Red Roof Inn using taxpayer money for $250 million in renovation

This ad was on NewAmerican.com and Huffingtonpost.com among other locations.

Representative Alan Grayson, who is working with Ron Paul of Texas to pass bill that would audit the Federal Reserve, gave a speech on the House floor on the Financial Regulation package. He said that during the market meltdown of 2008, when the Federal Reserve swept up trillions in bad assets from banks, the Fed also pumped about $200 million of freshly made dollars into the Red Roof Inn.

The Red Roof Inn was in deep financial trouble and no one on Wall Street was willing to buy this hotel chain. So the individuals with this asset turned to the Fed, which doled out the money.

This was done behind closed doors and without Congressional approval by the Federal Reserve. The legality of such a move is unclear.

After the Fed pumped in all of this money into the Inn, and seemingly still technically owns a portion of the company, the Red Roof Inn is renovating all of its 350 hotels with this money.

From Hotel Interactive in April,

Red Roof’s NextGen prototype includes wireless Internet and flat-screen TVs that are outfitted with auto sensing remote jack packs (RJPs). The jack pack allows guests to connect to, hear and see everything from a portable DVD/CD player, camcorder, MP3 player, notebook computer to a portable video game player, right on their in-room TVs.  There are also workspaces with ergonomic seating and a new bedding experience dubbed Love-you-Linens.

These renovations are ongoing but add up to about $250 million in cost, nearly the amount that the Fed gave to the company.

Red Roof Inn has also seemingly started an advertising blitz. The Red Roof Inn ads have been seen on such sites as AntiWar.com, Chicago Tribune, TheNewAmerican.com and HuffingtonPost.com, however it is unknown how much the company is spending on these ads.

The company did not immediately respond to comment.

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  • The Law, Frederic Bastiat

    Life, faculties, production — in other words, individuality, liberty, property — this is man. And in spite of the cunning of artful political leaders, these three gifts from God precede all human legislation, and are superior to it. Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.

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