MEAWW.COM / NEWS / HUMAN INTEREST

Ted Cruz helped rework rules to aid Texas fracking billionaires draw millions in Covid-19 relief, says report

The Texas senator called the WSJ story 'misleading' even though evidence shows the billionaire brothers have been his longtime financial backers

Texas Senator Ted Cruz, who has been backing President Donald Trump’s mission to overturn the results of the 2020 presidential election in his favor, will reportedly help two fracking billionaires from the Lone Star State by seeking changes to rules that would help them get $35 million in Covid-19 relief loan, which was primarily aimed at helping struggling businesses. The Wall Street Journal came up with the report on Monday, December 27, and Cruz called it “misleading”.

According to the WSJ, billionaire brothers Dan and Farris Wilks stepped up buying as the Covid-19 pandemic spread across the nation, acquiring bankrupt competitors while investing in others, but found soon that they were being stopped from taking advantage of the government-backed loan program even as one of their many firms were struggling for survival. It was then when the duo approached the senator for help. 

“As the coronavirus pandemic and low oil prices walloped US frackers this spring, Texas billionaires Dan and Farris Wilks got a $35 million relief loan to help one of their fracking companies stay afloat. At the same time, they were on a buying spree in the country’s oil patch,” the report said.

“Since spring, businesses controlled by the Wilks brothers have hunted for deals among fracking firms going through bankruptcy and taken or increased stakes in at least six other companies, corporate filings show. But when it looked like the oil-and-gas industry would be shut out of a key pandemic lending program, they and others in the industry turned their attention to Washington, making an appeal for help in meetings with home-state senator Ted Cruz.

“The twin dynamics of acquisitions and government rescue show how the economic tumult caused by the pandemic has reshaped the landscape for a key US industry. One result: The Wilkses have expanded their presence in a still-youthful industry where they first invested in 2002, soon to become billionaires as fracking flourished.

“But the industry was already under pressure from international competition and a sagging oil price by the time the pandemic hit, and its mounting woes prompted the Wilkses and others to turn to allies in Washington, including Mr. Cruz. The Republican senator helped convince the Trump administration and the Federal Reserve to change the rules for pandemic loans to ensure oil and gas firms could participate,” it added. 

Billionaires have been Cruz's longtime financial backers

The report then said that soon after the US government changed the rules of its lending program in April, a Wilks family firm named ProFrac Holdings LLC applied and received the loan worth $35 million, as per federal records. It also called the billionaire duo Cruz’s “longtime financial backers” and that they donated $15 million to a super PAC called Keeping the Promise that backed Cruz’s presidential election campaign in 2016. It also called the Wilks the “largest financial backers” of Cruz’s political career. 

Cruz's spokesperson Lauren Blair Aronson said the senator tried to save small and medium-sized businesses from getting directly hit by the pandemic by letting them access emergency funds, the WSJ report added. She said the Republican saw a program that helped 25 American energy producers, including roughly a dozen in Texas, and helped secure over 300,000 oil and gas jobs in the state. 

Chris Kevuke from non-profit BailoutWatch slammed Cruz, saying the Covid dollars were nothing but a gift from the senator to his campaign donors. He said ProFrac’s loan was a “blatant misappropriation of taxpayer dollars”. 

'It wasn't a secret'

Cruz reacted to the WSJ report in a couple of tweets on Monday in which he defended his action, saying he didn’t “weigh in” on behalf of any particular company. “I sent a public letter to the Fed arguing that the ENTIRE oil & gas industry shouldn’t be wrongfully excluded from emergency loans,” he said, adding that story was misleading. He then said that he is proud to defend jobs in Texas. In another tweet, he said he didn’t do anything secretly. “It wasn’t in secret; I sent out a press release on it,” he said, linking report about him writing a letter to the Treasury and Federal Reserve to help America’s energy producers in April this year by allowing them access to capital.