Treasury defends controversial coronavirus relief loan to troubled trucking company

Washington-DC

WASHINGTON (NEXSTAR) – The bipartisan panel tasked with overseeing the trillions of dollars in federal spending on coronavirus relief grilled Treasury Secretary Steven Mnuchin Thursday over the 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 Commission the Treasury Department ultimately loaned $736 million to 11 businesses, but the panel focused on the $700 million that went to a single trucking company, YRC Worldwide.

“Were I still in finance, I would not have made this loan,” said Rep. French Hill, R-AR.

During Thursday’s hearing, Hill outlined YRC’s history of financial difficulties.

“YRC has been in poor financial condition for quite some time, and the company has actually been shrinking since 2007,” he said. “The only way YRC has survived for the last ten years is through bailouts by the government and the private equity industry.”

Fellow commissioner, Bharat Ramamurti, asked Mnuchin if the close personal ties between YRC’s biggest creditor and Jared Kushner, President Donald Trump’s advisor and son-in-law, also played a role.

“Were you aware that in 2017, Apollo loaned the Kushner companies $184 million?,” Ramamurti asked.

“I was not aware of that,” Mnuchin replied.

A new report from the Government Accountability Office found the loan to YRC was the only one fast-tracked by the Treasury Department “though other businesses faced similar circumstances.”

Mnuchin admitted it was a risky loan but said Congress encouraged his department to take risks.

“We had tremendous interest from Congress asking us to expedite this,” he said. “We also had a certification from the Department of Defense that the loan qualified so of course we were going to prioritize this because, as you said, there was a tremendous risk to the Department of Defense and a tremendous risk to jobs.”

Mnuchin told the commission the economy is recovering faster than expected, and he is not concerned about YRC making good on the loan.

“We do not want to be in the long-term business of lending to this type of company or any of the national security companies,” he said. “But fortunately, we’ve made a significant profit and taxpayers should get paid back.”

The panel plans to ask the Defense Department similar questions next week.

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