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 properties properly spent tens of millions of dollars in pandemic relief funding.



a group of people that are talking on a cell phone: A group prays during an August demonstration supporting Margarita Santos, center, who was fired from her housekeeping job at the JW Marriott Santa Monica Le Merigot hotel. The hotel's operator, Columbia Sussex, received tens of millions of dollars in PPP loans. (Genaro Molina / Los Angeles Times)


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A group prays during an August demonstration supporting Margarita Santos, center, who was fired from her housekeeping job at the JW Marriott Santa Monica Le Merigot hotel. The hotel’s operator, Columbia Sussex, received tens of millions of dollars in PPP loans. (Genaro Molina / Los Angeles Times)

Rep. Katie Porter (D-Irvine) and seven of her Democratic colleagues issued a letter Tuesday urging the SBA to investigate how a hotel conglomerate that owns or operates at least 50 hotels spent the money it received — as much as $63 million — from the Paycheck Protection Program.

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The group of lawmakers said in the letter that the PPP was designed to keep workers employed but that the hotel company, Columbia Sussex, accepted the funding through multiple affiliates and still laid off thousands of workers.

“Columbia Sussex appears to have taken advantage of these policies — borrowing taxpayer money at artificially low interest rates through multiple entities while laying off workers,” their letter to SBA Administrator Jovita Carranza says.

Phone calls and emails to the Kentucky headquarters of Columbia Sussex were not returned Tuesday.

The PPP, part of the $2-trillion stimulus funding package approved by Congress in March, was promoted as a tool for keeping workers employed during the economic crisis. But experts, academics and union leaders told the Los Angeles Times that loopholes and flaws in the program allowed businesses to accept millions of dollars in forgivable loans without retaining or recalling most of their workers.

The program requires loan recipients to use at least 60%

Top Trump administration officials are calling on lawmakers to pass legislation to redirect unused funding from a small-business lifeline, the latest salvo in a week of twists and turns in talks between the White House and congressional leaders on a new round of coronavirus stimulus.



a man wearing a suit and tie: "He may. He may," Kudlow said of Mnuchin. "Secretary Mnuchin is up to $1.8 trillion. So, the bid and the offer is narrowing somewhat between the two sides."


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“He may. He may,” Kudlow said of Mnuchin. “Secretary Mnuchin is up to $1.8 trillion. So, the bid and the offer is narrowing somewhat between the two sides.”

“Now is the time for us to come together and immediately vote on a bill to allow us to spend the unused Paycheck Protection Program funds while we continue to work toward a comprehensive package,” White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin wrote in a letter on Sunday to members of the House and Senate. “The all-or-nothing approach is an unacceptable response to the American people.”

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The letter follows a bevy of mixed signals from the administration over the past week — which included President Donald Trump abruptly breaking off stimulus talks, then reversing course and insisting on a variety of relief measures.

House Speaker Nancy Pelosi (D-Calif.) on Sunday rejected the latest $1.8 trillion stimulus offer from Mnuchin. Many Senate Republicans, meanwhile, have been wary of greenlighting yet another hefty relief package.

Meadows and Mnuchin reserved their criticism for the Democratic-led House for passing two massive relief bills largely along party lines “instead of compromising with us on bipartisan legislation like we have done in the past.”

“We will continue to try to work with Speaker Pelosi and Senator [Chuck] Schumer,” the pair wrote. “It is not just about the top-line number but also about legislation that can be passed by both the House and the Senate and signed into law by President Trump to

Federal investigators say a Coppell man fraudulently applied for dozens of federal stimulus PPP grants and received more than $17 million that he spent buying real estate and luxury cars such as a Bentley and a Corvette.

A coalition of federal agencies charged Dinesh Sah, 55, of Coppell, with applying for $24.8 million in PPP loans for 15 businesses that claimed to have more than 500 employees, but in fact, many of the businesses were registered after the CARES Act was passed and did not have any employees, according to court documents detailing the indictment.

“Mr. Sah exploited this terrible pandemic for personal gain – and he should be held accountable to the American people for that behavior,” said U.S. Attorney Erin Nealy Cox in a statement. “COVID-19 has devastated the finances of hardworking business owners across the nation. PPP funds should be reserved for those who really need them to keep their companies afloat.”

