First Liberty’s collapse casts light on the patriot economy

We may not be used to thinking of it this way, but the collapse of First Liberty Building and Loan and the resulting political fallout is a national story of some importance.

According to the suit filed by the U.S. Securities and Exchange Commission, the Newnan-based lending company bilked some 300 investors from across the country out of $140 million. An analysis by the Atlanta Journal-Constitution has so far found $1.4 million in contributions that the family of First Liberty founder Brant Frost IV and the political action committee it controls have given to candidates and groups in several states.

This isn’t what makes First Liberty and the Georgia Republican Assembly PAC with which it shared an address an important national story, however. It’s what this story says about the health of the “patriot economy” First Liberty was supposed to be helping to build.

Businesses have been wrapping themselves in the flag to sell their products since the early days of the Republic, but the patriot economy we’re talking about here is a concept born out of the stridently partisan politics of today. There are even academic theorists who talk about the creation of a non-woke, “parallel” economy. In reality, you could describe the patriot economy as the small businesses that advertise through conservative radio programs and similar venues, with a pointed appeal to conservatives.

First Liberty got lots of love in the conservative chatterverse. The lawyerly Hugh Hewitt praised Frost as “Georgia’s George Bailey,” a reference to the kind-hearted banker played by Jimmy Stewart in “It’s a Wonderful Life.”

“I have known the Frost family for years,” said Erick Erickson in a testimonial for First Liberty. “They are fantastic people, solid Christians, and great conservatives.”

Somewhere along the line, politics became so tightly intertwined with business at First Liberty that it’s hard to trace the line between the two. Alabama State Auditor Andrew Sorrell is an example of this entangled relationship. In all, Sorrell has received $71,000 in contributions from Frost and related sources.

Sorrell also took money from his own PAC, Alabama Christian Citizens, and sunk $29,000 back into First Liberty. Now a candidate for secretary of state, Sorrell says he’ll give the contributions back when there’s a process for doing so. At the same time, he identifies himself as one of the 300 people who are owed their money back.

Reading this, the question has to arise: could there be more First Liberties out there in the patriot economy? Another question comes to mind: why did First Liberty collapse when it did?

Frost founded the firm back in 1995, and while there may have been chicanery we don’t know about, the federal complaint says nothing about it. The complaint describes how a “friends-and-family” style Ponzi scheme began to develop in approximately 2014, then picked up speed over the past couple of years as First Liberty made more aggressive radio appeals to small-time investors.

That much is plausible: the slow slide into corruption, the repeated appeal of the shortcut, the gradual increase in the number of those “in on it.” How it all comes to an end is more complicated.

The long arc of this increasing financial overreach tracks closely with Frost’s intensified efforts to have an impact on politics, particularly in the Georgia Republican Party. Then, when First Liberty’s glory days seemed just ahead, it folded.

Frost exulted in a video days after President Donald Trump’s inauguration that a “once-in-a-century miracle” had occurred, leaving conservatives in full control. As late as May, according to the federal complaint, he improperly withdrew $100,000 from his company.

Then, only weeks later, Frost closed First Liberty’s doors and released a statement: “I take full responsibility for my actions and am resolved to spend the rest of my life trying to repay as much as I can to the many people I misled and let down.”

Could the turmoil he has caused within the Georgia GOP possibly have anything to do with this sudden reversal in fortunes? We could be a long time finding out.