Gov. Brian Kemp’s bottom line looks a lot better after four years in office, with a net worth that has grown by $3.4 million since his 2018 election.

But a closer look at the figures shows his addition mostly came by subtraction.

During his first term, Kemp’s assets — which include ownership stakes in apartment complexes, office buildings and agricultural properties, as well as other business ventures and investments — actually fell 24% in total value from about $11.6 million to $8.8 million.

But he increased his overall net worth by erasing $6.3 million in debt, much of which came from his decision to divest himself from Hart AgStrong, a costly and controversial seed-crushing operation with plants in northeast Georgia and Kentucky.

Kemp’s campaign said the governor used the proceeds from the sale of his share of the company to pay off bank notes, business loans and mortgage debt on investment properties, leaving just the $180,000 outstanding balance on his private residence in Athens.

Doing the math, Kemp’s net worth grew 65% from $5.2 million in 2018 to $8.6 million on his most recent financial disclosure earlier this year, ahead of his rematch against Democrat Stacey Abrams.

Kemp managed all of this private business activity while simultaneously steering the state through a global pandemic and choppy economic waters. And, inevitably, sometimes the paths crossed.

Last year, Specialty Stone Inc., a landscaping supply company in Jackson County that is half-owned by Kemp, received $38,137 in pandemic relief from the federal Paycheck Protection Program.

In statements to The Atlanta Journal-Constitution, Kemp campaign spokesman Cody Hall at the time pointed to Kemp’s support for the PPP program and emphasized the governor was not a direct recipient of the aid and was not involved in the day-to-day operation of the store. In his personal financial disclosure, Kemp reported nearly $15,000 in losses in his investment in the store in 2020 and 2021.

In more recent comments for this article, Hall touted the governor’s track record as a businessman while defending Kemp’s decision to continue to manage his assets while serving in public office.

Credit: AJC

Credit: AJC

“Gov. Kemp has been a successful small businessman for over 35 years and still is to this day,” Hall said. “His business interests in construction, real estate and agribusiness do not conflict with his duties as governor and have been fully disclosed, reported on and discussed publicly for years now.”

Abrams’ personal finances have come under the microscope, too, as her narrow loss in the 2018 race to Kemp helped catapult the Democrat into wider fame — and brought her new financial opportunities.

An AJC review showed how her lucrative portfolio of books, speaking engagements, business interests and investments made her a multimillionaire.

She’s said that if elected she would step down from public boards and wall herself off from financial decisions that could create a conflict of interest. And when asked by the AJC, the Abrams campaign confirmed that she would place her assets in a blind trust.

Blind trust?

It used to be common for Georgia governors to distance themselves from their private financial matters while in office.

Govs. Joe Frank Harris, Zell Miller, Roy Barnes and Nathan Deal are recent examples of chief executives who placed their personal business in the hands of a trusted adviser. These blind trusts were meant to create separation between the governors’ personal lives and their service to the state, shielding them from claims of self-dealing.

And it worked, most of the time.

In the 1990 campaign for governor, Democrat Andy Young and Republican Johnny Isakson criticized Zell Miller for the 25% stake in a North Georgia bank held by him and his wife, Shirley. Young and Isakson said the banking stock created a conflict of interest for Miller, who would be called on to sign banking legislation.

In response, Miller placed his financial interests in a blind trust, and two years later the trustee liquidated the stock without consulting him. “The point of a blind trust is not to have it the subject of (Miller’s) knowledge,” the trustee told The Associated Press at the time.

Credit: AJC Staff

Placing those interests in a blind trust didn’t entirely shield Miller from the fallout. When his trustee sold the bank stock, Miller was criticized for the $600,000 he received in the sale — a 31% return on the investment made eight years prior.

But these are different times. Charles Bullock, a longtime political science professor at the University of Georgia with expertise in state politics, said Kemp’s decision to continue to manage his personal finances while in office likely does not shock or concern many voters in the current political environment.

He invoked Donald Trump, who refused to sever ties with his real estate empire and other businesses after his 2016 election as president, putting him and his family in line to directly profit from his public service.

