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.
{mosads}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.
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“The Cleaver Company has defaulted on the Note by failing to make payments as required by the terms of the Note and by failing to make payments,” Bank of America wrote in its filing.
Cleaver released a story last week in which he said, “This is a business dispute. The business has been run by an outside manager for years. Because this is a legal matter I am limited in what I can say and I hope you respect that.”
SBA also did not immediately return a request for comment, and did not have any public statement up on the Cleaver loan on its website.
Cleaver was elected to Congress in 2004, two years after he received the 2002 loan with SBA backing.
— This story was updated at 6:07 p.m. to include Cleaver’s statement.