HELENA, MT – Accountable.US discovered that energy company Gulfslope Energy, which has ties to Jared Kushner and significant financial troubles, got a $100,300 bailout from the Trump administration under the Paycheck Protection Program (PPP). Gulfslope is just the latest energy company with a troubling past to receive bailouts through the PPP, a program that’s supposed to help struggling mom and pop small businesses deal with the economic consequences of the COVID-19 pandemic.
“It’s a slap in the face to hard-working Americans who are still waiting for economic relief that this administration is giving loans meant to help small businesses to big oil corporations with ties to the President’s family,” said Jayson O’Neill, Accountable.US spokesperson. “Under normal circumstances, it would be shocking to hear that the President is bailing out a corporation tied to his family at the public’s expense during an unprecedented pandemic, but sadly this is just par for the course with the Trump administration.”
Gulfslope Energy is partially owned by Delek Group, an Israeli investment firm. In 2014, Delek Group signed a $434 million deal with Jared Kushner, and although the deal eventually fell through, it did expose Kushner’s ties to the company. Delek Group has been in desperate need of a bailout– during COVID-19 Delek Group valuation has gone down 66% and it owes investors billions that it is “not expected to be able to repay.” Delek is now benefiting from Gulfslope’s bailout money. Gulfslope was also a signatory to a letter to President Trump seeking a bailout for the oil and gas industry.
According to watchdog group Accountable.US’ tally, the oil and gas sector has received over $100 million from the PPP so far and the ‘Mining’ sector, which includes oil and gas, has been awarded over $3.9 billion. These filings were compiled as part of an ongoing tracking project by Accountable.US. TrumpBailouts.org documents the billion-dollar corporations and other large companies that have received taxpayer assistance under the CARES Act, and what advantages and assets they had going into the COVID-19 crisis that most small businesses could never access.
Previously controversial PPP grantees include a foreign-owned uranium mining corporation with ties to the Trump administration, at least two companies that market their ability to ship U.S. manufacturing jobs overseas, major luxury hotel chains, a fashion model agency, and even the L.A. Lakers.
BACKGROUND: The Small Business Administration’s Paycheck Protection Program has been plagued with reports of legitimate small businesses unable to access the help the President claimed would come in “record time”. They have faced a bureaucratic maze often ending in delays and rejection as banks reportedly prioritized those “with the best relationships — not the neediest or most deserving.” A recent survey of small businesses found only 13% of the 45% who applied for a PPP loan were ever approved. Meanwhile, CEOs of large companies have managed to coast through the process. Well over 300 publicly-traded firms or conflicted companies, some worth more than $100 million, have received over a billion dollars in taxpayer money. It’s no wonder the Trump administration has shied away from transparency in this process.
Foreign-Owned Energy Company With Kushner Ties Has Been Losing Millions Before Coronavirus Hit But They Still Got A $100,000 Loan From The Trump Administration.
GulfSlope Energy Got An Emergency Small Business Loan During Coronavirus Despite Struggling Financially For Years Prior To The Coronavirus Outbreak.
GulfSlope Energy Received Over $100,000 From The Paycheck Protection Program After Asking The Trump Administration For Royalty Relief…
On April 16, 2020, GulfSlope Energy Received A $100,300 Loan Under The Paycheck Protection Program. “On April 16, 2020, GulfSlope Energy, Inc. (the “Company”) entered into a promissory note (the “Note”) evidencing an unsecured $100,300 loan under the Paycheck Protection Program (the “PPP Loan”). The Paycheck Protection Program was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration. The PPP Loan is being made through Zions Bancorporation, N.A. dba Amegy Bank (the “Lender”).” [SEC EDGAR – GulfSlope Energy 8-K, 04/16/20]
On March 23, 2020, GulfSlope Energy Joined 18 Other Oil And Gas Companies To Pressure The Trump Administration To Help Out The Oil And Gas Industry. “We urge your Administration to direct Department of interior Secretary Bernhardt to exercise his existing authority under Federal law adn take the following actions: Grant suspension of all royalties on oil and natural gas produced in the Federal waters of the Gulf of Mexico by or on behalf of independent oil and gas companies […] Direct Suspensions of Operations and/or Production for those Federal offshore oil and gas fields specifically identified and requested by offshore operators, with accompanying suspensions of royalties […] Grant an automatic three-year extension of the lease terms of all primary term leases and leases operating under Suspensions of Operations and/or Suspensions of Production deadlines in Federal waters in the Gulf of Mexico.” [Emergency Requests For Relief For The Independent Gulf Of Mexico Producers, 03/23/20]
… But GulfSlope Energy Has Been Losing Millions For Years And Borrowing Money From Their Own Employees To Get By.
