According to the report, only companies involved in vital defense contracts or possessing high-level security clearance should have been eligible for such loans.
A recent congressional report has shed light on a dubious $700 million COVID loan granted by the Treasury Department to a struggling trucking company using funds allocated by the bipartisan CARES Act
Unfortunately, the recipient of the loan, Yellow, did not meet these requirements. Remarkably, the agency could authorize the loan even without meeting the national security conditions by obtaining approval from the Department of Defense or the director of national intelligence. Capitalizing on this “catch-all” provision, the Treasury Department approved the loan and consequently gained ownership of approximately one-third of the company.
This revelation comes at a time when the federal government is facing criticism for its inadequate oversight in the distribution of COVID-19 relief funds. A recent report from the Small Business Administration inspector general revealed that over $200 billion was disbursed to fraudsters in just two of the relief programs offered by the government. The lack of basic fraud controls to authenticate identities and ensure targeted relief reached those in need has drawn widespread condemnation.
The loan granted to Yellow by the Treasury Department was deemed a poor investment due to the company’s dire financial situation at the time
Unfortunately, the trucking service’s value has plummeted since receiving the loan, leaving taxpayers to bear the brunt of the consequences. This congressional report has sparked further debate about the need for increased transparency and accountability in the allocation of COVID-19 relief funds.
Critics argue that stringent measures should have been in place to prevent such mismanagement and ensure that taxpayer dollars were directed toward deserving recipients. As the fallout from these questionable loans continues to unfold, there are growing calls for comprehensive reforms to prevent similar incidents in the future.