Taxpayers could be on hook for car wash bought by congressman
Congressional Black Caucus Chairman Emanuel Cleaver (D-Mo.), who is facing a lawsuit for failing to pay down a 2002 Bank of America loan that he used to buy a car wash in Missouri, could have a good chunk of the $1.5 million he owes paid off by taxpayers.
According to the Kansas City Star, the Small Business Administration (SBA) backed about three-quarters of Cleaver’s 2002 loan, which means that if the loan goes bad, the SBA could pay off $1.1 million of that debt.
The Star reports that the SBA is unclear exactly how much it would pay to Bank of America, and said it would depend in part on how much Cleaver pays to the bank.
However, the suit filed by Bank of America on March 30 indicates that Cleaver has had trouble making payments throughout the life of the loan. According to the bank’s filing, Cleaver’s loan was for $1.35 million, and he now owes $1.2 million in unpaid principal after 10 years.
But if $240,000 in unpaid interest and nearly $60,000 in late fees and other charges is added, Cleaver now owes more than $1.5 million, more than the original loan value.
Posted in The Hill