Midwest Democracy | Candidate for Missouri governor beset by problems with late tax payments, The Kansas City Star

Dave Spence

Republican Dave Spence is running for Missouri governor on a simple platform: He's a businessman, and Missouri is a business.

"I want to be the CEO of Missouri," Spence tells audiences.

But an examination of tax and finance records shows that Spence, 54, or his companies have been late paying property, personal property, manufacturers' and other taxes totaling tens of thousands of dollars dating to 1995, and as recently as 2010.

Democrats are seizing on the late tax payments as evidence that Spence isn't qualified to be governor.

"Here's a guy who only cares about himself and his own bottom line, not about the taxpayers," said Democratic Party spokeswoman Caitlin Legacki.

Spence declined comment for this story. But his spokesman, Jared Craighead, called the tax allegations "a ridiculous Democratic attack that's meant to distract from (incumbent governor) Jay Nixon's dismal record on jobs."

Craighead added that all of Spence's taxes had been "paid in full."

In some cases, Craighead said Democrats were referring to cases in which a Spence tenant was expected to pay the taxes. In other cases, the amounts are so small as to result in penalties of just a few dollars.

"Most Missourians understand you get busy," Craighead said. "Dave's been building a business, creating jobs, and occasionally things aren't taken care of as promptly as we would like. ... They're old issues."

The late-taxes issue is yet another bump in the political road for Spence, who is running for public office for the first time and has suffered several stumbles since launching his campaign for governor last year.

In January, Spence changed his online biography to correct a claim about his degree from the University of Missouri in Columbia. Spence holds a home economics degree. But his biography on his campaign website originally omitted the word "home."

Last December, Spence's campaign distributed a flier in the St. Louis area that claimed he had attended the "University of Missouri-Columbia School of Business and earned a degree in economics." But Spence never attended the university's business school. His degree in home economics was awarded through a different school at the university.

Spence said later he didn't know his campaign materials had included the claim about the business school.

"I have said all along that I will not or do not lie," Spence told The Associated Press. "A lot of this is overblown."

Last weekend the AP reported about Spence's ties to a St. Louis area bank that made loans to him as a board member, even after the bank received a $40 million bailout from the federal government. Spence said he had done nothing wrong.

"I played by the rules," he said.

But Spence acknowledged to the AP that he had voted with the rest of the Reliance Bancshares Inc. board in early 2011 to forgo payments to the government. That was a change in what he told two media outlets previously, which was that he had resigned from the board in part because of that decision.

Until December, Spence was president and chief operating officer of St. Louis-based Alpha Packaging, which employs 800 people in eight states and the Netherlands. Alpha Packaging manufactures plastic bottles for pharmaceuticals and personal care products.

Spence entered the governor's race after fellow Republican Peter Kinder ended his campaign and opted to seek a third term as lieutenant governor. Three other GOP candidates also are in the race, although Spence is considered the most formidable because of his personal wealth. On the final day of November, for instance, Spence contributed $2 million to his own campaign.

Examples of Spence's tax problems:

• In June 1995, the state of Missouri sued Alpha Packaging for unpaid manufacturers' taxes and personal property taxes totaling $10,071. The court dismissed the case the next month. Craighead did not know whether the case was dismissed because the taxes were paid.
• In 2003 and 2009, Alpha Packaging was late in paying business personal property taxes in St. Louis County and was assessed interest and penalties. The 2003 taxes were paid on June 15, 2004, and included $63 in interest and $14 in penalties. The 2009 taxes were paid on Dec. 29, 2010, and included $42 in interest and $5 in penalties.

Craighead said Alpha Packaging had no record of interest or penalties paid in 2003. In 2009, Alpha failed to include one truck/tractor on its property tax declaration. Craighead called it an oversight.

• In 2007, Spence and his wife were penalized $1,609 for past-due property taxes on their St. Louis County home, which campaign officials did not dispute.
• In 2007, Spence and his wife were about six months late in paying taxes on their three vehicles and wound up paying $86 in interest and $16 in penalties. Craighead said confusion over whether Missouri taxes applied to a vehicle brought to the state from Utah caused the problem. "They were under the impression they did not have to pay it because it came from Utah," he said.
• Alpha Packaging went more than three years -- 2007 to part of 2010 -- without paying a "local business tax" on a Jacksonville, Fla., plant. Craighead said the company discovered the issue itself and paid the tax.
• In 2007, a lien was filed against one of Spence's businesses, Big Sky Properties, for more than $280,000 in unpaid bills related to building improvements. Craighead said a tenant was responsible for making the payments for the improvements, and the contractor filed a mechanic's lien on the property. Spence wound up making the payments and was later reimbursed by the tenant.
• Big Sky Properties paid more than $23,000 in penalties and interest for late St. Louis County property taxes in 2008 and 2009. Craighead explained that "the renter (of the property) did not pay the taxes he was obligated to pay under the lease, and Dave had to step in and pay the taxes and was reimbursed."

