No one has to wonder where Mel Miller stands on the controversial question about the historic black Boston church and the big loan it failed to repay to the nation’s largest black-owned bank.
Miller thinks the Charles Street African Methodist Episcopal Church is pursuing a “bankrupt’’ strategy by aggressively resisting the collection efforts of OneUnited, the bank that extended the credit and now seeks to foreclose on the church. He thinks church officials should face up to their obligations more seriously.
“Most borrowers understand that the consequences of default can be quite severe,’’ reads an admonishing line from an editorial in the Bay State Banner, the newspaper Miller has owned for four decades.
Well, yes and no. There is no shortage of people and places with financial baggage in this story: OneUnited, which received a $12 million federal bailout, and Miller’s own newspaper, which failed to repay an emergency loan from the city last year.
Miller is an interesting character in the church drama because he wears two different business hats. He is a newspaper publisher focused on the city’s black community, but he also serves as a director of OneUnited.
It’s fair to say Miller is in the opinion business, as a newspaper publisher. He gave me an earful over the phone the other day. Among other things, Miller says he doesn’t feel compelled to mention his own position at the bank in his newspaper’s editorials, which take OneUnited’s side in the fight, because “everybody knows’’ that.
His prominent role in the church controversy - particularly on the Banner’s editorial pages- stands in contrast to the low public profiles of OneUnited executives. He may not be the bank’s official voice, but Miller has certainly emerged as its leading public advocate in the church dispute.
This is a strange role for a businessman who himself is still trying to repay the loan that saved his company.
Banks don’t expect to win any popularity contests when they try to collect on a bad loan. A black-owned bank foreclosing on a black church is much worse. But this case became a kind of perfect storm because the people demanding fiscal responsibility have such checkered financial records of their own.
Start with the bank: OneUnited ran into catastrophic trouble in 2008, when securities it owned plunged in value. But then the bank got the $12 million in federal bailout funds. OneUnited earned a profit last year, but it hasn’t paid a dime in interest payments to taxpayers.
And then there is the Banner. The newspaper also fell on hard times, a year after the US Treasury bailed out OneUnited. It stopped publishing briefly that summer, but Mayor Tom Menino stepped up and offered the Banner a $200,000 loan.
That money - yes, a bailout - was supposed to give the newspaper breathing room and a chance to line up new investors. Skeptics viewed it as a borderline political tactic in the middle of a mayoral election year.
The loan was issued by a unit of the Boston Redevelopment Authority, and the full amount came due last fall. But the Banner did not repay any of the debt.
No problem. The BRA decided to turn the delinquent Banner loan into a “work-out’’ situation and gave the newspaper more time. Beginning in January, the Banner would pay $1,500 a month to the city, with the loan coming up for review in June. So far, the Banner has paid most - but not all - of its $1,500 monthly obligations, city officials said.
The Banner’s loan has been secured by real estate all along, but the city never considered taking the collateral.
“We hope to never get to that point and don’t expect to,’’ says Brenda McKenzie, director of economic development at the BRA.
Miller insists that the circumstances between the Banner and the church are entirely different, but that privacy rules prevent him - as a OneUnited director - from explaining the Charles Street AME situation.
It’s true that loans and banking relationships can be very different. But the businessman lecturing the church on the consequences of default himself benefited greatly from the patience of a lender that made a different choice.
There’s still time for OneUnited and Charles Street AME to make a different choice, too.