With Daniel Lippman
HOTELS WROTE CHECKS TO LAWMAKERS WHO HELPED THEM IN PUSH FOR RELIEF: When more than 100 lawmakers sent a letter in June to Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell, it was a lobbying victory for the battered hotel industry. Hotel lobbyists had pressed members of Congress to urge Mnuchin and Powell to help hotels whose mortgages had been packaged into commercial mortgage-backed securities. Without enough guests, many of those hotels were struggling to make their mortgage payments with little ability to negotiate with lenders.
— Just two days after the lawmakers sent the letter, the American Hotel & Lodging Association’s PAC cut a check for $5,000 to the campaign of Rep. Van Taylor (R-Texas), the letter’s lead signer. The PAC — known as HotelPAC — also gave $5,000 to Taylor’s leadership PAC and wrote checks to the campaigns of two more of the letter’s first four signers in the days before the letter went out: Reps. Andy Barr (R-Ky.) and Al Lawson (D-Fla.). The PAC had never donated to any of the lawmakers before June, campaign finance records show. In total, HotelPAC gave more than $91,000 to 18 of the 105 lawmakers who signed the letter — including eight who had never received an AHLA donation before — in the days before and after they sent it on June 22.
— AHLA and several of the members of Congress who signed the letter said the timing of the donations was coincidental. A Taylor spokesperson said it was “absolutely ridiculous” to ask whether there was a connection between the contributions and Taylor’s decision to send the letter. “Congressman Taylor has been working on this issue since March when hundreds of his constituents started reaching out to him about the importance of this issue to them and their families,” she said in a statement.
— HotelPAC’s burst of contributions in June — which included dozens of checks to lawmakers who didn’t sign the letter as well as the ones who did — came after a long drought. An AHLA spokesperson said the PAC hadn’t made any political contributions since March 10 before resuming its giving in June because the trade group had shut down its offices and furloughed staff in response to the pandemic. “We did not resume PAC disbursement activity until June, so we did have a large number of checks go out in June in time for the quarterly fundraising deadline,” the spokesperson said in a statement.
— The economic pain of the pandemic has been especially intense for hotel and shopping center owners with mortgages that have been bundled into commercial mortgage-backed securities and sold to investors, since it is hard for such hotels to negotiate with their creditors. Nearly a quarter of hotels with such mortgages were delinquent in July, according to Trepp, an industry research firm. Such hotels haven’t been able to apply for Paycheck Protection Program loans or other lifelines because the loan covenants typically bar borrowers from taking on any more debt.
— Lawson, the Florida Democrat who was one of the letter’s lead signers, said he first learned about the issue from Steven Leoni, a Tallahassee businessman whose company owns a strip mall in his district. The strip mall — where the tenants include the Bajas Beachclub nightclub and an Aveda Institute beauty school — carries a mortgage that’s been packaged into a commercial mortgage-backed security. Lawson said he’d been working on the issue for months before AHLA reached out. “This was a group of people that really, really needed help,” he said in an interview. “We bailed out the airline industry but we hadn’t done anything for the hotel and restaurant industries as well as the shopping centers.”
— When the letter failed to convince Mnuchin and Powell to take action, Lawson, Taylor and Barr introduced a bill late last month to bail out hotels and other businesses with commercial mortgages that have seen steep drops in revenue, which has drawn nearly a dozen other cosponsors. But Cecil Staton, the Asian American Hotel Owners Association’s president and chief executive, said in an interview earlier this month that he wasn’t optimistic Congress would act. “It’s almost like Nero fiddling while Rome is burning,” he said. “I am just flabbergasted there is not more of an attempt to deal with this particular issue.”
WHAT WENT WRONG FOR KODAK: “When a proposed $765 million contract was made public in late July between [Eastman] Kodak and the federal government, investors and lawmakers had questions, chief among them: Why pick Kodak, a struggling photography company?” The Wall Street Journal’s Rachael Levy, Geoffrey Rogow and Alex Leary report. “Many of the answers point back to [Peter] Navarro, who spearheaded the idea and then used his sway within the administration to help Kodak navigate the bureaucracy to be first in line for the potential contract, including tapping an obscure government agency to help push the loan through the final stages.”
— “The deal came together in ‘Trump time,’ Mr. Navarro said when it was announced, using a phrase he likes to describe speed. Today, the arrangement is on life support and Mr. Navarro is distancing himself from it. … In an interview, Mr. Navarro said, “we did everything right in moving the project forward but something on Kodak’s end appears to have gone wrong.” He said his work was part of a ‘much broader effort’ in which the administration is evaluating more than 30 new potential drug manufacturers.”
HEALTH CARE LOBBY RALLIES AGAINST PUBLIC OPTION: “Bernie Sanders threw Joe Biden a lifeline on health care this week. K Street is now trying to cut it away,” POLITICO’s Susannah Luthi reports. “A deep-pocketed health care coalition has launched an assault on the public option during the Democratic National Convention, previewing the intense level of industry opposition Biden’s health plan will face if he’s elected president. The Partnership for America’s Health Care Future, made up of hospital, insurance and pharma lobbying heavyweights, formed in 2018 as an ad hoc alliance bent on fighting ‘Medicare for All’ and broader expansions of government coverage, including a publicly run health insurance alternative. A new six-figure ad campaign from the group decries the public option as an expensive quagmire that would undermine private health insurance.”