At a gathering at the St. Charles Pachyderm Club last month, Spence reportedly said: "We're all paying taxes. ... We're all contributing. We look in the mirror every single night and say, 'I tried to do the right thing.' And we got a lot of people that aren't, and we've got to tighten it up."

Read more here: http://midwestdemocracy.com/articles/candidate-for-missouri-governor-beset-by-problems-with-late-tax-payments/#storylink=misearchChromeHTML\Shell\Open\Command#storylink=cpy

Read more here: http://midwestdemocracy.com/articles/candidate-for-missouri-governor-beset-by-problems-with-late-tax-payments/#storylink=misearchChromeHTML\Shell\Open\Command#storylink=cpy

Courtesy of Kansas City Star

Please click the following links for additional information about Dave Spence's tax problems:

Candidate for Missouri Gov Faces Problems With Late Tax Payments

Report: Candidate for Mo. governor paid taxes late

Report focuses on GOP hopeful's late tax payments

What other negative reports are in store for Dave Spence? The poor guy has been roasted before he even faces his primary challenger, let alone Gov. Nixon. Poor Home Economist Dave Spence, he can't help it!

Read more here: http://midwestdemocracy.com/articles/candidate-for-missouri-governor-beset-by-problems-with-late-tax-payments/#storylink=misearchChromeHTML\Shell\Open\Command#storylink=cpy

Editorial: Spence credibility buried in avalanche of TARP explanations, St. Louis Post-Dispatch

Dave Spence

It's rare that a boneheaded decision gets a politician into trouble. It's usually the cockamamie explanation that does it.

As Republican gubernatorial candidate Dave Spence tries to escape a nimbus cloud of contradictions over his actions as a board member of Reliance Bancshares Inc., he should take that lesson to heart. Otherwise he'll struggle to get out of the GOP primary against Kansas City lawyer Bill Randles, let alone have a chance against Gov. Jay Nixon, a Democrat, in the November election.

Mr. Spence, a wealthy St. Louis businessman, should have learned that lesson before he ever entered the race. After all, he pushed aside his friend, Lt. Gov. Peter Kinder, when Mr. Kinder stumbled over contradictory explanations for spending taxpayer dollars on personal stays in St. Louis luxury hotels and his relationship with a former stripper.

Voters tend to forgive mistakes. But they won't put up with a thick fog of contrived answers that obscure the truth.

Here are the facts related to Mr. Spence's role on that bank board, as laid out in an Associated Press story by reporter David Lieb:

• Mr. Spence joined the bank's primary board after it asked for and received $40 million from the federal government's Troubled Asset Relief Program.

To help the bank improve its capital position, Mr. Spence invested heavily in the bank. Other board members didn't ante up to the same level.

• Mr. Spence and the rest of the board voted in early 2011 not to repay the $40 million in TARP money to the federal government. This was after the bank voted in 2009 and 2010 to approve loans, in approximately the same amount, to bank board members and executives. Mr. Spence received some of these loans, one for a vacation house at Lake of the Ozarks.

Considering the national controversy over the TARP bailout and the GOP's obsession in bashing it, Mr. Spence should have been prepared to answer questions regarding his role in it when he entered the governor's race.

He wasn't. First, he said he resigned from the board over the TARP issue, even though federal documents indicated otherwise. Then he said he couldn't remember how he voted. Bank boards take a lot of votes, Mr. Spence said.

Then he told Mr. Lieb the truth, that he voted against paying back the taxpayers. This occurred after he built a political campaign by criticizing the same government help that saved the bank he served.

Mr. Spence wants us to believe he and his fellow board members were scrupulously careful in following the rules when loaning each other money but didn't really pay attention enough to remember stiffing taxpayers of their $40 million.

Not only do Mr. Spence's answers lack the ring of truth — as did his previous explanation for confusing his college home economics degree with an economics degree — but they also perfectly illustrate the country's overwhelming struggle with income inequality and privilege for the wealthy.

