Santa Monica hotel operator accused of misusing PPP money

LA area Congress members among a group saying Columbia Sussex double counted employees for more federal relief funds, then laid off workers

Los Angeles /
Oct.October 14, 2020 11:30 AM
Representatives Ted Lieu (D-Torrance) and Katie Porter (D-Irvine), with the hotel (Credit: Google Maps)
Representatives Ted Lieu (D-Torrance) and Katie Porter (D-Irvine), with the hotel (Credit: Google Maps)

The operator of the JW Marriott Santa Monica Le Merigot and dozens of other hotels is under the microscope for allegedly misusing money from the federal government’s coronavirus emergency relief fund.

Three Los Angeles-area Congress members are among a group of eight asking the Small Business Administration to investigate Kentucky-based Columbia Sussex, according to the Los Angeles Time. In a letter to the SBA, the Democratic House members said Columbia Sussex accepted as much as $63 million in Paycheck Protection Program funding that was meant to keep workers employed, though it laid off thousands of people, the report said.

“Columbia Sussex appears to have taken advantage of these policies — borrowing taxpayer money at artificially low interest rates through multiple entities while laying off workers,” the letter said.

Representatives Ted Lieu of Torrance, Alan Lowenthal of Long Beach and Katie Porter of Irvine are among the elected officials who signed the letter.

They allege that Columbia Sussex received PPP funding through 17 affiliates and double counted employees of those businesses to justify more money.

The company did not return calls for comment, according to the Times.

The federal government launched the $349 billion PPP in April and it ended in August with around $100 billion having gone unused.

A loan would be forgiven if an employer used 60 percent of it on payroll by December. Otherwise, the loan comes with an interest rate considerably lower than what is available through traditional lenders.

The Securities and Exchange Commission is investigating hotelier Monty Bennett’s company Ashford Inc. and affiliated entities after the firm took $68 million in PPP funding and then paid out millions of dollars in preferred dividends to shareholders, including Bennett himself. The company in May said it would refund the government all of the money. [LAT]Dennis Lynch 


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