The Remarkable Rags-to-Riches communicative Of Stacey Abrams

Authored by Paul Sperry via RealClearInvestigations,

By her own admission, Stacey Abrams has made a number of „personal financial missteps” in her career. Despite a history marked by bill collectors, tax liens, and ethics investigations, the Georgia politician and Democratic Party activist has managed to amass a small fortune – while working most of her career in the not-for-profit sector.

Financial records show that when she first entered statewide politics in 2018, she reported a net worth of less than $109,000. By 2022, the last year she had to publicly file a financial report, it had grown to more than $3.2 million. Abrams is probably even better off than that, thanks to her latest venture: Rewiring America, which uses federal funds to provide low-income people with free electric appliances.

The green-energy startup hired Abrams as senior counsel in 2023 after she helped secure federal funding for the nonprofit by putting together an umbrella group that applied for and won grants totaling $1.9 billion from the Biden Environmental Protection Agency, according to a podcast interview she gave last year. Those funds were frozen last month by the Trump administration while it investigates the grant application and award process along with Congress.

It’s just the latest in a string of investigations involving Abrams, who has presidential ambitions, and nonprofits she’s launched. Last month, Georgia lawmakers announced a special probe into her New Georgia Project and its fundraising arm, which failed to report millions of dollars in contributions and spending tied to Abrams’ first gubernatorial bid. She’s also been accused by ethics watchdogs of personally misusing political donations raised for her campaigns.

“I’ve always been concerned about her leveraging public service to enrich herself,” William Perry, who formerly led the Georgia chapter of liberal Common Cause, told RealClearInvestigations. Perry, who developed a thick file on Abrams while investigating money in Georgia politics for 15 years, said he knows of no other candidate for statewide office with more documented cases of ethics violations than Abrams.

Although Abrams’ career has been pockmarked by financial problems and ethics investigations, she has never been charged with a crime. Instead, her career illustrates the often cozy and remunerative relationship between political insiders and government entities that discharge public dollars. In previous articles, RCI has reported on the connection between those close to the Democratic Party and Biden administration green energy grants.

Money woes have followed Abrams – an academic star who was raised in a middle-class home by parents who became ministers – since graduating from Yale Law School in 1999, even though she started out making $95,000 a year, not including a large signing bonus, with a top corporate law firm in Atlanta.

After running up several credit cards and failing to pay her taxes, Abrams, who has never married and has no children, racked up almost $230,000 in debt, financial records reveal. She has spent much of her adult life fending off bill collectors while repairing her bad credit. Despite working as a tax attorney before launching her decades-long career in government, she has seen the IRS file at least two liens on her property to recover back taxes and penalties. 

The 'Allure of Available Cash’

Abrams did not respond to requests for comment, but she has acknowledged a history of debt and tax problems. In her 2018 memoir, “Lead from the Outside,” she lamented: “I’d love to say that I learned my lesson after law school, and that I maintained my personal finances in pristine order. But, alas, I discovered a second way to stumble … The allure of available cash, money I should have remitted to the Internal Revenue Service, proved irresistible. … [W]hen the time came to pay my taxes, I fell behind.”

She wrote that it would take her “a long time” to get out of debt and start building wealth. “Over the years, my income has gone up and down,” Abrams wrote, “but I still have precious little in the way of wealth beyond my slowly appreciating house and bare-bones retirement account.”

But in the seven years since then, Abrams has seen a miraculous turnaround in her finances – going from someone with “precious little” to a multimillionaire. And it all happened after she ran unsuccessfully for governor of Georgia, first in 2018 and then again in 2022, during which she raised a combined $81 million. It’s unusual. Most politicians build wealth after reaching high office, but Abrams did so after losses vaulted her to celebrity status, achieved in part by blaming racially discriminatory voter suppression for her loss.

Tax filings and personal financial disclosures reveal some of her newfound wealth has come from nonprofit organizations she’s started, including more than $750,000 through the Southern Economic Advancement Project and at least $427,500 from two New Georgia Project-tied nonprofits, where she worked part-time.

