loans, with their guarantees, are also only available to applicants who can’t get funding on their own through normal financing methods.  So in Rep. Ernie Leidiger’s “government spending is not the answer” world, the market would have spoken and his business would go without that additional capital.  Businessman Ernie Leidiger was happy to take the federal-backed funding and run with it.

Eviction, lawsuits, and pornography

Ernie knows what it’s like to make payroll and how to keep a concern running … these days what works is running lean, being nimble, and stay true to your business.  – Ernie Leidiger 2010 campaign website

How have Leidiger’s companies failed since the infusion of government money? Not so great, really.

Former employees tell stories of a mismanaged operation with internal strife and unhappy customers.  Brothers Office Furniture and Brothers Liquidation both carry “F” ratings from the Better Business Bureau as testament to those assertions.

Jelco Parts (and Leidiger’s other businesses) were evicted (Case 27-CV-HC-10-4859) from their Brooklyn Park offices in August 2010, just 13 months after receiving that guaranteed government loan.  Since then, the businesses have relocated to north Minneapolis.  The registration of the Brothers Office Furniture business under Soderquist comes at a timeframe concurrent with the legal dispute with their landlord in the eviction process.

Two corporations — the original Brothers Office Furniture and Brothers Office Corporation — that rolled up to Jelco Parts were discontinued around this time.  It appears Leidiger and his associates were trying to disassociate the two businesses.  Why would you need to do such a thing?

Experts consulted indicate that this may be a strategy to protect the assets of Brothers Office Furniture should Jelco Parts default on its SBA loan, as that company’s assets would be at risk to cover the portion of the loan that was not guaranteed if the two organizations were still legally bound together.  This may also explain why Leidiger’s residence in Mayer is registered under the name of his wife Jan, and sister-in-law Linda — as Leidiger’s personal assets could also be at risk if Jelco Parts defaulted.

Meanwhile, Brothers Office Furniture lost a lawsuit and was ordered to pay $7,500 in damages in April 2011 and still hasn’t paid up (Case 27-CV-11-11245).  Per state law, such judgments are supposed to paid within 30 days.  The plaintiff in this case has had to go to court to get a writ of execution in an attempt to collect from Leidiger’s company — as of yet, unsuccessfully, as the judgment is still listed as active in the state court system.

And, that’s not the only lawsuit the Leidiger businesses have endured recently.  Judgments against Brothers Recycling & Liquidation ($32,389,90 from May 2011, also resulting in a writ of execution, Case 73-CV-11-4601) and Brothers Office Furniture & Liquidation ($1,415.28 from November 2011, Case 27-CV-12-3581) are also unpaid at this time.  Total it up and you’ve got over $40,000 in unpaid legal judgments against the Brothers family of businesses.

That’s not to say, though, that there haven’t been some high points.  Although Rep. Ernie Leidiger is a noted supporter of “traditional family values”, Brothers Liquidation did have a major sale last year —  selling off the inventory of the Shinders bookstore chain, which included 20,000 X-rated magazines (all of which I’m sure were the “traditional family values” kind of pornography).

Pulling up the ladder

So what does this all mean?  Some people who read this will no doubt be concerned about some of the specifics listed above.  And while there are certainly things to be troubled about there, I think the most important lesson to learn from this comes not from focusing on any individual event, but about what the totality of this record means in context with the political positions that Leidiger advocates for.

While Rep. Ernie Leidiger voices opposition to many forms of government spending and votes against bills that would create jobs, businessman Ernie Leidiger happily collects government-guaranteed loans originated with no fees.  Rep. Ernie Leidiger supports traditional family values, while businessman Ernie Leidiger sells pornography.

(And let’s not forget about Rep. Leidiger’s creative interpretations of campaign finance law that violated two state statutes and generated $800 in civil penalties or his embrace of radical preachers who espouse hateful agendas.)

This is not to suggest that the programs that Leidiger has benefited from are bad programs, or that Leidiger’s military service wasn’t noble.  To the contrary, the programs in question are good programs and should be continued and Leidiger’s Naval career is honorable.

And I’m not going to deride Leidiger’s entrepreneurial spirit.  It’s great that we have people like Leidiger who are willing to take risks and start businesses.  We need more of them.  But, Leidiger’s policies and positions don’t reflect the reality of his own life.

Leidiger says “government is the problem” — yet, government has been there at nearly every step of the way in his adult life.  He served in the Navy and got two taxpayer-funded degrees.  His business is supported by a $500,000 SBA loan — guaranteed by the federal government and originated with fees paid by the taxpayer.  His business has had over $16,000 in state contracts since 2008.  He is the recipient of numerous government benefit programs due to his military service and his position as a state legislator.

