How did this hotel company spend their PPP money? Eight congressmen want to know

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Eight members of Congress are calling on the Small Business Administration to investigate whether the operator of a luxury Santa Monica hotel and dozens of other hotels have properly spent tens of millions of dollars funding pandemic relief.

MP Katie Porter (D-Irvine) and seven of her Democratic counterparts posted a letter Tuesday calling on the SBA to investigate how a hotel conglomerate that owns or operates at least 50 hotels has spent the money it – Up to $ 63 million from the Paycheck Protection Program.

The group of lawmakers said in the letter that the PPP aimed to employ workers, but that hotel company Columbia Sussex accepted funding through multiple subsidiaries and is still laying off thousands of workers.

“Columbia Sussex appears to have taken advantage of this policy – borrowing taxpayers’ money at artificially low interest rates through multiple companies and laying off workers at the same time,” said her letter to SBA administrator Jovita Carranza.

Phone calls and emails to Columbia Sussex’s Kentucky headquarters were not returned on Tuesday.

The PPP, part of the $ 2 trillion stimulus package approved by Congress in March, was promoted as a tool to employ workers during the economic downturn. But experts, academics, and union leaders told the Los Angeles Times that gaps and flaws in the program enabled companies to accept billions in forgivable loans without keeping or removing most of their employees.

The program requires loan recipients to use at least 60% of the money on payroll and makes them wait until December to spend that money on payroll. If the recipient fails to adhere to the guidelines, the loan will no longer be forgivable – however, it will be converted into a low-interest loan that is much cheaper than loans offered by traditional lenders.

The PPP kicked off in April with $ 349 billion in forgeable credit. Congress added $ 320 billion later that month. The program ended on August 8 with more than $ 100 billion unused.

Columbia Sussex employed approximately 6,500 people nationwide through subsidiaries prior to the pandemic. Porter and her colleagues accused the hotel conglomerate of receiving PPP funding through 17 subsidiaries registered at the same Kentucky address and double counting the employees of the different companies to justify the need for more PPP funds.

The letter asks the SBA to investigate the 17 loans and respond by Monday.

Porter’s office said the call for an investigation was backed by Unite Here Local 11, which represents thousands of hotel workers in southern California and Arizona. The union criticized the Columbia Sussex-operated JW Marriott Santa Monica Le Merigot hotel, accusing management of firing a housekeeper after contracting COVID-19 and not providing enough training and personal protective equipment to other workers.

A representative from Marriott Corp. said Marriott “has well-established cleaning processes and training”. The manager of Le Merigot said the housekeeper was fired for endangering guests and employees with her infection, but she suspects she has been fired as a union organizer.

“Wealthy hotel groups who have breached the Paycheck Protection Program at the expense of workers should be prosecuted in full,” said Kurt Petersen, Co-President of Unite Here Local 11.

In addition to Porter, the Congressmen who signed the letter are Democratic MPs Alan Lowenthal from Long Beach, Ted Lieu from Torrance, Linda T. Sánchez from Whittier, Greg Stanton and Ruben Gallego from Arizona, André Carson from Indiana, and Jan Schakowsky from Illinois .

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