Citing supporting documents obtained by American Oversight, the House Select Subcommittee on the Coronavirus Crisis last week released new evidence that the Trump White House may have played a direct role in helping a trucking company inappropriately secure a CARES Act loan meant for businesses critical to national security.
The subcommittee obtained emails suggesting that in 2020, top White House officials were involved in approving a $700 million loan to defense contractor Yellow Corporation, previously known as YRC Worldwide.
Yellow’s loan, announced in the summer of 2020, came through a CARES Act program meant to provide financial support to businesses “critical to maintaining national security,” and made up a whopping 95 percent of the total funds disbursed under that program. Not only did that massive amount elicit scrutiny, the Congressional Oversight Commission — the watchdog monitoring CARES Act spending — also questioned whether the company was indeed critical to national security, since its services could be easily replaced by another contractor. Yellow also used much of the funds for long-term capital investments rather than just “losses incurred as a result of the coronavirus” as stipulated by the CARES Act, and had already been facing financial troubles before the pandemic — the company lost more than $100 million in 2019.
On Oct. 5, Subcommittee Chair James Clyburn wrote to the National Archives and Records Administration requesting Trump administration communications and calendar entries related to the loan. In the letter, the subcommittee outlined its newly obtained evidence, including a May 2020 email indicating then-Deputy Assistant to the President Tim Pataki planned to meet with the White House political director and call the Department of the Treasury on behalf of Yellow. Another email, from then-Special Assistant to the President Joseph Russo, asked a Yellow representative who they had been in contact with at the Treasury.
The findings are consistent with public records previously obtained by American Oversight, which were cited in the subcommittee’s letter. Emails we obtained from the Treasury showed top officials — former Secretary Steve Mnuchin, National Economic Council Director Larry Kudlow, White House Chief of Staff Mark Meadows, and President Donald Trump’s executive assistant — discussing the announcement of the loan, including a July 1 email in which Mnuchin forwarded a YRC press release, likely about the loan, to Meadows, Kudlow, and Michael.
The records obtained by American Oversight also reveal that on July 1, Mnuchin sent Meadows and Trump assistant Molly Michaels a CNN article about the loan and highlighted a comment from James Hoffa, president of the Teamsters union, which represents many Yellow employees. According to the article, Hoffa “thanked President Donald Trump, Treasury Secretary Steve Mnuchin and Congress for the assistance.” The next week, Treasury Counselor Adam Lerrick sent Mnuchin the Treasury’s press release about the loan, to which Mnuchin replied, “Yup!”
In addition to the concerns raised about Yellow’s suitability, a December 2020 Government Accountability Office report found that the loan was processed faster than loans for other companies and was negotiated by Treasury officials “not otherwise involved in the loan program.” Moreover, at the time of the loan, the Justice Department was in active litigation against Yellow for systematically overcharging the Department of Defense for freight shipments.
The subcommittee’s investigation has also brought attention to the fact that Yellow is backed by Apollo Global Management, a private equity firm that loaned $184 million to Jared Kushner’s family company in 2017 and in the spring of 2020 communicated with White House officials about adjusting a federal lending program’s rules in its favor.
In its Oct. 5 letter, the subcommittee asked the National Archives and Records Administration to release Trump White House records related to Yellow Corporation, Apollo, and applications to the CARES Act national security loan program.
American Oversight filed records requests to the Treasury Department in 2020 to learn the extent of private-sector influence on Covid-19 relief spending. Documents we obtained revealed communications exchanged by Mnuchin and Kushner with representatives of the aviation and auto industries, as well as other high-level executives.
For more on American Oversight’s investigation into the Trump administration’s contacts with the private sector during the early months of the pandemic as well as its mishandling of the coronavirus crisis, visit our Covid-19 Oversight Hub.
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