U.S. Rep. Vicky Hartzler was not aware that the Trump administration waived ethics reviews done by the Small Business Administration when her family businesses applied for paycheck protection loans, her office said this week.
Hartzler, R-Harrisonville, and her husband, Lowell Hartzler, received an unknown amount of support for their farms and tractor dealerships in western Missouri and eastern Kansas under the loan program created by the March relief legislation known as the CARES Act.
The Washington Post reported Friday that the Trump administration issued a rule April 13 that waived requirements for additional reviews when lawmakers and federal employees apply for small business funds for companies in which they or a family member in their household have an ownership interest of 10 percent or more.
Hartzler "was not aware of any rule waivers at the time of application," Danny Jativa, spokesman for Hartzler, wrote in an email to the Tribune.
"As you and others have reported, any application made for PPP was done in accordance with House Ethics guidelines. It’s also worth clarifying that it was her husband who applied."
Without the rule, the Post reported, those loans would have to be approved by a SBA body called the Standards of Conduct Committee.
Policy experts and government watchdogs told the Post the blanket waiver could allow officials to write the rules to benefit themselves. Josh Gotbaum, a Brookings Institution scholar who has worked in economic policy under Democratic and Republican administrations, told the newspaper that he was "appalled" by the waiver.
"The idea that the Small Business Administration can, without any review or publicity, secretly let all of its employees arrange loans for their family members or associates is outrageous," Gotbaum said.
Hartzler represents Missouri’s Fourth Congressional District. She was first elected in 2010 and, following redistricting in 2011, has been re-elected four times in the 24-county district that includes all or most of the central Missouri counties of Boone, Audrain, Cooper, Howard, Moniteau and Randolph.
In an interview, Hartzler’s Democratic opponent in November, Lindsey Simmons of Hallsville, said she had seen the Post story and said it shows how members of Congress and the Trump administration are making it easier to dip into the treasury.
The CARES Act had a conflict-of-interest provision to prevent Trump, his family and other officials with major holdings to seek funding from a program for large businesses. That provision did not extend to the PPP loans.
"I think it just points to a pattern of people in positions of power creating loopholes for themselves so they can have first access to funds that are meant for real small businesses in underserved communities," Simmons said.
According to Congressional disclosure reports, Hartzler, jointly with her husband, owns a farm and farmland leased to others in Cass County. She and her husband own Heartland Tractor, a dealership with locations in Harrisonville, Lamar, Nevada and Iola, Kansas.
The combined value of the holdings is in the range of $4.45 million to $15.3 million and the businesses produced income between $217,000 and $1.3 million in 2018, the last year for which figures are available. Members of Congress give ranges for the value of and income produced by their assets.
Congress has approved almost $660 billion in funding for the Paycheck Protection Program, which provided forgivable loans to businesses that shut down or saw decreased revenue during COVID-19 related shutdowns.
Under the terms of the loans to small businesses, the recipient does not have to repay the money if it is all spent within eight weeks of receipt and payrolls are not cut.
The maximum loan under the program is $10 million. The average loan from the first $349 billion approved in March was $206,000. Only businesses with fewer than 500 employees are eligible.
The Post reported that the SBA spokesman, Jim Billimoria, said blanket waiver was issued because it considered the PPP to be like other disaster aid, which does not require approval from the Standards of Conduct Committee.
"The Standard of Conduct Committee gave a blanket approval rather than case-by-case consideration in recognition that PPP loans were in some respects akin to disaster loans (which do not require any Standards of Conduct Committee approval) and in anticipation of the large volume of potential cases that might come before the Committee," Billimoria said in a statement to the Post.
Other members of Congress known to have received PPP loans are Rep. Susie Lee, D-Nev., and Rep. Roger Williams, R-Texas. Connecticut artist Judith Pond Kudlow applied for PPP funds, according to remarks made in an interview with ABC by her husband, Larry Kudlow, White House chief economic adviser and director of the National Economic Council, the Post reported.
Hartzler has not disclosed how much her family businesses received under the program. In the interview, Simmons again called on Hartzler to disclose the amount of the loans and join in supporting legislation filed by Sen. Joni Ernst, R-Iowa, to require Congressional disclosure of PPP loan amounts.
It is uncertain whether the loans must be disclosed on the financial disclosure Hartzler must make for this year that will be filed in 2021.
Asked whether Hartzler would support Ernst’s legislation, Jativa wrote: "I can’t speak to her specific stance on the Ernst bill, but I can tell you that Rep. Hartzler believes it is unfortunate that focus is being diverted from those in need because of this crisis to shaming those who did everything right to help their employees."
The statement about Ernst’s legislation is part of a pattern for Hartzler, Simmons said.
"It isn't surprising to me she wouldn’t be in favor of Sen. Ernst's bill, just like it doesn't surprise me that she is unconcerned SBA waived these oversight rules," Simmons said.
Simmons has said she did not object to Hartzler accepting the loan, just that it should be disclosed.
Simmons is an attorney.
"I am trained to do that which is the best interest of my client, and if Vicky’s business interest was in my portfolio of clients to protect, I would have recommended the business apply if it was eligible," Simmons said in April. "It seems to me that would make good business sense."
Simmons recently called on Hartzler to disclose whether she has received or applied for the Coronavirus Food Assistance Program, which provides direct payments to farmers
Hartzler has not applied for or received any funding from the $16 billion program, Jativa wrote.