One can only imagine the scene at the breakfast table in the Nienow household Saturday.

Sean Nienow, the Minnesota state senator who promises on his website to bring “the same common sense money management used by families and businesses” to government, opens the newspaper to see a headline reporting that he and his wife have defaulted on their federal Small Business Administration loan.

“Honey, paper says we’re being sued by the feds for $748,000.”

“What for?” asks his wife, Cynthia.

“No idea, didn’t read it,” says Nienow, turning quickly to the sports page.

That’s what Nienow wants us to believe. A suit was filed against him, his wife and his former company, National Camp Association Inc., on Friday. He has not seen it. And he told reporters Monday he saw the newspaper headlines but didn’t read the stories about how the federal government is asking him to pay back nearly three-quarters of a million dollars.


Nienow is not talking about the case he hasn’t seen, or the stories he hasn’t read. In case his interest is piquing and he’s now reading this column, however, I should start with this: Sen. Nienow, would a legislator who routinely alleges widespread “welfare fraud” and decries government interference and handouts to business, then gets caught defaulting on a large government loan qualify for your “stinky diaper award”?

Nienow gives the “award” to bills and actions in government that just don’t pass the smell test. Nienow’s mysterious loan seems like a strong contender.

Nienow, R-Cambridge, has usually struck me as a straight shooter. I gave him credit last year for correctly predicting the e-tab gambling fiasco, and he called stadium financing “fairies and fufu dust.”

Good one.

I also like his attention to privacy issues and better oversight of Medicaid and HMOs.

But Nienow, who once worked for like-minded U.S. Rep. Michele Bachmann, talks tough when it comes to government bailouts of companies, and he has worked tirelessly to reduce programs, such as food stamps, that aid the poorest among us.

Now we learn that not only did Nienow himself turn to a government-guaranteed program to start a business, but about 18 months later, he simply stopped making the payments.

Mike Ryan, director of the Small Business Development Center at the University of St. Thomas, had not read the suit. But he said the SBA loan process is “pretty straightforward.”

An applicant would give the banker (U.S. Bank in Nienow’s case) a business plan that would show cash flow to at least cover the monthly ($7,500) loan payment. They would also put up some collateral toward the loan. Records show Nienow used his home, which is estimated on various websites to be worth between $120,000 and $150,000.

It’s not unusual for the collateral to be less than the loan. A bank would also consider the borrower’s history — Nienow was a financial planner — and character.

Nienow’s business was as a consultant who helped families find summer camps, and it was run out of his house. Doesn’t sound like a high-finance, heavy-equipment business. I know nothing about how difficult it is to find the right summer camp because I always went to the Boys Club’s Camp Voyager, where we rode horses and sang canoeing songs.

I didn’t need a consultant.

“The first question is what did he use the funds for,” said Ryan. “The other interesting thing is the timing. In January 2009 it was very difficult to get business loans. Banks had just tanked six months before that.”

Ryan’s center has helped entrepreneurs make business plans and get SBA loans. He can’t recall many during that period, nor one that defaulted. He thinks that if Nienow can’t pay, the feds could “theoretically” take his house, but he’s not heard of it happening.

Nienow may well have good answers to all these questions. I hope so, I hope he’s willing and able to show his loan intentions were not just “fairies and fufu dust.”

He says his suit has no connection to his legislative job.

He’s wrong. Voters care about character, especially of a guy who makes a big deal out of accountability, transparency and his favorite, “personal responsibility.”

“I’ve said for years, big business loves big government,” Nienow once said.

Apparently some small businesses do, too.