Watchdog group files complaint against Dem who requested PPP loan changes that benefited husband

NEWYou can now listen to Fox News articles!

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

An ethics watchdog is requesting that Congress investigate Democratic Rep. Susie Lee after accusing her of a conflict of interest in asking the Small Business Administration (SBA) to expand its coronavirus loan eligibility in a way that they say benefited her husband's business.

Just weeks after Lee's reported request, SBA changed its criteria on April 28 to include the gaming industry. Two weeks later, Full House Resorts, of which both Lee and her husband own millions of dollars in stock and options, received a total of $5.6 million in loans -- a conflict of interest, the Foundation for Accountability and Civic Trust argued in a complaint it will file on Friday.

“Conflict of interest laws are some of the oldest and most important ethics laws on the books," said Kendra Arnold, who leads FACT. "This appears to be a fairly straightforward violation -- Lee couldn't be any more directly tied to the company through both her own and her husband's interests, and she advocated for regulatory changes that would, and in fact did, benefit the company. The OCE [Office of Congressional Ethics] needs to throughly investigate this case as soon as possible."

The complaint also claims that Full House Resorts saw its stock price rebound to $2.00 per share after two of its casinos received SBA loans. During the pandemic, it had declined from $3.59 per share to just $0.53.

PLANNED PARENTHOOD AFFILIATES IMPROPERLY APPLIED FOR AN RECEIVED $80 MILLION IN CORONAVIRUS STIMULUS FUNDS, FEDS SAY

According to The Daily Beast, Lee reportedly said in her letter: “For the SBA to take the position that these small businesses are not eligible for needed aid because of their involvement in the gaming industry belies the economic realities of their location and will doom countless small businesses in Nevada to bankruptcy.” Both the Treasury Department and SBA updated their Paycheck Protection Program guidelines within weeks of that letter being sent.

Lee's office has denied wrongdoing, claiming that the congresswoman didn't participate in Full House's decision to apply for the loan. Fox News has requested comment.

“She is not involved in any aspect of Full House’s business or decision making,” a spokesperson told the Daily Beast. “She had no influence over the decision to file the application, and she had no influence over whether or not that application was approved or denied. The conditions and details under which Full House Resorts received its PPP loan are entirely between Full House Resorts and regulators.”

After the Daily Beast published its report, a spokesperson told the outlet that Lee didn't learn about the company's intent to apply until days after the SBA expanded its loan eligibility.

RESTAURANT EXECUTIVES PLEAD WITH TRUMP FOR MORE FLEXIBILITY WITH PPP LOANS AMID CORONAVIRUS PANDEMIC

FACT argues, however, that Lee's knowledge of the application is "completely irrelevant" given that a conflict of interest arises when a member of Congress acts in a way that "may affect" their personal financial interest.

MSNBC's Stephanie Ruhle previously indicated that senior Democrats advised Lee's husband that the situation was problematic for his wife. "He didn’t care & obviously she was comfortable with it," Ruhle claimed.

"A conflict of interest exists," the FACT complaint reads, "when a Member's private affairs appear to, or actually do, conflict with their ability to officially act on behalf of the public interest ... Because the integrity of government action is at risk, the ethics rules require Members to refrain from official action where there is even an inference of a conflict, as well as where there is an actual conflict."

CLICK HERE TO GET COMPLETE CORONAVIRUS COVERAGE

According to the complaint, conflicts can occur when members vote on legislation or engage in other official actions, including contacting an executive agency like SBA.

"This is not a case where Lee simply voted on legislation, but is a case where she used her official position to advocate for an agency to change its regulations," the complaint adds. "Therefore, the conflict rules must be strictly applied to prevent both an apparent or an actual conflict of interest."