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Companies tied to NH officials among recipients of virus relief loans

By Matthew Daly, Brian Slodysko And Julie Carr Smyth
Associated Press
Governors who ordered shutdowns as their states responded to the coronavirus pandemic were among millions of beneficiaries of the loan program created to help small businesses weather COVID-19’s effect on the economy, data released Monday show.

The governors of at least eight states have ties to companies that received loans through the Small Business Administration’s Paycheck Protection Program. Both Republicans and Democrats, their associated companies’ loans ranged from $150,000 to more than $11 million. It is legal for businesses owned by elected officials to apply for and receive the loans, which are forgivable if used to preserve jobs.

A minor league baseball team part-owned by Ohio Gov. Mike DeWine received a loan, as did an investment company led by New Hampshire Gov. Chris Sununu’s family. A communications company in which New Jersey Gov. Phil Murphy has a stake, and a winery and hospitality company founded by California Gov. Gavin Newsom also were beneficiaries. At least six of billionaire West Virginia Gov. Jim Justice’s family businesses qualified for loans. Virginia Gov. Ralph Northam’s former medical practice, in which he’s still invested, a commercial real estate brokerage firm started by Maryland Gov. Larry Hogan, and an air conditioning and supply company partially owned by Mississippi Gov. Tate Reeves also received loans.

Governors have played a leading role in the U.S. response to the deadly coronavirus pandemic, issuing orders that shut down businesses and schools, establishing guidelines on masks and social distancing, and shuttering residents in their homes.

Their businesses were able to successfully navigate a system that many Main Street businesses had trouble accessing before the application deadline was extended to early next month. The aid package is the centerpiece of the federal government’s plan to rescue an economy devastated by shutdowns and uncertainty. The data released by the Treasury Department presents the fullest accounting of the program thus far.

Governors’ successful efforts to tap the loan program came, in some cases, as they faced pushback against the economic effects of their virus policies. The Republican DeWine, for example, has been rebuked by some local party officials and targeted in statehouse protests for going too far in his response.

He is a part-owner of DeWine Seeds-Silver Dollar Baseball, which received a loan listed between $150,000 and $350,000. The company owns the Asheville Tourists, a minor league baseball team in North Carolina, which was purchased by the governor’s family in 2010. DeWine’s son, Brian DeWine, serves as president of the team.

A spokesman said DeWine has a 32% stake in the baseball team and plays no management role. He said the loan, for $189,500, will cover payroll and payroll-related expenses.

Waterville Valley Holdings, an investment group led by the family of Sununu, a Republican, got a loan of between $350,000 and $1 million. The company is the principal investor in the Waterville Valley Resort, a ski area where Sununu served as CEO until just before he took office in 2017.

Sununu’s legal counsel, John Formella, noted that the resort is part of an industry that was shut down and severely impacted by the pandemic. At least five other New Hampshire ski areas or the resort properties associated with Sununu got loans of at least $150,000.

A New York-based communications company with a stake held by New Jersey Gov. Phil Murphy, a Democrat, got a loan of $350,000 to $1 million. Cohere Communications reported it would retain 21 jobs as part of the program. Murphy’s stake in the company is not clear, but he reported it in a 2019 financial disclosure form filed with the state Ethics Commission.

PlumpJack Management Group LLC, Newsom’s winery and hospitality company, received a loan worth $150,000 to $350,000. PlumpJack reported retaining 14 jobs thanks to the loan. The company is part of a portfolio of brands that include a resort hotel at the Squaw Valley ski resort, five restaurants and bars, four Napa Valley wineries, a sports retailer and more.

Before taking office in 2019, Newsom announced he would step away from his businesses and put his assets in a blind trust managed by a family friend and attorney.

Asked why PlumpJack applied for the loan, Newsom said during a press conference about the coronavirus that “you would have to ask the people that are running those businesses. It’s in a blind trust; period, full stop.”

In West Virginia, Justice’s family companies received at least $11.1 million from the federal relief program.

Justice, a Republican, is considered to be West Virginia’s richest man through ownership of dozens of coal and agricultural businesses, many of which have been sued for unpaid debts. At least six Justice family entities received the Paycheck Protection Program loans, including the governor’s lavish resort The Greenbrier, as well as The Greenbrier Sporting Club, an exclusive members-only club linked to the resort.

Payments to Justice companies could be as high as $24.3 million, because the federal government disclosed the dollar figures in ranges, not specific amounts.

“I encouraged all business in our state to try to seek anything and everything that they could possibly seek from the federal government in regards to loans,” Justice said Monday, adding that about $2 billion has come into the state from the federal package.

Justice said he wanted to place his assets in a blind trust shortly after he was elected but has not done so. He maintains that his children are in control of the family business empire.

Northam’s former medical practice, which he owns a stake in, received a loan of between $2 million to $5 million. Northam, a pediatric neurologist, isn’t involved in Children’s Specialty Group’s day-to-day operations and played no role in their loan application, his spokeswoman said.

A commercial real estate brokerage firm started by Maryland’s Hogan also received a loan of between $150,000 and $350,000. Hogan stepped aside from the company when he was elected governor. His assets are managed by a trust.

That was the same loan range listed for Southern Air Conditioning & Supply Inc., a family business started and operated by the father of Mississippi’s governor. Parker Briden, a spokesman for Reeves, said the governor is a minority shareholder in the company who has no “day-to-day role” in its operation.

“The Governor has a lot of other work to be worried about,” Briden said in a statement.

Data: Congress created virus aid, then reaped the benefits

At least a dozen lawmakers have ties to organizations that received federal coronavirus aid, according to newly released government data, highlighting how Washington insiders were both author and beneficiary of one of the biggest government programs in U.S. history.

