Wednesday, August 25, 2010

"I have never lobbied for some special treatment or for a government payment"

It's an attack ad that writes itself -- via Taegan Goodard:
In an interview with WKOW-TV, Wisconsin U.S. Senate candidate Ron Johnson (R) blasted government subsidies.

Said Johnson: "I'm in business. I have never lobbied for some special treatment or for a government payment.... When you subsidize doesn't work through the free market system very well."
Never ever ... for ever never?
However, it turns out Johnson actually received a $2.5 million government subsidized loan to expand his company back in 1985.
Get ready for a lot of parsing between what counts as a "subsidy" and a "subsidized loan" ... and a relentless barrage of well-deserved attack ads from Feingold.

This is about as flagrant a lie as one is going to find in politics and since Johnson has based a large swathe of his campaign on the evils of government spending -- in particular the dozens of press releases detailing the so-called pork in the stimulus bill -- this should cripple his credibility.

I don't expect too many deathbed conversions to Dave Westlake's campaign, but wouldn't be surprised if a few intellectually honest conservatives advocated as much in the face of this absurdity.

MORE: And here we go:
Campaign spokeswoman Sara Sendek says the bond in question wasn't special treatment or a subsidy, but a loan that was paid back in full.
Bullshit. If Johnson were to acting in accord to his "free market"/Ayn Rand rhetoric, he would have gone to a bank for the loan and paid off the interest. Instead, he went to the government because:
In the 1980s the company expanded through the help of a $2.5 million government bond issued by the city of Oshkosh - a bond that charged below-market interest rates.


Late this afternoon the Johnson campaign sent a one-sentence response to our story, saying the sort of bond issued by Oshkosh is neither special treatment nor a government payment or subsidy.

They also say the loan was paid back in full.

In case you missed it, Johnson's campaign apparently made no mention of paying off the equivalent interest.

So much for "free market principles"...

EVEN MORE: Here's the Memeorandum thread.

MORE STILL: The MJS points out that not only has Johnson been caught with his hands in the cookie jar, but his campaign's initial response to the matter has also been demonstrably false:

In a statement issued Wednesday, Johnson's campaign said, "An industrial revenue bond is neither special treatment nor a government payment or subsidy. It is a loan and was paid back in full."

Got that? calls it a "loan" (as did several of the news organizations featured above). But:

An industrial revenue bond is a tax-exempt bond normally issued by a governmental body for a project. The City of Oshkosh was not making a loan; a bank or other lender would buy the bonds from Pacur and resell them to investors. Pacur would then have been responsible to pay back the bonds' principal amount, plus interest.

But at a lower rate of interest than he would have received from a private bank. That's good business, but completely contrary to his campaign message.


Zach W. said...

There's more where this story came from....

Jb said...

I have little doubt.

Jo Egelhoff, said...

You're wrong about this Jb.

Jb said...

I don't know what I was wrong about -- The MJS update of this post was added several hours before your comment's time signature.

Regardless of what Johnson received from the city of Oshkosh, he still tied up tax-payer dollars for private sector use. That's the bottom line here.