Shaken Trust : Business Owner Says Quake Aid Rules Let Many Fall Through Cracks

“ I feel like I’ve been rolled and pleated I can’t prove it, but I think I was cheated I woke up without a single dime And I swear on my horse, I have seen the light If I had a horse, I would be alright But now it’s time to move on down the line. “ --”Only Game in Town” by Ronn Crowder

Ronn Crowder, an aspiring country musician and songwriter, need look no further than his own life for the stuff of mournful blues and blue collar tragedy.

Moving from Tennessee to the San Fernando Valley in 1981, Crowder bought a home and established his own typesetting business, only to see his life wrecked by the Jan. 17 Northridge earthquake.

He has filed for personal bankruptcy--in which he will probably lose his house--and now plans to move back to Tennessee next month.

He and his wife, Linda, and their two sons, Clayton, 12, and Ronnie, 7, are selling most of their personal belongings at weekend yard sales, both to raise money for groceries and because they cannot afford to take much with them on the drive back to Tennessee.

Crowder, 47, seeks no pity, but he is angry and frustrated that after years of being a good citizen and taxpayer, he seems to have fallen through the cracks of a system that is supposed to help people get back on their feet after a disaster like the 6.8 quake that damaged his home and business equipment.

He didn’t lose everything in the quake like many others did, but $18,000 in damage to his modest two-bedroom home and another $3,000 to his typesetting equipment in a home office is a bigger loss than he can handle without help.

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He received a $1,400 grant from the Federal Emergency Management Agency, but he has been turned down by every other government agency to which he has turned for help.

“We’ve never asked for any of this stuff before,” Crowder said Saturday during a break from trying to sell clothing and other odds and ends from his front yard. “I’m baffled. I don’t understand any of it.

“It’s like I’ve fallen through the cracks of the system. We were part of the middle-class tax base. When we really needed it, the system failed us. All those years we were good citizens, paying our taxes and not breaking the law . . . that don’t mean anything?”

FEMA officials respond that government disaster assistance was never meant as a replacement for private insurance. Other than FEMA grants that averaged about $2,500 to take care of immediate short-term housing needs and repairs right after the quake, most government assistance comes in the form of loans from the Small Business Administration.

But loans are expected to be paid back, said SBA spokeswoman Diane Brady, so the agency withholds loans from those who appear unable to pay.

“That is the most common reason someone is declined,” Brady said.

In fact, almost half the applications for aid are rejected, according to government figures.

As of June 18, only about 67,000 of 124,000 applications processed for personal and family SBA loans were approved. Only about 9,500 of 17,000 business applications were approved, and only 1,600 of 6,500 applications were approved in a separate program that provides working capital for companies that lost business as a result of the quake.

Still, the SBA has provided quake victims with a combined total of nearly $2.3 billion in loans.

Crowder, however, calls his a classic Catch-22 situation.

“I don’t have the cash flow (to repay a loan) because I don’t have my equipment, and I don’t have my equipment because I can’t get a loan to fix it or replace it,” Crowder said.

Crowder and his family moved to Los Angeles 13 years ago to fulfill his dream of becoming a musician and songwriter. But recognizing that would take time, he enrolled at Los Angeles Valley College in Van Nuys and studied journalism. After graduating, he was offered a job as a reporter at a local newspaper for $250 a week, but realized that would not house and feed his wife and two children.

As part of his journalism studies, Crowder had learned about typesetting. He worked for a few years for a typesetting company, then in 1986 he started his own business and bought a small house in Panorama City.

After many of his clients went out of business following the 1992 riots, Crowder received a $21,000 SBA loan designed to help riot-impacted businesses, and slowly started to rebuild his client base.

Then the Northridge earthquake hit, damaging most of his business equipment.

Like tens of thousands of others, he applied for disaster assistance. After receiving a FEMA grant for $1,400 to make immediate repairs to his home, he expected to qualify for another SBA loan.

But earlier this month, he was notified that his loan was denied because SBA officials didn’t believe he could repay it.

Meanwhile, Crowder’s wife, Linda, 35, had been fired from her job with the Federal Reserve Bank in April after 13 years because she began making mistakes, which she blames on fatigue from working overtime to make up for their lost income and nerves rattled by the continuing aftershocks.

After the SBA turndown, Crowder’s application was forwarded to the state Individual and Family Grant Program, a last resort, bare-minimum disaster assistance program, which could not help him because he was self-employed.

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A spokeswoman for the IFGP confirmed that business losses for self-employed people are not covered under the program, which is designed to cover only immediate survival needs.

“Wait a minute, this is America,” Crowder commented. “You’re going to penalize me because I’m self-employed? What happened to rewarding initiative?”

Crowder could not turn to the state’s CALDAP program, a last resort loan program for homeowners, because voters this month turned down a bond measure that would have provided money for it.

He did receive a voucher from the Red Cross to buy a new stove. But he had to turn down an offer from Habitat for Humanity, a nonprofit group that helps low-income families build homes, to provide the labor to fix his damaged roof because he can’t afford the materials.

Behind in house and car payments, the credit cards charged to the limit and running out of money, the Crowders filed for bankruptcy in May to stave off creditors and give them time to rethink their future. They applied for help from the county Aid to Families with Dependent Children program, but when they admitted they had a $10,000 retirement account, they were denied help until that money was exhausted.

Roberta Kiehl, AFDC program administrator for Los Angeles County, said program recipients are limited to $2,000 in property, including bank and retirement accounts.

“But we couldn’t touch that money because if we withdrew it, then under the bankruptcy filing they would take it to pay the creditors,” explained Crowder, adding that he is in debt nearly $200,000, including a $150,000 mortgage.

But while his finances are falling apart, Crowder’s music career may finally be coming together.

He has signed with personal manager Rob E. Brondell and record producer Danny Sheridan, contacts he made while performing at a fund-raiser the day before the Northridge quake and again while helping clean up Sheridan’s quake-damaged recording studio.

Crowder plans to continue both his typesetting business and his pursuit of a music career in Tennessee, and is trying to make the move a positive experience, both for himself and his family.

“This experience has brought us all closer together,” he said. “The boys were back in their room sorting out their toys to see which ones they were willing to sell. It’s kind of neat. They were showing their family spirit. Of course, I wouldn’t make them sell anything they didn’t really want to.”

Despite having to start over, Crowder remains upbeat.

“The things we are losing are just material things,” he said. “You lose a little face, but there was nothing else we could do. We did our best. So what’s to feel bad about?

“I don’t want to be depicted as poor, poor pitiful people. We’ll be OK. But I hope that FEMA and the SBA will fill those cracks that we and a lot of other people have fallen through.

“When people like us are totally denied by everybody, then geez, there something wrong.”