But that doesn’t account for all of it. Income from several book deals – several works of nonfiction and eight “romantic suspense novels” – also contributed to her wealth. The total value of those contracts is not public, but according to her 2022 disclosure, she owed her publishers advances totaling $800,000 against future royalties. Abrams has been accused of tapping public resources to drum up sales for her books. In 2018, Perry’s government watchdog group filed a complaint alleging she used her campaign staff and travel budget to promote her memoir “Minority Leader,” whose publisher gave her a $150,000 advance, according to a personal financial disclosure she filed in her bid for Georgia governor.

“It is illegal for the candidate to utilize campaign contributions and resources to promote and sell the candidate’s book,” wrote Perry, who now heads Georgia Ethics Watchdogs, in a complaint filed with the state’s campaign finance commission. “And this is precisely what Abrams has done.”

The watchdog, who says he originally supported Abrams as a Democrat, added that at least one Abrams campaign staffer “reported travel expenses that matched her book tour.” The state ethics commission declined sanctions.

Perry said Abrams has had „more ethical challenges than any other statewide candidate” for office, including conflicts of interest from lucrative state contracts she helped land for a consulting firm she co-founded while she was working on related policies with Georgia’s governor as a state lawmaker. “Stacey Abrams was once a public official I liked a lot,” he said, “but she’s become unethical.”

The 51-year-old Abrams began her career in government working for the city of Atlanta as an attorney before serving 11 years in the Georgia State Assembly.

At the same time she worked for the state, she started a consulting firm, Sage Works LLC, “providing advice to governmental and nonprofit clients on operations,” according to her disclosures. Records show she was paid $62,000 in taxpayer money as a consultant on an Atlanta urban redevelopment project in 2006 and 2007, which raised ethical red flags.

Many 'Mistakes’ in Finances

“When I left the city of Atlanta to run for office, I had to figure out a way to afford my house and I started a consulting firm,” she explained in an interview at the time. “They [city officials] hired me and I negotiated a pretty good price for myself and built a reputation as someone who understood the intersection of public and private enterprise when it comes to particularly public-private development.”

While in the assembly, Abrams also supplemented her state salary with more than $150,000 in per diem payments. Such payments are routine. But in 2011, she claimed more out-of-session expenses than any other Georgia House member, Perry pointed out. That same year, she claimed per-diem pay plus mileage for working in Georgia on the same day that a lobbyist reported buying her a cab ride out of state in Miami. When confronted with the discrepancy, Abrams said she made a mistake and reimbursed the state.

Abrams made so many “mistakes” on her annual state financial disclosures she had to file no fewer than 18 amendments after watchdogs and local media caught major errors and omissions. “Abrams’ reports have to be repeatedly amended,” Perry said. „She apparently forgets about hundreds of thousands of dollars she’s earned from companies she owns or serves as a partner, or board of directors she has served on.”

She also made “mistakes” in her campaign reports. Perry questioned more than $84,000 she reimbursed herself from her legislative campaign accounts between 2006 and 2017 without providing details or any itemization of what the money was spent on. “This means she could have pocketed the money, which of course would be illegal,” he said.

After he filed an ethics complaint, Abrams promised to disclose where the money went but never did.

When Abrams first ran for governor in 2018, she loaned her campaign $50,000 even though records showed she owed the IRS $54,052. She claimed financial hardship for deferring tax payments while working to support her parents, for whom she had bought a new Honda and later a new house in Stone Mountain for $370,000.

“You can’t pay your taxes, but you have the money to run for governor?” Perry said. “She of course paid herself back [for the campaign loan], and did so while on a payment plan for back taxes with the IRS.”

In April 2018, Abrams used campaign resources to promote her book, “Minority Leader: How to Lead from the Outside and Make Real Change,” which was released one month before the gubernatorial primary election. She enlisted several paid campaign officials to post a link to the book-purchasing website on Twitter. Her communications director even encouraged her followers to “pre-order your copy today.” Her staff also promoted her book tour in tweets. Abrams herself pushed sales on her official campaign page on Facebook.

