An independent watchdog overseeing the coronavirus bailouts has demanded documents and information about Texas Sen. Ted Cruz’s role lobbying for changes to a key bailout program that benefited his top political donors.
“Recent public reporting has raised questions about changes made to the Main Street Lending Program” after Cruz requested them “to ensure access to capital for businesses in the oil and gas industry,” Special Inspector General For Pandemic Recovery Brian D. Miller wrote in a letter January 6, citing a Wall Street Journal investigation based on BailoutWatch findings.
The investigation found that Cruz sought and received two key changes to the program that would directly benefit Wilks Brothers, a Texas fracking company owned by billionaires who are his top political patrons. Cruz asked that the maximum loan size be increased and that companies be permitted to use the government-subsidized loan money to repay existing debt.
As a result, Wilks Brothers-owned ProFrac was able to obtain a $35 million loan through the program, which allows banks to resell the loans to the Federal Reserve, retaining only 5% of the risk on their own balance sheets. Dan and Farris Wilks donated $15 million to a super PAC that supported Cruz’s failed 2016 presidential bid.
The letter addressed to Treasury General Counsel Brian Callanan, requests written communications between Cruz and then-Treasury Secretary Steven Mnuchin. It includes a list of questions about the program changes and Cruz and Mnuchin’s roles. The letter was included in the SIGPR’s quarterly report, released last month, and was first reported by Bloomberg. It notes that the Wall Street Journal story does not allege misconduct.
Miller’s oversight role was created under the CARES Act to oversee the Treasury and Federal Reserve responses to the pandemic, including their efforts to bail out oil and gas companies.