Some people respond to personally difficult situations by avoiding the other party to the situation. Due dates get ignored, messages get ignored, and sometimes even subpoenas get ignored. That last one is pretty bad. Thus why the Small Business Administration (SBA) is seeking default judgment against state Sen. Sean Nienow, R-Cambridge.
The local media have been reporting that the federal government, in the form of the SBA, is seeking default judgement against Nienow for failing to repay about $750,000 in principle, interest, and fees on a loan the SBA gave him in 2009. However, they haven’t really explained “default judgement” to readers (unless I missed it, which is possible), and I get a feeling no one has explained it to Sen. Nienow, else he surely would have shown up in court. It doesn’t mean a judgement that he defaulted on a loan, though that’s pretty much the point of the lawsuit against him. A default judgement is something the plaintiff asks for from the judge when the defendant doesn’t show up to court, hasn’t been negotiating, and apparently hasn’t been answering the phone or the e-mail, whatever means the SBA has been trying. Plaintiffs request default judgement when it’s able to show the defendants aren’t trying to settle and are showing contempt for the judicial process, such as by not showing up in court.
Apparently Nienow isn’t just avoiding the SBA and the plaintiff in an earlier lawsuit, but he’s avoiding the press too. Though not entirely. KSTP TV managed to find him and get him to stand still a short time somehow, and kudos to KSTP for not softballing the interview. They have Nienow dodging the questions, including a rather obvious one. What happened to the money he borrowed? He’s paid back almost none of it, so where is it?
Where the money went is one of the mysteries, actually probably the whole underlying mystery, and Nienow’s refusal to answer the question is entertaining without really getting us anywhere. If it was something straightforward like the money was used to cover the purchase price of the business, and then the recession dried up the customer base — after all, in the biggest economic crisis since the Great Depression, summer camp consulting must have dropped from most people’s shopping lists — that would be understandable. That’s in fact my best guess, based on what the Star Tribune reported regarding the lawsuit by the prior owner of the business, who also sought default judgement when Nienow wouldn’t respond when the seller asked for his remaining payment. If there were a lot of start-up costs, that would be understandable, though maybe not for consulting on summer camp choices out of your home. I have no idea how summer camp consulting works, so I’ll fight the temptation to assume start-up costs would be really low, though having run a business from home, it’s a temptation I’m not fighting all that well. And it was an existing business, apparently worth six figures. How do you blow through $650,000? How do you not answer when that question is coming from your lender? Sen. Nienow, where is the money? No one apparently can get an answer because they’re still trying to answer the question, where are you?
Just to clarify the issue, or rather what the issue isn’t, I don’t care that he ignored all the conservative rhetoric about government can’t and shouldn’t do anything and accepted the SBA loan. That’s what the SBA is for, and in January 2009, we were plunging into what looked like the Second Great Depression partly because no one could borrow any money. So it was a good thing the SBA was giving out loans. They were about the only entity doing so, and the stimulus was desperately needed. I’d wonder if Nienow thought stiffing the government was OK, but he stiffed a private creditor too, so sounds like he just couldn’t or wouldn’t pay his debts.
I also don’t care that his business failed, unless it turns out to have been a scam all the way along. Assuming Nienow really intended to consult on choosing summer camps, most businesses fail, even when the Republicans haven’t collapsed the economy again. So big whoop, in the sarcastic tone of the scandal sense. Plenty of businesses default on loans. Some can’t pay, and some find the costs of defaulting are less than the costs of paying so they default (e.g. American Crystal Sugar), which stinks but is legal.
What I care about is that he behaves like someone with something to hide by dodging creditors and courts. I care that it’s OK for him to stiff a government entity of $650,000, but a kid whose parents are a few dollars behind on the school lunch account should have his food taken away in a publicly humiliating manner. Not that Nienow necessarily approves of the public humiliation or of children going hungry. He just thinks fixing the problem for the whole state by spending an amount merely six times his one SBA loan is too high a price to do anything about it.
Or as I imagine Nienow putting it, “That’s just my opinion of government spending. So sue me!”.