Treasury Made $25 Million After Trump Admin's Controversial Trucking Loan

The U.S. Treasury reportedly received more than $25 million in interest payments on a controversial loan worth $700 million that the Trump administration gave to a trucking company.

The loan was administered under the Coronavirus Aid, Relief and Economic Security (CARES) Act program for companies deemed as "critical to maintaining national security."

The Select Subcommittee on the Coronavirus Crisis released a report Wednesday detailing "troubling new evidence" that the trucking company, now named Yellow Corporation, received the massive loan "despite the assessment of career Department of Defense (DOD) officials that the company was not 'critical' to national security—a requirement under the CARES Act."

"The loan's approval involved the intervention of top Trump Administration officials—potentially including the president—and its generous terms also violated CARES Act risk and interest rate requirements," the committee said in a release.

The committee's chairman decried the findings for their alleged impact on U.S. taxpayers, while an attorney for the company said that the loan allowed the Treasury to rake in millions on interest payments.

Yellow Corporation lawyer Marc E. Kasowitz said in a letter to the committee responding to its findings, which was shared with Newsweek, that the company paid more than $25 million in interest on the loan. He also said in the letter that the Treasury's equity stake in Yellow is now worth about $70 million, an increase of roughly 50 percent since the beginning of the loan.

Trump Admin Trucking Loan
The U.S. Treasury reportedly received more than $25 million in interest payments on a controversial Trump administration loan worth $700 million to a trucking company. Above, former President Donald Trump speaks during a rally hosted by the former president at the Delaware County Fairgrounds on April 23, 2022 in Delaware, Ohio. Drew Angerer/Getty Images

The committee began investigating the loan to the Yellow Corporation in June 2021 to determine whether the loan was "issued appropriately and used properly," according to an earlier press release.

The committee said in a new press release Wednesday that documents it obtained indicated that rather than using the loans to make up for COVID-19 pandemic-related losses, as is required under the CARES Act, Yellow Corporation executives "sought to use government funds for long-term capital investments to update the company's aging truck fleet."

At one point, the company's chief financial officer said in a message to a private creditor: "while we had our hand in the cookie jar we thought we would try to get a little 'catch up' capex [capital expenditures] while we were at it," according to the committee.

In his letter, Kasowitz noted what he described as the "prominent quotation of an off hand and flippant remark made by a former employee."

"It is highly unfortunate, indeed, that the Committee, which had the opportunity to quote from literally tens of thousands of pages of substantive material in the documents voluntarily produced by Yellow to the Committee, has chosen instead to elevate rhetoric over substance for cheap political gain," he wrote.

The report's findings alleged that White House officials, "likely" with the "involvement" of former President Donald Trump himself, intervened while the company's loan application was being evaluated. Administration appointees then "overrode" the Defense Department's recommendation against awarding the loan to Yellow, the release said.

Representative James Clyburn, a Democrat from South Carolina who chairs the committee, said in a statement that the new report "reveals yet another example of the Trump Administration disregarding their obligation to be responsible stewards of taxpayer dollars.

"Political appointees risked hundreds of millions of dollars in public funds against the recommendations of career DOD officials and in clear disregard of provisions of the CARES Act intended to protect national security and American taxpayers. The Select Subcommittee is committed to accountability for government officials and other unscrupulous actors who sought to use a public health crisis as an opportunity for political gain and personal profit," the statement read.

Kasowitz addressed what he described as the "unsubstantiated, and indeed demonstrably false, allegations" made by the committee in his response letter.

He asserted that documents Yellow has provided established that Yellow was eligible for and properly used the CARES Act loan. Yellow applied for the loan in April 2020 as it was "facing potentially crippling economic dislocations" from the COVID-19 pandemic and received "broad" bipartisan support from members of Congress who Kasowitz said urged the Treasury to approve the company's application.

Kasowitz also described one committee allegation — that Yellow's use of some loan funds "to make long term capital investment" was improper — was "baseless." He wrote that Yellow took part in extensive negotiations with the Treasury over its intended use of the loan funds.

"The documents that Yellow provided to the Committee also establish that Yellow was required to seek approval from Treasury through explicit disbursement requests to obtain any funding thereunder," he wrote. "As a practical matter, this means that Treasury reviewed and approved the use of all funds in advance of their disbursement to Yellow under both the prior Presidential administration as well as the current."

Kasowitz pinpointed the "uncontroverted evidence" Yellow provided as a "stark contrast to the Committee's partisan approach."

"That evidence speaks to the transparency of the loan application process; the rigor of the negotiations between Treasury and Yellow; the efficacy of the Department of Defense's conclusion that Yellow was vital to supporting numerous military supply chains; and, contrary to the insinuations by the Committee of undue political pressure, the broad, bipartisan support that Yellow had from both Democrats and Republicans in its pursuit of this critical, job-saving loan," he wrote. "In completing its review of the loan, rather than continue to leak information about its investigation to the press, Yellow implores the Committee to start focusing on the objective evidence rather than its pursuit of political vendettas."

Newsweek reached out to the Treasury and a representative for Trump for comment.

Update 4/27/22, 4:30 p.m. ET: This story was updated with additional information and comments.