Stacey Abrams’s net worth skyrocketed over 2,800% in just three years thanks in part to her holdings in a company called Now Corp. (or “NowAccount”), a Government Accountability Institute study has revealed. NowAccount’s business model relied on an unconventional government-backed financing scheme that shifted the burden of its losses onto taxpayers. Abrams admits she was the executive who devised the highly profitable strategy.
In 2018, Abrams reported a net worth of just $109,000 in her personal financial disclosure ahead of her failed 2018 gubernatorial bid in Georgia. Now, as she heads into the 2022 gubernatorial race, Abrams’s campaign filings shows her net worth is over $3.17 million after making more than $6 million in book advances, speaking deals and growing corporate investments like NowAccount.
Abrams co-founded the NowAccount financial technology (“fintech”) start-up in 2010 with business partners Lara Hodgson and John Hayes. Their business got off to a slow start but NowAccount was able to pay Abrams’ $80,000 in salary in her first year as Senior Vice President and $60,000 per year in subsequent years. In 2018, the year Abrams ran for Governor, NowAccount paid her nearly $300,000—a dramatic increase—her financial disclosure shows.
In 2013, Abrams’s fintech company pulled in just $100,000 in annual revenue but thanks to a federal small business loan program overseen by the state of Georgia, NowAccount would soon have the power to distribute nearly $10 million in taxpayer funds to its network of applicants. By 2016, NowAccount’s applicants were defaulting on their loans and taxpayers were forced to bail out more than $1.5 million in bad loans made between 2015 and 2018.
NowAccount’s value spiked in October 2021 after a $29 million financing and investment deal that the company made with two private equity firms—Brigade Capital Management LP and Virgo Investment Group. Stacey Abrams, who has owned as much as 16 percent of NowAccount, announced her 2022 bid for governor on December 1—less than eight weeks after the $29 million windfall.
Abrams was the Minority Leader of the Georgia House from 2011 until she resigned ahead of her 2018 run for governor. The fact that her business got federally-backed state contracts while she held high-level positions with the state legislature drew sharp criticism during her first gubernatorial campaign in 2018. According to the Atlanta Journal Constitution, Abrams claimed that she “played no role in securing the state contracts” for NowAccount and that she “scrupulously avoided conflicts of interest.”
The decision to apply for taxpayer funding under the 2010 Jobs Act was Abrams’s idea. “I read the Jobs Act,” Abrams said. “I brought the provision to John and Lara.” Abrams was aware that her role as minority leader of the Georgia House might pose a conflict so she “talked about it” with her co-founders and said, “here’s what we can do,” but she emphasized that she “did not want there to be any conflict at all.”
The Jobs Act program was administered in the state by the Georgia Department of Community Affairs (DCA). A spokesperson for DCA claims there were public hearings and the agency sought input from professionals “who could help deploy the federal funds to small businesses.”
“At no time did Stacey Abrams participate in any meetings or discussions with DCA about NowAccount,” according to the DCA. Nonetheless, NowAccount was apparently the only private lender that “showed interest” and the company was specifically named in the Georgia application for U.S. Treasury Department funds.
The state of Georgia ultimately received $48 million from the federal program which included $10 million for credit guarantees. NowAccount’s network received 90 percent of those funds allowing them to provide $9.1 million in funding to their network of applicants.
By 2016, the DCA was growing frustrated with the NowAccount contract which gave the DCA a five-day approval window or else the loans would be approved automatically. The DCA’s deputy director met with Abrams and Hodgson’s co-founder, John Hayes, regarding the DCA’s growing backlog of applications from Now Accounts clients.
“While our backlog is unacceptable, it is still necessary that we approve the loans they make,” the DCA deputy wrote in an email. NowAccount co-founder John Hayes “sees things differently and acts entitled to these funds, which may play an important role in the business model.” According to the DCA deputy, Hayes “advanced several challenging points of view, as well as threats to engage the legislature, his high-profile board, and his attorneys.”
The DCA deputy even invoked Stacey Abrams’s name in a warning to his colleagues about the NowAccount “headache,” stating that they “should be aware that Stacey Abrams is a co-founder and SVP in the company. (I expect she is smart enough not to weigh in, but John [Hayes] is otherwise well-connected).” NowAccount appeared to only have the political sway in Georgia which may be why, according to Abrams’ co-founder, they “were never successful in getting other states to adopt a Georgia-like program.”
Other DCA emails and public records show that Abrams’s company was recommending ineligible companies for loans including at least one company that had multiple tax liens and an open court judgment. “This loan is a classic example of files we received that are incomplete,” one DCA email says. “You can see that once the business owner was asked for proof of payment, he withdrew the loan.” The DCA “spent valuable time with research and internal documentation on a loan that was obviously not eligible to begin with.”
Given just five days to approve or deny the loans to NowAccount’s applicants, the DCA understandably made loans to companies that could not pay them back and taxpayers were left holding the bag. All told, the total losses incurred by Abrams’s NowAccount network exceed $1.5 million.
When news broke that taxpayers had bailed out NowAccount’s clients, Abrams went into damage control mode and claimed that she had “walled myself off” from NowAccount’s operations. Abrams’s name is suspiciously absent from the “About Us” tab which describes the beginnings of the company (Abrams was previously listed as Senior Vice President but her name was removed sometime after May 26, 2016). Her now-deleted bio on NowAccount’s website emphasized her government connections and especially her ability to get taxpayer financing for private projects.
GAI’s investigation has revealed that Abrams did not “wall [herself] off” and, rather, she played “an integral part of the plan to use the federal program to benefit NOW” (which Abrams previously admitted).
When Abrams first ran for governor in 2018, she had a small retirement account of less than $5,000 and a mountain of IRS tax debt, student loans, and credit card debt. Now, she has paid off all her debts, has a large retirement nest egg of more than $725,000 in stocks and bonds, and more than $3 million in personal net worth.