Using campaign contributions to promote the sale of a book for the personal profit of a candidate does not qualify as “ordinary or necessary expenses” allowed by state law.

After Georgia Ethics Watchdogs filed a 13-page complaint with the state ethics commission, Abrams said her campaign did nothing wrong. However, all campaign web pages supporting the sale of the book were suddenly removed, and all the book promotions posted on social media by her campaign staff were deleted.

Raising more ethics alarms, Abrams appears to have used charitable donations to her nonprofits to fund her political campaigns. A year before she launched her 2018 bid for governor, Abrams founded a fundraising arm for her voter registration nonprofit, New Georgia Project. The state ethics board found that the project and its „action fund” failed to disclose $4.2 million in contributions and $3.2 million in spending during the 2018 election cycle on behalf of Abrams’ failed bid for governor. Earlier this year, the organizations agreed to pay a $300,000 fine for the violations, prompting dozens of layoffs.

The nonprofits’ “primary purpose was political activity,” and therefore “violated numerous state laws relating to their political activity,” the Washington-based Foundation for Accountability and Civic Trust said in a recent letter to the IRS calling for their tax-exempt status to be revoked. 

Registered as 501(c)(3) and 501(c)(4) nonprofits with the IRS, the groups are prohibited from engaging in campaign activity. A special committee of the Georgia Senate is investigating whether “dark money” was funneled through Abrams’ nonprofits to her campaign. Meanwhile, the House Ways and Means Committee has asked the IRS to revoke the tax-exempt status of the groups. Abrams no longer lists the New Georgia Project on her personal website.

Abrams is also the founder of a host of other liberal nonprofits, including: Fair Fight Action, Fair Count, the Southern Economic Advancement Project , and American Pride Rises APR Network, a national organization dedicated to defending and expanding DEI. Collectively, the nonprofits have raised more than $100 million in charitable donations. As 501(c)(3) nonprofits, they are not required to reveal their donors. But in her books, Abrams has thanked wealthy liberal philanthropists Steve Phillips and Susan Sandler, as well as „the Soros family.” U.S. agencies also fund her organizations through federal grants.

Abrams resigned from Fair Fight Action’s board before she announced her second run for governor in 2022, but the nonprofit nonetheless acted on her behalf during the election. Campaign disclosures reveal an in-kind donation – valued at $542,000 worth of Fair Fight employees’ time – plus a $1.5 million direct donation from Fair Fight to Abrams’ leadership PAC.

Abrams also appoints members of her family and close friends to lucrative positions at her nonprofits, as well as through campaign consulting jobs. Her sister Jeanine Abrams, for one, has earned $182,000 a year in total compensation as president of her Fair Count nonprofit, which Stacey Abrams founded to make sure communities of color aren’t undercounted in the census, according to its latest IRS filing. And Abrams’ “dearest friend” and longtime partner Lauren Groh-Wargo has netted $330,000 a year as the CEO of Fair Fight Action, even though the nonprofit is $2.5 million in debt and has had to lay off about 75% of its staff.

As an entrepreneur, Abrams has built wealth by founding or co-founding a number of private businesses that have also relied on government contracts.

She co-founded the financial services firm NOWaccount Corp in 2010 to take advantage of an Obama-era federal jobs program. “I read the [Small Business] Jobs Act,” Abrams said, and took it back to her partner and said, “Here’s what we can do.” Abrams, in turn, worked with the Obama administration to help her utilize a state lending program the act initiated for minority businesses.

Through 2017, NOWaccount took in several million dollars from government programs run by Fulton County and the state of Georgia, funds that were backed by the federal government. Abrams landed the contracts while working for the state and the governor on related business.

