Representatives spotlight loans to lodge chain Westmont Hospitality Group in letter to SBA calling for “vigilant oversight” of mortgage forgiveness course of: “The place did the cash go?”
PHOENIX & LOS ANGELES, March 22, 2022–(BUSINESS WIRE)–March 15, Congressman Ruben Gallego (D-AZ) despatched a letter to the Small Enterprise Administration (SBA) calling for vigilant oversight as $696 billion of the whole $789 billion lent by means of the Paycheck Safety Program (PPP) section has already been forgiven.
On March 16, UNITE HERE Native 11 submitted testimony at a Home Small Enterprise Administration’s Small Enterprise Oversight, Investigations and Rules Committee listening to titled “An Empirical Evaluate of the Paycheck Safety Program.”
The letter (accessible right here) follows President Biden’s March 1 announcement that the Division of Justice will appoint a Chief Prosecutor to concentrate on probably the most egregious types of pandemic fraud. Gallego was joined by Representatives Linda Sanchez (D-CA), Adam Schiff (D-CA), Ted Lieu (D-CA), Nanette Diaz Barragan (D-CA), Grace Flores Napolitano (D-CA), Julia Brownley (D-CA), Norma Torres (D-CA), Alan Lowenthal (D-CA), Katie Porter (D-CA), Jimmy Gomez (D-CA), Raul Grijalva (D-AZ), Ann Kirkpatrick (D-AZ), Kweisi Mfume (D-MD), Anthony Brown (D-MD), Ayanna Pressley (D-MA) and Darren Soto (D-FL).
The letter highlights Westmont Hospitality Group, a global lodge firm that owns and operates over 400 motels world wide, for example of the necessity for “vigilant oversight” and improved transparency. In accordance with knowledge supplied by the SBA, Westmont associates obtained $48 million by means of 44 PPP loans that had been tied to roughly 5,300 jobs. Regardless of this, the letter states, an absence of transparency by the SBA has made it “not possible” to find out whether or not these 5,300 jobs had been truly retained, but over $28 million of the Westmont-connected loans have already been forgiven.
The Paycheck Safety Program (PPP) was handed by Congress as a part of the CARES Act of 2020 in an effort to assist small companies and save jobs within the midst of the COVID-19 pandemic. PPP debtors should spend at the least 60% of their loans on payroll prices with the intention to obtain full mortgage forgiveness.
UNITE HERE Native 11, the labor union that represents hospitality staff in California and Arizona, offered proof to Congress Members relating to one lodge related to Westmont that obtained a PPP mortgage however issued WARN Act notices that it had completely separated 122 staff, elevating the query whether or not PPP had actually served its objective of defending jobs.
As of January 3, 2022, SBA had forgiven $9.7 billion of the $13.9 billion in PPP loans to motels. With the assist of PPP funds, the lodge business has not solely weathered the pandemic however has grown on the backs of its staff, with fewer staff compelled to do extra work than earlier than this unprecedented disaster. Whereas the variety of U.S. non-public business lodging institutions elevated by 1,375 from the primary quarter of 2020 to the second quarter of 2021, the business employed 443,600 fewer staff in February 2022 than in February 2020 earlier than the pandemic.
Congressman Ruben Gallego mentioned, “When the COVID-19 pandemic first started, the Paycheck Safety Program served as a crucial lifeline to maintain our companies open and hardworking Individuals employed. Within the years since, now we have seen corporations get well, but it surely hasn’t been clear whether or not some companies upheld their finish of the cut price to maintain staff employed. As SBA continues to observe this system, it is vital corporations are totally clear in justifying PPP mortgage forgiveness. That’s why I’m main this name for SBA to replace Congress on what it’s doing to guard hospitality staff’ jobs.”
Elba Hernandez, a housekeeper on the Westmont-operated Hilton Santa Monica Resort & Suites, mentioned, “For the various months that I used to be laid off in the course of the pandemic, I didn’t get a cent from Westmont. I’m very upset that Westmont acquired $48 million and nonetheless hasn’t instructed us how they spent the cash.” Hernandez’s employer is a restricted legal responsibility firm that has as its supervisor or member a Westmont affiliate that obtained PPP funds.
Teams supporting the letter embody the Covid Oversight Coalition, Public Citizen, American Oversight, Individuals for Monetary Reform and United Steelworkers and UNITE HERE Native 11.
Lisa Gilbert, Govt Vice President of Public Citizen, mentioned “The Paycheck Safety Program was meant to supply funds to small companies as a lifeline to common Individuals in a time of disaster. Guaranteeing that the funds weren’t abused and that they had been used to maintain Individuals at work is a key responsibility of Congress. Public Citizen vigorously applauds Rep. Gallego for pushing for extra transparency and accountability of the PPP funds.”
Aliya Sabharwal, Covid Oversight Marketing campaign Supervisor at Individuals for Monetary Reform, mentioned, “The Paycheck Safety Program was not meant to be a bailout for billionaire firms. Small companies are nonetheless struggling to remain open whereas large corporations appear to have made a revenue. That’s not proper. We have to know the place that taxpayer cash went and to whom. And if corporations acquired it however didn’t comply with the principles, there have to be penalties.”
Congressman Gallego’s letter follows prior letters urging SBA to enhance transparency and oversight of PPP loans that highlighted lodge chains: an October 2020 letter led by Congresswoman Porter, a July 2021 letter led by Congresswoman Barragan and a February 2022 letter from Congresswoman Judy Chu asking the SBA to enhance transparency round PPP mortgage forgiveness.
UNITE HERE Native 11 is a labor union representing over 32,000 hospitality staff in Southern California and Arizona who work in motels, eating places, universities, conference facilities, and airports.
Congressional letter accessible right here
View supply model on businesswire.com: https://www.businesswire.com/information/house/20220322005993/en/
Contacts
CA – Maria Hernandez | mhernandez@unitehere11.org | (623) 340-8047
AZ – Rachele Smith | rsmith@unitehere11.org | (623) 670-9889