Katie Hobbs Transition Team Includes Nonprofit Under Loan Fraud Investigation

Katie Hobbs Transition Team Includes Nonprofit Under Loan Fraud Investigation

By Corinne Murdock |

Governor-elect Katie Hobbs’ transition team includes the leader of a nonprofit under investigation for pandemic loan fraud. 

Chicanos Por La Causa (CPLC) President, CEO, and lobbyist David Adame was named to Hobbs’ transition team. 

The Small Business Administration (SBA) is investigating CPLC for fraudulent pandemic loans under the Paycheck Protection Program (PPP). The Democrat-led Select Subcommittee on the Coronavirus Crisis issued a report at the beginning of this month revealing that CPLC’s nonprofit lending subsidiary, Prestamos, received approximately $7.7 billion in loans. That made Prestamos the third-ranked lender for PPP last year, after JP Morgan Chase Bank and Bank of America. 

“As of late December 2019, Prestamons had provided ‘more than $50 million in loans supporting more than 400 businesses’ since its formal inception in 2000,” stated the subcommittee report. “In other words, in the two decades prior to the pandemic, Prestamos likely issued less than one percent of the funds that it issued in 2021 as part of the PPP.”

The subcommittee recommended the Department of Justice (DOJ) to act on their findings. 

In a statement, Prestamos said that their compliance program resulted in the denials of 57 percent of PPP applications. 

“Prestamos supports any effort to identify and correct fraud and to enhance controls, and we have been working with the SBA to strengthen the role of non-profit, community-based lenders in reaching those in need,” stated the lender.

Hobbs named her transition team about a week before the SBA report dropped.

CPLC’s website has a portal for its “Boards,” which currently houses a broken link. However, archived versions of the portal link include the word “Prestamos” in the URL.

In 2020, Adame served on Sen. Mark Kelly’s (D-AZ) transition team. Adame is also a board member of the Arizona-Mexico Commission appointed by outgoing Governor Doug Ducey, a member of the Dean’s Council at Arizona State University (ASU) W.P. Carey School of Business, and a board member of the Greater Phoenix Economic Council (GPEC).

The GPEC President and CEO, Chris Camacho, has worked closely with CPLC and was also named to Hobbs’ transition team. 

The co-chair of GPEC’s International Leadership Council, Sharon Harper, recently issued a $1.5 million grant to CPLC through her trustee role for the Virginia G. Piper Charitable Trust. Harper also named Adame to a Creighton University board. 

Harper, the president, CEO, and co-founder of Plaza Companies, also sits on the boards of the McCain Institute and BioAccel, and serves as a vice chair for the Arizona Community Foundation. 

A number of Hobbs’ other transition team members also have ties to CPLC.

Mary Rose Wilcox, former Phoenix City Council member and defeated 2014 congressional candidate, also has ties to CPLC and its loans operations: in 2009, the former Maricopa County Supervisor faced 36 felony counts for failing to disclose her CPLC loans and exercising a conflict of interest when voting on funding related to CPLC. The charges were dropped, ultimately, and Wilcox received about $1 million in settlement. 

Mesa Mayor John Giles has worked closely with CPLC over the years. Most recently, the mayor helped establish a new affordable housing development, “Nuevas Vistas.” Giles also supported CPLC’s efforts to pass Proposition 308, granting in-state college tuition to illegal immigrants so long as they graduated from an Arizona high school. Arizona voters approved the measure last month. Leftist dark money heavily backed the proposition. 

Bob Worsley, former state senator, and John Graham, chairman & CEO of Sunbelt Holdings, also signed onto Prop 308. 

Maricopa County Supervisor Steve Gallardo has also partnered with CPLC in the past. Marlene Galan-Woods, a former Fox News and CBS News anchor, serves on the team and is the wife of Grant Woods: a prominent attorney awarded by CPLC for his work and campaign co-chairman for both former Governor Jan Brewer and Sen. John McCain.

CPLC’s political arm, CPLC Action Fund, endorsed Hobbs in October through its initiative “Latino Loud” or “Sí Se Vota.”

Adame then appeared in one of Hobbs’ TV campaigns released in late October.

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.