'Financially strapped' trucking company received $700 million pandemic loan with support from Trump White House
A troubled trucking company in financial turmoil reportedly received inside support from the Trump White House and obtained a nine-figure pandemic loan awarded by the U.S. Treasury Department, according to documents released by the Democratic-led Select Subcommittee on the Coronavirus Crisis.
According to The Washington Post, the Yellow Corporation, previously known as YRC, was awarded approximately $700 million. The proceeds were supposed to be designated for businesses that were "critical to national security." However, the loan awarded to Yellow has received bipartisan criticism as Democratic and Republican lawmakers believe the U.S. Pentagon and Treasury stretched the meaning to ensure the Defense Department subcontractor could be included with other trucking competitors.
The Post reports that the Government Accountability Office (GAO) also noted multiple inconsistencies in the government's handling of Yellow compared to other business loan applicants. Per the Post:
"Treasury fast-tracked the loan to Yellow "due to the urgency of the business's financial circumstances," GAO found, even though other companies faced similarly dire circumstances. And the loan was negotiated and executed by Treasury staff who were "not otherwise involved in the loan program," GAO said."
After receiving the loan proceeds, Yellow reportedly paid for capital investments and upgraded machinery such as new tractors and trailers to replace older equipment.
Now, congressional investigators have submitted a request to the National Archives and Records Administration seeking to obtain the Trump White House's communication records in regard to Yellow and its private equity support firm, Apollo Global Management.
Despite the ongoing investigation and speculation about the loan, Yellow has defended its acceptance of the loan.
"Yellow reached out to the appropriate executive and legislative branches to help save 30,000 jobs and protect the vulnerable U.S. supply chain during the height of the COVID-19 crisis," the company said in a statement provided by a spokeswoman. "Our request received bipartisan Congressional support and the full support of the International Brotherhood of Teamsters. When negotiating with the Department of the Treasury, all guidelines were followed, and the due diligence process was extensive. We stand by our work and are proud to partner with the U.S. government and our military to support America's domestic supply chain."
A spokeswoman representing Apollo Global Management also released a statement to make it clear that the firm "was not involved in the company's decision to seek the Treasury funds and did not advocate on their behalf."
The latest investigation comes months after the former U.S. Treasury Secretary Steven Mnuchin was pressed about the loan. Back in December 2020, Mnuchin described the company as a "'critical vendor' to the Defense Department," the Post reports. Mnuchin claimed the loan "would allow the company to sustain its employment while providing an appropriate repayment to taxpayers."