House Committee investigates previous administration’s involvement with Yellow Corp.’s COVID loan
October 7, 2021
The House Committee on Oversight and Reform is looking into evidence suggesting that Yellow Corp. had a direct line to the Trump White House ahead of receiving a controversial $700 million loan from pandemic relief funds.
Rep. James Clyburn, chairman of the Select Subcommittee on the Coronavirus Crisis, is requesting Trump White House records related to YRC Worldwide’s (now called Yellow Corp.) $700 million loan obtained under the Coronavirus Aid, Relief and Economic Security Act. In June, Clyburn officially launched a separate investigation into the loan, which may have been issued inappropriately and not used properly.
Last July, Yellow Corp. received 95% of the $735.9 million in CARES Act loans for businesses critical to maintaining U.S. national security. Just a few weeks later, the Congressional Oversight Commission issued a report criticizing the trucking company’s national security eligibility used to justify the loan. That commission was created by the CARES Act and will oversee the Department of Treasury and Federal Reserve Board’s management of COVID relief loans through September 2025.
In a letter sent to U.S. Archivist David Ferriero, Clyburn is seeking records from the National Archives and Records Administration after new evidence obtained by the subcommittee suggests former Trump White House officials may have played a role in Yellow Corp.’s $700 million loan.
Clyburn’s request stems from the following evidence recently obtained by the subcommittee:
- Email indicating that former Deputy Assistant to the President Tim Pataki “committed to huddle with (White House political director) Brian Jack and then he would call Treasury on (Yellow’s) behalf.”
- Email showing that Special Assistant to the President Joseph Russo later asked Yellow Corp. to specifically identify the company’s contacts at Treasury.
- Multiple emails showing that Yellow Corp. had continued contact with other Trump-era White House offices and officials – including the Chief of Staff to National Economic Council Director Larry Kudlow – as it sought a loan from Treasury, and Yellow’s representatives reported that the “White House remains engaged and has been calling for updates frequently.”
According to a news release, that evidence is consistent with public records showing that former Treasury Secretary Steven Mnuchin sent messages to then-White House Chief of Staff Mark Meadows, Kudlow and Trump’s personal assistant concerning the announcement of the loan to Yellow Corp.
Clyburn also implicates former White House advisor Jared Kushner.
“Any involvement by the former White House and advisor Jared Kushner in Yellow obtaining this national security loan could present a troubling conflict of interest,” Clyburn said in a statement. “Yellow received a $600 million lifeline loan shortly before the pandemic from Apollo Global Management LLC, a firm that made a $184 million loan to Kushner’s family business earlier in his White House tenure. Shortly after the passage of the CARES Act, Apollo reportedly emailed Kushner advocating for reduced risk requirements in a separate pandemic loan program from which Apollo stood to benefit, suggesting that Apollo may also have lobbied Kushner to influence the process for approving the loan to Yellow.”
Specifically, Clyburn is requesting the following documents from March 2020 to January 2021:
- All communications of White House officials regarding (i) Yellow Corp. (ii) any application for a loan through the CARES Act national security loan program, or (iii) Apollo Global Management.
- All calendar entries, calendar invitations, notes memorializing communications, and memoranda of White House officials concerning the same three topics as above.
In its 13th report issued in May, the Congressional Oversight Commission requested documents from the secretary of defense and the secretary of the treasury. As of its last report issued on Sept. 30, the commission has not yet received a response from the secretary of defense.
Criticism of Yellow Corp.’s CARES Act loan
Controversy over Yellow Corp.’s loan began almost immediately. In the Congressional Oversight Commission’s third monthly report released last July, commission members questioned the LTL trucking company’s eligibility. Many questioned the company’s role in national security.
“The Treasury has defined a ‘business critical to maintaining national security’ as a business that is at the time of its application performing under a defense contract of the highest national priority or operating under a top-secret facility security clearance,” the commission stated. “YRC apparently did not meet either of the two national security eligibility criteria.”
According to the report, YRC qualified for the program under a catch-all provision created by the Treasury. That provision allows the Treasury to determine if a business is critical to maintaining national security based solely on a recommendation and certification from the secretary of defense or the director of national intelligence.
Furthermore, Yellow Corp. was struggling financially at the time. In May 2020, the company had to suspend health benefits to all employees as it was delinquent in paying health contributions for work performed that March.
In 2019, the federal government filed a lawsuit against Yellow Corp., accusing it of systematically overcharging the government millions of dollars for freight carrier services. That case was settled in April for more than $2 million.
Despite being at risk of bankruptcy and ambiguously considered important to national security, the Treasury awarded Yellow Corp. $700 million in exchange for the Treasury receiving a 29.6% equity stake in the company.
Yellow Corp. could not be immediately reached for comment. LL