2020-07-24 17:11:26 UTC
President Donald Trumpfs refusal to divest from his real estate empire has
resulted in a barrage of unprecedented corruption scandals as he funnels
millions of dollars in campaign donations to his family through his hotels and
openly charges elites for access via his Mar-A-Lago resort in Florida.
Now, Trumpfs mixing of business and politics has compromised the integrity of
Congressf coronavirus crisis bailout, as the president personally benefits from
a government lending program intended to help small businesses, according to
data the Treasury Department recently disclosed.
Rescue funding has helped a handful of business tenants continue to pay rent at
a Manhattan office building Trump partially owns. The firms received up to $9
million from the Paycheck Protection Program (PPP) Congress established in March
to keep small businesses alive and enable them to continue meeting payroll
obligations to their workers.
Itfs impossible to quantify how much Trump is directly reaping from the
arrangement \ there are other investors in the property, and there is no direct
evidence that Trump, his family, or the firms involved in the rescue program
were aware of the situation until HuffPost brought it to their attention. But an
arrangement in which the president is a downstream beneficiary of a public
rescue raises unavoidable questions about how and why some PPP applicants have
been accepted and others have been denied.
gIt is a conflict-of-interest disaster, one we should never get used to,h said
Zephyr Teachout, a law professor at Fordham University in New York and author of
Corruption In America, a respected history on political graft. gEvery decision
made by the president has a question mark next to it c You canft guess where
and when conflicts will arise, or the way any given conflict will poison a
program by raising questions around it.h
According to Trumpfs latest personal financial disclosure form, he owns a 30%
stake in the office building at 1290 Avenue of the Americas in Manhattan, valued
at more than $50 million. The building generates over $5 million a year in
income for the president.
The law firm of Selendy & Gay and three separate entities managed by Garrison
Investment Group, which combined occupy four spaces in the building, each
received PPP loans. According to Treasury Department data, Selendy & Gay
received a loan of up to $5 million, while the three Garrison vehicles received
loans totaling up to $4 million. Both Garrison and Selendy & Gay declined to
comment for this story.
Law firms and financial institutions do not typically come to mind for most
people when they think of small businesses. But the purpose of the PPP is not
only to help local restaurants survive. Whatever their line of work, small firms
have financial obligations to other parties \ their employees, utility
companies, creditors and landlords. By preventing these institutions from going
under, the programfs architects hoped to prevent a cascade of other losses and
defaults and a snowballing economic calamity.
Lending terms for the PPP are lenient by design. If companies that receive the
funding meet a certain set of criteria \ most notably, maintaining their
payrolls \ they donft even have to pay back the loan.
The legislation Congress passed in March authorizing the PPP and other rescue
initiatives explicitly prohibited Trump and his businesses from directly
receiving government funds. But since Trump is a partial landlord for a handful
of firms receiving PPP money, he is a downstream beneficiary of the rescue.
In an email to HuffPost, the presidentfs son Eric Trump dismissed the idea that
the Trump family had engaged in any impropriety. He demanded that his comments
not be quoted for attribution, but HuffPost had not agreed to any such
stipulation prior to receiving his note on that.
This is arguably one of the most asinine narratives I have seen (and the bar
is low),h Eric Trump said. gIfm actually baffled by the stupidity ... This is
disgusting and you should be ashamed.h
Nevertheless, the nature of the Trump familyfs operation makes it impossible to
tell where legitimate public support for the economy ends and where any favors
for it begins. More than 100 major donors to Trumpfs campaign had received up
to $273 million in PPP funding as of early July.
gThe administration rigged this program meant for struggling mom-and-pops to
the benefit of the wealthy and well-connected,h said Kyle Herrig, president of
Accountable.Us, a non-partisan government corruption watchdog. gItfs no
surprise to see upscale businesses that send Trump rent checks manage to secure
millions of dollars in taxpayer money.h
And the PPP money will likely be just the beginning of the entanglement between
rescue and racket. The pandemic has created particularly acute pressure on the
real estate sector, as families forego vacations at resorts and hotels,
businesses fail, and residential rents plunge in major cities as people flee
crowded neighborhoods because of health concerns. No matter how Congress
structures economic aid, any effective rescue will flush money to Trump in some
form, and it will be difficult if not impossible for the public to determine
whether that money is legitimate.
gThis is one reason the framers of our country were so focused on structural
impersonal prohibitions against conflicts of interest,h Teachout said. The
Trump debacle, she added, gshould teach everyone to divest \ not just
presidents, by the way, but members of Congress, all decision-makers.h