A report was released by Democratic lawmakers on Wednesday that claimed that top Trump administration officials awarded a $700 million relief loan to a struggling trucking company in 2020 over the objections of career officials at the Defense Department.
Corporate lobbyists helped to secure government funds during the early months of the coronaviruses crisis as trillions of dollars of relief money were being pumped into the economy, according to a report released by the Democratic staff of the House Select Subcommittee. The trucking company, Yellow Corporation, received special treatment despite concerns about its eligibility to receive relief funds because of the intervention of senior officials such as Steven Mnuchin, the former Treasury secretary and Mark T. Esper, the former defense secretary.
The chairman of the subcommittee, Representative James E. Clyburn of South Carolina, said that the report shows that the Trump administration ignores their obligation to be responsible stewards of taxpayer dollars.
Congress set up a pot of money that was controlled by the Treasury Department to assist companies that were considered critical to national security as part of the relief package. In July 2020, the Treasury Department gave a $700 million loan to the trucking company Yrc Worldwide.
Lobbyists for Yellow had been in close contact with White House officials throughout the loan process and had discussed how the company employs teamsters as its drivers.
According to correspondences obtained by the committee, the White House chief of staff coordinated with Yellow lobbyists. The report noted that the White House's political operation was almost giddy in its effort to assist with the application.
The company's close ties to the Trump administration and years of financial and legal turmoil led to immediate questions about the loan. The firm had lost more than $100 million in the year and was being sued by the Justice Department. It recently agreed to pay $6.85 million to resolve allegations that they knowingly presented false claims to the U.S. Department of Defense.
A company needs to be certified by the Defense Department to get a national security loan.
The company had been accused of overcharging the government and defense officials recommended against certification. The work that the company had been doing for the federal government, which included shipping meal kits, protective equipment and other supplies to military bases, could be replaced by other trucking firms.
The day after a defense official notified a Treasury official that the company would not be certified, one of Mr. Mnuchin's aides set up a telephone call between him and Mr.
The approval of the loan was announced a week after Mr. Esper certified that the company was critical to national security.
News reports praising the loan were included in the email sent by Mr. Mnuchin. James Hoffa, the president of the Teamsters union, made a direct plea to the president about the loan, according to documents in the report.
Mr. Esper did not respond to the request for comment.
The loan was necessary to save jobs and maintain trucking services for the Defense Department, said Mr. Mnuchin at the congressional oversight hearing. Lawmakers from both parties, such as Senator Ron Wyden, Democrat of Oregon, and Pat Roberts, Republican former senator from Kansas, sent letters to Mr. Mnuchin urging him to consider the loan application.
There are a lot of inquiries. There have been many investigations into Donald Trump's businesses and personal affairs since he left office. Here is a list of those ongoing.
There were many connections between Yellow and the Trump administration. Apollo Global Management is a private equity firm with close ties to administration officials. The company's chief executive was selected by Mr. Trump to serve on the economic task force. He nominated William D. Zollars, the company's former chief executive, to the U.S. Postal Service's board of governors.
Yellow is accused of misrepresenting its business in order to get a loan. It claimed to provide more trucking services to the Defense Department. A company executive discussed using funds to catch up on capital investments when relief money was supposed to be used for offsetting losses from the Pandemic. The executive said that the company had something in the cookie jar.
Mr. Clyburn sent a letter to the inspector general of the Treasury Department asking for an investigation into whether Yellow had violated the False Claims Act.
A law firm representing Yellow sent a letter to Mr. Clyburn before the release of the report defending the company's actions and describing many of the allegations as baseless.
The New York Times received a letter from Mr. Trump's personal lawyer, who was previously Mr. Kasowitz.
The reporting was contributed by Maggie.
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