The "haves" have rigged the system to their benefit. They take government money, use if for themselves, sometimes refuse to pay it back and then criticize the poor and elderly for their "entitlement" culture.

No wonder he "forgot."

At least Mr. Kinder's ultimate explanation for ending up in a Southside dive bar fawning over an-ex stripper had a certain panache. He claims he simply was looking for a bathroom and decided to have a glass of wine.

In retrospect, that almost sounds believable. Courtesy of St. Louis Post-Dispatch.

Our addition:

BREAKING NEWS: INSTEAD OF REPAYING $40 MILLION BAILOUT, DAVE SPENCE'S BANK GAVE $40 MILLION IN INSIDER LOANS TO BOARD MEMBERS

Explanation Needed: Why Was the $40 Million Bailout Spent on Board Members, Not Repaid to Taxpayers?

Why is Dave Spence in the hot seat?,104.1 KSFG Radio

Why is Dave Spence in the hot seat? Click download to listen to the radion audio.

While defending bank role, Spence gives campaign $250,000 stimulus, St. Louis Post-Dispatch

Dave Spence

Republican hopeful for governor Dave Spence knows how to dip into his own bank account to help out his chances of winning in November.

It's other bank issues that have the plastics guru fielding a round of unwanted headlines.

At the deadline for the campaign finance quarter that ended Saturday, Spence donated $250,000 to his campaign, bringing his total personal contribution to at least $2.25 million.

The new injection of cash comes amid fresh scrutiny of Spence's role with St. Louis-based Reliance Bancshares, whose problem is it doesn't have enough cash.

In an interview with the Associated Press published over the weekend, Spence acknowledges that, while on the board of Reliance, he was part of a unanimous decision not to make payments on $40 million the institution received under the federal Troubled Asset Relief Program. 

That was a point he apparently did not realize until recently. Previously, Spence told the St. Louis Beacon that he "could not recall the details" behind the board's decision, but recently took steps to learn more about his role.

"It was a unanimous decision, based on the recommendation of the bank regulators, who said they did not have enough capital," Spence campaign manager Jared Craighead told the Beacon.

It's true that Spence's involvement with the bank cost him both financially, and, he says, personally.

"You'd come out of those meetings and you felt like you were hit over the head, or you went 10 rounds with Mike Tyson," Spence told the Associated Press.

Bank records also show that Spence — in what he has described as part of an effort to raise money for the bank — bought 500,000 shares for $1.5 million.

Today, those shares are worth less than $600,000.

Spence also received a number of personal and business loans while on the board of Reliance, which isn't necessarily unusual — that's how many bank board members get their seats in the first place. 

Indeed, the loans might have helped the bank, if it was struggling for new business.

But that may not do much to change the political calculus.

Spence's current travails not only demonstrate the pitfalls of executives venturing into politics — Spence likely never imagined that his association with Reliance could one day be a political liability — but also the superior campaign discipline of Democrats.

 

Gov. Jay Nixon's campaign team and the state party have been laser-focused on bringing attention to Spence's bank and TARP ties.

Republicans, meanwhile, have been attacking Nixon on ... an ad buy from the Democratic Governor's Association?

At the end of the day, Spence may well have suitable rationale for all his decisions while on the board at Reliance, which he left last year.

There is evidence that he tried to help the bank pay back the government.

Every moment, however, Spence spends discussing bank bailouts and the loan on his vacation home is time not spent chipping away at the incumbents already formidable advantage. Courtesy of St. Louis Post-Dispatch

Spence Doesn't Believe in the Minimum Wage

For Missourians trying to get by on $7.25 an hour, they can tell you exactly how hard it is to survive.  Trying to have a life, afford all the essentials, keep a roof over your head and food on the table for $15,000 a year is nearly impossible.  Trying to have a family?  Good luck.

But if Dave Spence and the free market had their way, there wouldn't be any minimum wage.  After giving a speech in Sedalia late last month, Spence stated that he doesn't support the federal minimum wage.  At all.

Unfortunately for Spence, Missourians overwhelmingly support the minimum wage.  In 2006, over 75% of Missouri voters agreed that we should raise the the state's minimum wage to the federal level and then tie it to the Consumer Price Index (CPI).  The problem with Spence's view in opposing the federal minimum wage, is that if the feds did away with the minimum wage, Missouri, in effect, would as well - and that would leave thousands of Missourians without any wage protection.