Though she said she „walled myself off” from government decisions tied to the contracts, minutes from a 2014 Fulton County meeting involving her business tell a different story. They state that she not only personally attended the meeting, but “Representative Stacey Abrams appeared in connection with the request for a letter of inducement for the issuance of $20,000,000 in taxable bonds” to backstop NOWaccount’s transactions and accelerate payments to her clients. Taxpayer guarantees gave her NOWaccount a substantial boost.

Abrams was paid at least $660,000 in salary from NOWaccount, even as her company ran into trouble with the Georgia Department of Community Affairs. The agency complained her outfit recommended loan applications for approval of clients with inflated credit scores and who otherwise would not have been eligible to receive lines of credit from the state program. All told, taxpayers had to cover more than $1.3 million in defaults connected to her company.

Another watchdog group, Government Accountability Institute, suspects Abrams actually pocketed millions from the deal, even as taxpayers bailed out her clients, according to a 2022 study.

Nonetheless, Abrams used the episode as a case study in successful entrepreneurship to help sell her 2022 book, “Level Up: Rise Above the Hidden Forces Holding Your Business Back.”

Government contracts also provided the revenue stream for another firm started by Abrams – Insomnia Consulting, which specializes in writing up reports for the development of government transportation, energy, and water projects. One of her biggest clients was an Eskimo tribe project in Alaska.

Abrams’ latest government-tied venture is perhaps her most controversial – and could be her most lucrative.

Since March 2023, she’s been working as senior counsel for Rewiring America, a Washington-based green-energy group that’s backed by a $2 billion EPA grant as part of former President Biden’s climate agenda to “decarbonize” the country.

The goal is to replace all gas appliances in households by encouraging homeowners to take advantage of green tax credits, rebates, and other inducements made available through Biden’s Inflation Reduction Act of 2022, which included $27 billion for a Biden initiative called the Greenhouse Gas Reduction Fund.

As part of her contract with Rewiring America, Abrams has traveled to communities of color like DeSoto, Ga., to help give away “free” heat pumps, heat pump water heaters, and induction stoves to residents.

She also helped “build” an online “calculator” people have used to find out what incentives and rebates they qualify for to electrify their homes. She says she’s educating minorities “on the losing end of environmental justice” that they have access to thousands of dollars waiting for them in an „electric bank account.”

As she did with the Obama jobs bill, Abrams studied the Biden legislation and saw opportunity. Although Abrams and legacy media outlets, including the Washington Post and Politifact, have downplayed her role, she was a key player in putting together the coalition, Power Forward Communities, that applied for the $2 billion grant made available through Biden’s act. Rewiring America is part of that coalition.

“[T]he other thing that we did, that Stacey and I have been working on over the last year and change, is that we put together a coalition to apply for something called the Greenhouse Gas Reduction Fund, and we were selected for two billion dollars to really create a way forward for low- and moderate-income households in communities so that every kitchen table is able to participate,” Rewiring America CEO Ari Matusiak said last July while sitting next to Abrams for a Bloomberg Green Festival podcast interview in Seattle.

The Rewiring America website lists Matusiak, who formerly worked for Obama in the White House, as the “founder and co-chair of Power Forward Communities, a national coalition awarded $2 billion from the Greenhouse Gas Reduction Fund to decarbonize and reinvest in American households.”

During the podcast, Abrams said that “even though the Inflation Reduction Act passed in [2022], it has taken time to deploy that much money. Those dollars are coming online.”

After running for statewide office and helping Biden win Georgia in 2020, Abrams almost overnight has become a multimillionaire with a 4,100-square-foot home near Emory University valued at more than $1.4 million and more than $727,000 in stocks and bonds.

To hear Abrams, it all came from “leveraging” the private sector in the years after she left the Georgia statehouse. But the record shows she never really disconnected from the public sector and has been mixing her private business with the public interest her entire career.

Paul Sperry is an investigative reporter for RealClearInvestigations. He is also a longtime media fellow at Stanford’s Hoover Institution. Sperry was previously the Washington bureau chief for Investor’s Business Daily, and his work has appeared in the New York Post, Wall Street Journal, New York Times, and Houston Chronicle, among other major publications.