As Republicans call for an ethics probe into federal coronavirus relief that benefited her husband’s business, Rep. Susie Lee insists she “took the right vote”
Pressure from Democratic Rep. Susie Lee for a change in the federal government’s pandemic loan requirements that ultimately benefited her husband’s business has given Republicans new ammunition – including an outside ethics complaint – as the race for District 3 begins.
Lee, along with the rest of the state’s congressional delegation, lobbied the Small Business Administration in April to change its rules to allow small gaming businesses to benefit from the Check Protection Program. then nascent payroll intended to stem permanent job losses triggered by coronavirus closures.
But a report from last week of The daily beast discovered that the company run by Lee’s husband Dan, Full House Resorts, had received $ 5.6 million on two P3s about two weeks after the SBA made the switch.
Lee denied any involvement in the loans, saying The daily beast through a spokesperson that “she had no influence” either on the decision to file an application with the SBA or on the final approval of that application. A spokesperson then clarified that she had, however, been informed of both the request and its possible approval.
Since the story broke, Lee has avoided direct media interviews and relied instead on spokespersons. The MP declined a request for an interview from The Nevada Independent and declined at least one other offer from MSNBC from the original story of The daily beast has been published.
In a statement to The Nevada Independent, a spokeswoman for Lee said the congresswoman is working to deal with “two urgent and unprecedented health and economic crises” and that “40,000 Nevada businesses and their employees now have a lifeline in this storm “because of his advocacy in Congress.
“She got the right vote, advocated for the right policies for her district and demands full transparency for all coronavirus programs,” the spokesperson said. “Republicans and Democrats have joined Susie in this vote and fight, but now a bunch of partisan hacks and obscure super PACs are attacking her for it. It’s deceptive and cynical, even by Washington’s lowest standards – but Susie Lee has never let dishonest partisan attacks stop her from doing her job for Nevada.
Republicans, meanwhile, seized the issue as an alleged conflict of interest as they sought to make loans an issue in Lee’s re-election bid. The Congressional Leadership Fund – a major super PAC for the leadership of the GOP House which has already set aside nearly $ 1 million in advertising targeting Lee in the fall – called its “incorrect” decision “to rig the system.”
Those criticisms were reinforced on Friday with the announcement of a conservative ethics watchdog, the Foundation for Accountability and Civic Trust, that it filed a formal complaint against Lee with the Congressional Ethics Office.
This complaint, citing in large part The daily beast history as proof, said in part that Lee’s financial interests in Full House “cast doubt” on his impartiality and whether or not his actions were “in the best interest of the public.”
“This is not a case where Lee simply voted on the legislation, but it is a case where she used her official position to advocate for an agency to change its regulations,” the complaint read. “Therefore, conflict rules must be strictly enforced to avoid an apparent or real conflict of interest. “
Breaking the pressure to change the SBA rules
Small gaming businesses across the state have been wiped out after coronavirus closures in March forced their doors to close. But those economic woes quickly turned into an existential crisis after the SBA revealed in early April that any company making more than 33% of its revenue from gambling would not be eligible for federal wage relief.
While early characterizations of the Trump administration focused on the ineligibility of “small casinos,” the rule more broadly denied access to federal aid to businesses ranging from taverns, grocery stores, and other businesses that maintain machinery. slot as part of their activities.
Along with the rest of the Nevada delegation, Lee had for weeks pushed the SBA to reverse its decision and broaden its definition to include gaming companies. These efforts included a letter Lee wrote to the SBA urging the agency to adjust its guidelines to “reflect the intent of Congress” and extend paycheck protection to small gaming companies.
But Lee wasn’t the only one pushing for a change. The six members of the Nevada congressional delegation rushed to launch a series of public and private appeals to save small gaming businesses, including writing their own letters to the SBA and praising their own role in securing the game. change after the fact.
Rep. Dina Titus boasted of writing to the SBA from March 27; Representative Steven Horsford underlined his own testimony the Small Business Committee; and Sens. Catherine Cortez Masto and Jacky Rosen same lodged a legislative appeal in the Senate, alongside a bill identical to the House presented by Titus, which would have forced the hand of the SBA.
