North American hotel group Ashford Inc. will return nearly US$59 million ($91 million) in government Payment Protection Program loans.
One of the biggest beneficiaries of the United States government’s US$660 billion ($1.02 trillion) small business lending program, Ashford Inc. and its subsidiary companies had applied for US$126 million ($196 million) in forgivable loans.
According to multiple reports, Ashford Inc. had secured at least $91 million. However, some, including the The New York Times and Wall Street Journal, report the company received as much as US$70 million ($108.6 million).
On Saturday, the firm and its companies said it would return the funds it had thus far received, with the decision stemming from “the [Small Business Administration’s] recently changed rules and inconsistent federal guidance that put the companies at compliance risk.”
The firm – which boasts 130 hotels in its portfolio at company Ashford Hospitality, including several Ritz-Carltons, Sheratons and Embassy Suites – had previously said that it would not return the amounts if received.
It came amid the voluntary resignation of Ashford Hospitality president and chief executive Douglas Kessler, who will remain at the company until 14 May, when Ashford chief strategy officer J. Robison Hays will take over the roles.
Ashford Inc. had come under intense scrutiny for asking to access the funds at a time when many small businesses are locked out from receiving government assistance.
Additionally, the amount asked for by the firm far exceeded the average size of loans – US$206,000 ($320,000) – in the program’s first round of funding, the NYT reported.
According to the NYT, the Trump administration had scrambled to tighten the program’s rules after it became clear that companies like Ashford were benefiting from the $1.02 trillion program.
Last week, US treasury secretary Steven Mnuchin said companies had until 7 May to voluntarily return the funds and that they could be held “criminally liable” if they did not meet the program’s criteria, according to the NYT.
He said the United States would audit any company that received more than US$2 million ($3.1 million) in loans.
Likewise, Senator Chuck Schumer, Democrat of New York and the minority leader, reportedly asked for an investigation into the company’s loans, while Joe Biden, the presumptive Democratic nominee for this year’s US presidential race, wrote on Twitter that the firm should give the money back.
When I say Donald Trump is the most corrupt president in modern American history, this is what I'm talking about.
Monty Bennett should return the tens of millions of dollars he received, and we should give it to the small businesses that need it. https://t.co/CV5NqlreSs
— Joe Biden (@JoeBiden) May 2, 2020
According to the NYT, Ashford Inc., headed by Trump campaign donor Monty Bennett, is one of several big companies that qualified for the program thanks to an “intentional loophole” that came after a lobbying push from hotel and restaurant companies, with Ashford among them.
Based on this push, congress had allowed individual restaurants and hotels that belong to bigger companies to benefit from the program, the outlet reported.
In a company release, Bennett denied reports his company had accessed “loopholes”.
“Congress designed the [Payment Protection Program] to specifically allow companies that own multiple hotel properties to obtain separate loans for each property as a means to prevent the economic collapse of the hospitality industry that is now occurring,” he said.
Featured image supplied by Remington Hotels.