GulfSlope Energy Reported A Net Loss Of $13.7 Million In 2019, Up From $2.6 Million In 2018. “We had a net loss of approximately $13.7 million for the year ended September 30, 2019, compared to a net loss of $2.6 million for the year ended September 30, 2018.” [SEC EDGAR – GulfSlope Energy 10-K, accessed 04/28/20]
- With $55.6 Million In Losses Since Its Inception, GulfSlope Continues To Be A “Concern” With “Substantial Doubt” About Their Ability To Turn Things Around. “The Company has incurred net losses through September 30, 2019 of $55.6 million, has a lack of cash on-hand, and a working capital deficit. These factors raise substantial doubt as to the Company’s ability to continue as a going concern.” [SEC EDGAR – GulfSlope Energy 10-K, accessed 04/28/20]
Since 2013, GulfSlope Has Been Borrowing Millions From Their CEO, John Seitz, To Stay Afloat. “During April through September 2013, the Company entered into convertible promissory notes whereby it borrowed a total of $6,500,000 from John Seitz, its current chief executive officer. […] In May 2013, John Seitz converted $1,200,000 of the aforementioned debt into 10,000,000 shares of common stock, which shares were issued in July 2013. Between June of 2014 and December 2015, the Company entered into promissory notes whereby it borrowed a total of $2,410,000 from Mr. Seitz. […] During January through September 2016, the Company entered into promissory notes whereby it borrowed a total of $363,000 from Mr. Seitz. […] Additionally, during the year ended September 30, 2017, the Company entered into promissory notes with John Seitz whereby it borrowed a total of $602,500. […] As of September 30, 2017 and September 30, 2016 the total amount owed to John Seitz, our CEO, is $8,675,500 and $8,073,000, respectively. There was a total of $1,201,286 and $782,154 of unpaid interest associated with these loans included in accrued interest within our balance sheet as of September 30, 2017 and 2016, respectively.” [SEC EDGAR – GulfSlope Energy 14A, accessed 04/28/20]
- Still Needing Money, GulfSlope Borrowed An Additional $267,000 From Then-President And COO Ron Bain. “From August 2015 through February 2016 the Company entered into promissory notes whereby it borrowed a total of $267,000 from Dr. Ronald Bain, its [former] president and chief operating officer, and his affiliate ConRon Consulting, Inc.” [SEC EDGAR – GulfSlope Energy 14A, accessed 04/28/20]
As GulfSlope Energy Rakes In Government Loan Money, So Benefits An Israeli Investment Firm Which Is One Of The Gulfslope’s Largest Investors And Financial Partners, With Connections To Jared Kushner
GulfSlope Energy Has Worked With The Overseas Investment Firm Delek Group To Drill In The Gulf Of Mexico…
GulfSlope Energy Entered An Agreement With Delek Group To Pursue Oil And Gas In The Gulf Of Mexico With Delek Group Carrying 90% Of The Financial Burden. “GulfSlope Energy, Inc. (OTCQB: GSPE) and Texas South Energy, Inc. (OTC PINK: TXSO) (collectively, the “Companies”) announced today that they entered into a strategic partnership with Delek Group Ltd., a global independent oil and gas company based in Israel (“Delek”), whereby the Companies and Delek have mutually agreed to pursue oil and natural gas opportunities in the Gulf of Mexico. The initial transaction of this partnership is the execution of a participation agreement, whereby Delek GOM Investments LLC, a subsidiary of Delek, acquired rights to a 75% record title interest in nine prospects (Photon, Quark, Pomeron, Tau, Tanker, Graviton, Tachyon, Selectron, and Canoe) in the shallow waters of the Gulf of Mexico. GulfSlope will retain a 20% record title interest and Texas South will retain a 5% record title interest in each of these nine prospects. Delek shall bear 90% of the gross cost and expense for each well until the test well reaches its objective depth. Thereafter, Delek will be responsible for 75% of the costs and expenses and GulfSlope and Texas South will be responsible for their pro-rata ownership interest of all such remaining costs and expenses while partially carried and thereafter. In addition, Delek shall pay $1.5 million to the Companies (73% to GulfSlope and 27% to Texas South) upon the filing of each well’s exploration plan with the BOEM.” [GulfSlope Energy, 01/08/18]
The Initial Agreement Between Delek And GulfSlope Left Opportunities For Future Drilling Collaborations. “Initially, the parties will participate in two exploration wells in the prospects known as “Tau” and “Canoe” (the “Initial Prospects”), which we estimate to contain more than 300 million barrels of oil and gas equivalent in the aggregate. […] Upon completion of the drilling operations on the Initial Prospects, Delek will have the right to participate in up to three additional phases of drilling with respect to the balance of prospects upon identical cost sharing arrangements as set forth in the Initial Prospects. In addition, the parties have agreed to establish an area of mutual interest to govern cooperative efforts on future lease and property acquisitions. Additionally, Delek shall have the right to acquire up to 20% of the issued and outstanding shares of common stock of each of GulfSlope and Texas South based on achieving certain milestones.” [GulfSlope Energy, 01/08/18]
Delek Is Based In Israel. [Delek Group, accessed 04/28/20]
…Resulting In GulfSlope Energy Giving Delek Group A Quarter Of The Oil And Gas Company To Pay Off Their Debt.
