While helping to decide how to spend millions of dollars in tax revenue this past legislative session, Rep. Glenn Way, R-Spanish Fork, quietly filed personal bankruptcy.
Way says a fraudulent business deal and unexpected medical bills after the birth of his fourth child put him in dire financial straits. Way declared Chapter 7 bankruptcy Feb. 11 in U.S. Bankruptcy Court."It was probably the toughest thing I had to do in my life," said Way, a conservative first-year lawmaker who is up for re-election this fall.
Way and his wife, Shelina, had 16 to 49 creditors, according to bankruptcy court records. They listed assets from $100,000 to $499,000 and liabilities in the same range. The case was closed June 17, meaning Way is now under no legal obligation to pay any of the debts.
Several of the companies to whom Way owed money sued him prior to the bankruptcy. A 3rd District Court judge allowed at least one, Nicholas and Co., to garnish his wages to satisfy a $1,961 bill.
"A lot of people think automatically that if you're a legislator that you're well-heeled," he said. "There are many that aren't."
Way, 31, who now works for fellow GOP legislative candidate Parley Hellewell's heating and air conditioning firm, said he plans to pay off "all legitimate debts," including about $20,000 in medical bills, as he has the money. He said he has no intention of paying creditors associated with a restaurant he owned that touched off his financial troubles.
Way and Richard Moss, a local Republican who has managed several Utah County political campaigns, took over a pizza parlor near Brigham Young University called The New Yorker in October 1995. The owners transferred the struggling restaurant's lease and a $27,000 debt to the two entrepreneurs as part of the deal.
Just days prior to the buyout, Way had formally announced a bid for Congress in Utah's 3rd District. About three weeks into running the place, renamed Sgt. Pepperoni's, Way said he received a call from an attorney in California saying the equipment in the restaurant was part of a bankruptcy case and was considered stolen. Way said he also found out at that time that the lease on the restaurant was nontransferable.
Way and Moss closed the pizza parlor Nov. 18, 1995. They walked away from the deal, but were still considered the business' legal owners. Creditors soon came calling, and Way says they mostly targeted him rather than his partner.
"There's no doubt about it. They think I'm a deep pocket here because I'm involved in the political arena," he said.
Some of the firms to which the pizza parlor owed money, Way said, told him he'd be wise just to pay up because as a congressional candidate he wouldn't want the press knowing about his financial woes. He said he wanted to fight the claims against Sgt. Pepperoni's in court, but couldn't afford it.
The restaurant fiasco forced Way out of the congressional race in January 1996. It didn't, however, keep him from running for the Legislature later that year.
Way, who dabbles in development, believed his fortunes were looking up when he and a partner were close to buying some land in southwest Provo for a 25-home subdivision. But the sale didn't go through.
In August 1996, the Ways' fourth child was born with complications, and Way was without insurance. The mounting medical bills had a domino effect on his already shaky finances. Way said he probably could have qualified for Medicaid. But "fundamentally, I had a problem with that. I wanted to pay for my own child."
PPM, Hellewell's company, and the $100-a-day wage for attending the 45-day legislative session and periodic interim committee meetings are Way's only current sources of income. He said he and Hellewell also are working on a deal to build three four-plexes in Spanish Fork.
Way downplays the impact bankruptcy will have on his bid for re-election. He faces Democrat Joel Bradford, a Utah Valley State College apprenticeship director, in November.
"It shouldn't have any effect on it. But we're expecting it will be blown out of proportion and sensationalized for political gain," he said. Word of Way's financial difficulties already are sweeping Spanish Fork. He intends to take out an ad in the local newspaper to quell what he says is misinformation.
Way, who spent $16,000, including $4,000 out of pocket, on his last legislative campaign, said he intends to rely on donations to fund his campaign. However, he said he did put $400 of his own money in the campaign to help jump-start the effort.