— “‘The public option would become the third most expensive government program, behind only Medicare and Social Security,’ a narrator warns in one of two ads the Partnership is running this week. The campaign includes digital ads and spots on television and the streaming service Hulu.”
MORE CONTEXT ON TRUMP’S FEUD WITH GOODYEAR: PI reported on Wednesday that President Donald Trump’s tweet urging his followers not to buy Goodyear tires was perhaps the first time he’d urged a boycott of an American company as president. Turns out that’s not quite right. Trump called for boycotting Comcast in June, assailing the cable provider’s “terrible service” and the “FAKE NEWS” broadcast by MSNBC and NBC News, which are owned by Comcast. “Drop them and go to a good provider!” he tweeted. And he suggested his followers “stop using or subscribing to” AT&T last year as a way to force changes at CNN, which is owned by AT&T. PI regrets the error.
LIFE IN THE PRIVATE SECTOR: Paul Ryan “is trying his hand at another kind of deal making, jumping into the rush on Wall Street toward blank-check acquisition companies,” The Wall Street Journal’s Maureen Farrell reports. The former House speaker will serve as chairman of a vehicle known as Executive Network Partnering Corp., which will seek to raise roughly $300 million in an initial public offering, people familiar with the deal said. That figure is subject to change based on demand.”
— Ryan “is one of the boldest names yet to join a surge this year in the creation of blank-check companies. Also known as special-purpose acquisition companies, they turn the traditional IPO model on its head by going public before acquiring a business. They have gained popularity as deal makers look to take advantage of the economic dislocation caused by the coronavirus pandemic.”
HOSPITALS, RADIOLOGISTS BACKING NEAL IN TOUGH PRIMARY: Rep. Richard Neal (D-Mass.), the chair of the House Ways and Means Committee, “generally kept a low profile on health policy. But he emerged as an ally for hospital and doctor groups late last year after they spent millions on ads and lobbying to derail a bipartisan billing fix” championed by Rep. Frank Pallone (D-N.J.) and Sen. Lamar Alexander (R-Tenn.). “Neal in December blocked the plan from being included in a year-end spending deal and then introduced his own doctor- and hospital-friendly billing legislation that critics say would drive up prices and then insurance premiums.”
“The legislative gridlock that followed, combined with the coronavirus pandemic, all but doomed any efforts to come up with a compromise before the elections.” As Neal faces a tough primary challenge next month, the “American Hospital Association has spent more than $427,000 this month on digital and radio ads on Neal’s behalf while the American College of Radiology Association spent $43,528 on fliers touting Neal as a ‘health care reform champion’ who has ‘put patients over politics.’”
IF YOU MISSED IT THIS MORNING: “Steve Bannon, a former senior White House adviser to President Donald Trump, has been arrested and charged with three other men for swindling donors who supported a private effort to build sections of wall along the U.S.-Mexico border,” POLITICO‘s Josh Gerstein, Ben Schreckinger and Kyle Cheney report. ” Bannon and the other men were indicted by a federal grand jury in New York on charges of conspiracy to commit wire fraud and money laundering in connection with their roles in the nonprofit group ‘We Build the Wall.’ Prosecutors allege that Bannon, 66, diverted $1 million raised by the group to another organization he controlled and spent hundreds of thousands of dollars of donor funds on his personal expenses.”
— FTI Consulting has hired Cheyenne Hopkins as a managing director in its strategic communications practice. She was previously the Bank Policy Institute’s senior vice president of public affairs strategy.
— Fenton has hired Danielle Schlanger as a vice president in its political practice. She was previously the New York State deputy communications director on Michael Bloomberg’s presidential campaign.
— Boundary Stone Partners has hired Christine Turner as a senior vice president and Ben Brenner as a senior manager. Turner previously worked for Michael Bloomberg’s presidential campaign. Brenner previously worked as a fellow in the Office of Personnel Management.
Gideon Greenfield Victory Fund (Theresa Greenfield for Iowa, Sara Gideon for Maine)
Pennsylvania Patriots Victory Fund (Reps. Brian Fitzpatrick and Scott Perry; Bringing America Together PAC, First Capital PAC, Republican Federal Committee of Pennsylvania)
Defeat Republicans PAC (Hybrid PAC)
Hard Hatters for Biden (Super PAC)
Hard Hatters for Trump (Super PAC)
Recreate Politics (Super PAC)
Rural Colorado United (Super PAC)
Service Matters PAC (Super PAC)
Stop Socialism Now PAC (Super PAC)
United Women’s Health Alliance PAC (Super PAC)
Cardinal Infrastructure, LLC: Virginia Railway Express
Hobart Hallaway & Quayle Ventures, LLC: Clinical Reference Laboratory, Inc.
Forbes-Tate: PrivaPath Diagnostics, Inc. DBA Let’s Get Checked, Inc.
Society of American Florists: Society of American Florists