The Arizona Republic

Border wall contractor­s got $9.35M in PPP loans

Companies decline to comment about government relief money

- Caitlin McGlade

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.

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