In October 2019, GulfSlope Energy Signed A Deal With Delek GOM Investments To Give Them Over 38 Million In Company Shares, Giving Delek 24.3% Ownership. “In October 2019, the Company signed a Post-Drilling Agreement with Delek GOM Investments, LLC. The Agreement provides, among other things, that the Company (i) issue to Delek 38,423,221 shares of common stock of the Company (the “Insurance Proceeds Shares”) as compensation with respect to certain insurance proceeds received in connection with drilling of the Tau well prospect, (ii) that as payoff for the Company’s outstanding obligations of $1,220,548 (“Term Loan Payoff”) to Delek.”[SEC EDGAR – GulfSlope Energy 10-K, accessed 09/30/19]
Delek Group Signed A $434 Million Deal With Jared Kushner, Which Eventually Fell Through.
Delek Group Had Plans To Sell Its Stake In Insurer Phoenix Holdings To The Kushner Group For $434 Million. “Mr. [Jared] Kushner, who took over his family’s real estate empire in his 20s and bought The New York Observer, visited Israel in 2014 when he was trying to acquire a controlling stake in Phoenix Holdings, an insurer. He signed a nonbinding memorandum of understanding to buy 47 percent of the firm from the Delek Group, an Israeli conglomerate, for about $434 million. But the deal fell apart, partly because of regulatory requirements.” [New York Times, 11/23/16]
- The Deal Fell Through Due To Regulatory Requirements. “He [Jared Kushner] signed a nonbinding memorandum of understanding to buy 47 percent of the firm from the Delek Group, an Israeli conglomerate, for about $434 million. But the deal fell apart, partly because of regulatory requirements.” [New York Times, 11/23/16]
Jared Kushner Continues To Have A Financial Connection To The Kushner Group Though Stepped As Head Of The Group Since Joining The Trump Administration. “When he joined the Trump administration last year as senior adviser in charge of – among many other things – Middle East peace efforts, Jared Kushner resigned as chief executive of the family business. However, he is still a beneficiary of trusts that have holdings in Kushner properties.” [Haaretz, 02/28/18]
Delek Group Has Been In Desperate Need A Bailout During Coronavirus After Prioritizing Oil And Gas Interests.
Delek Group Valuation Has Gone Down 66% During Coronavirus And It Owes Investors Billions That It Is “Not Expected To Be Able To Repay.” “Last year, Yitzhak Tshuva took a huge gamble by having Delek Group sell off most of its non-energy related subsidiaries to focus on oil and gas. Last spring, he ignored warnings that he was getting too big for his boots when he raised $1.72 billion dollars to buy North Sea oilfields from market giant Chevron. Leveraged up to the eyeballs, he is now falling victim to plummeting oil and gas prices brought on by a price war between Russia and Saudi Arabia and the near global COVID-19 lockdown, which is seeing huge drops in energy demand. Delek Group, exactly a third of which (33.78%) is owned by the public, is teetering on the brink of collapse. The value of the company has gone down by 66 percent since the beginning of the year to NIS 3.5 billion ($960 million), the business newspaper Calcalist reported Tuesday. It owes its investors more than NIS 6 billion ($1.65 billion) and the banks around NIS 2.6 billion ($715 million) — sums which it is not expected to be able to repay.” [The Times Of Israel, 04/06/20]