In the year since COVID-19 plagued the gaming industry, many companies have seen their luck improve.
This turned out to be good news for Rep. Susie Lee, a Democrat from Nevada, both politically and personally.
Last year, Lee scored a major victory for his Las Vegas district by successfully pushing casinos into the federal paycheck protection program, which provided loans to businesses hit hard by the pandemic.
This decision in turn extended a lifeline for Lee and his family. Full House Resorts – a gaming company run by Lee’s husband in which the congresswoman personally has a direct financial stake – has applied for and received millions of dollars in these loans, The Daily Beast reported in June 2020.
Full House has recovered well since then. But in a new twist, the casino is now arguing that taxpayers should pay the full $ 5.6 million government-funded that kept them afloat.
According to a new report filed with the Securities and Exchange Commission, the company said it had requested a loan forgiveness from the Small Business Administration and believed it would qualify.
If so, Uncle Sam would be granting a windfall to a company whose value on the New York Stock Exchange has tripled from pre-pandemic levels. And this spring, the company, which operates five resort properties in Nevada, Colorado, Mississippi and Indiana, expanded one of its Colorado properties with a $ 3.4 million purchase that included a “charming hotel”.
This windfall would allow Full House shareholders to save a good chunk of change. And Lee herself is a major shareholder in the company: In her latest official financial disclosure form, she declared millions of dollars of stock and stock options in the company, stored in various investment accounts.
In May 2021, Lee announced that she and her husband, Daniel, were in the process of getting divorced. Its August 2021 financial statement lists a number of investments jointly held in Full House, but also a stake of at least $ 1 million – and up to $ 5 million – in shares in the company that it owns. belongs only.
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Representative Susie Lee advocates for action on climate change at an event with House Democrats in September.
Chip Somodevilla
Lee’s office told The Daily Beast last year that she was aware her husband’s business had applied for PPP loans, but was not involved in business decisions.
Responding to questions for this article, a spokesperson for Lee said the congresswoman “is not involved in any aspect of the business or decision-making of Full House.” She had no influence on the decision to file a PPP loan cancellation request and, of course, has no say in whether or not that request was approved.
Full House did not respond to an email request for comment.
Lee is just one of a dozen members of Congress closely associated with companies that have taken out P3 loans. Car dealerships owned by Three Republicans-Res. Roger Williams (R-TX), Vern Buchanan (R-FL) and Mike Kelly (R-PA) have each secured PPP loans, for example. A law firm where Representative Matt Cartwright (D-PA) previously worked, who currently employs his wife, has also secured loans.
Many election candidates also benefited from the program, including Lee’s likely Republican opponent April Becker, who herself operates a gambling business that received more than $ 600,000 in PPP loans in 2020 and 2021. Becker criticized President Joe Biden for “socialist spending,†referring to the Democrat-backed $ 1.9 trillion US bailout that extended the pandemic loan program used by Becker’s businesses.
Members of Congress and their family members are authorized to apply for and receive PPP loans. Millions of businesses nationwide have been able to secure these funds – in May 2021, the federal government granted nearly $ 800 billion in loans to 10.7 million borrowers – and there is no indication that lawmakers were treated differently.
But ethics watchers have pointed out that it doesn’t look good for members of Congress to benefit directly or indirectly from a program like this, which they designed and voted to create.
The Full House case also illustrates some of the broader criticisms of the Pandemic Lending Program, a massive government effort that was put in place within weeks as COVID ravaged U.S. businesses.
PPP was primarily designed as a lifeline for small businesses with fewer than 500 employees and few options to stay afloat. “A state-owned enterprise with substantial market value and access to capital markets is unlikely to be able to make the required certification in good faith,” the SBA said upon deploying the program.
But these companies have nonetheless found ways to obtain PPP funds. Government rules allowed branches of large companies to apply; Full House was one of the many companies to take advantage of this rule.
Large companies not only got PPP loans, but also managed to get them forgiven. According to NBC News, 157 companies with access to equity capital had $ 300 million in canceled loans, out of a total of $ 610 billion that borrowers requested to be canceled. Their investigation also found that $ 120 million in loans have been canceled for businesses that are performing better now than before COVID, like Full House.
Asked about the Full House example, Brandon Brockmeyer of Project on Government Oversight said, “It is important that the SBA carefully consider whether to approve pardon applications, to make those decisions safe from all odds. undue influence and be transparent with the public about their dealings. “