MonCrief suggests the deal was approved after the fact.
Careful review of the loan agreement shows that a letter was sent to ACORN dated August 19, 2008 from Forest City Ratner that stated Forest City Ratner would make a loan to ACORN in the amount of 1 million dollars and give ACORN Institute 300,000 now and 100,000 in August of 2009 and 2010. What is even more interesting is the date on the signed agreement between Bertha Lewis and FCR, September 4, 2008 (for copies of the contract please email me). According to emails that I have in my possession, Bertha Lewis confirmed the loan to the New York Times on September 25, 2008, and she stated that the loan was signed on September 8, 2008 and dispersed around September 12, 2008.
I haven't seen those emails (yet), but if Lewis said the loan was signed September 8, then she apparently was, as MonCrief details, misleading some members of her board.
The $1 million loan, half delivered 8/1/08 and the other half on 10/1/08, was granted at an annual interest rate of 4.58%, with 36 monthly payments from 6/1/09 through 5/31/11, according to a document MonCrief forwarded. If ACORN missed payments, after 30 days the interest rate would rise to an annual rate of 18%.
That number dismayed some people. MonCrief quotes a board member's email recounting a discussion of the loan:
There then arose a discussion regarding the ability to pay the loan off, especially since if the loan payment was late, the interest rate would go up to 18%.
Given the concerns raised, it's worth clarifying whether the board did approve the deal before it was signed.
Forest City Ratner gave a $300,000 grant for the first year and then $100,000 in the second year, so those donations could essentially cover the first year (and more) of loan repayments.
What about the Times?
Moreover, though the New York Times, according to MonCrief, knew of the deal, the newspaper neglected to write about it. However, as I detailed last month, the Times wrote about a roughly equivalent bailout of ACORN.
It's time for another look.