I do believe I was first to do this with Dicey Doug Ducey’s “default” flavored ice cream, but I digress.
The Arizona Democratic Party is having some fun with spoofing Dicey Doug Doug Ducey with new ice cream flavors this week. On Monday it was “Doug Ducey’s Pistachio Ponzi Scheme.” The Phoenix New Times reports, Democrats Call Doug Ducey’s Cold Stone a “Ponzi Scheme,” and Say It With Ice Cream:
The Arizona Democratic Party is comparing the way Republican gubernatorial candidate Doug Ducey ran Cold Stone Creamery to a Ponzi scheme.
This stunt comes on the heels of reporting from the Wall Street Journal on the high default rate on Small Business Administration loans used for franchises. Cold Stone Creamery, with a 29.4 percent default rate, was behind only three other franchises for the highest default rate. Taxpayers then footed the bill for the loan charge-offs.
According to the WSJ story, “Cold Stone owner Kahala Franchising LLC said the problems caused by the recession were compounded by the ‘extreme growth’ that occurred in the years immediately preceding the downturn.”
DJ Quinlan, the executive director of the Arizona Democratic Party, pointed to the dictionary definition of a Ponzi scheme, which calls it “an investment swindle in which early investors are paid off with money put up by later ones in order to encourage more and bigger risks.”
“That’s what a Ponzi scheme is: basically, you bring in new investors so you can pay off the original ones, and that’s the story of Cold Stone under Doug Ducey,” Quinlan says. “This was Ducey’s plan to push out this expansion, to get franchises to take out these [Small Business Administration] loans to prop up the stores, so that he could continue to make money and walk away, selling the company, making tens of millions of dollars. To me, that fits the model of a Ponzi scheme.”
Quinlan says he’s not claiming Ducey did anything illegal, but that he believes the dictionary definition is applicable here.
The state Democratic Party has consistently gone after Ducey’s business record. Even when Ducey was first running for Treasurer in 2010, the party hosted several former Cold Stone franchise owners who blamed the company for their personal financial downfalls.
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Democratic Senator Katie Hobbs — who was at the Dems’ ice cream unveiling today — issued a statement further blasting Ducey’s experience.
“Doug Ducey might think that a thirty percent failure rate is a success in business,” Hobbs says. “I am a parent with two children in our public schools and we cannot accept a thirty percent failure rate in our schools. Our schools are not a ponzi scheme and cannot be treated like one.”
Quinlan says the Arizona Democratic Party will be releasing more Ducey-themed ice cream flavors throughout the week.
Tuesday’s new ice cream flavor is . . . “Corporate Welfare Crunch.”
Dessert Alert: New Ducey Ice Cream Flavor, Corporate Welfare Crunch, in Honor of Doug Ducey’s Dishonest Business Practices
Ducey himself lied repeatedly to Arizonans when he said he built Cold Stone Creamery, “without government.” But as the Wall Street Journal and Business Week have reported, Cold Stone received tens of millions of dollars in government loans.
“If Doug Ducey were an honest businessman, he would apologize for lying that Cold Stone Creamery was built without government help, and admit that Cold Stone Creameries applied for and accepted millions of dollars in government loans—they should be serving Corporate Welfare Crunch,” said DJ Quinlan, executive director of the Arizona Democratic Party. “Ducey walked away with millions after he encouraged franchises to take out government loans, and thirty percent of them defaulted, leaving taxpayers like us to pay a bill of more than $30 million.”
Business Week reported on September 16, 2014 that, “franchisees in the Cold Stone Creamery ice cream chain defaulted on 29 percent of working-capital loans backed by the government, costing taxpayers tens of millions of dollars, according to an analysis of Small Business Administration data published by the Wall Street Journal last week.”
The Wall Street Journal reported on September 10, 2014 that, “Quiznos, Cold Stone Creamery, Planet Beach Franchising and Huntington Learning Centers Inc. ranked among the 10 worst franchise brands in terms of Small Business Administration loan defaults.” The report went on to note that “Cold Stone owner Kahala Franchising LLC said the problems caused by the recession were compounded by the ‘extreme growth’ that occurred in the years immediately preceding the downturn.” The CEO of Cold Stone during the period of extreme growth was Douglas A. Ducey.
To view the Ducey Fact Sheet, click here.
h/t photo: Matthew Hendley, Phoenix New Times