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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

Dave Spence Interview Leaves Me Wanting, Bob McCarty Writes

I don’t know him personally, but suspect Dave Spence might be a great guy.  When looking for a Missouri Republican to defeat incumbent Democrat Gov. Jay Nixon, however, I want someone who appear sharp and energetic, not someone who reminds me of Sarah Steelman.  Unfortunately, those qualities appear to be in short supply in a recent interview Spence gave to a Southeast Missouri newspaper reporter.

Only at the 4-minute mark in the interview video above, when Spence begins to talk about his past, does he begin to show some enthusiasm — and that’s not going to cut it.  Instead, I think it’s going to take a candidate — home economics degree or not — who’s enthusiastic and energized about the future to defeat Nixon in November.


The other Republican candidate in the race is Bill Randles.


Courtesy of Bob McCarty Writes

Our addition: 

   Doesn't Home Economist Spence look swanky in a chef's white hat?

Poor Home Economist Dave Spence, he doesn't know even what to say. He ain't a politician, he needs to drop out! How is he going to debate a skilled politician like Nixon? Spence needs to take some energy drinks before he interviews. But give credit where due, Spence is good in cooking, home management, child care etc. But beating Nixon will require more than that. Before it comes to even debating Nixon, Home Economist Spence will have to debate Bill Randles, a Harvard Law Graduate. We can't wait for the duel between the two Republicans.

We predict that the GOP will give Nixon an early Christmas in November 2012. Spence thinks that  his millions of $ will elect him while Attorney Randles assumes that the Harvard Law degree will land him in the Governor's mansion. Spence has no message other than how he modernized his fraternity house at Mizzou. Randles has neither message nor money. It will take more than Spence and Randles for the GOP to beat a popular incumbent Governor. 

Don't forget that Home Economist Spence fudged his resume, was busted for DWI at 3 AM in the morning at the age of 47, and supported TARP (fed bank bailout) as long as he benefited from it, but opposes it now. Don't forget that Spence got $42,000,000 TARP money for his bank and refused to pay back the American taxpayers' money. Can you trust such a man to be Missouri's next Governor? What was a 47-year old doing out there in the wee hours of the morning when he was busted for DWI? His wife and young children were back home in bed at that time. That's a serious character flaw for a man who wants to be our next Governor!

                                            You can't drink and drive! That's the law in Missouri.

                                                          
                             The Ladue police in St. Louis busted Dave Spence for DWI 3 AM in August
                             2004 at the age of 47. He was booked, fingerprinted, appeared in a DWI
                             court, and his driver's license was suspended for three months, not to
                             mention the other sanctions that come with DWI arrest and conviction.

More Bad News for Dave Spence’s Bailed Out Bank: Reliance Bank Posts Another $34 Million Loss Last Year, Still Not Repaying Its $40 Million Bailout

Jefferson City, Mo. Just over one year since it announced it would stop repaying its $40 million bank bailout, Dave Spence’s former bank announced Friday it is still losing money to the tune of $34 million last year, as opposed to losses of $48.5 million during the previous year, when Spence still served on the board of directors. Spence still refuses to come clean about his role in the bank’s decision to stop paying back its $40 million bailout, how much he benefited from the bailout personally or the circumstances around his decision to leave the bank.

Missourians are still waiting for Dave Spence to explain how much he personally benefitted from his bank’s $40 million bailout and why, three years later, the bank still refuses to repay the taxpayers, said Caitlin Legacki, Missouri Democratic Party spokeswoman. For nearly six years, Spence helped drive Reliance Bank into the ground with reckless loans and bad investments, making it one of St. Louis' worst-performing banks.  Now that Spence is running for office, he may want to pretend that this bank doesn't exist  but Missourians have 40 million reasons to demand some answers.

According to the St. Louis Business Journal report Friday, Reliance Bancshares lost $34 million for full-year 2011, compared with the $48.5 million the company lost in 2010.

