Federal Watchdog Probing Sen. Ted Cruz's Efforts To Change Pandemic Loan Program
A federal watchdog for pandemic relief funding is asking for information about Texas Sen. Ted Cruz’s efforts to change a loan program. Requirements of the program were altered soon after Cruz wrote to officials in charge. The changes benefitted major Cruz donors.
The Federal Reserve's Main Street Lending Program provided loans to businesses suffering from the economic effects of the pandemic. According to a December report in the Wall Street Journal, soon after Cruz wrote to Fed Chairman Jerome Powell and former Treasury Secretary Steve Mnuchin in April, two key requirements for the loan program were changed.
Those changes allowed two major Cruz financial donors to secure a federally-backed loan of $35 million. Texas billionaires Farris and Dan Wilks’ company ProFrac Holdings LLC received the loan while buying or increasing their ownership stakes in other oil and gas companies.
Now, Brian D. Miller, the Special Inspector General for Pandemic Recovery, is asking the Treasury Department for communications from Cruz’s office. The inspector also wants to know the rationale for the change to the loan program.
“While the recent reporting does not allege misconduct, it does concern the management of investments made by the Secretary under the CARES [Act] —an area of core jurisdiction for the Special Inspector General for Pandemic Recovery,” Miller wrote to a Treasury Department lawyer last month.
The letter appeared as an appendix to the inspector’s recent quarterly report to Congress.
An email from a Cruz’s office to KERA emphasized the economic damage the pandemic brought to an already-struggling oil and gas industry.
“With the price of oil at $-37, energy producers on the brink of bankruptcy, and tens of thousands of blue collar workers in Texas with their jobs on the line, Sen. Cruz worked to ensure small and medium-sized businesses directly harmed by the economic impacts of this pandemic had access to emergency liquidity,” Cruz spokesperson Maria Jeffrey Reynolds said. “The result of his leadership was a program that has helped about 25 U.S. energy producers, including roughly a dozen in Texas, and helped protect over 300,000 oil and gas job in Texas.”
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