Would Ernie Leidiger have the same level of achievement today without the products of government to help him on the way?  It’s impossible to say, but the journey certainly would have been more difficult.  And now that he’s made it, Ernie Leidiger has set out to undo the sorts of programs that allow people to have the same journey he has had.  He’s pulling up the ladder, leaving future generations (and those pushed to the sidelines by our current economic woes) to fend for themselves.  That’s what concerns me the most here.

This is exactly the kind of “leadership” that we don’t need.  Being ignorant of your past and our present is no way to point this state towards the future.

[UPDATE]:  More problems for Leidiger here.

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53 Responses to “Hypocrisy, eviction, lawsuits and porn: what does the business career of Rep. Ernie Leidiger mean?”

  1. Wow, you are really out there. Waaay out there. Do you imagine that a liquidation business picks and chooses which inventory it will liquidate? Imagine a liquidator burning half of obtained inventory, just because a partner in the business disagrees with it on principle. I assume you use gasoline. I have to wonder what you personally think of cigarettes. Do you boycott the gas stations that sell products you disagree with? Why some of them even sell girly magazines? Why would you buy gas a such an establishment? What about a gocery store. I know the one I worked at when I was kid used to sell Playboy and Penthouse, and yet my mom still not only allowed me to work there, but also bought groceries there! Wow. She supported porn in your mind.

    • I don’t think your example here is relevant to the point I was making.

      • I think I understand your point perfectly. You will stoop to any means to smear a good a decent man because you disagree with him polically. that’s the ONLY point I can gather from this blatant smear campaign.

    • Liediger is a dirt ball, plain and simple. My husband worked for him for two agonizing years. LIEdiger screwed over employees and customers, demanding upfront money for product that was never delivered. His wife left him 2 years ago and never looked back. His kids are all estranged. His military service consisted of going to school on our dollar.

      • I worked for Ernie for several years and think the world of him. He’s a genuinely good guy with good intentions. Pretty harsh statements about his family. No matter your political beliefs, you should get a case of MYOB regarding family.

  2. Next on the agenda is the size of government. Ernie did NOT say we should have no government. Never has, never will. To suggest that he’s being hypocritical by having served in the military to get his education and being government subsidized is patently absurd. He was serving his country!! This wasn’t some social welfare program. He was serving! And have you ever heard Ernie suggest that our govvernment shouldn’t have a military or military academies? But yes, when it comes to economy, which was Ernie’s point, government is not the solution, it is indeed the problem. It is absolutely impossible to maintain current goverment spending levels and expect to have a robust economy. We are seeing this all over the globe. Socialism is failing. Massive government spending is our problem. We don’t have a liquidity problem. We have a solvency problem, and the Democrats solution is more spending. It makes zero sense!

    • I don’t have a problem with Ernie Leidiger serving in the military and getting a college education out of it. I do have a problem with him voting to make it more difficult for others to go to college. Ernie Leidiger should understand and respect the role government can play in ensuring equality of opportunity for all.

      I don’t have a problem with Ernie Leidiger getting a SBA loan. I do, though, think it’s hypocritical to complain about the size of government interfering with the economy when your own business is dependent on government financing. Ernie Leidiger should understand the positive role that government can play in encouraging entrepreneurship our market economy.

      [EDIT]: The essential point here is that government has been there at every step of the way in Leidiger’s adult life. He’s made it, and now he’s working to make it harder for folks to try and follow in his footsteps. That’s wrong, and it’s not the direction we should be going.

      • He’s is NOT working to make it harder to get ahead. He’s working to make it easier. We don’t get ahead by having more and more of our earnings taken away from us. We cannot be taxed into prosperity. We cannot even be taxed into solvency at this rate of spending. This has to change at every level of government. We’re out of money.

        • How does cutting the U of M and MnSCU by over 10% make it easier to get ahead? What, specifically, has Rep. Leidiger voted for or advocated for that would help Minnesotans get a college education?

          • You somehow imagine that Ernie’s opposition to the bonding bill was a referendum on higher education? Wow, that’s a interesting stretch. Why don’t you just create an article that states how much you HATE Ernie? Because that’s what I’m getting out of this article. It’s nothing but conjecture and slander on your part. But we’ve been down this road before, haven’t we. Still sore about not acheiving the results you were looking for on past nonsense, perhaps?

            • There was also Leidiger’s vote on the higher ed funding bill in 2011, where he voted for a 13% cut for the U of M and MnSCU.

              https://brickcity.wordpress.com/2011/03/30/carver-county-legislators-vote-to-slash-higher-education-funding/

              So, do you have an answer on what Leidiger has done or advocated for to help Minnesotans get the education they need?

              • I don’t see where he’s done anything to prevent Minnesotan’s from getting the education they need. In my family, we choose affordable schools, and in fact our son is serving in the military, like Ernie did, to pay for his education. Naturally, Ernie has congratulated him on his choice. More money doesn’t mean better education. You see that in one of your other posts. We spend more than other districts and yet some out perform us in some areas. Oh, and I believe Ernie voted for the pay back some of the school shift, which governor Valium promptly vetoed.

