The monetary consequences could be even more dire for Kemp, records obtained by The Atlanta Journal-Constitution show. Kemp has promised to cover about $10 million in other loans for the now-struggling agricultural business — meaning that if the company defaults, he could be forced to make good on debts that far exceed his net worth of $5.2 million.

Three of those loans, totaling almost $700,000, come due in December. None is backed by collateral.

Brian Kemp is running for Governor. The AJC had three questions for him.

Kemp’s lawyers have disputed the validity of his commitment to back the $500,000 loan to Hart AgStrong, a canola processor based in Bowersville, about 100 miles northeast of downtown Atlanta. And campaign aides said Kemp is unlikely to be held responsible for the company’s other debts. Additional investors also guaranteed those loans, the aides said, and AgStrong put up its facilities and property as collateral.

“Brian Kemp is one of many investors in Hart AgStrong,” the campaign’s press secretary, Cody Hall, said in a statement. “The company’s collateral and equity exceed his investment. After 30 years of hard work in the private sector, Kemp is in a strong financial position.”

The lawsuit, filed by a Toccoa businessman who lent AgStrong the money at Kemp's request in 2015 and 2016, could go to trial in Gwinnett County as early as November, shortly after the gubernatorial election.

The Journal-Constitution examined court files, financial disclosures and other public records on Kemp’s personal finances. It also obtained a transcript of Kemp’s deposition after asking a judge to make the document public.

Those documents show that even after he became secretary of state in 2010, Kemp remained active in his myriad business ventures, including AgStrong. He has played a central role through much of the company’s 10-year history: He signed real estate and loan documents that identified him, at various times, as AgStrong’s assistant manager and corporate secretary. His $750,000 investment initially amounted to a one-quarter stake in the company and still accounts for 8 percent of its privately held shares. And he personally negotiated for the $500,000 loan now at the heart of litigation, as well as an earlier $600,000 loan from the same lender.

But when a lawyer asked him about his corporate position, Kemp pleaded ignorance.

“I don’t recall that,” he said.

‘Opportunity’

Late one afternoon in November 2015, Kemp emailed his friend Rick Phillips with a proposition. Kemp didn’t say so directly, but what he was looking for was money.

“Hope all is well?” Kemp wrote from his personal Gmail account. “Are you around Tues Nov 17 after lunch? I have another business opportunity to run by you.”

The message set in motion two loans to Hart AgStrong from Phillips' firm RLP Investments. Kemp has said he met Phillips several years ago through one of his political consultants.

AgStrong paid off the first, $600,000 loan in about a month, as promised. The second loan, for $500,000, would come due in October 2016. AgStrong agreed to pay an annual interest rate far higher than banks were charging: 10 percent, or more than $4,000 a month.

On Jan. 22, 2016, Kemp signed a document labeled “personal guaranty agreement.” Leaving no doubt about its purpose, the document goes on to say Kemp “personally guarantees” the loan, with those words in boldface type.

Kemp emailed Phillips the next day: “Thanks for helping us again! Very much appreciated!”

The guaranty said AgStrong would use the loan’s proceeds to purchase raw canola seed from “farmer suppliers.” It turned out that the company really needed the money.

Hart AgStrong’s canola storage and processing plant in Bowersville, Ga., is about 100 miles northeast of downtown Atlanta. Secretary of State Brian Kemp, the Republican candidate for governor, personally guaranteed loans for the business, which has struggled. HYOSUB SHIN / HSHIN@AJC.COM

AgStrong, founded in 2008 by four cousins from northeast Georgia, tried to introduce canola seed, typically grown in cooler, drier climates, as a cash crop in the southeastern United States. It contracted with farmers to produce seed that it could then refine into canola oil or mash into meal for livestock feed. A video on the company’s website describes the cousins as “entrepreneurial missionaries.”

“We could establish a structure where Christian families could be able to have their own businesses in agriculture and be able to put a lot of idle land into production,” one of the cousins, Robert Bruce Davis, the company’s chief executive, said in the video.

Through his lawyer, Davis declined a request for an interview.

AgStrong didn’t just buy the crops, it encouraged the growers to invest in the company. The value of their ownership stakes would increase as other farmers bought in and the company grew.

In 2014, AgStrong broke ground on a $7.3 million processing plant in western Kentucky, with the help of a $450,000 state tax credit. The facility opened in 2015.

