Omni Hotels & Resorts, the international luxury hotel chain owned by billionaire Robert B. Rowling, has been accused of misusing millions of dollars in federal anti-pandemic relief funds aimed at keeping workers on the payroll.
The Omni William Penn Hotel in Pittsburgh is one of a number of hotels in the chain that accepted federal PPP money but did not use it to pay workers’ wages.
Bill O’Discoll / Wissa
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Bill O’Discoll / Wissa
The Omni William Penn Hotel in Pittsburgh is one of a number of hotels in the chain that accepted federal PPP money but did not use it to pay workers’ wages.
Bill O’Discoll / Wissa
Unite here, the service workers union of more than 300,000 members in North America, said that several Omni hotels where workers are represented have received loans from the Paycheck Protection Program but have not paid hundreds of workers.
Unite Here said 32 Omni hotels received loans of approximately $ 76 million from the program known as the Public-Private Partnership. About $ 23 million of that went to seven hotels, in cities including Chicago, Boston, Washington, DC and San Francisco, where it represents more than 1,000 housekeepers, waiters and other service workers.
In its application to the Small Business Administration, Omni Providence of Rhode Island requested a $ 2.6 million PPP loan, and promised to keep 246 jobs.
Quilcia Moronta, a health club operator, has been laid off after working at the hotel for 21 years. She applied for unemployment benefits and food coupons, and was optimistic when the hotel loan was approved on April 13th.
“While I was struggling to support my family, I learned that the Omni family had received some PPP funds,” said Moronta, a single mother with two children. “I said, ‘Wow, at least they’re going to help us get things over when it comes to basic needs. ”
After eight months, unemployment benefits for Moronta and other workers expired, and health coverage long ago expired. They are still waiting for the benefits of a public-private partnership.
“We are here in December, and we haven’t heard anything about Omni using that money to help her employees,” she said.
“Here in Boston, I spoke to the hundreds of workers who work at Omni Parker House, and I know none of them received a single cent of that money,” said Carlos Aramayo, executive vice president, Unite Here. “Looking at this winter, a lot of them can really use it.”
Zebie Williams was laid off in March from his job as a nightclub houseman at Omni William Penn in Pittsburgh. He said that since unemployment and supplemental weekly assistance from the federal government ran out, he has struggled to feed his family, which includes a partner with a disability and three daughters. To expand the budget, he said, he skipped meals.
“It’s not right that babies should not eat,” said Williams. “I would do it 10 times again if this happened. I’ll make sure my kids eat. I’ll do it.”
In a written statement, a spokesperson for the Dallas-based chain said workers in hotels were not kept because facilities were either closed or operating at extremely low capacity.
The PPP was part of Act CARES, the mega-pandemic relief package President Trump signed in March. About 5.2 million companies received $ 523 billion in PPP loans. Although the Small Business Administration Program was intended to help small businesses preserve workers’ wages – as an alternative to unemployment – it is He was widely criticized for favoring large corporations, and shocked by allegations of fraud.
PPP rules allow businesses to use money on payroll even if it is closed. But Omni chose not to. Instead, the chain said in its statement, “Any amount of PPP loans that have not been waived will be returned or paid with interest as per the terms of the program.”
Quelsia Moronta (right), who was laid off from Omni Providence last spring, with her children Gabriela and Gabriel.
Quelsia Moronta
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Quelsia Moronta
Quelsia Moronta (right), who was laid off from Omni Providence last spring, with her children Gabriela and Gabriel.
Quelsia Moronta
Critics say whether hotels pay down loans is a long way off. Note, for example, that the interest rate on PPP loans is only 1% – well below the market rate.
“It’s disgusting if companies want to use this as a way to get a low-interest loan from the federal government,” says Aramayo. “It’s really unfair for a company to take money that was meant to help its workforce and use it for another purpose.”
Omni’s use of money “really goes against the spirit of what this is.” [program] Harry J. Van Buren, professor of business ethics at St. Thomas University in Minneapolis, “Even if they pay off the loan, the fact that they came so close to getting free money for some time is really an advantage to them as well.”
“I’m thinking about other companies that might not get the money because Omni did, whether they were really small companies that were struggling, or another company that might have used it to pay their workers,” said Lisa Gilbert, Omni’s executive vice president. . “It doesn’t seem like a big investment of the taxpayers’ money, even if they pay it off at the end of the day.”
On December 8, Aramayo wrote to the US Small Business Administration and the US Treasury Department to scrutinize “PPP loans for Omni Hotels,” especially if [the borrowers] Apply for tolerance. “ It was only weeks before President Trump signed into law a new pandemic relief package with its own version of the Paycheck Protection Program – one with new rules to help address some of the problems critics found in the first iteration.
