Anti-Spending N.C. Senate Candidate Profited From SBA Loans

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Garland Tucker III, the retired Raleigh businessman challenging North Carolina Sen. Thom Tillis for the 2020 Republican nomination, has made government spending one of the top issues of his campaign, calling the federal debt “immoral.”

“I’m not a politician, and I’m not going to think twice about voting no on spending,” Tucker said in a recent interview.

A first-time political candidate at 72, Tucker is dipping into his own deep pockets to run television ads trying to frame the issues early against Tillis, the former North Carolina speaker of the House who won his first term in the Senate in 2014. Even though the challenger supported Tillis, 58, in that race and cut him a $2,600 check, he said he can no longer do so after watching the incumbent vote to raise the debt ceiling and in favor of budget deals breaking spending caps.

“[Tillis] ran on a very good, conservative platform in 2014. But in terms of his votes on spending … he’s just not delivering,” Tucker said in an interview with Fox News’ Sean Hannity in early May.

But despite this aversion to government largesse, Tucker has benefited from it. The company he founded and ran, Triangle Capital Corp., relied on hundreds of millions of dollars in low-cost, low-interest loans secured through the Small Business Administration as a main component of its business strategy.

Many conservatives, including President Reagan -- one of Tucker’s personal “conservative heroes” -- have pushed to abolish the SBA entirely. Others have targeted the types of SBA-backed loans Triangle received as welfare for the wealthy. The loans are particularly egregious, the critics say, because they often benefit venture capital firms whose directors include Ivy League MBAs and veterans from Wall Street powerhouses who could secure loans in the free market without the federal government’s assistance and default protections.

Triangle Capital Corp., or TCAP, is a business development company, which provides loans and other services to small and mid-sized businesses with revenues between $20 million and $300 million.

Tucker earned a Harvard MBA and ran two businesses before launching TCAP, which he built into a market leader over 15 years before the industry sector became over-saturated the last few years. During its upswing, the amount of SBA-backed loans Triangle had on its books greatly expanded from $17 million in 2004 to $250 million in 2016, according to the company’s filings with the U.S. Securities and Exchange Commission.

As the CEO, Tucker saw his pay soar during that time, increasing a dramatic 634% from 2007 to 2016. In 2007 he received $515,152 in total compensation, the filings show. By his final years with TCAP, 2014-16, Tucker earned a combined $8.7 million, or about $2.9 million annually. That total includes a $2.5 million bonus related to his resignation as CEO in 2016. He later stepped down as chairman of the board in mid-2017.  

The Tucker campaign defends his decision to tap the SBA loan program by pointing to the company’s years of success from its founding up until Tucker stepped down.

“Not only the owners of the business (shareholders) but the customers [North Carolina businesses] prospered, and hundreds of thousands of jobs were created and retained!” campaign spokesman Francis De Luca told RealClearPolitics in written responses to questions about the loans.

Indeed, a BusinessNC article last year credited Tucker with building TCAP into a “dividend-rich company” that was producing “market-leading returns and had gained a reputation as an innovator in its ‘business development industry’” before hitting a rough spot a few years ago. That’s when its business model became less attractive as recession fears faded and money started flooding financial markets again.

During its building years, De Luca argued that TCAP and similar business like it had to utilize the SBA’s Small Business Investment Company program because its competitors did so and it would have suffered a competitive disadvantage had it tried to operate without them.

The loans didn’t end up costing taxpayers anything because they were all paid back on time along with the interest charged, he said.

“Practically speaking, businesses like [TCAP] have little choice but to comply with the government’s rules to be competitive,” De Luca said. “TCAP received SBIC loans to, in turn, invest in small and medium-sized American businesses to create jobs.”

De Luca also argued that there is “no direct relation” between Tucker’s dramatic salary increases during his final years as CEO and the expansion of SBIC loans it utilized, noting only that the amount of the loans increased because the company was “growing” and “was successful.”

In Tucker’s final years with the company, De Luca notes, TCAP had reached the maximum dollar limit for SBIC investment and continued to grow “though private equity investments and continued to invest in private businesses.”

Despite the company’s success using the government-guaranteed loans, Tucker, through his spokesman, now says he agrees that the program is essentially unnecessary — that venture capital and business development companies like his could obtain funds on the open market if the SBIC wasn’t an option.

“Garland Tucker agrees with President Reagan. He would love to abolish the SBA,” De Luca said. “Garland knows private markets are more than capable of handling the funding needs of all size businesses.”

The spokesman then pivoted to note that Tillis received an award in 2018 from the trade association that represents the segment of the SBA-backed industry to which TCAP belonged. He forwarded a press release put out by the Small Business Investor Alliance recognizing the freshman senator as among a group of select members of Congress it had chosen to honor for their support.

Triangle Capital applied for and received three SBIC licenses from the SBA to access up to $350 million in federal government-backed loans. In 2019, Tucker called the loans “a very attractive source of investment capital, which is well-suited for the types of investments we make.”

Those comments contrast sharply with Reagan’s descriptions of some of the SBA’s lending practices. In 1985, he called the SBA’s lending programs “costly and unfair,” and in 1986 approved a budget proposal that would have eliminated the agency.

“We’ll also save billions by eliminating taxpayer subsidies to some of America’s biggest corporations through Export-Import Bank loans and by abolishing the Small Business Administration’s lending programs, which are not only costly and unfair but unneeded in an economy creating over 600,000 new businesses and corporations a year,” Reagan said.

“Supporters of programs like these always ignore the big, hidden costs all of us eventually have to pay,” he said. “If programs like these can’t be cut, we might as well give up hope of ever getting government spending under control.”

FreedomWorks, a conservative and libertarian organization that advocates for smaller government, also has called for shuttering the SBA, which it said would save taxpayers $14 billion over 10 years.

Even though the SBA if often viewed as supporting mom-and-pop businesses and other scrappy, hyper-local start-ups, others lament that it is being used to prop up private enterprises with plenty of resources and expertise.

Adam Andrzejewski, founder and CEO of, a government-transparency organization whose honorary chairman is former GOP Sen. Tom Coburn of Oklahoma, a devoted fiscal conservative, has said the business investment market can operate just fine without the SBIC.

“Politicians shouldn’t tilt the scales with cronyism or distort the market with agency programs like the SBIC,” he told RealClearInvestigations in 2016.

Susan Crabtree is RealClearPolitics' White House/national political correspondent.

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