Border wall contractors got $9.35M in PPP loans
Companies decline to comment about government relief money
Construction of the U.S.-Mexico border wall has accelerated during the pandemic, yet at least five companies currently involved with building it received federal loans intended to help businesses retain their workforce as the spread of COVID-19 slowed the economy.
Together the companies collected up to $9.35 million in Paycheck Protection Program funds and reported saving 260 jobs, according to federal data.
The construction industry has taken a hit during the pandemic and experts say having a federal contract doesn’t necessarily protect a company’s entire operation, especially if they have many unrelated private sector projects.
But the companies that received multimillion dollar border wall contracts wouldn’t answer questions about their PPP loans, so the pandemic’s impact on their operations is unclear.
The federal government is paying a company listed as CJW Joint Venture about $70 million for border wall work around San Diego. It also just loaned CJW Construction, which shares the same California address, up to $1 million through the PPP program.
Missouri-based Randy Kinder Excavating took a $5 million job on the border last summer and then this March secured another $175.6 million to build segments of the border wall in Texas, totaling about 15 miles.
The firm also just received a PPP loan of up to $350,000.
CJW Construction did not respond to requests for comments and a representative of Randy Kinder Excavating sent The Arizona Republic an email that stated only: “NO COMMENT.”
Gideon Contracting, Burgos Group and LGC Global Corp., all of which received PPP loans ranging from a maximum of $1 million to $5 million, also have active contracts to work on the border wall. USAspending.gov, which publishes federal contract data, has yet to post the dollar amounts of their awards.
The administrative assistant for New Mexico-based Burgos Group did not respond to requests for comment.
An employee at Michigan-based LGC Global Corp. said the firm got its contract about a month ago and said it was for roughly $50 million. He couldn’t speak to the PPP loan and his colleagues to whom he directed a reporter for further comment did not respond to calls.
An employee at Texas-Gideon Contracting hung up on a reporter who called to ask about the status of the firm’s border wall contract.
“I’m going to stop you right there because we’re not allowed to talk about it,” she said. “If you have questions, you have to go to the Army Corps of Engineers.”
The Republic wanted to ask the five firms whether they’ll seek to have their PPP loans forgiven and if any of the money they received through the program went to expenses related to the border wall project.
Scott Amey, general counsel with the Project on Government Oversight, said the fact that contractors have received millions to do uninterrupted border wall work raises questions about whether they were impacted enough by the pandemic to need PPP loans. But he also said it’s possible they needed help for parts of their operations not working on the border wall.
Randy Kinder Excavating, for example, highlights on its website 21 construction projects.
“I wish they would have answered questions because it may avoid any criticism that they may get for accepting a loan while they’re working on a federal contract that is paying millions of dollars,” Amey said.
Three other contractors poised to help build the border wall, but not yet called to action, also received federal loans. The government has paid them a small amount to be ready when it needs them to begin work.
Together they received up to to $5 million in PPP funds.
Work on border wall advances
Congress launched the Paycheck Protection Program this spring in response to an economy tanked by the COVID-19 pandemic. The program, touted as assistance for small businesses, authorized private lenders to disperse 1% interest loans, with the opportunity for loan forgiveness if businesses used the funds appropriately.
To have the loans forgiven, companies must prove they used the money on payroll costs in the eight weeks after getting their loans, or for mortgage, rent or utility obligations. More than half of loan recipients surveyed by the National Federation of Independent Businesses expect their entire loans to be forgiven.
Experts say those loans have prevented many companies from going out of business as the pandemic slowed economic activity across the nation.
But construction on the border wall has not stopped.
Just as COVID-19 began to take hold of the United States in March, the Trump administration waived laws in order to speed construction of the border wall.
Four Democratic lawmakers, including Arizona Reps. Ann Kirkpatrick and Raúl Grijalva, implored the Justice, Defense and Homeland Security departments in April to halt work on the wall and use those resources to fight COVID-19.
“At a time when we are all taking extraordinary steps to limit the death toll and economic devastation wrought by this unprecedented pandemic, it is deeply concerning to learn that government officials, contractors and construction workers in border communities will defy public health orders and continue border wall construction unabated, perhaps even accelerating construction in our border communities,” the lawmakers’ letter said.
A U.S. Army Corps of Engineers spokesperson told The Republic the corps is “maximizing” teleconferencing, social distancing, cleaning personal and public areas and supporting flexible work schedules to protect everyone involved.
In addition, every contractor has to submit to the corps plans for keeping their employees safe and healthy, including social distancing protocols, sanitizing shared surfaces and quarantining sick employees.
‘Enormous amount of uncertainty’
Brian Turmail, spokesman for Associated General Contractors of America, pointed out that a key to qualifying for a PPP loan was being able to show market uncertainty.
The organization serves about 27,000 member businesses. Turmail said many have seen project cancelled or delayed because of the pandemic. Not only have private sector clients halted projects, but getting government inspectors to visit work sites so a project can progress has been tough for some, he said.
More than 30,000 construction-related companies have received paycheck protection loans, according to federal data.
“There wasn’t a contractor in this country in April of 2020 who wasn’t experiencing an enormous amount of uncertainty,” Turmail said.
The construction industry lost a million jobs in early April, but the loans have since helped bring back more than 600,000, he said.
And while he acknowledged that a federal contract brings stability to a project, it doesn’t help a company’s employees working on other jobs.
“It’s not like the team that builds the wall is on Monday at the wall, on Tuesday at a hospital and on Wednesday back to the wall,” he said.