Under pressure from Congress and outside groups, the Trump administration this week disclosed the names of some loan recipients in the $659 billion Paycheck Protection Program, launched in April to help smaller businesses keep Americans employed during the pandemic. Connections to lawmakers, and the organizations that work to influence them, were quickly apparent.

Among businesses that received money was a California hotel partially owned by the husband of House Speaker Nancy Pelosi, as well as a shipping business started by Transportation Secretary Elaine Chao’s family. Chao is married to Senate Majority Leader Mitch McConnell.

Car dealerships owned by Republican Reps. Roger Williams of Texas and Mike Kelly of Pennsylvania, and fast-food franchises owned by Rep. Kevin Hern, R-Okla., received money. So, too, did a law firm owned by the husband of Sen. Jeanne Shaheen, D-N.H., and the former law firm of Rep. Matt Cartwright, D-Pa., which employs his wife.

Money also flowed to a farming and equipment business owned by the family of Rep. Vicky Hartzler, R-Mo., and a regional casino company led by the husband of Rep. Susie Lee, D-Nev.

Members of Congress and their families are not barred from receiving loans under the PPP, and there is no evidence they received special treatment. Loans were granted to Democrats and Republicans alike, something President Donald Trump’s campaign was quick to highlight when records showed donors to his campaign coffers were among the earliest beneficiaries.

Hundreds of millions of dollars also flowed to political consultants, opposition research shops, law firms, advocacy organizations and trade associations whose work is based around influencing government and politics.

While voting, lobbying and ultimately benefiting from legislation aren’t illegal, advocates say the blurred lines risk eroding public trust in the federal pandemic response as Congress begins debating yet another round of coronavirus relief.

“It certainly looks bad and smells bad,” said Aaron Scherb, a spokesperson for Common Cause, a watchdog group that was also approved for a loan through the program.

As of June 30, the Treasury Department program had handed out $521 billion to industries including manufacturing, construction, restaurants and hotels.

Treasury identified just a fraction of the total borrowers Monday, naming only companies that got more than $150,000. Those firms made up less than 15% of the nearly 5 million small companies and organizations that received assistance.

Many of the lawmakers connected to loan awards emphasized they weren’t part of the application process.

A spokesperson for Pelosi said her husband, Paul, is a minority investor in the company that owns the El Dorado Hotel in the wine-country town of Sonoma, Calif. Paul Pelosi has a 8.1% stake in the company, valued at $250,000 to $500,000, Pelosi’s office said.

“Mr. Pelosi is a minor, passive investor in this company,” said the Democratic speaker’s spokesperson, Drew Hammill. “He was not involved in or even aware of this PPP loan.” The firm, EDI Associates, is listed as a recipient of a loan between $350,000 and $1 million.

New York-based Foremost Maritime Co., founded by Chao’s parents and run by her sister, was cleared for a loan valued between $350,000 and $1 million. McConnell, a Republican seeking reelection in Kentucky, said Tuesday: “Neither my wife, nor I, have anything to do with that business and didn’t know anything about it.”

The Shaheen & Gordon law firm in Dover, N,H., got a loan of $1 million to $2 million. The firm is owned by Jeanne Shaheen’s husband, William Shaheen. A title company partially owned by William Shaheen got a $160,000 loan and a half dozen companies he partially owns or another relative owns got loans, below $150,000.

Jeanne Shaheen said she “was not involved in any way in applying for those loans nor do I have anything to do with their businesses, and Congress had no role in processing PPP applications.’’

Four car dealerships owned by Kelly received $600,000 to $1.4 million. Mike Kelly Automotive Group, Mike Kelly Automotive LP and Mike Kelly Hyundai and Kelly Chevrolet-Cadillac, all near Pittsburgh, received the money. A spokesman for Kelly said he wasn’t part of the loan application and isn’t involved in the operations of the dealerships, in accordance with ethics rules.

Williams, one of the wealthiest lawmakers with a net worth of over $27 million in 2018, received a loan for his Roger Williams Chrysler Dodge Jeep dealership in Weatherford, Texas. Williams is president and CEO of JRW Corp. of Fort Worth, which is listed as receiving a loan of $1 million to $2 million. “Like every other company who accepted a small business loan, our business qualified under law and regulation, and today over 100 of our employees are grateful that we did,’’ Williams said in a statement.

At least five car dealerships owned by the husband of Rep. Carol Miller, R-W.Va., also received loans, each ranging from $350,000 to $1 million, the data show.

Other lawmakers, while distancing themselves from the loan process, sought to portray the PPP program as a success story.

Hern’s Tulsa-based KTAK Corp., a management company for several McDonald’s restaurants, received $1 million to $2 million. Hern isn’t involved in the day-to-day operations, but “he is happy to share that the family business was able to keep all employees either at their current level of employment or move part-time employees to full time,” Hern’s chief of staff, Cameron Foster, said. Four businesses owned by fellow Rep. Markwayne Mullin, R-Okla., received at least $800,000.

Full House Resorts, a Las Vegas-based casino company led by Lee’s husband, Daniel, got two loans totaling $5.6 million, according to the Securities and Exchange Commission. The company said the funds would be used to rehire several hundred employees and prepare to reopen two casinos in Indiana and Colorado.

A spokesperson said Tuesday that Lee did not know about the company’s intention to apply for a loan when she and other Nevada lawmakers pushed for a rule change to allow small casinos to receive the loans. She had no influence over the application or any aspect of Full House’s business or decision making, spokesperson Jesus Espinoza said.

Two wineries tied to Rep. Devin Nunes, R-Calif., and an Iowa farm run by his family received loans worth at least $2 million. The wineries got separate loans worth $1 million to $2 million, and an Iowa dairy farm that is tied to his relatives received $150,000 to $350,000.

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