But when AgStrong stored that first year's crop, a buildup of moisture caused "catastrophic damage," Davis told the agriculture news site The Progressive Farmer. The company suffered a 100 percent loss.

It also owed farmers millions of dollars. When AgStrong couldn’t pay in full, federal agriculture officials suspended its license to operate the Kentucky grain facility. Without the license, AgStrong couldn’t buy more canola seed from farmers. Without the seed, it couldn’t make oil and meal.

AgStrong, which still operates its plant in Bowersville, owes the Kentucky farmers about $1.5 million, court records say. But it continues to make monthly payments, said Sean Southard, a spokesman for the Kentucky Department of Agriculture. The agency, he said, “continues to monitor the situation.”

‘Disappointing’

October 2016 was a busy month for Kemp.

As secretary of state, he oversaw preparations for the Nov. 8 presidential election, rebutting claims that he had tried to suppress minority voting and that Georgia’s voting system was vulnerable to hacking. On Oct. 20, Republican candidate Donald Trump, whom Kemp supported, suggested the election was “rigged” and said he might contest the results if he lost to Democrat Hillary Clinton. In response, Kemp released a statement promising “secure, accessible and fair elections.”

Amid all that activity, the loan that Kemp guaranteed for AgStrong would come due on Oct. 22. The following day, he received a letter from Phillips’ lawyer, who said he had learned AgStrong could not pay the loan or even that month’s interest.

While this news was “disappointing,” attorney James Cornwell wrote to Kemp, “it was equally disappointing that you did not approach us regarding defaulting on the note, but rather only after we reached out to you.”

Cornwell recently declined to comment, as did a lawyer representing Phillips in the lawsuit.

To “even consider” an extension, Cornwell wrote to Kemp in 2016, Phillips would need to see financial records from not just the company, but from its principals, as well. It is not clear from court filings whether Davis provided documents, but Kemp sent Phillips a personal financial statement and three years of federal income tax returns.

On Nov. 11, three days after the election, Cornwell wrote that Phillips had reviewed Kemp’s documents and shared them with his advisers.

“Frankly,” the lawyer wrote, “he is torn between friendship and the business of the debt owed. Because of the friendship, Rick wants to work with you while at the same time being provided adequate security for the $500,000 note. Would you please think this through and then contact me or Rick with your thoughts?”

Kemp visited Phillips several times to talk about the loan, including in the weeks after the company failed to pay in October, according to court records. These discussions led to an agreement: AgStrong would have until Feb. 22, 2017 — 120 days — to pay.

In a letter documenting the agreement, Cornwell wrote: “There will be no further extensions.”

Nevertheless, Phillips again gave AgStrong more time after it again fell behind on monthly interest payments. Finally, on May 24, 2017, Cornwell sent Kemp and Davis a notice that Phillips was filing a lawsuit.

“Please be aware,” Cornwell wrote, “that the debt is owed not only by Hart AgStrong, but by each of you individually.”

The deposition

Kemp had barely settled into a chair in his lawyer’s office when he and Cornwell began a battle of wills.

Cornwell pressed Kemp on AgStrong’s finances, on the dates of meetings at which he asked Phillips for loans, on the names of other investors who might have guaranteed loans.

“I wouldn’t be able to speak on behalf of what the company has or hasn’t done,” Kemp said, including “the balance or non-balance” of the loan at the heart of the lawsuit.

In court papers, AgStrong’s lawyers dispute that the company defaulted on the loan. Although it paid nothing toward the $500,000 principal, they say, the company upheld its promises by paying interest. The company’s lawyers also say Phillips reneged on an agreement to settle the lawsuit that would have allowed AgStrong to pay over five years. Phillips’ lawyers say he never accepted the company’s proposed settlement.

Kemp's defense centers on his assertion that his personal guaranty "expired" when Phillips delayed the loan's due date. He has said Phillips filed the lawsuit for political purposes; campaign finance records show that Phillips, his wife, Letha, and two of his companies gave Cagle $42,000 for the 2018 gubernatorial primary and runoff election.

In the deposition, Kemp carefully avoided accepting any responsibility for the debt or even acknowledging he had guaranteed it in the first place.

Thirty-one times, the transcript shows, Kemp answered questions with a variation of, “I would have to let the documents speak for themselves.”

Cornwell grew increasingly frustrated. At one point, he asked if Kemp understood the meaning of the word “guaranty.”

“I would, again, say that I signed the agreement,” Kemp replied, “and the words that are in there are the words in that.”