NEW HAVEN, Conn. – December 11, 2020 -A new analysis by UNITE HERE, the hospitality workers’ union, reveals that billionaire-owned Omni Hotels received over $76 million of Paycheck Protection Program (PPP) funds, but did not rehire workers at several hotels. The disclosure was included in a letter to the Small Business Administration (SBA) urging an investigation into how one of the PPP’s largest beneficiaries failed to fulfill Congress’s intent with the pandemic program.
The letter, addressed to SBA Administrator Jovita Carranza and Deputy Secretary of the Treasury Justin Muzunich, notes how “The failure of these hotels to rehire their employees has financially harmed our members and created great uncertainty for them and their families.”
The expressed intent of members of Congress in passing the CARES Act was that PPP funds be used to keep workers employed. The union’s analysis of PPP data showed 32 Omni Hotels received more than $76 million in PPP loans – the largest amount received by any hotel group that UNITE HERE could identify, and one of the largest beneficiaries of the PPP overall.
Yet, several Omni properties that received PPP loans have been closed and have not paid workers. To this day, more than 80% of workers at five union Omni properties remained unemployed, even though these properties received millions in PPP loans; three of them remain closed. The union urges the SBA to closely scrutinize whether Omni has followed PPP requirements, especially if the company and its hotels apply for forgiveness.
In the letter, the union further called on the SBA to investigate all of the PPP loans by Omni’s lenders, Affiliated Bank and Origin Bank, who approved almost all of Omni’s PPP loans. Meanwhile, Origin Bank originated $3.5 million worth of PPP loans to entities affiliated with one of its board members. The public interest would be served by examining all PPP loans approved by these two banks.
“It is time for the SBA to step up and ensure that money intended to help American workers actually benefits them,” said UNITE HERE Executive Vice-President Carlos Aramayo. “It is unfathomable that massive corporations like Omni have access to millions of tax-payer backed loans, while hundreds of their workers remain without a paycheck heading into the holidays.”