Kushner’s possible link to $ 700 million loan raises questions for watchdog
A member of the Congressional Oversight Commission raised the possibility of a link between the president’s son-in-law and a loan for a struggling business.
A Congressional Comptroller of Federal Pandemic Aid raises the possibility of a link between President Donald Trump’s son-in-law Jared Kushner and a $ 700 million relief loan to a struggling trucking company.
Bharat Ramamurti, a Democratic member of the four-person Congressional Oversight Committee, raised the possibility of a connection with Kushner in a hearing Thursday, as panel members from both sides challenged the Treasury Department’s decision to grant the loan to YRC Worldwide. The taxpayer-funded loan was granted on the grounds that the company’s operations are essential to maintaining national security.
Panel members questioned the decision to view YRC’s activities as vital to national security. It was the first and by far the largest loan made under the national security portion of the Treasury Department’s business assistance program, which has loaned billions to major airlines and small air carriers.
YRC received a separate $ 600 million loan last year from Apollo Global Management and several other lenders which was arranged by Apollo, a large private equity firm that is YRC’s largest creditor, according to the monitoring panel. Apollo co-founder Joshua Harris advised the Trump administration on infrastructure policy in early 2017 and met with Kushner, who is an adviser to the president. Later that year, Apollo loaned Kushner’s family real estate company $ 184 million to help refinance their mortgage on a Chicago apartment building, according to a New York Times report cited by Ramamurti.
Ramamurti asked Treasury Secretary Steven Mnuchin if he had had any contact with Kushner or his staff regarding the YRC loan. Mnuchin said he didn’t. Ramamurti then expanded the question to a request for correspondence with anyone in the White House.
“This warrants further investigation,” Ramamurti said. He called the loan to YRC an “accelerated and extremely generous loan that aptly helped” Apollo as a creditor of YRC.
There was no immediate comment on the matter to the Associated Press from Kushner or his team.
“Apollo was not at all involved in (YRC’s) decision to search for Treasury funds,” Apollo spokeswoman Joanna Rose said Thursday. “We provide capital to thousands of businesses. We are one of the many lenders at YRC. A company that our funds own or control.”
Congressional auditors discovered that taxpayers stood to lose money on the $ 700 million investment. YRC had been in financial trouble for years, long before the pandemic began, and was in danger of going bankrupt.
Mnuchin defended the loan, saying YRC meets criteria for companies deemed essential to national security, as the Treasury Department had established with the Department of Defense and the office of the director of national intelligence.
He acknowledged that taxpayers could end up losing the money if YRC fails and doesn’t pay it back. “It was a risky loan,” Mnuchin said, but added, “We were fortunate that the economy recovered.… In the end, the treasury and the taxpayers will be very well compensated.
Mnuchin noted that before the loan was approved this summer, several lawmakers had asked the Treasury Department to help YRC in order to save jobs.
Representative French Hill, R-Ark., A panel member who is a former banker, told Mnuchin: “If I was still in finance, I wouldn’t have made this loan.”
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YRC, based in Overland Park, Kansas, provides transportation and logistics services, such as the delivery of food, electronics, and other supplies to military sites across the country. The Department of Defense is a major customer of the YRC and the major supplier of transportation to the Department of Homeland Security.
The national security portion of the Treasury’s business assistance program, with an available pot of up to $ 17 billion, was earlier this year to be reserved for ailing aircraft manufacturer Boeing or General Electric. They were able to tap private credit markets and did not seek government assistance.
To qualify for national security assistance, companies must operate under defense contracts of the highest national priority or operate under top-secret security clearance. YRC apparently did not meet any of the criteria but qualified under a “catch” provision allowing a recommendation and certification from the Secretary of Defense or Director of National Intelligence to suffice.
The four-member oversight commission was appointed by congressional leaders from both parties to oversee spending of some $ 2 trillion in economic aid passed by Congress last spring and headed by the Treasury Department and the Reserve federal.