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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (28932)	7/18/2005 11:26:45 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 362603

Yawn. Another day, another scandal, another R about to bite the dust? Auto dealer's future unclear By Kevin Woster, Journal Staff Writer RAPID CITY -- The clouds hanging over Family Automotive on Thursday afternoon symbolized much more than rain. The economic horizon is uncertain for the Cambell Street Hyundai dealer — formerly Dan Nelson Hyundai and Dan Nelson Isuzu — as a two-state automobile group founded by Rapid City native Dan Nelson faces federal bankruptcy proceedings and a class-action lawsuit in Iowa over questionable business practices. Faltering finances and legal action have all but destroyed Dan Nelson Automotive Group Inc., which was headquartered in Sioux Falls and operated car dealerships there, in Sioux City, Council Bluffs and Des Moines, Iowa, as well as in Rapid City. And now it could produce political fallout for Sen. John Thune, R-S.D., a close friend and political ally of Nelson. Before his election to the Senate in a historic win over incumbent Sen. Tom Daschle, D-S.D., last November, Thune sat on the board of directors of a Sioux Falls bank that granted millions of dollars in loans to Nelson Automotive. MetaBank, formerly First Federal Bank, is now trying to collect those defaulted loans in the bankruptcy proceedings. Thune critics, primarily Daschle supporters and former employees, have been questioning the propriety of Thune's relationship with Nelson and the bank that loaned him money. On Thursday afternoon, the South Dakota Democratic Party officially joined the fray with a news release by chairwoman Judy Olson Duhamel of Rapid City. The release pointed out that Nelson was a top adviser to Thune during his previous congressional campaigns, had contributed to his campaigns and received nearly $90,000 from Thune's campaign in 2004 for vehicle leases and office space. "With Enron and World Com, Americans have grown weary of corporate corruption and scandal," Olson said. "Now we have a situation right here in South Dakota where it appears Mr. Nelson's business has fallen victim to questionable financial dealings while the senator sat on the bank's audit committee." Olson said Thune owed state constituents an explanation on the specifics of his relationship with Nelson and its potential effect on the loans. Thune communications director Kyle Downey said the senator would not respond Thursday to Olson's statement. Downey issued a short statement on Thune's behalf Thursday evening that rejected the implications of any wrongdoing. "While a private citizen, John Thune served on the board of directors for MetaBank with utmost integrity. During this service he was unaware of any legal or financial problems surrounding Nelson's companies," Downey said. "To suggest, as some former employees of Sen. Thune's previous political opponent are doing, that John Thune acted improperly are baseless and false. These attacks are part of an ongoing campaign against Sen. Thune." Thune, a three-term congressman who lost a close race against Sen. Tim Johnson, D-S.D, in 2002, worked as a director for MetaBank from January 2003 through the election last November. Dan Nelson Automotive filed for Chapter 11 reorganization last month, but MetaBank has filed papers to change the case to Chapter 7, which could push the business toward liquidation. Court documents show that Nelson Automotive owes almost $30 million. The Democratic release and some news reports had said that more than $28 million came from MetaBank alone. But documents in the case appear to list MetaBank's loans to Nelson Automotive at closer to $10 million. The assets of the company also are difficult to determine exactly from available documents. Some news reports based on court filings list Nelson Automotive assets at $6.4 million. But the $6.4 million appears to be for Nelson Automotive only, and the financial arm of the group, South Dakota Acceptance Corp., lists $16.8 million in assets — for a total of $23.2 million. Nelson has disappeared from official involvement with the company these days, selling his 75 percent ownership to partner Chris Tapken of Sioux Falls for $50. Neither Nelson nor Tapken could be reached for comment Thursday afternoon. Nelson said previously that many of his financial problems came because a lawsuit in Iowa hurt car sales. The lawsuit charged Nelson's automotive group with promising to help financially struggling buyers to purchase cars, then burdening them with excessive payments and interest rates. Tapken recently sent a news release to the Journal that said the Family Automotive Network was acquiring the Dan Nelson Hyundai dealership in Rapid City. The dealership would offer stock to tenured employees at the business, Tapken said. The Family Automotive Network also will operate dealerships in Sioux Falls and Sioux City, the release said. The news release also said Dan Nelson would own stock in Family Automotive Network and remain active in Dan Nelson Suzuki and Victory motorcycles in Sioux Falls. A used-car dealership in Des Moines operated by Dan Nelson Automotive closed recently. The company had previously closed a Council Bluffs dealership in April. The Rapid City dealership was open for business Thursday. The service department was working on vehicles, and potential customers were looking at cars. The store manager refused to speak with a Journal reporter. A floor salesman also declined to be interviewed, referring questions to the Family Automotive Network headquarters in Sioux Falls — which had closed for the day. Contact Kevin Woster at 394-84132 or kevin.woster@rapidcityjournal.com rapidcityjournal.com