During Spence's time with Reliance Bancshares, federal banking regulators repeatedly admonished the bank and its subsidiaries for making bad loans and engaging in risky business practices.

Oversight of risk management was central to the role of David Spence and the rest of the Reliance Bancshares board. These board members were responsible for overseeing the Company's risk management processes, including those relating to lending, litigation and compliance risk.

BACKGROUND

“Aggressive” Expansion.  Shortly after Spence joined its Board of Directors, the St. Louis Post Dispatch reported that one of the most aggressive local banks is Reliance Bank of Des Peres Reliance also has been on a branch-building tear. Since 1999, the bank has added nine branches and expects to add three or four more this year. [St. Louis Post Dispatch, 6/3/05]

Risky Investments.  Despite the sinking state of the economy in early 2008, Reliance continued to expand [by adding bank branches] in both St. Louis and Florida. The attraction of Houston and Phoenix is faster growth, similar to southwest Florida, Reliance chairman and CEO said in late 2007. St. Louis is the market I've been in for 40 years and know best, but it is not growing like Fort Myers, Houston or Phoenix, he said.  This faster growth turned out to be a huge real estate bubble. [St. Louis Business Journal, 3/17/08; 11/5/07]

Crack Downs By Federal Regulators. In 2009 and 2010, “Reliance Bank and Fort Myers, Fla.-based Reliance Bank FSB entered into enforcement agreements with state and federal regulators.” For example, the FDIC and the Missouri Division of Finance demanded that Reliance cease making or extending any loans which might violate the Bank's written loan policy and reduce the level of risk. [Reliance Bancshares, DEF 14A, 2011; SNL Bank Weekly Southern Edition, 04/12/10]

•  Four Years of Losses. Reliance lost $319,000 in 2008, $29 million in 2009, $48.5 million in 2010, and $34 million in 2011. [St. Louis Post-Dispatch, 4/23/09, 08/10/11; St. Louis Business Journal, 2/17/12]
•  Highest Losses of Any St. Louis Bank in Q1 2011. Of the 10 largest locally chartered banks” in the St. Louis area, “only two posted a loss for the first nine months of 2011.  One of them was Reliance Bank.  In the first quarter of 2011, Spence’s last quarter on the board, the bank had “the highest loss of any St. Louis-chartered bank, at least partly due to struggles with high default rates in its commercial real estate loan portfolio. [St. Louis Post Dispatch, 5/13/11]

“Severe Financial Distress.” Reliance Bank, in March 2011, was in severe financial distress. It exhibited “significantly higher stress than the industry average, due to a negative net income earnings profile, lending default rates that are higher than industry average, [and] lower capital adequacy versus the industry. As a result, the bank received an F rating from Institutional Risk Analytics. [St. Louis Business Journal, 4/15/11; IRA Bank Rate, 5/26/11]

Risk Management Was Central to Role of Spence And Board Members. Oversight of risk management [was] central to the role of David Spence and the rest of the Reliance Bancshares board. These board members were responsible for overseeing the Company's risk management processes, including those relating to lending, litigation and compliance risk.[Reliance Bancshares, DEF 14A, 2011; Reliance Bancshares, SEC form 10-K, 3/30/11]. Courtesy of Missouri Democreats

Our addition:

Doesn't Home Economist Dave Spence look ritzy in a chef's white hat?

Millionaire Home Economist Dave Spence Don't Worry Be Happy (click this link)

(If even you are trailing Nixon by 20%, Leno has made you a national joke, and you don't know how to explain Reliance Bank debacle you've an $8,000,000 palace with a golf course and you are worth $265,000,000). But the skeletons that were hidden in your closet were flushed out! We told you on this blog when you announced your candidacy for Missouri Governor, that be prepared for the rough and tumble of politics. You are not a politician for Heaven's Sake, you are a good old Home Economist. get out of politics and start day care centers, fitness centers etc. You will make many more millions just like the plastic company you sold to the Wall Street sharks.


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