                • Minnesota students already have one of the highest rates of school loan debt in the country, and cuts the magnitude of those that Leidiger voted for would have been extremely harmful. Tuition at the U and MnSCU have already doubled in the last decade — this is no way to keep our state moving forward.

                  I would also point out if that Ernie was really serious in paying off the school shift, he or his caucus would have presented a plan to pay back the whole thing. Instead, we got a commitment of one-time dollars to pay back about 1/6 of it and no plan for taking care of the rest. That’s not leadership.

                  • Yeah, so 1/6 is still better than nothing. What did your governor do. Real leadership. You make me laugh. It makes perfect sense to pay it back as you can. We can and he said no. Why? Politics. Pure and simple. Unless the dopey governor knows what the future will bring, which I’ll remind you, no one, I mean not one person, predicted our recent budget surplus, during this lousy economy, and yet the governor claims to know what the future holds? He must taking better meds than the rest of us, I guess.

                    • We just see why using diverting surplus dollars to pay back the shift doesn’t make sense — now $167M is being taken away from the school payback for the NE MN flooding.

                      We need a real plan to pay back this money. It’s better for everyone — including the school districts who will be able to coherently develop long-term financial plans.

                    • Corrected — apparently the flood dollars are not coming out of the K-12 shift payback, but apparently from the remaining reserves.

  3. SJK International is not mentioned in any of the alleged J-1 visa abuses that you have mentioned. You really enjoy painting with an extremely wide bursh, do you not? Because some J-1 programs may be, (and that’s not even a given yet as to who is responsible for the links you’ve given), involved in some sort of labor scam, that doesn’t mean this one is. In your mind one bad apple spoils every apple tree ever grown.

    • I did not, and do not, allege that SJK has been involved in any J-1 abuse. Many people, from both sides of the aisle, though, find this program to be of questionable value and believe that it takes jobs away from American workers.

      • But you bring up the abuse, rather than the questionability in your latest response. Again, a smear tactic. I’m seeing a pattern.

  4. In an additional smear campaign, you cite some of Ernie’s businesses as having an F rating with the BBB. Did you note the reasons? One had one complaint, which has been closed, and the other had two complaints which have both been closed. The companies mainly have an “F” rating because they have not requested BBB ratings, nor have participated in the BBB rating system. Many businesses do not actively seek this endorsement as it does cost money to participate. Failure to participate in the program is hardly cause for an “F” rating. And your wide paint brush, again, is nearly cause for slander combined with the rest of your nonsense. If you had a decent readership, I’d expect a call from an attorney at some point.

    • You don’t earn a “F” rating from the BBB solely by not paying their accreditation fee. As noted on the BBB site, there are other reasons for their rating. People are free to judge for themselves how much weight they want to place on this or any other element of the post.

      • No, but you do get an ‘F’ if you have had any complaints, and also have not sought accreditation, or not participated in the program. Similiar companies with no complaints receive an A+ despite not seeking accreditation. Again, more smear.

        • Yes, it seems the BBB gives businesses who have received complaints lower grades than those who haven’t received any complaints. Very curious, indeed.

          • One lousy complaint merits an ‘F’? That’s a pretty hefty curve. I used to think a BBB rating meant something until you pointed us in this direction. Now i see that as long as you pay the dues, everything is groovy.

  5. Excellent work, Sean. Very thorough analysis. I will absolutely pass this along to my network. It should open up some good discussion.

    • I guess slander counts as thorough analysis. That all I see here. taking a page from the Obama slime machine, I guess. When did the Democrats become so hatefilled. LOL!

      • John, facts & spirited discussion are great! However….. you are way off base talking about the “Obama slime machine” and “hate-filled Democrats.” Actually, Sean’s comments have been quite respectful. It seems you are the instigator, calling the governor “Governor Valium”, “dopey” and referring to meds. Perhaps you should take a long look in the mirror. If you want substantive discourse, you need to participate in such a manner.

        • This entire post is a hate filled rant! There’s nothing respectful in this entire post. Where the talk about Ernie’s successful business career. How about his charitable work? Do you really think Sean was being respectful when he tried to align Ernie with questionable practices with foreign students, when the organization he with HAD NOTHING to do with these allegations? You people are out there, and I mean waaaaaayy out there. And, I’m sorry you can’t handle the Obama slime machine comment. But an ACTUAL journalist confronted him on his campaign’s nonsense at the press conference yesterday. Of course he denied all of the accusations, but we have the the comments all on record. SO, don’t give me this high horse nonsense that Sean, or the Democrats are somehow above the fray. They are trying every effort under the sun to slander Romney, just as Sean has done here with garbage post about Ernie.

