YRC Worldwide Faces House Probe Over COVID-19 Loans
We wrote around fifteen months ago about how YRC Worldwide received a $700 million cash infusion to help survive the COVID-19 pandemic. Democrats in the House of Representatives now want to investigate the circumstances regarding that loan, saying that under the Trump Administration that some foul play may have been involved.
Details
The Coronavirus Aid, Relief, and Economic Security Act (CARES) gives loans to specific failing businesses at the cost of both interest payments and ownership stake. It is very similar to what happened in 2008 with the bank and insurance bailouts. The CARES Act totaled $2.2 trillion dollars, but $735.9 million was allocated for businesses related to national defense.
$700 million of this went to YRC Worldwide, a shipping and logistics company.
YRC Worldwide is defending its decision to apply for a loan, stating, “last year, after significant adverse impact by the pandemic, we applied for and received a Cares Act loan, which we will repay in full.” The company added that “as part of Cares Act loan requirements established by Congress, Yellow was designated as critical to maintaining national security by the secretary of Defense.” In short, YRC Worldwide says that it provides delivery services to the Department of Defense.
The investigation is being done by the Select Subcommittee on the Coronavirus Crisis Congress, spearheaded by Democrat James Clyburn. The subcommittee has seven Democrats and five Republicans.
Conclusion
There are arguments to be made in both directions as to whether this investigation is virtuous or partisan. A single company receiving about 95% of national defense loans is sure to raise an eyebrow. At the same time, the subcommittee having a majority of Democrats, including outspoken Trump detractor Maxine Waters, might lead readers to believe that there is more going on in the background of this investigation than just monitoring the allocation of less than 1% of total funds.
What are your thoughts on this turn of events? Is this another attempt to drag Donald Trump’s name through the mud, or was YRC Worldwide in secretive government dealings? Let us know what you think in the comments below.
The loans YRC Worldwide has received are expected to mature come September 2024.
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