Nathan Deal Steps in it Again With $74M Copart Tax Dispute

One month ago I wrote an articled entitled “Are Georgian’s Getting a Raw Deal from Our Governor?” The more we learn about Nathan Deal the clearer that answer becomes. In that article I wrote about a salvage yard that was owned by Nathan Deal that resulted in a scandal that led to his resigning from Congress.

Copart is a Texas based firm that bought his salvage yard. Copart now owes the state of Georgia $74 million in back taxes and penalties.  Gov. Deal made at least $3.2 million in a business deal with Copart while serving as governor. High-ranking members of Gov. Deal’s state-paid staff coordinated details of the Copart deal. Gov. Deal was heavily in debt when he became governor, and now is a millionaire thanks in large part to the Copart deal. To date, the state has not collected the $74 million that Copart owes Georgia.

To put that number in perspective, that tax revenue could: (Source Better Georgia)

  • Hire an additional 1,480 public school teachers in Georgia
  • Pay for a full ride to UGA for 3,208 students
  • Fully fund Georgia’s Department of Veterans Service for nearly four years.

A few Questions Nathan Deal needs to answer and soon.

  1. Why did Gov. Deal refuse to lift a finger to collect the $74 million Copart owes Georgians, even while collecting checks for himself?
  2. Why is the governor changing course now? If he had the power to act, why did he wait?
  3. Will Gov. Deal continue leasing his property to Copart for $10,000 a month?
  4. What did the governor know about Copart’s tax bill, and when did he know it?
  5. Does Gov. Deal think the state’s top elected official should be getting rich from a major tax cheat?

Deal spokesman Brian Robinson said over the weekend that the governor has instructed the Department of Revenue to wring from Copart “every cent it owes in Georgia taxes.” But he said the governor hoped it would be resolved by an outside judge, rather than the state tax agency, so he can’t be accused of tinkering with the outcome.

“The governor assumes at this juncture of the process the case will go before an administrative law judge, which means it wouldn’t be decided by an executive agency or by a Deal appointee,” said Robinson. “This further ensures objectivity and fairness for all parties while bolstering public trust that every taxpayers gets treated equally under the law.”

Deal_Rags_Riches

Background on Copart’s Sweetheart Deal with Nathan Deal

According to the AJC here: “The Texas-based car auction firm that agreed to pay $3.2 million each to Deal and his business partner Ken Cronan for Gainesville Salvage & Disposal is battling the state over nearly $74 million in disputed back taxes, and the company has been ramping up its lobbying forces as it wages the legal fight.”

It is important to note that Nathan Deal appoint’s the tax department’s head. You think by appointing someone as head of the tax department doesn’t give leverage? I would sure think it does. It is also amazing that Deal was flat broke not long ago and now is a millionaire. The transaction will net Deal and Cronan roughly $3.2 million each from the sale of the business and a 10-year lease on the land. It is the company’s fifth location in Georgia as it looks to expand its footprint in this market.

This controversy goes back several years and was the primary reason Deal hightailed it out of congress when he did. Deal and his partners held a no-bid agreement with the state of Georgia to provide space for state employees to inspect rebuilt and salvaged cars for safety. The Atlanta Journal-Constitution reported in 2009 that Deal, then a congressman, intervened with state officials who wanted to open the program to more locations.

He was opposed to any new locations since he didn’t want anyone else to have a piece of that sweet peach pie he had all to himself. Funny that a purported Republican should be against competition. I guess free markets only apply when you don’t have a monopoly and become rich off of it. Nathan Deal seems to follow the school of philosophy aka “Do as I say not as I Deal” when it comes to his wallet at least. 

Fast forward a few years and now Copart own’s Nate’s honeypot salvage monopoly business. A state audit found the company owes $73.8 million in taxes, penalties and fees accumulated between 2007 and 2011. Under the terms of Copart’s purchase agreement, Deal and Cronan will get roughly $2 million apiece for the salvage business and vehicles. The contract also requires the firm to pay Deal and Cronan $120,000 each annually over 10 years to lease the land, and gives Copart an option to buy the land for $4.8 million when the lease agreement ends.

So this brings us to one question. What kind of state are we when we have this kind of one-party, oligarchy-like government running the show? Is this the direction we want to continue to send our state in? If Attorney General Sam Olens wasn’t in the pocket of Nathan Deal, this would almost certainly warrant a criminal inquiry. Perhaps the Justice Department should be looking into this. One thing’s sure: the only chair Nathan Deal should probably be sitting in is one that’s inside a prison. Even in Georgia which is dead last in corruption, you can only get away with so much for so long before the feds come knocking.

 

 

 

 

 

 

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