In a joint statement issued after the overthrow of the SBA, senators said they were “happy to see that our calls for reform have been answered”.
Representative Mark Amodei – the only Republican in the delegation – appears to have played a more direct role in the SBA’s decision. Talk to The Nevada Independent in April, Amodei said he spoken directly to new White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin, pressuring the pair on the gambling issue and even berating Mnuchin.
Amodei said at the time that “As the only Republican with, I think, that kind of access to administration… it’s like, ‘Hey, I have to have this.'”
Following last week’s scrutiny of Lee’s role in changing the PPP, a report released on Tuesday by Politics appointed three other members Congress who have benefited financially from federal coronavirus relief, including two Republicans and a Democrat.
Key to this review is the lingering secrecy surrounding the allocation of hundreds of billions in coronavirus relief funds, such as the SBA and the Treasury Department. having resisted calls for disclosure of recipient information through the Freedom of Information Act.
Democrats have pushed for increased transparency in federal coronavirus relief payments, including trying to pass a new disclosure law last month that was ultimately blocked by House Republicans. This includes Lee, who touted a vote in favor of this bill, the so-called Truth Act.
Still, concerns continued to mount over the ethical implications of Lee’s role in the broader policies that allowed possible loans to her husband’s business.
Full House operates five properties in four states, including two in Nevada: Grand Lodge Casino in Incline Village and Stockman’s Casino in Fallon. Securities and Exchange Commission documents show Full House applied for the loans in anticipation of the reopening of two of its non-Nevada casinos, Bronco Billy’s in Colorado and Rising Star in Indiana, and as it sought to rehire “several hundred” employees between the two properties.
While the company itself technically exceeds the 500 employee limit for accessing PPP loans, its individual properties do not, ultimately opening the doors to the $ 5.6 million in loans.
In a conference call with investment analysts last month, Dan Lee said that “we are sort of prime candidates” for the paycheck program, adding that “we are using it the way it is supposed to be trying to. get people back to work “.
Financial disclosures show Lee and her husband own millions in Full House stock or stock options who cratered because the nationwide hospitality industry has been shut down by the coronavirus. As markets collapsed at the start of the pandemic, the company’s stock price fell from a peak of $ 3.55 on February 21 to just $ 0.53 on March 18.
Since the loans were approved, this price has risen steadily, although it is still far from the February peak. At time of release, the stock was at $ 1.78, down $ 0.30 since the release of The daily beast story.
The race for District 3
The Republican fury over the potential conflict of interest comes as the dust settles in primary races in Lee’s Congressional District 3 – a vibrant district considered by the GOP to be the most competitive pickup opportunity in Nevada in the 2020 cycle.
In his own uncompetitive primary, Lee took the win in the early post-mail return last week, securing around 83% of the vote on Tuesday morning.
She will now face Republican Dan Rodimer, a former wrestler turned entrepreneur who emerged from a bitter, often combative Republican primary with a victory of nearly 19 points over his closest opponent.
Approved by the leadership of the Republican House, pro-Trump Rodimer has often touted his campaign as the best placed to beat Lee, who won his seat by around 9 points in 2018 and is entering the 2020 all-around with over 2 million. dollars in his campaign coffers.
Rodimer, reiterating the criticisms leveled by the CLF, also sought to scold the incumbent on the issue of PPP loans, accusing him in a tweet on Friday of having traveled to Washington to serve his own interests.
“Take advantage of a pandemic to enrich yourself and your family, while tens of thousands of # NV03 families are suffering? Rodimer tweeted. “It’s time to fire Susie Lee!”
Disclosure: The Nevada Independent received a PPP loan.
Updated on 06/16/20 at 1:48 p.m. – This article has been updated to include comments from Dan Lee regarding Full House’s PPP loans during a call with investment analysts in May.
Updated 06/17/20 at 8:02 am – This article has been updated to reflect that FACT has filed its complaint with the Congressional Ethics Office. An original version referred to the organization’s intention to file.