The business partner of U.S Rep. Nathan Deal, a Republican candidate for governor in 2010, says they got out of the lucrative state auto salvage inspection business because they fear changes made by the state endanger the safety of Georgians.
“I am deeply concerned that a reduction in safety requirements could result in a liability issue for our company and therefore was not in our best interest,” Ken Cronan said in an email blast Deal’s campaign sent to supporters.
He later added, “This was more than a business decision. It was a moral decision.”
State Revenue Commissioner Bart Graham has said the inspections will be no less safe than they’ve been over the past 20 years, when Deal and Cronan were in the business.
The AJC reported this week that Deal ended his business arrangement with the state that earned his company about $300,000 a year.
State records show that Deal and Cronan chose not to continue as one one of the Department of Revenue’s locations where rebuilt salvaged vehicles are inspected.
The Atlanta Journal-Constitution reported in August that Deal personally intervened with state leaders to preserve the obscure state program that granted him a regional monopoly. Deal on three occasions in the past year and a half met with Graham to question changes Graham wanted to make to the program. The state has, since 1982, required any vehicle that is totaled and rebuilt to pass a safety inspection before it can be given a new title.
Deal’s efforts prompted a government watchdog organization, Citizens for Responsibility and Ethics in Washington, to file an ethics complaint against him with the U.S. House. That complaint is pending.
Despite Deal’s efforts, Graham succeeded in altering the program, which has seen little change and no competition since it was established in the 1980s. While Graham’s attempts to make changes through legislation and the state budget were stymied, he used his regulatory power as revenue commissioner to accomplish much the same thing.
Deal and Cronan own and operate Recovery Services Inc., also known as Gainesville Salvage Disposal, which earned $1.5 million in fees from the state from 2004 through 2008, according to state records. The company provided a location and equipment for state inspectors to examine salvaged vehicles. Deal and Cronan never had to compete for the business, state officials said. Their company was one of five around the state allowed to host the inspections through informal agreements.
Deal personally earned up to $150,000 a year from the enterprise, according to reports he files with the U.S. House.
But new rules took effect in September that ended the state’s relationship with the five firms that hosted the inspections. After Sept. 17, any business that wanted to host state inspectors had to apply to the Revenue Department. The new rules also limited to $50 the fee the businesses could charge owners to have their vehicles inspected by the state. Deal and Cronan had been charging twice that much.
In his campaign missive to supporters Thursday, Deal bashes the “liberal media” for its reporting on the story. It quotes Cronan citing safety concerns about the new inspection program.
“The decision (by the Department of Revenue) puts Georgia consumers at risk of purchasing a vehicle that has the potential for injury to themselves or other motorists,” Cronan is quoted as saying. “While the state’s previous program had been a model for other states, we are now opening floodgates for vehicles that should not be allowed to return to the highways of our state.
“It will not be long before word gets around among re-builders as to which stations are less than honest and will hand out approved inspections on a wink, a nod and the slip of a Benjamin.”