      • I, my friend, am not hate-filled. I am, in fact, one of the most forgive-and-forget, second-chance givers you will ever meet. I always give someone the benefit of the doubt until they prove me wrong. (And even then, I’m likely to eventually forgive and forget.) We should get together over a beer sometime so you could get to know the real me before you insult me. 😉

        Now, by definition, slander is false. What I read was a list of factual occurances that were researched and sourced. People will have to judge for themselves how they feel about Mr. Leidiger based on the information presented.

        • I insulted you? How did I do that? Because you’re a Democrat you feel insulted by the remark about being hete-filled. that goes to Sean, and the Obama slime machine. Fact: SJK had NOTHING to do with Sean’s links to questionable activites around the visa program. Fact Ernie is not a porn peddler. He is a liquidator of inventory. Fact: He has only one complaint against his business of how many years? two against another? And yet he disregards all of Ernie’s previous enterprises? Sean goes around cherry picking little things that he can use to paint Ernie in a bad light. It’s disgusting, and it’s hate filled. And if you’re comfortable supoorting this, then the label fits for you as well. This an insult you have to earn. If you don’t want to feel insulted, reject this garbage for what it is.

          • Yikes, John, you seem way too worked up. Any objective observer would look at the comments on this post and observe only one person using insults, name calling and mean-spirited rants. The rest of us are attempting to have rational discussions.

            My last post was sincerely reaching out to you as a fellow human and trying to point out that it is a problem and a mistake to label all people in a group as hate-filled or liars or slime, etc. You said Democrats are hate filled, I’m a Democrat and I’m not hate filled. I know Sean and he’s not hate filled either. I’m sure we can agree that all Republicans aren’t the same either. Our political affiliations are only one facet of who we are.

            Maybe you aren’t familiar with the winky faced icon I used – it is typically meant to convey a playfulness or gentle chiding, a spirit of good fun. Just because we disagree doesn’t mean we are mortal enemies. We live in the same community and all have a vested interest in its success. 🙂

            • That just not true. Once you know the facts, this is nothing but a pure and simple hate-filled smear campaign, And I’m sorry your party (my former party) engages in this tactic, (as we’ve seen trying blame Romney for a woman’s cancer, or claim he’s a felon. Sean clearly HATES Ernie Leidiger to try so hard to paint him as something he’s not.

              I’ve been using sniley’s since they were invented, so yeah, I’m quite familiar with them. Playful doesn’t belong on this post. Sean has raised some seriously flawed accusations here, most of which are baseless, and that leads me to this conclusion. You can claim the high road all you wish. But until you call this what it is, a smear campaign, which it clearly is as I’ve demonstrated, you are part of the Democratic slime machine. What Sean did here is indefensible.

              You think I’m worked up? You think I’m irrational? This whole “article” is irrational. And it’s purpose is to paint the picture of man as he is not. It’s slimy and you should be ashamed to be supporting it. My Democrat buddies think this is disgusting. Why don’t you?

  6. This is an incredibly well informed post by Sean. John, you should really do some digging before you get behind this moron.

    • It’s just a lot of smear. Liquidating inventory doesn’t make you a pron seller. Sean shoul dbe ashmed him self. Same with the SJK nonsense. Ernie has had a lot successful business ventures. rather than make up nonsense accusations, I atually talked to the man. The pron charge is preposterous. the SJK thing nonexistent, (as Sean later admits), and Ernies musinesses may be struggling in this lousy economy, but you are merely focusing on those you which to use for this piece of smear. Instead of swallowing this crap, I suggest you look into for yourself. But first you’ll have to wipe the Democratic mud out of your eyes. This may be the weakest, slimiest piece of garbage I’ve every read about any single policitician.

      • Brothers Liquidation sold 20,000 X-Rated magazines. I never suggested Leidiger was Ferris Alexander, but I do know that there are many Carver County Republicans who think that Leidiger should have lived up to what he claims his values to be and passed on that transaction so as not to be involved with that type of material.

        Knowing who “kh” is, I would say it’s pretty likely they are plugged into this situation, John. You may want to listen to what they have to say.

        BTW, have you checked out this week’s Minneapolis/St. Paul Business Journal? Some interesting stuff in the “Business Leads” section…

        • I’ve got news for you. This was brought up and the monthly meeting, and everyone was pretty much in agreement that this porn thing is a ridiculous issue. It was a small part of a business transaction to liquidate inventory for a fire sale. Any liquidation company would have been required to follow through, and sell all of the inventory, not just the items that are politically agreeable to some.

    • I notice there is feigned outrage over referring to Ernie as a moron. Just when someone tags a Democrat does it offend the sensibilities here. Shocking.

Trackbacks/Pingbacks

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  10. Leidiger defaults on SBA loan; taxpayers left holding the bill | Brick City Blog - October 19, 2012

    […] 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 […]

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