Abu Dhabi, UAETuesday 24 November 2020

US ELECTIONS

US Congress created virus aid, then reaped the benefits

Government data shows at least a dozen members have ties to organisations that received financial assistance

A business part-owned by Speaker of the House Nancy Pelosi's husband received federal financial assistance. Getty Images/AFP
A business part-owned by Speaker of the House Nancy Pelosi's husband received federal financial assistance. Getty Images/AFP

At least a dozen US legislators have ties to organisations that received federal coronavirus aid, according to newly released government data.

The figures showed that politicians were authors and beneficiaries of one of the biggest government programmes in US history.

Under pressure from Congress and outside groups, the Trump administration this week disclosed the names of some loan recipients in the $659 billion (Dh2.4 trillion) Paycheck Protection Programme.

It was launched in April to help smaller businesses keep Americans employed during the pandemic.

Connections to politicians and the organisations that worked to influence them were apparent.

Among businesses that received money was a California hotel part-owned by the husband of Democratic House Speaker Nancy Pelosi.

Then there was a shipping business started by Transport Secretary Elaine Chao’s family. Ms Chao is married to Senate majority leader Mitch McConnell.

Car dealerships owned by Republican representatives Roger Williams of Texas and Mike Kelly of Pennsylvania, and fast-food franchises owned by representative Kevin Hern received money.

So did a law firm owned by the husband of Senator Jeanne Shaheen, and the former law firm of representative Matt Cartwright, which employs his wife.

Money also went to a farming and equipment business owned by the family of Representative Vicky Hartzler, and a regional casino company led by the husband of Representative Susie Lee.

Members of Congress and their families are not barred from receiving loans under the PPP, and there was no evidence they received special treatment.

Loans were granted to Democrats and Republicans, something President Donald Trump’s campaign was quick to highlight when records showed donors to his coffers were among the earliest beneficiaries.

Hundreds of millions of dollars also flowed to political consultants, opposition research shops, advocacy organisations and trade associations whose work is based on influencing government and politics.

While voting, lobbying and ultimately benefiting from legislation are not illegal, advocates said the blurred lines risked eroding public trust in the pandemic response as Congress began debating another round of coronavirus relief.

“It certainly looks bad and smells bad,” said Aaron Scherb, a spokesman for Common Cause, a watchdog that was also approved for a loan through the programme.

As of June 30, the Treasury Department programme had handed out $521bn to industries including manufacturing, construction, restaurants and hotels.

The US Treasury identified only a fraction of the borrowers on Monday, naming only companies that received more than $150,000.

Those companies made up less than 15 per cent of the nearly five million small companies and organisations that received assistance.

Many of the legislators connected to loan awards stressed that they were not part of the application process.

Ms Pelosi's office said her husband Paul was a minority investor in the company that owns the El Dorado Hotel in the wine country town of Sonoma, California.

Mr Pelosi has a 8.1 per cent stake in the company, valued at between $250,000 and $500,000, the office said.

“Mr Pelosi is a minor, passive investor in this company,” said Ms Pelosi’s spokesman, Drew Hammill.

“He was not involved in or even aware of this PPP loan.”

Foremost Maritime in New York, founded by Ms Chao’s parents and run by her sister, was cleared for a loan valued between $350,000 and $1 million.

“Neither my wife, nor I, have anything to do with that business and didn’t know anything about it,” Mr McConnell, a Republican seeking re-election in Kentucky, said on Tuesday.

The Shaheen and Gordon law firm in Dover, New Hampshire, was given a loan of between $1 million and $2m. The firm is owned by Jeanne Shaheen’s husband, William Shaheen.

A title company partially owned by Mr Shaheen received a $160,000 loan and a half dozen companies he part-owns or another relative owns received loans of less than $150,000.

Ms Shaheen said she “was not involved in any way in applying for those loans, nor do I have anything to do with their businesses, and Congress had no role in processing PPP applications".

Four car dealerships owned by Mr Kelly received $600,000 to $1.4m.

His spokesman said he was not part of the loan application and was not involved in the operations of the dealerships, in accordance with ethics rules.

Mr Williams, one of the wealthiest politicians with a net worth of more than $27m in 2018, received a loan for his Roger Williams Chrysler Dodge Jeep dealership in Weatherford, Texas.

He is president and chief executive of JRW Corp in Fort Worth, which is listed as receiving a loan of $1m to $2m.

“Like every other company who accepted a small business loan, our business qualified under law and regulation, and today over 100 of our employees are grateful that we did,” Mr Williams said.

At least five car dealerships owned by the husband of representative Carol Miller also received loans, each ranging from $350,000 to $1m, the data showed.

Others, while distancing themselves from the loan process, sought to portray the PPP programme as a success story.

Full House Resorts, a Las Vegas casino company led by Ms Lee’s husband, Daniel, received two loans totalling $5.6m, the Securities & Exchange Commission said.

The company said the funds would be used to rehire hundreds of employees and prepare to reopen two casinos in Indiana and Colorado.

A spokesman said on Tuesday that Ms Lee did not know about the company’s intention to apply for a loan when she and other Nevada politicians pushed for a rule change to allow small casinos to receive loans.

She had no influence over the application or any aspect of the House’s business or decision making, spokesman Jesus Espinoza said.

Two wineries tied to representative Devin Nunes and an Iowa farm run by his family received loans worth at least $2m.

The wineries received separate loans worth $1m to $2m, and an Iowa dairy farm that is tied to his relatives received $150,000 to $350,000.

Updated: July 16, 2020 02:43 AM

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