Francisco, Turlay have both gone through bankruptcy

Being businessmen, white, conservative and older than 70, Vancouver City Councilor Bill Turlay and his political opponent, George Francisco, have plenty in common. Something else they have in common: They’ve both gone through bankruptcy.

Turlay’s 1994 bankruptcy filing came to light two years ago when he ran for Vancouver mayor. With just a few days to go before the Nov. 3 general election, Francisco’s 2004 personal bankruptcy filing was aired by supporters of Turlay’s campaign for re-election.

According to federal bankruptcy records from District Court in Arizona, Francisco, 74, filed for Chapter 7 bankruptcy, which is for debtors who don’t have the ability to pay the money they owe. Records indicate the initial amount creditors and the government claimed against Francisco was $959,000.

On Wednesday, Francisco said he never tried to hide his bankruptcy, pointing out that many have gone through it, and it was “not a big deal.”

Francisco said he filed when the Internal Revenue Service placed a lien against his house in Scottsdale, Ariz. The problem began when he invested his 401K retirement money into property development after an accountant incorrectly advised him that the transaction would be the same as a 401K rollover, he said. As a result of prematurely tapping into his 401K, the IRS billed him for taxes, plus additional penalties, he said.

Francisco, who was teaching at the University of Phoenix at the time, couldn’t afford to pay the taxes and had no alternative than to file for bankruptcy, he said. He sold his house for $1.1 million and paid off most of the debt with the sale proceeds, he said. The case was closed in 2008.

He has “most certainly” recovered financially since then, said Francisco, who owns an insurance business, Total Insurance by George.

“I have a successful business, and I’m doing well,” he said.

Turlay, 79, filed Chapter 7 bankruptcy with his wife 21 years ago to settle debts for Contech Corp., a company that made compass metal detectors. Turlay was president and secretary of the company, which had roughly $146,000 in assets and $649,000 in liabilities. The Turlays ended up losing their home.

On Wednesday, Turlay said he wasn’t going to make a campaign issue out of Francisco’s bankruptcy revelation.

“I really don’t have time to get into negative campaigning,” he said. “I want to stick to issues.”