Omni hotels accepted millions of PPP funds but failed to pay workers
Omni Hotels & Resorts, the international chain of luxury hotels owned by billionaire Robert B. Rowling, accused of embezzling millions of dollars in federal pandemic relief funds intended to keep workers on the payroll .
Unite Here, a service workers union with more than 300,000 members in North America, said several Omni hotels where it represents workers took loans from the Paycheck Protection Program but never paid any. hundreds of workers.
Unite Here said 32 Omni hotels have received approximately $ 76 million in loans from the program, known as PPP. About $ 23 million went to seven hotels, in cities like Chicago, Boston, Washington, DC and San Francisco, where he represents more than 1,000 housekeepers, waiters and other service workers.
In its application to the Small Business Administration, Omni Providence in Rhode Island requested a $ 2.6 million PPP loan, promising to keep 246 jobs.
Health club attendant Quilcia Moronta was fired after working at the hotel for 21 years. She applied for unemployment benefits and food stamps and was hopeful when the hotel loan was approved on April 13.
“As I struggled to provide for my family, I learned that the Omni had received PPP money,” said Moronta, a single mother with two children. “I said, ‘Great, at least they’re going to help us fend for ourselves when it comes to basic needs.’ “
Eight months later, unemployment benefits for Moronta and other workers expired, and health coverage is long gone. And they are still waiting for the benefits of PPP.
“At the moment, it is December and we haven’t heard anything that Omni is using this money to help its employees,” she said.
“Here in Boston, I have spoken to hundreds of workers who work at Omni Parker House, and I know that none of them received a single penny of that money,” said Carlos Aramayo, vice-president. executive chairman of Unite Here. “Looking at this winter, a lot of them could really use it.”
Zebedee Williams was fired in March from her job as a night banquet maid at the Omni William Penn in Pittsburgh. He said that since unemployment and weekly extra help from the federal government ran out, he had struggled to feed his household, which includes a disabled partner and three daughters. To stretch the budget, he said, he skipped meals.
“It’s not good for kids not to eat,” Williams said. “I would do it 10 times if the situation happened. I would make sure my kids ate. I would make do with it.”
In a written statement, a spokesperson for the Dallas-based chain said hotel workers were not held up because facilities were either closed or operating at significantly reduced capacity.
The PPP was part of the CARES Act, the massive pandemic relief package President Trump signed in March. Some 5.2 million businesses have obtained $ 523 billion in PPP loans. Although the Small Business Administration program was designed to help small businesses keep workers paid – as an alternative to unemployment – it has been widely criticized for favoring large companies and pricking up fraud allegations.
PPP rules allow a business to use funds for payroll even if it is closed. But the Omni chose not to. Instead, the channel said in its statement, “any amount of PPP loans that are not canceled will be returned or repaid with interest according to the terms of the program.”
Critics say whether hotels pay off loans is not the issue. They note, for example, that the interest rate on PPP loans is only 1%, well below the market rate.
“It’s disgusting if companies want to use this as a way to get a low-interest loan from the federal government,” Unite Here’s Aramayo says. “It’s really not fair for a company to take money that was intended to help its own workforce and use it for other purposes.”
Omni’s use of funds is “clearly very contrary to the spirit of what this [program] was on point, “said Harry J. Van Buren, professor of business ethics at the University of St. Thomas in Minneapolis.” Even if they repay the loan, the fact that they have come considerably closer to the free money for a while, is really a plus for them too. “
“I think of other businesses that may not have received money because Omni did, either real small businesses in difficulty or another business that could have used it to pay their bills. employees, ”said Lisa Gilbert, executive vice president of consumer advocacy group Public Citizen. “It doesn’t seem like a great investment of taxpayers’ money, even if they return the money at the end of the day.”
On December 8, Aramayo wrote to the Small Business Administration and the US Department of the Treasury, to review PPP loans to Omni hotels, “especially if [the borrowers] ask for forgiveness. It was only a few weeks before President Trump enacted a new pandemic relief package with his own version of the Paycheck Protection Program – one with new rules to help address some of the issues that critics discovered in the first iteration.
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