Thursday, April 28, 2022

Democrats accuse Trump administration of improper $700M COVID-19 aid loan


The subcommittee said then-Treasury Secretary Steven Mnuchin approved the loan for the trucking company after a meeting with Defense Secretary Mark Esper. 
File Photo by Sarah Silbiger/UPI | License Photo

April 27 (UPI) -- The Trump administration improperly overruled career Defense Department officials' recommendations not to provide a $700 million loan to a trucking company as part of coronavirus relief in 2020, Democratic lawmakers said Wednesday.

The allegations came in a report released by Democrats on the House Select Committee on the Coronavirus Crisis, which was set up in April 2020 to oversee the use and dispersement of COVID-19 pandemic-related aid.

Congress passed the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act to assist Americans and U.S. companies negatively impacted by the pandemic. Some $17 billion was designated for a program to provide loans to companies considered critical to national security. The largest chunk of funding from that program went to YRC Worldwide, which now goes by the name Yellow Corporation.

But the subcommittee overseeing the funding said it's uncovered evidence that the $700 million loan was pushed by political appointees with links to Yellow over the objections of career defense officials.

"Today's select subcommittee staff report reveals yet another example of the Trump administration disregarding their obligation to be responsible stewards of taxpayer dollars," said subcommittee Chairman Rep. James Clyburn, D-S.C.

"Political appointees risked hundreds of millions of dollars in public funds against the recommendations of career DOD officials and in clear disregard of provisions of the CARES Act intended to protect national security and American taxpayers. The select subcommittee is committed to accountability for government officials and other unscrupulous actors who sought to use a public health crisis as an opportunity for political gain and personal profit."

The report says career defense officials recommended against granting the loan, saying Yellow had misrepresented how critical its services were to the Defense Department and had overcharged for its services. Officials said the services provided by Yellow could be replaced by another company.

There were also questions about Yellow's previous financial and legal troubles. The Justice Department had previously sued the company for overcharging the government and Yellow lost some $100 million in the year before the pandemic.

The subcommittee report said that when the Treasury Department -- which made the final approval on loans under the CARES Act -- caught wind that the Defense Department didn't plan to certify the loan to Yellow, former Secretary Steven Mnuchin's office set up a direct call with then-Defense Secretary Mark Esper.

According to the report, Esper overruled career defense officials and certified the loan was critical to national security.

Then-White House Chief of Staff Mark Meadows was instrumental in securing the loan for Yellow and was regularly in contact with representatives from the company, the report said. James P. Hoffa, head of the Teamsters union, which represents truckers employees by Yellow, was in direct with Trump about the loan, and some Democratic and Republican lawmakers appealed to Mnuchin to approve the loan
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Others believed the loan was a mistake, including Rep. French Hill, R-Ark., a member of the Congressional Oversight Commission that also reviews use of COVID-19 aid.

"As I've previously said, the $700 million taxpayer-backed loan treasury made to Yellow, formerly YRC, was a mistake, and now the commission is focused on how we can prevent this from happening again," he said, according to The New York Times.

The report said there were a number of ties between Yellow, Apollo Global Management, which provided financial backing to the company, and the Trump administration -- Former Apollo CEO Darren Hawkins served on Trump's coronavirus economic task force and Trump nominated former Yellow CEO William Zollars to the U.S. Postal Service's board of governors.

In response to the report, Yellow accused the subcommittee of "baseless speculation and innuendo."

"Yellow strove hand-in-hand with senior union leadership to garner support for its loan application, and in fact received broad support from numerous members of Congress on both sides of the aisle who recognized Yellow's criticality and urged treasury to approve Yellow's application," company lawyer Marc Kasowitz said, according to The Washington Post.

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