Stacey Abrams’ growing financial fortunes draw fire from the right
As Abrams, 48, attempts to unseat incumbent Republican Brian Kemp – himself a wealthy businessman – his entrepreneurial interests are playing a growing role both for his campaign and among conservatives seeking the undermine. Some right-wing media writers have taken aim at his inflated wealth, as well as fintech firm NOW Corp.
Abrams, who is also a tax lawyer, saw her net worth rise from around $109,000 in 2018, when she first ran against Kemp for governor, to $3.2 million last year. last year, according to financial information. Most of the increase seems to come from his growing fame and its effect on his ability to sell books and command speaking fees.
But she also reported stakes of at least $5,000 in eight companies in addition to NOW Corp. They include a consulting firm and a company that works with the state’s thriving film production industry, among others.
Abrams’ emphasis on his business background makes sense as a way to win over the small group of Georgia voters who have yet to choose sides in the race, said Andra Gillespie, a political scientist at Emory University in ‘Atlanta who followed the two candidates. gubernatorial offers.
“She’s trying to cultivate a broad appeal base and show that she’s been able to show leadership and management skills,” Gillespie said. “A lot of people assume she only served as a state legislator.”
It also thwarts Kemp, 58, who consistently portrays himself as a small businessman first and a politician second. According to his financial statements, the governor’s business interests are largely in real estate. He listed a net worth of $8.6 million. Kemp currently leads Abrams in the polls by about four percentage points, according to an average from Real Clear Politics.
The Abrams campaign did not respond to requests for comment on the candidate’s finances and the Republican attacks, though it did provide information on NOW Corp’s activities.
Abrams’ finances were also a focus of the 2018 campaign. When she first ran for governor, she owed the IRS $54,000 for back taxes from 2015 and 2016, which she said was related to the cost of caring for a sick relative. This led to Republican attacks questioning his ability to run the state.
It almost certainly hurt her in the election, Gillespie said. Abrams lost that race by 1.4 percentage points, or 54,000 votes — the closest a Democrat has won the Georgia governorship in more than 20 years.
“Some people may have preferred her to clean her own house before running the state,” she said. Abrams’ financial reversal, along with his focus on his business expertise in this race, “takes that story away.”
Gillespie predicts Republicans will now weaponize Abrams’ improved finances as a sign that she is a wealthy national figure out of touch with the average Georgian voter. Already, his rising fortunes have been stung by Fox News, the right-wing Free Beacon and a group called StopStacey.org, which put out a press release about Abrams’ new million-dollar home. Some of Abrams’ supporters noted the irony of a party that champions free enterprise and business success criticizing a black woman for her financial accomplishments.
Abrams’ growing wealth owes much to his presence in the national spotlight. Her publishing income, for example, has soared from $173,000 in 2018 to more than $2 million in 2021. While she previously wrote romance novels under a pseudonym, Selena Montgomery, Abrams wrote a mystery , a children’s book, a political tome and a motivational book. under his own name as his fame grew.
“Abrams’ proven track record of publishing across multiple genres and growing national profile has only grown her following,” said Kristen McLean, analyst at market research firm NPD BookScan.
His speaking fee income grew from $254,192 in 2019 to $1.1 million in 2021. Abrams also earned between $200,000 and $250,000 annually in the three years beginning in 2019 from the Roosevelt Institute, a liberal think tank in New York. The money was for her role as founder and director of the Southern Economic Advancement Project, established by Abrams in 2019, which coordinates with organizations doing economic policy work in the South.
But it’s NOW Corp., under the NOWAccount brand, that Abrams mentions the most on the campaign trail as proof that it understands small business. The company is similar to factoring companies that lend money against unpaid invoices so businesses get paid faster, with differences it says make access to cash easier and cheaper for small businesses. businesses. It received nearly $40 million in new funding from investors last year.
Abrams co-founded NOW with business partner Lara Hodgson in 2010 after an earlier venture failed due to bills that took too long to be paid. According to research firm Growjo, the closed company now employs 70 people and has an estimated annual revenue of $8.2 million.
Abrams, who last earned income — $279,940 — from NOW Corp. as of 2018, is an advisory member of its board of directors and has less than a 15% stake in the company, according to his campaign.
NOWAccount customers sell some or all of their outstanding invoices to the company and pay a one-time service fee of 3% to 5% depending on the length of repayment terms with customers. They get 95% to 97% of what’s owed compared to the 80% or less that factoring companies often pay, said Sheila Jordan, an entrepreneur and factoring veteran who has used NOWAccount for eight years.
NOW’s key innovation is to assess customers based less on the creditworthiness of the company and more on the creditworthiness of the customers who are indebted to them. The bills he buys go to entities known to pay, including governments and some of Georgia’s biggest companies.
“Everyone I know in small businesses has been burned so many times,” said Jordan, whose Atlanta-based software company Knowledge Architects sells training videos. “With NOWAccount, they use my client’s credit and take the responsibility off me.”
NOW received a boost from the state in its early years, when Abrams was the Georgia House Minority Leader. Using a provision of the Jobs Act of 2012, former Republican Gov. Nathan Deal’s Department of Community Affairs offered credit guarantees that helped convince a consortium of credit unions to participate in Now.
Safeguards became a minor issue in 2018, when a senior opponent said Abrams should have told Democrats she was dealing with a Republican administration. Peter Schweizer, senior editor of the right-wing Breitbart News newspaper, dug it again this year, saying the media had focused too much on his book sales and speaking fees as the source of Abrams’ wealth. – even if both are described. about its financial disclosures – and not enough about NOW Corp. and its taxpayer boost.
Abrams had “leveraged her public position to earn millions of dollars for a business she partly owned,” Schweizer wrote on the Government Accountability Institute website. Since NOW Corp. is tightly held, its finances are unknown, and Schweizer has included no evidence of how Abrams would have received special treatment from a Republican administration.
Justin Vining, spokesperson for the Community Affairs Department, said the state contracts that allowed credit guarantees ended in May 2017. Overall, NOWAccount registered 394 loans and received $10.3 million. dollars in guarantees from the program, which enabled the company to extend $83 million in financing to customers, he said in an email.
Politically, it’s to the GOP’s advantage to at least imply there’s something suspicious about getting rich while practicing politics, even if there’s little evidence, Charles Bullock said, professor of political science at the University of Georgia. But the shift between targeting Abrams for his debts and attacking him for doing the right thing is stark, he said.
“She’s not making the argument, Republican, that ‘I know how to run a state because I’ve run a business,'” Bullock said. “She says she doesn’t want to be seen as just a politician, but as someone with real-world experience.”
More stories like this are available at bloomberg.com