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Omni Hotels & Resorts, the worldwide luxurious resort chain owned by billionaire Robert B. Rowling, is being accused of misusing hundreds of thousands of {dollars} in federal pandemic reduction funds meant to maintain employees on payroll.
The Omni William Penn Hotel in Pittsburgh is considered one of a variety of motels within the Omni Hotels & Resorts chain that accepted federal Paycheck Protection Program funds however didn’t use them to pay employees.
Bill O’Driscoll/WESA
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Bill O’Driscoll/WESA
The Omni William Penn Hotel in Pittsburgh is considered one of a variety of motels within the Omni Hotels & Resorts chain that accepted federal Paycheck Protection Program funds however didn’t use them to pay employees.
Bill O’Driscoll/WESA
Unite Here, a service employees union with greater than 300,000 members in North America, mentioned a number of Omni motels the place it represents employees took Paycheck Protection Program loans however by no means paid a whole bunch of employees.
Unite Here mentioned 32 Omni motels obtained about $76 million in loans from this system, often known as PPP. About $23 million of that went to seven motels, in cities together with Chicago, Boston, Washington, D.C., and San Francisco, the place the union represents greater than 1,000 housekeepers, servers and different service employees.
In its software to the Small Business Administration, the Omni Providence Hotel in Rhode Island requested for a $2.6 million PPP mortgage, promising to retain 246 jobs.
Quilcia Moronta, a well being membership attendant, was laid off after working on the resort for 21 years. She utilized for unemployment advantages and meals stamps and was hopeful when the resort’s mortgage was authorised on April 13.
“As I was struggling to provide for my family, I learned that the Omni had received some PPP money,” mentioned Moronta, a single mom with two youngsters. “I said, ‘Great, at least they’re gonna help us get by when it comes to basic needs.’ “
Eight months later, unemployment advantages for Moronta and different employees have expired, and well being protection is lengthy gone. And they’re nonetheless ready for PPP advantages.
“Right now, here we are in December, and we haven’t heard anything about Omni using that money to help their employees,” she mentioned.
“Here in Boston, I’ve spoken to hundreds of workers who work at the Omni Parker House, and I know none of them have received a single dime of this money,” mentioned Carlos Aramayo, Unite Here’s government vice chairman. “Looking at this winter, a lot of them could really use it.”
Zebedee Williams was laid off in March from his job as an in a single day banquet houseman on the Omni William Penn Hotel in Pittsburgh. He mentioned that since unemployment advantages and weekly supplemental help from the federal authorities ran out, he has struggled to feed his family, which features a companion on incapacity and three daughters. To stretch the price range, he mentioned, he has skipped meals.
“It’s not right for the kids not to eat,” Williams mentioned. “I would do it 10 times again if the situation happened. I would make sure my children eat. I would make do.”
In a written assertion, a spokesperson for the Dallas-based chain mentioned employees on the motels had not been retained as a result of the amenities have been both closed or working at drastically lowered capability.
PPP was a part of the CARES Act, the large pandemic-relief bundle President Trump signed in March. Some 5.2 million companies have secured $523 billion in PPP loans. Though the Small Business Administration program was meant to assist small companies maintain employees paid — as an alternative choice to unemployment — it has been extensively criticized for favoring giant companies and been stung with allegations of fraud.
PPP guidelines do allow a enterprise to make use of funds for payroll even whether it is closed. But the Omni elected not to do this. Instead, the chain mentioned in its assertion, “any amount of the PPP loans that are not forgiven will be returned or repaid with interest per program terms.”
Quilcia Moronta (proper), who was laid off from the Omni Providence Hotel final spring, together with her youngsters, Gabriela and Gabriel.
Quilcia Moronta
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Quilcia Moronta
Quilcia Moronta (proper), who was laid off from the Omni Providence Hotel final spring, together with her youngsters, Gabriela and Gabriel.
Quilcia Moronta
Critics say whether or not the motels pay again the loans is inappropriate. They be aware, as an example, that the rate of interest on PPP loans is simply 1% — effectively under market charge.
“It’s disgusting if companies want to use this as a way to get a low-interest loan from the federal government,” says Unite Here’s Aramayo. “It’s really not fair for a company to take money that was intended to help out their own workforce and use it for some other purpose.”
Omni’s use of the funds is “obviously really contravening the spirit of what this [program] was about,” mentioned Harry J. Van Buren, a professor of enterprise ethics on the University of St. Thomas in Minneapolis. “Even if they do repay the loan, the fact that they got awfully close to free money for some period of time is really an advantage to them as well.”
“I do think about other businesses that maybe didn’t get money because Omni did, either truly small businesses that were struggling or another company that might have used it to actually pay their workers,” mentioned Lisa Gilbert, government vice chairman of the patron advocacy group Public Citizen. “It doesn’t seem like a great investment of taxpayer dollars, even if they pay back the money at the end of the day.”
On Dec. 8, Aramayo wrote to the Small Business Administration and the Treasury Department, urging them to scrutinize PPP loans to Omni motels, “especially if [the borrowers] apply for forgiveness.” It was simply weeks earlier than Trump signed into legislation a brand new pandemic-relief bundle with its personal model of the Paycheck Protection Program — one with new guidelines to assist handle among the issues critics discovered with the primary iteration.
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