Spence also argues that the government shouldn't be interfering with his beloved free market, but that's just Spence being a hypocrite.  When Spence was on the board of Reliance Bancshares, the bank received $40 million in bailout funds that "saved [his bank's] bacon," and which they and Spence have yet to return to taxpayers, even after pouring $2,000,000 into his campaign for governor.


In short: government interference in ensuring that workers receive a minimum wage? BAD.  Government interference in bailing his bank out to the tune of tens of millions of dollars? GOOD. I wonder what the voters think of that?  Hopefully we'll be able to find out in November when there will likely be a proposal on the ballot that, if approved, will raise Missouri's minimum wage to $8.50 an hour.


The full exchange is transcribed below:


Man: As you know, Missourians voted that proposal a couple of years ago to automatically increase the minimum wage to keep up with inflation. Fortunately, we had very little inflation. But if inflation takes hold again, that has the potential to just drive up employer costs tremendously. As an industrialist, what’s your attitude on that?


Spence: Well I think that is a slippery slope for government to get involved in what the free market should decide. You know if somebody is sitting at homeunemployed I just don’t think that the government should get involved unless somebody is willing to (...) and I think the free market will determine if labor shortage- if labor is short, it’s going to go up, if labor- I mean you know if labors tight, it’s going to go up naturally. If it’s loose like it is right now, it’s probably not going to go up. So, try telling that to somebody who is unemployed, who's trying to feed their family. I just don’t think that’s fair. Courtesy of Fired Up Missouri.


Our addition:

Millionaire Home Economist Dave Spence is worth $265,000,000 but said in Sedalia , Missouri, he doesn't support the federal minimum wage of $7.25. Our fellow Missourians, this is the man who wants to be your next Governor! Home Economist Spence is from a different planet.

Millionaire Home Economist Dave Spence lives in this opulent palace worth
$8,000,000 but he doesn't support the federal minimum wage of $7.25. The man is heartless! It's an insult that he wants to be our next Governor. 

Millionaire Home Economist says Don't Worry Be Happy! I oppose the
federal minimum wage of $7.25 for Missourians but I am worth $265,000,000
and I live in a $8,000,000 place with a golf course. Isn't it an insult to our
intelligence that such a heartless man wants to be the next Governor of Missouri.


GOP gubernatorial candidate Dave Spence makes campaign stop in Sedalia (click the link for the original story).

Spence Gets In Touch With His Feminine Side

From DailyKos we get this “absolutely priceless” story via STLToday’s Political Fix blog …

"On his campaign website, Republican Dave Spence, the plastics guru running for governor, says he “earned a degree in Economics” from the University of Missouri. That may be true — but it is not entirely accurate. 

According to the university, Spence’s degree is not in economics. It is in home economics.

And the proverbial chaser, from Mizzou’s website:

"The initial one-year program was designed for young women who wished to learn proper management of the home.

Republicans. Lie. Constantly. Source: Franklin Count Democrats

Our addition:

Doesn't home economist Dave Spence look dapper in a chef's hat? He fudged his academic credentials!  The man is a  disgraced! The man leaves his wife and young children at the age of 47 in 2004, boozes until the wee hours of the morning   and is busted by Ladue, St. Louis cops. His license was suspended for three months. That's the man who wants to be Missouri's next Governor?

Original story in Daily Kos (click the link)

Missouri gubernatorial candidate tied to troubled bank, Missourian

JEFFERSON CITY — In TV ads, Republican gubernatorial candidate Dave Spence recounts how "bank after bank turned me down for a loan to start my business" as a young entrepreneur. Eventually, he got a loan — and built a successful plastic bottling company.

Two decades later, the tables had turned. Spence had joined the board of directors of a St. Louis area bank, where he had no trouble getting about a dozen loans to purchase and renovate commercial buildings and homes — even after the bank received a $40 million bailout from the federal government.

With every move Spence makes in Missouri's 2012 governor's race, Democrats have countered by highlighting his connections to Reliance Bancshares Inc., which has yet to repay a penny of its federal money. Democrats contend Spence personally gained from his position on the bank. And they say the bailout runs contrary to Spence's campaign pledge to improve Missouri's economy by reducing government intrusion in business — calling into question why voters should choose him either in a Republican primary or against Democratic Gov. Jay Nixon.

