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

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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 picture

April 27 (UPI) — The Trump administration improperly rescinded recommendations from Defense Department career officials not to issue a $700 million loan to a trucking company as part of 2020 coronavirus relief, Democratic lawmakers said Wednesday. .

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

Congress passed the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act to help Americans and American businesses adversely affected by the pandemic. Some $17 billion has been earmarked for a loan program for businesses deemed critical to national security. Most of the funding for this program went to YRC Worldwide, now known as Yellow Corporation.

But the subcommittee overseeing the funding said it uncovered evidence the $700 million loan was pushed by political appointees with ties to Yellow despite objections from defense career officials. .

“Today’s select subcommittee staff report reveals yet another example of the Trump administration’s failure to live up to its obligation to be a responsible steward of taxpayers’ money,” the chairman said. subcommittee, Representative James Clyburn, DS.C.

“Political appointees risked hundreds of millions of dollars in public funds against the recommendations of DOD career officials and in blatant disregard of CARES Act provisions designed to protect national security and American taxpayers. The subcommittee restricted pledged to be accountable to 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 the loan, saying Yellow misrepresented the importance of his services to the Department of Defense and overcharged for his services. Officials said services provided by Yellow could be replaced by another company.

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

The subcommittee report says that when the Treasury Department — which gave final approval for the loans under the CARES Act — learned that the Department of Defense had no intention of certifying the loan to Yellow, the office of former Secretary Steven Mnuchin set up a direct call with then-Secretary of Defense Mark Esper.

According to the report, Esper canceled career defense officials and certified that the loan was essential to national security.

Mark Meadows, then White House chief of staff, was instrumental in securing the loan for Yellow and was in regular contact with company officials, according to the report. James P. Hoffa, head of the Teamsters union, which represents Yellow trucking employees, was in direct contact with Trump about the loan, and some Democratic and Republican lawmakers have appealed to Mnuchin to approve the loan.

Others believed the loan was a mistake, including Rep. French Hill, R-Ark., a member of the Congressional Oversight Committee that is also reviewing the use of COVID-19 aid.

“As I’ve said before, the $700 million taxpayer-backed loan to Yellow, formerly YRC, was a mistake, and now the commission is focused on how we can prevent it from happening again.” , he said, according to The New York Times.

The report says there are a number of ties between Yellow, Apollo Global Management, which provided financial support to the company, and the Trump administration – former Apollo CEO Darren Hawkins was one of them. of Trump’s coronavirus economic task force and Trump named former Yellow CEO William Zollars. on the Board of Governors of the United States Postal Service.

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

“Yellow worked hand in hand with senior union leaders to gain support for his loan application, and in fact received broad support from many members of Congress on both sides of the aisle who acknowledged the criticality of Yellow and urged the Treasury to approve Yellow’s request,” company attorney Marc Kasowitz said, according to The Washington Post.

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