Politics - News Analysis
Mitch McConnell’s Wife’s Family Business Raked in a Ton of PPP Cash
When the Paycheck Protection Program was established, it provided millions of businesses with a cushion of forgivable loans — to the tune of hundreds of billions of dollars. But now it’s been revealed that a shipping business started by the family of Elaine Chao, Secretary of The Department of Transportation, and the wife of House Minority Leader Mitch McConnell (R-Ky.) has benefitted by this largesse.
While the exact amount of the loan wasn’t revealed in data published Monday by the U.S. Small Business Administration, it’s reported the amount is somewhere between $350,000 and $1 million.
Foremost Group, the New York-based company launched by Chao’s family in 1964 is currently headed by her father and sister, Newsweek reports. SBA’s data shows it was approved for the loan on April 15, allowing the company to save 20 jobs.
In a July 6 news release, Treasury Secretary Steven Mnuchin lauded the SBA’s data.
“The PPP is providing much-needed relief to millions of American small businesses, supporting more than 51 million jobs and over 80 percent of all small business employees, who are the drivers of economic growth in our country,” he said.
“We are particularly pleased that 27 percent of the program’s reach in low and moderate-income communities which is in proportion to percentage of population in these areas,” Mnuchin noted, adding that $100,000 was the average loan size.
The news release also reported that about 4.9 million loans were approved via the PPP program. The loan approved for Foremost Group was part of a second group of loans (valued $150,000 and above). These account for nearly 75 percent of PPP loan dollars allocated by the SBA. The news release also reported that some loans amounted to as much as $10 million.
But here’s where things get clunky. Unlike some heavily-scrutinized large companies, like say, Shake Shack, which returned it’s $10 million PPP loan in April, or Harvard University, which received more than $8.5 million, Foremost Group slipped under the radar.
Chao’s relationship with the company hasn’t however, having been the focus of an ethics investigation launched in 2017 by the House of Representatives after she became the Transportation Secretary. She’s also been criticized for keeping stocks after promising she would sell them upon becoming head of the Department.
This smacks of nepotism and perhaps a conflict of interest. But Foremost Group isn’t the only company that has close ties to politicians, CNBC reports. Many of these companies received more than $100,000 according to the SBA’s report, including a school that’s named after Jared Kushner and political organizations with Republican and Democratic ties.
Newsweek sought comment from the Department of Transportation but didn’t receive a response as of publication.
It’s laudable that small businesses were helped by this, but as can be seen in Elaine Chao’s example, sometimes pond scum doesn’t rise to the top. It merely infiltrates everything it touches.