WASHINGTON — Democratic lawmakers released a report Wednesday claiming that top Trump administration officials granted a $700 million pandemic aid loan to a struggling truck company in 2020 over objections from career officials at the Department of Defense.
The report, released by the Democratic staff of the House Select Subcommittee on the Coronavirus Crisis, details the role of corporate lobbyists in securing government funds during the early months of the pandemic as trillions of dollars in emergency aid were pumped into the economy. † It also suggests that senior officials such as Steven Mnuchin, the former Secretary of the Treasury, and Mark T. Esper, the former Secretary of Defense, stepped in to ensure that the transportation company, Yellow Corporation, received special treatment despite concerns about it. fact that it was eligible for aid. †
“Today’s selected subcommittee personnel report reveals yet another example of the Trump administration ignoring their obligation to be responsible stewards of taxpayers’ money,” South Carolina Representative James E. Clyburn, the subcommittee’s Democratic chairman, said in a statement. a statement. †Political appointees risked hundreds of millions of dollars in public funds against the recommendations of DOD officials in and in apparent disregard for the provisions of the CARES Act designed to protect national security and American taxpayers.
The $2.2 trillion pandemic aid package that Congress approved in 2020 included a $17 billion pot of money set up by Congress and overseen by the Treasury Department to help companies deemed critical to the national economy. safety. In July 2020, the Treasury Department announced it would provide a $700 million loan to transportation company YRC Worldwide, which has since changed its name to Geel.
Lobbyists for Geel were in close contact with White House officials during the loan process and had discussed how the company employs teamsters as drivers, according to the report.
Mark Meadows, the White House chief of staff, was a “key player” who coordinated with Geel’s lobbyists, according to correspondence the committee obtained. The report also noted that the White House’s political operation was “almost dizzy” in its effort to assist with the application.
The loan immediately raised questions from watchdog groups because of the company’s close ties to the Trump administration and because it had faced years of financial and legal turmoil. The company had lost more than $100 million in 2019 and was being sued by the Justice Department over claims it had defrauded the federal government over a seven-year period. It recently agreed to pay $6.85 million to resolve allegations “that they knowingly made false claims to the U.S. Department of Defense by systematically overcharging freight forwarding services and making false statements.” to hide their wrongdoing.”
To qualify for a government loan, a company needed certification from the Department of Defense.
According to the report, defense officials had advised against certification over allegations that the company overcharged the government. They also noted that the work the company had done for the federal government — including shipping meal kits, protective gear and other supplies to military bases — could be replaced by other trucking companies.
But the day after a defense official notified a Treasury official that the company would not be certified, one of Mr. Mnuchin’s employees made a phone call between him and Mr. Esper.
Following the call, Mr Esper stated that the company was critical to national security and the loan approval was announced a week later.
Mr. Mnuchin then emailed Mr. Meadows with news reports praising the loan. He highlighted positive comments from James Hoffa, the longtime chairman of the Teamsters union, who made a direct plea to President Donald J. Trump about the loan, according to documents in the report.
Mr Esper and Mr Mnuchin declined to comment.
A former finance minister familiar with the process said the loan saved 25,000 union jobs amid an economic crisis and prevented a massive disruption to the national supply chain on which the Ministry of Defence, businesses and consumers had depended. The former official said that because of the terms of the loan, taxpayers benefited from the agreement.
At a congressional hearing before leaving office in late 2020, Mr. Mnuchin said the loan was appropriate and necessary to save jobs and maintain trucking services for the Department of Defense. Lawmakers from both parties, such as Senator Ron Wyden, a Democrat from Oregon, and Pat Roberts, the former Republican senator from Kansas, had sent letters to Mr. Mnuchin asking them to consider the loan application.
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Yellow had many connections to the Trump administration. The company received financial backing from Apollo Global Management, a private equity firm with close ties to government officials. Mr. Trump had chosen the company’s CEO, Darren D. Hawkins, to be part of an economic task force on the coronavirus. And he had nominated the company’s former chief executive, William D. Zollars, to the board of governors of the US Postal Service.
The report accuses Yellow of misrepresenting things to secure the loan. It claimed to provide a higher proportion of trucking services to the Department of Defense than the department estimated. Communications in the report also revealed that a company executive discussed using funds to make up for capital investments, when the emergency money was intended to offset losses caused by the pandemic. The director said the company had its “hand in the biscuit tin”.
In conjunction with the publication of the report, Mr. Clyburn sent a letter to the Inspector General of the Treasury Department requesting an investigation into whether Yellow had violated the False Claims Act.
A law firm representing Yellow sent a letter to Mr. Clyburn in which it defended the company’s actions and described many of the allegations as “baseless”. The letter stated that the company had settled its dispute with the government last month.
The letter, written by Marc E. Kasowitz, who was previously Mr. Trump’s personal attorney, was delivered to DailyExpertNews by Heather Nauert, an adviser to Yellow who was previously a spokeswoman for Mike Pompeo, the secretary of Mr Trump of State.
Maggie Haberman reporting contributed.
