Chicanos Por La Causa CEO Says Prestamos Not a "Lender of Last Resort;" County Supervisor Borrowed From Group
The CEO of Chicanos Por La Causa on Wednesday denied some media reports that the agency's lending division, Prestamos, is a "lender of last resort."
Prestamos is at the center of the criminal indictment of Maricopa County Supervisor Mary Rose Wilcox. She's been accused of failing to disclose at least $177,500 in loans she and her husband received from the social service agency.
Channel 15 (KNXV-TV) reported last night that CEO Edmundo Hidalgo described Prestamos as a "lender of last resort." The TV report was "covered" this morning by a mistake-ridden broadcast on KTAR (92.3 FM), with talk-show host Darrell Ankarlo claiming Prestamos loans "to the lowest of the low, people who can barely make it through the day."
Hidalgo tells New Times today that his quote to Channel 15 referred only to the Prestamos of 20 years ago, not the lending institution it has become.
When Chicanos Por La Causa established Prestamos a couple of decades ago, it required business owners to prove they couldn't obtain a loan anywhere else. Along with their loan application, business owners had to submit two letters of explanation from other banks that wouldn't help them, Hidalgo explains.
Since then, Prestamos -- which is basically Spanish for "loans" -- brought in much more capital. The operation then changed from loans of last resort to business loans designed to create jobs and redevelop communities.
Prestamos has lent some small businesses far more than it lent the Wilcoxes' El Portal, Hidalgo says. It recently lent one business owner $3 million, he says. The agency also lent money for the redevelopment of the Clarendon Hotel in Phoenix.
The distinction is important: If the public thinks Prestamos typically only lends a few bucks here and there to desperate folks, that would make the loans to Wilcox look shady. If, however, Wilcox is an average business-loan borrower from Prestamos, then that bolsters her attorney's argument -- that this was scarcely different than borrowing from Wells Fargo.
Hidalgo also maintains that the total amount lent to the Wilcoxes' business was $177,500. Documents from the Sheriff's Office allege that not only did the Wilcoxes take at least $297,500 in loans, but that only $7,500 has been paid back.
After the indictment, the Sheriff's Office seized the actual loan documents from Chicanos Por La Causa. Hidalgo says that means the Sheriff's Office now possesses proof that there were only three loans, and that the first two -- for a total of $57,500 -- have, in fact, already been paid back.
The Wilcoxes are still paying off the third loan for $120,000, taken out in 2008, he says.
Public records show that Wilcox didn't list any of the three loans in her annual financial disclosure statements. Her attorney, Colin Campbell, says that's because she wasn't required to -- the loans were for a business, and therefore only had to be disclosed if they were more than $10,000 and comprised more than 30 percent of the businesses total outstanding debt.
If you want to know how confident Wilcox is that she didn't have to disclose the loans, consider this:
As we mentioned yesterday, Phoenix Magazine published an article in March 2008 that criticized her for failing to disclose the first two loans. The article all but begged for an investigation by the authorities.
Seven months later, Wilcox and her husband took out the $120,000 loan from Prestamos -- and Wilcox didn't mention it on her disclosure forms.
The failure to disclose the third loan was either a shocking case of criminal hubris, or Wilcox honestly felt she didn't need to list the loan.