Spence says his banking tenure actually cost him financially, drained him physically, took time away from his family and sometimes left him quite frustrated. If it now is a political liability, that's only because his opponents are ignoring the extent to which he tried to help out the financially strapped bank before finally resigning in March 2011 — eight months before he entered the governor's race as a self-financed political newcomer.

"I can look in the mirror at the end of the day knowing I did nothing wrong," Spence told The Associated Press. "I played by the rules. I didn't like the outcome, and I suffered personally for it. But I did nothing wrong."

Spence already was a self-made businessman — the owner of Alpha Packaging, which manufactures plastic bottles for pharmaceuticals and personal care products — when a friend who was the chief lending officer at Reliance Bank encouraged him to buy stock in the Frontenac-based company. He bought 88,000 shares, which Spence said gave him an ownership stake of 0.4 percent.

Soon Spence's involvement in the bank grew. He joined the board of directors of Reliance Bank in May 2005 and immediately took out a $7.9 million mortgage for the headquarters of Alpha Packaging. More loans followed in subsequent years. He borrowed money to buy and renovate a building in Earth City that he rents to another business. He also took out loans on a house for his sister-in-law and a condominium for his mother.

On Feb. 13, 2009, the bank's holding company — Reliance Bancshares — received $40 million from the U.S. Treasury under the Troubled Asset Relief Program, known as TARP. Later that same month, Spence took out an equity loan on his home. In May 2009, Spence was elevated to the board of directors for the bank holding company. The next year, he took out a more than $1.1 million mortgage on a vacation home at the Lake of the Ozarks and a smaller loan on his business property.

Democrats have been quick to seize upon Spence's role in overseeing a bank that required a federal bailout.

"Dave Spence helped drive this bank into the ground. The bank was then forced to get a $40 million loan from the taxpayers. And instead of repaying the taxpayers, he gave himself an insider loan to buy a vacation home," said Caitlin Legacki, a spokeswoman for the Missouri Democratic Party.

Technically, Spence did not give himself the home loan.

As a board member, Spence was considered a bank "insider" under federal regulations, and his loans thus required approval by the bank's board of directors. Spence said he left the room while his colleagues voted to approve each of his loans. A spokeswoman at the bank did not return phone messages.

"There was no favoritism and there was no special treatment, like 'Oh that's Dave, he's good for it.' Baloney," Spence said. "You had to go through the same scrutiny, or more, on the board as you would if you came in off the street and wanted to buy a house."

It's not uncommon for bank board members to receive loans from the institutions they supervise, said Keith A. Thornburg, vice president and general counsel for the Missouri Bankers Association and a prior attorney for Missouri's bank regulatory agency. In fact, bank board members are sometimes among a bank's best customers, he said.

"When you're on a bank board, you are encouraged to do business with the bank," said Spence, adding that his prompt loan payments provided a reliable profit for the institution.

"In effect, by keeping my business with the bank, I was helping them out and giving them the ability to recover cash-flow-wise and start making TARP (payments)," Spence said. "Unfortunately, it just hasn't happened yet. But I did more than my share to help."

In addition to taking loans from the bank, Spence also bought 500,000 shares of Reliance Bancshares stock — at a price of $1.5 million — in fall 2010. Spence said the investment was part of a capital drive that was meant to generate up to $20 million but instead netted about $4 million, of which he provided the bulk. The bank's stock price plunged, dealing Spence a financial loss and leaving him frustrated that other large shareholders hadn't also invested.

Around December 2010, Spence said he informed fellow board members that he wanted to resign, but they persuaded him to remain a few more months. The failed investment was one of several factors in his desire to leave, Spence said. But most significant was the fact that the bank board was taking too much of his time, shorting both his family and his work in the plastic packaging business, Spence said.

As one of his last actions, Spence said he voted with the rest of the bank board in early 2011 to forgo payments to the U.S. Treasury — a move that he said "didn't sit well with me" but which Spence said was suggested by regulators because of the bank's continued financial struggles. When his resignation became official in March 2011, Reliance Bancshares submitted a form to the U.S. Securities and Exchange Commission stating that Spence's resignation was "not related to any disagreements with (the bank's) operations, policies or practices."

Spence said that statement remains true, because his qualms weren't the main reason for his departure. But he adds that he's glad to be done with the bank.

"You'd come out of those meetings and you felt like you were hit over the head, or you went 10 rounds with Mike Tyson," Spence said. Courtesy of Missourian