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How a $17 billion bailout fund intended for Boeing ended up in very different hands
Business
How a $17 billion bailout fund intended for Boeing ended up in very different hands
Millions of dollars have gone to an experimental spaceflight firm backed by venture capital, companies with a history of financial losses and an Arkansas manufacturer that relies on prison labor
By Yeganeh Torbati and Aaron Gregg
November 25, 2020 at 6:00 a.m. EST
The Trump administration has used a $17 billion loan fund meant for businesses critical to U.S. national security to help a hodgepodge of little-known companies with unclear importance to national defense, and the fund remains mostly unspent nearly eight months after Congress approved it as part of a $2 trillion stimulus bill.
Aircraft manufacturers including Boeing were the fund’s intended recipients but balked at the terms and did not apply. Instead, the 11 companies that have tapped the fund so far include a company that has pitched its products as an enabling technology for the facial recognition tracking of immigrants, a manufacturer of roadblock barriers and surveillance firms. ... One company that received a loan is an experimental spaceflight technology firm backed by deep-pocketed venture capital investors. Others have a history of financial losses. One manufacturer relies on minimum-wage prison labor to make wire harnesses for military and commercial customers.
“The most important information to be transparent about is why these firms deserve these funds,” said Mandy Smithberger, a defense industry analyst at the Project on Government Oversight. “Understanding that these are limited funds, why were these companies the priorities?”
The Treasury Department announced the first national security loan, $700 million to trucking company YRC Worldwide, in a news release in July. The 10 following loans — worth about $36 million total — have been subsequently posted on Treasury’s website in the past month. Given the timing of the disclosures — in the days just before and after a contentious presidential election and in the midst of a sharp spike in coronavirus cases nationwide — the new loans have received little scrutiny thus far.
{snip}
Yeganeh Torbati
Yeganeh Torbati joined The Washington Post in 2020 as a reporter investigating the tax, budget, trade and regulatory decisions made by Washington’s power brokers. She previously covered the federal government for ProPublica, and she wrote about immigration, national security and Iran for Reuters. Follow https://twitter.com/yjtorbati
Aaron Gregg
Aaron Gregg covers the defense industry, government contractors and federal policy issues for the Washington Post's business section. Follow https://twitter.com/Post_AG
How a $17 billion bailout fund intended for Boeing ended up in very different hands
Millions of dollars have gone to an experimental spaceflight firm backed by venture capital, companies with a history of financial losses and an Arkansas manufacturer that relies on prison labor
By Yeganeh Torbati and Aaron Gregg
November 25, 2020 at 6:00 a.m. EST
The Trump administration has used a $17 billion loan fund meant for businesses critical to U.S. national security to help a hodgepodge of little-known companies with unclear importance to national defense, and the fund remains mostly unspent nearly eight months after Congress approved it as part of a $2 trillion stimulus bill.
Aircraft manufacturers including Boeing were the fund’s intended recipients but balked at the terms and did not apply. Instead, the 11 companies that have tapped the fund so far include a company that has pitched its products as an enabling technology for the facial recognition tracking of immigrants, a manufacturer of roadblock barriers and surveillance firms. ... One company that received a loan is an experimental spaceflight technology firm backed by deep-pocketed venture capital investors. Others have a history of financial losses. One manufacturer relies on minimum-wage prison labor to make wire harnesses for military and commercial customers.
“The most important information to be transparent about is why these firms deserve these funds,” said Mandy Smithberger, a defense industry analyst at the Project on Government Oversight. “Understanding that these are limited funds, why were these companies the priorities?”
The Treasury Department announced the first national security loan, $700 million to trucking company YRC Worldwide, in a news release in July. The 10 following loans — worth about $36 million total — have been subsequently posted on Treasury’s website in the past month. Given the timing of the disclosures — in the days just before and after a contentious presidential election and in the midst of a sharp spike in coronavirus cases nationwide — the new loans have received little scrutiny thus far.
{snip}
Yeganeh Torbati
Yeganeh Torbati joined The Washington Post in 2020 as a reporter investigating the tax, budget, trade and regulatory decisions made by Washington’s power brokers. She previously covered the federal government for ProPublica, and she wrote about immigration, national security and Iran for Reuters. Follow https://twitter.com/yjtorbati
Aaron Gregg
Aaron Gregg covers the defense industry, government contractors and federal policy issues for the Washington Post's business section. Follow https://twitter.com/Post_AG