Treasury defends controversial coronavirus relief loan to struggling trucking company
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WASHINGTON (NEXSTAR) – The bipartisan panel tasked with overseeing the trillions of dollars in federal spending for coronavirus relief grilled Treasury Secretary Steven Mnuchin on Thursday over money his agency gave to companies involved in national security .
Congress approved $ 17 billion in the CARES Act to help these businesses survive the pandemic. Mnuchin told the Congressional Oversight Committee that the Treasury Department ultimately loaned $ 736 million to 11 companies, but the panel focused on the $ 700 million that went to a single trucking company, YRC. Worldwide.
“If I was still in finance, I wouldn’t have made this loan,” said Representative French Hill, R-AR.
During Thursday’s hearing, Hill described YRC’s history of financial difficulties.
“YRC has been in a bad financial situation for some time, and the business has been contracting since 2007,” he said. “The only way YRC has survived over the past decade is by bailouting the government and the private equity industry. “
Another commissioner, Bharat Ramamurti, asked Mnuchin if the close personal ties between YRC’s biggest creditor and Jared Kushner, advisor and son-in-law to President Donald Trump, had also played a role.
“Did you know that in 2017 Apollo loaned $ 184 million to the Kushner companies? Ramamurti asked.
“I was not aware of this,” Mnuchin replied.
A new report from the Government Accountability Office found that the loan to YRC was the only one to be accelerated by the Treasury Department “although other companies faced similar circumstances.”
Mnuchin admitted it was a risky loan, but said Congress encouraged his department to take risks.
“We have had huge interest from Congress asking us to speed this up,” he said. “We also had a certification from the MoD that the loan was eligible, so of course we were going to prioritize that because like you said there was a huge risk to the MoD. and a huge risk to employment. “
Mnuchin told the commission that the economy is recovering faster than expected and that he is not worried that YRC will honor his loan.
“We don’t want to be in the long term business of lending to this type of company or to one of the national security companies,” he said. “But fortunately, we made a significant profit and the taxpayers should be reimbursed. “
The panel plans to pose similar questions to the Defense Ministry next week.
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