KC region lawmakers call for greater transparency about businesses getting federal aid

May 1, 2020
In The News

Lawmakers from the Kansas City region are calling on the Trump administration to release the names of companies benefiting from a program meant to provide emergency relief to small businesses during the coronavirus pandemic.

Rep. Sharice Davids, D-Kansas, wrote Thursday Treasury Secretary Steve Mnuchin and Small Business Administration Administrator Jovita Carranza asking them to release a complete list of companies receiving aid through the Paycheck Protection Program.

Davids, a member the House Small Business Committee, made the request following reports of publicly-traded companies receiving money through program, which is aimed at helping small businesses pay their workers during the crisis.

She said many businesses in her suburban Kansas City district are still waiting to hear whether they’ll receive a loan through the $660 billion program.

“It is unacceptable that small businesses struggling to pay their rent and their employees cannot access the program while we see reports of more well-connected chains and financially secure businesses getting millions,” Davids wrote.

No comprehensive list of recipients has been released to the public or lawmakers, but data will likely become available in the future. A spokeswoman for the SBA referred to a notice on the agency’s website that promises to balance transparency and privacy concerns with regards to individual loans.

“In the near future, we will be able to turn our efforts to providing loan-specific data to the public, but hope that all understand the need for the Agency to focus its efforts on fulfilling the urgent needs of small businesses,” the website states.

Davids’ letter came the same week that the Columbia Tribune reported that businesses owned by Missouri Republican Rep. Vicky Hartzler’s husband had applied for and received payments through program.

“The family businesses applied for PPP loans and received them. Everything was done in accordance with the CARES Act and the provisions that were in there,” said Hartzler’s spokesman Danny Jativa.

“These small business employees shouldn’t be penalized and be forced to forgo the same financial stability that is offered to any other small business employee in the country simply because Vicky Hartzler serves in Congress.”

Hartzler’s family owns multiple companies. Her office did not disclose which businesses were approved for a loan or the size of the payment. Her office declined to say whether she agreed with Davids that the Treasury Department should release a complete list, but noted that she supported the creation of bipartisan oversight commissions to ensure stimulus money was used properly.

Hartzler’s Democratic opponent, Lindsey Simmons, called on her to release more information, saying in a statement that there “is a genuine conflict of interest when a publicly elected official votes to appropriate a fund—and then re-appropriate it—knowing that fund will benefit her private business.”

In a Friday interview, Davids said one reason to disclose the loans is to see whether politically-connected people are benefiting.

“First of all, I don’t think that members of Congress should be able to benefit from programs like this… Countless small business owners have been shut out of the program,” she said.

She said the program left too much power in the hands of banks to decide which businesses would be approved for the loan,s which benefited larger businesses at the expense of smaller firms.

The the Associated Press identified 94 publicly traded firms that had received a total of $365 million based on SEC filings.

The New York Times reported that Dallas-based asset management firm Ashford Inc. received $53 million by having roughly 100 hotel properties apply separately, including the Courtyard by Marriott Wichita.

Rep. Emanuel Cleaver, D-Missouri, said he asked Mnuchin for a list last month.

“Everyone wants to see where the money is going,” Cleaver said. “This is a democracy or it’s supposed to be and the members of congress cannot even find out where the money’s going… It’s a bit scary.”

Sen. Jerry Moran, R-Kansas, said he’s also discussed the issue with Mnuchin.

“No question that greater oversight is positive. No question that greater transparency is necessary,” Moran said Friday when he asked if he agreed with Davids that a full list needs to be disclosed.

However, Moran cautioned that companies that obtained aid shouldn’t be penalized if they qualify because of loopholes in the law. He blamed some of the questionable loans on the speed with which the federal government rolled out the program because of urgency during the pandemic.

“We asked the SBA to administer $350 billion in loans in two weeks. It’s an agency that deals with $30 billion in loans a year,” Moran said Friday. “There will be instances in which Kansans shake their heads.”