Leidiger defaults on SBA loan; taxpayers left holding the bill

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.

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7 Responses to “Leidiger defaults on SBA loan; taxpayers left holding the bill”

Trackbacks/Pingbacks

  1. Leidiger's default puts taxpayers on the hook - LeftMN - October 22, 2012

    […] to public documents acquired by Sean Olsen at Brick City Blog, a business owned by State Rep. Ernie Leidiger (R -Mayer) defaulted on a $500,000 federally […]

  2. Don’t let Ernie Leidiger fly under the radar | Brick City Blog - October 23, 2012

    […] face it, the last few months haven’t been that great for Ernie Leidiger.  His tax issues and rank hypocrisy on government involvement in the private sector have been exposed for all to see in the middle of a re-election […]

  3. Ernie Leidiger uncorks some whoppers at the Waconia candidate forum | Brick City Blog - October 24, 2012

    […] calling for elected officials to be held to a higher standard.  This coming from the tax avoiding, government loan defaulting, campaign finance law violating, lawsuit losing guy.  It would be funny if Leidiger didn’t […]

  4. Let’s Go To The Tape, Round 2 | Brick City Blog - November 1, 2012

    […] of government in promoting small business (starting at 27:20).  In that answer, Leidiger not only dodges his own history with small business loans, but criticizes the actions of the Carver County Board saying (at 28:00) […]

  5. More Than Just Ernie: The Best of Brick City Blog in 2012 | Brick City Blog - December 28, 2012

    […] From: Leidiger defaults on SBA loan; taxpayers left holding the bill […]

  6. Ernie Leidiger asks: Had Enough of Me Yet? | We Can Do Better Carver County - January 30, 2014

    […] Loan Default:  Brick City Blog […]

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