Sah was arrested Sept. 16 and remains in custody, said a spokeswoman for the U.S. attorney’s office for the Northern District of Texas.

Sah is one of dozens indicted by government prosecutors for fraudulently applying for forgivable loans through the Payroll Protection Program, the $650 billion slice of the CARES Act designed to help small businesses cover costs for wages, rent and utilities. Among those charged with fraud were a former NFL football player and a former reality television star.

The Small Business Administration's Paycheck Protection Program provided forgivable loans to North Texas restaurants, churches, hotels, nonprofits and many other groups to help them weather the economic fallout of COVID-19 pandemic.

More than 5.2 million loans were approved nationwide. According to the U.S. Treasury Department, Texas businesses were approved for more than $41 billion in grants that were intended to go to businesses with 500 employees or fewer.

The indictment said Sah actually received $17.3 million and used the money on multiple homes, international transfers and a 2020 Bentley convertible, a luxury car that typically sells

The Small Business Administration (SBA) and Treasury Department announced that they are simplifying the loan forgiveness application for Paycheck Protection Program (PPP) loans under $50,000.

“We are committed to making the PPP forgiveness process as simple as possible while also protecting against fraud and misuse of funds,” Treasury Secretary Steven MnuchinSteven Terner MnuchinOn The Money: Trump says talks on COVID-19 aid are now ‘working out’ | Pelosi shoots down piecemeal approach | Democrats raise questions about Trump tax audits House Democrats to unveil bill to create commission on ‘presidential capacity’ Trump’s new Iran sanctions raise alarm over humanitarian access MORE said Thursday evening, calling for additional simplification through legislation.

The simpler, two-page form businesses can fill out to have their PPP loans forgiven is meant to ease burdens on struggling small businesses.

Small-business groups praised the move.

“We are thrilled about this new SBA and Treasury interim guidance to help small businesses during a time many of them are looking at the last quarter of estimated tax payments and year-end accounting,” said Keith Hall, president and CEO of the National Association for the Self-Employed.

The National Association of Federally-Insured Credit Unions, which had been critical of some early PPP missteps, said it was a “move in the right direction.”

The PPP program, part of a March’s CARES Act, was created in order to help businesses hit by the pandemic keep their doors open and workers on the books as the economy seized up. In all, the program distributed 5.2 million loans worth $525 billion, which Treasury estimated helped save 51 million jobs.

The program debuted to some doubts, as smaller businesses had a harder time securing loans and major chains were found to have received large loans. Many of the large businesses returned the loans after an outcry.

But

Luke LaHaie is on no one’s list of Wall Street heavy-hitters. But from the comfort of his Chicago condo, he’s just become the biggest player in a hot new thing in American finance: pandemic relief loans.

His little-known firm, The Loan Source, has scooped up $3.3 billion of small-business loans issued under the federal Paycheck Protection Program. LaHaie, 35, is racing to buy even more.

The Loan Source is part of a largely hidden ecosystem that’s sprung up around the PPP program, which was designed to keep small businesses afloat. It’s capitalizing on free money from the Federal Reserve to buy PPP loans from the banks that actually lent out the money, with the goal of eking out a small profit in the unglamorous business of servicing the debt.

LaHaie is one of the new breed of pandemic pros who are trying to make a little money off the PPP program, often at little risk to themselves. The loans in question are guaranteed by the government. That means defaults aren’t a worry, whether small businesses survive or not.

A data tracker developed by a team of 40 researchers and policy specialists, led by Harvard University economics professor Raj Chetty, shows the program has protected very few paychecks. They detected just a 3% difference in employment patterns for businesses above and below the PPP’s 500-employee cutoff. That implies the $521 billion program disbursed $289,000 for each job saved.

The Pitch

LaHaie, meanwhile, spends much of his day on the phone with banks, which have already made the easy money, reaping more than $10 billion in origination and processing fees. Now they’re left with the burdensome administrative task of servicing the debt and helping many borrowers who qualify for loan forgiveness.

LaHaie’s pitch: sell us your PPP loans, at a small discount