Questions Treasury Secretary Mnuchin Must Answer On Pandemic Response

Questions Treasury Secretary Mnuchin Must Answer On Pandemic Response
Image source: CNBC Video Screenshot

WASHINGTON, D.C. – Ahead of Treasury Secretary Steven Mnuchin’s testimony in front of the House Select Subcommittee on the Coronavirus about the administration’s implementation of key stimulus programs such as PPP and the urgent need for additional economic relief, government watchdog group Accountable.US released the top five questions that American taxpayers deserve the answers to. The hearing comes as newly released reports show that the White House coronavirus task force’s private conversations with governors contradict with the public statements made by President Trump and senior officials.

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Q2 2020 hedge fund letters, conferences and more

Large, Publicly Traded Firms Received PPP Loans While Small Businesses Shut Their Doors

1) Secretary Mnuchin, you pledged that the government would perform a full audit on any company that received small business loans above $2 million. When and how are loans supposedly being audited? And who are the contractors who supposedly will be reviewing PPP loans?

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In an interview with CNBC’s “Squawk Box” in April, Secretary Mnuchin stated, “I’m going to be putting out an announcement later this morning that for any loan over $2 million, the Small Business Administration will be doing a full review of that loan before there is loan forgiveness.”

However, over three months later, it remains unclear exactly how and when this audit is being implemented. Just today, a GAO report claimed SBA is working with a contractor who will “use an automated review tool to flag potentially questionable loans over $2 million and that the contractor would conduct manual reviews of flagged loans" and “another contractor would perform a quality assurance review on a sample of loans.” Meanwhile, public data shows that the Small Business Administration (SBA) has approved over 1,000 Paycheck Protection Program (PPP) loans for publicly traded companies. As these bigger firms enjoy the lion’s share of PPP funds, 40% of Black-owned businesses face permanent closures and new analysis shows that the poorest congressional districts received less aid than the richest.

Fraudsters Obtain Millions In PPP Relief

2) Secretary Mnuchin, as the number cases of fraudulently received PPP loans increases across the country, how exactly were loans through the PPP approved? With rampant fraud arising in the program, which loans will now be approved for forgiveness and how is forgiveness being decided?

Following the SBA’s limited PPP data release, reporting has revealed that several business owners across the country have taken advantage of the program’s little oversight and poor management. Since May, the Justice Department has filed approximately 40 PPP fraud cases and counting.

In July, Mnuchin proposed automatic forgiveness for loans below $150,000 without providing guidance on the necessary steps to ensure recipients do not receive forgiveness through instances of fraud and abuse, which have plagued the program since its inception.

Already-Wealthy Businesses Triple-Dipping In CARES Act Relief Programs

3) Was it the CARES Act’s intention for companies like private air travel organizations to be able to access three separate pots of money? If not, why hasn’t guidance or rules been issued to close this loophole?

Last week's reporting revealed that multiple private jet operators have been given access to three major CARES Act bailout programs – the Payroll Support Program, the Economic Injury Disaster Loan (EIDL) program, and the Paycheck Protection Program (PPP). Meanwhile, over 110,000 mom-and-pop shops have already permanently shut down.

Attacks on the USPS Are Attacks on Communities of Color and Small Businesses

4) The recently proposed cuts to the US Postal Services’ staff hours and funding would disproportionately hurt communities of color and the rural small businesses who rely on the USPS for their supply chains. How will you use your influence to ensure us that the USPS will receive the funding it needs to serve American taxpayers and small businesses?

From the Trump administration opposing essential funding to proposing a cut in staff hours and removing hundreds of mail processing machines, the USPS is currently facing several threats that directly impact communities of color and rural small businesses. The Treasury Department agreed to provide USPS with $10 billion in relief funding “in exchange for proprietary information about the mail service’s most lucrative private-sector contracts."

Black and Latinx people rely on the USPS for essential items like money orders, face masks, and life-saving medicine. Additionally, the Postal Service is a lifeline for small businesses, especially those owned by communities of color and in rural areas. According to a 2019 report by the Postal Service Inspector General, “70% of businesses with fewer than 10 employees said they had used the Postal Service in the prior six months.”

Lack of Oversight Over Bailouts to the Well-Connected

5) Given all the issues that have already been exposed in the Paycheck Protection Program, one would think that you would be doing more to promote transparency. Will you commit to disclosing PPP loans approved from July 6 to August 8? How does anything less than full disclosure and proper oversight serve the public interest?

Multiple bailouts and emergency loans have been offered to business owners with connections to politicians and members of the Trump administration. Some of these include:

  • $67 million for Omni Air International, which the Trump administration has contracted to conduct deportation flights and which is a subsidiary of a firm that donates exclusively to Republican campaigns
  • Nearly $20 million for GEE Group Inc., which has been closely linked with longtime Trump advisor Art Laffer
  • Nearly $3 million for at least five portfolio companies of Thrive Capital, the venture capital firm run by Joshua Kushner, the brother of President Trump’s son-in-law Jared Kushner
  • Between $1 and $2 million for KTAK Corp., a company owned by Rep. Kevin Hern, and about $450,000 to Heartland Tractor Company, a firm owned by Rep. Vicky Hartzler and her husband

Despite these suspicious bailouts and other concerns over your handling of the COVID-19 response, the Trump administration has repeatedly pushed back against transparency measures: the Treasury Department has disputed the oversight power of the Pandemic Response Accountability Committee (PRAC) and Mnuchin has argued that “we never agreed to full transparency.”


Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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