“Trump lowered the bar dramatically in that area,” Bullock said.

Rather than separate himself from his vast business holdings, Trump allowed his children to actively manage his assets. Critics — then and now — say that decision created countless conflicts of interest, especially with his real estate holdings, while his businesses profited.

Kemp’s fortune, while substantial, is nowhere near that of Trump’s, and Bullock said voters may have lowered their expectations of what is proper financial behavior for politicians as a result.

Sonny’s scrutiny

Even before Trump, concern over conflicts of interest has not been enough to sway voter opinion. Sonny Perdue eschewed tradition during his two terms as governor and remained popular with voters throughout.

Elected in 2002, Perdue became the first governor since the 1970s to forgo the blind trust and actively managed his assets while in office. As a result, he was accused of using his position of power and influence to enrich himself, including signing legislation that gave him a $100,000 tax deferral on a controversial land deal.

“He also left office very popular,” Bullock said. “If Georgia law had allowed it, he could have been elected a third time.”

Despite his popularity, Perdue was heavily scrutinized for his decision to moonlight as a private businessman while serving in office. In contrast, Kemp has received relatively little attention or criticism, even from Democrats who haven’t chosen to make the Republican’s private business a campaign issue in 2022.

State Rep. David Wilkerson, D-Powder Springs, said he would rather the governor put more distance between his personal finances and the business of the state, but you can’t build a campaign around it.

“It’s not the best practice,” said Wilkerson, a certified public accountant. “But do voters typically punish someone for not doing that? They haven’t in the past.”

Wilkerson said the decision of high-ranking politicians to continue to act as private investors or business people feeds into a narrative that politicians are crooked.

“Every decision that gets made, you wonder if it is in the best interest of the state or their best interest,” he said.

Credit: HYOSUB SHIN / AJC

Much of Kemp’s total worth is tied up in real estate and investments, however he has made a comfortable living. Since taking office in 2018 — through earlier this year — Kemp reported total income of $1.8 million. Of that, $514,704 came from taxpayers in the form of his salary as governor.

An almost equal amount came from a variety of other interests and investments, but the largest share of his income was from the rental properties he owns and manages. Over the past four years, Kemp reported $787,798 in rental income, much of which came from apartment complexes he owns with partners in Athens.

Focusing on the metro Atlanta rental market, the AJC’s “Dangerous Dwellings” investigation into living conditions in substandard and often violent apartment complexes, showed how weak state laws allow deplorable living conditions to fester.

If legislators overhaul those laws next year, it will be up to the governor to enact the changes.

When asked whether Kemp’s active management of apartment complexes in Athens presented a potential conflict of interest, Hall sidestepped the question.

“The governor’s second-term agenda will focus on jobs and the economy, education and public safety,” he said. “The governor does not typically comment on pending legislation, we have not been approached about any tenant-landlord legislation, and to my knowledge no legislation has been introduced.”

Pricey pitfalls

While Kemp’s campaign touts his successes as a businessman, not everything he has touched has worked out. His investment in Hart AgStrong was a troublesome example.

Kemp initially invested $750,000 in the company a decade ago and backed $10 million in loans as the company made a financially disastrous expansion into Kentucky. Republican donor and financier Rick Phillips claimed in a 2017 lawsuit that Kemp failed to repay the loan he negotiated and guaranteed for Hart AgStrong.

Kemp was hounded by the lawsuit and questions over Hart AgStrong’s business practices during his 2018 campaign. Kemp settled the lawsuit for an undisclosed sum right before taking office. In late 2019, the company was sold to agriculture giant Perdue Agribusiness. Kemp declared $622,914 in revenue that year from his stake in Hart AgStrong.

Another clunker on Kemp’s balance sheet is Shelter Rock Partners, a company owned by the governor that invested in timberland in Lincoln County north of Augusta. Kemp’s disclosure reflected more than $310,000 in losses from the property, which Hall said was caused when Kemp sold the property for less than he owed on it. It was the largest loss reported on his balance sheet.