On July 1, Congress voted to extend the deadline for small businesses to apply for approximately $134 billion in Paycheck Protection Program funds until Aug. 8, before Congress departed for a two week Fourth of July recess.
Last week, Treasury, SBA missed the deadline to disclose small business loan data for the Paycheck Protection Program. “[T]the data to be released comprises only about 15 percent of the total number of loans — though much more of the dollar value — it would be the largest disclosure yet for a program that suffered from a rocky start but that economists credit with helping limit job losses.”
California Congresswoman Katie Porter is demanding the resignation of the Trump administration’s small business chief for enabling “abuse” and “waste” of coronavirus relief funds and refusing to comply with basic government oversight efforts.
Porter’s call came after the Government Accountability Office (GAO) said in a reportlast week that it “encountered the most difficulty trying to obtain information from the Small Business Administration (SBA)” during the process of examining the Trump administration’s handling of the $650 billion Paycheck Protection Program (PPP).
The GAO also said SBA’s attempts to speed up the loan application process left the sprawling small business relief program “more susceptible to fraudulent applications.”
“Because of the number of loans approved, the speed with which they were processed, and the limited safeguards, there is a significant risk that some fraudulent or inflated applications were approved,” the GAO said. “In addition, the lack of clear guidance has increased the likelihood that borrowers may misuse loan proceeds or be surprised they do not qualify for full loan forgiveness.”
In an interview on MSNBC Thursday, Porter argued the GAO’s findings demonstrate that SBA administrator Jovita Carranza is “unfit to continue in that role.”
“The PPP program, that $650 billion, this is one of the biggest government programs in our country’s history, and she is fighting with the nonpartisan GAO on basic data that lets them do their job of transparency and accountability,” said the California Democrat. “That is the wrong mindset for somebody whose title is administrator.”
In a series of tweets last week, Porter warned that the SBA “has essentially no plans to review 99% of PPP loans.”
“According to the [GAO] report, small businesses that didn’t need the money returned at least 3,800 loans,” Porter wrote. “How are you going to know if the other 4,576,388 loans are legitimate? Any answers, [Treasury Secretary] Steve Mnuchin or Jovita Carranza?”
“Carranza has mismanaged this program from start to end, refused to comply with lawful oversight, and enabled waste, fraud, and abuse of taxpayer dollars,” said Porter. “She should take responsibility and resign.”
That limited information was finally released on Monday, and it appears that Congresswoman Katie Porter has her work cut out for her in rooting out the “waste, fraud, and abuse of taxpayer dollars” in the Paycheck Protection Program.
Here are just some of the headlines from today:
The Kushner family, large chains backed by private equity, Wall Street investors, Kanye West, members of Congress, and the law firm that represented President Donald Trump during the Mueller probe were among the thousands of beneficiaries of a Covid-19 relief program aimed at rescuing struggling small businesses and keeping workers employed, according to new federal data released Monday.
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“Serious questions remain about whether PPP funds were equitably distributed to minority-owned businesses, and there is an alarming rate of small-dollar loans,” John Arensmeyer, founder and CEO of advocacy group Small Business Majority, said in a statement. “Nationally, a total of more than 21,800 small businesses, many with multiple employees, received a loan for under $1,000.”
“To raise eyebrows even more,” Arensmeyer added, “more than 1,200 of those businesses received less than $100—with some receiving loans as low as $1.00! Underfunding has been a pervasive problem for borrowers since PPP launched.”
I don't really care about PPP shaming and dunking, all that does is give people a laugh without changing anything. I do care about businesses unable to get loans or more than a *dollar* in funding when there's $130 billion still left in the kitty. pic.twitter.com/OpSKkfqvy5
— David Dayen (@ddayen) July 6, 2020
The SBA’s disclosure—which included only the names of beneficiaries who received at least $150,000 in PPP funding—came in response to widespread outrage over the Trump administration’s effort to keep information about loan recipients secret.
A searchable database of PPP beneficiaries can be viewed here.
When the Trump administration began implementing a trillion-dollar program to bail out struggling employers amid the COVID-19 pandemic, a central concern was that the president would use the program to benefit his friends and allies.
It turns out that Trump’s pals weren’t the ones catching the windfall so much as Washington, D.C.’s well-off and well-connected in general. Among the entities cashing six to seven-figure checks from the federal government’s Paycheck Protection Program in recent months were a fiscal responsibility advocacy organization run by anti-tax crusader Grover Norquist, a high-powered consulting firm run by former Secretary of State Madeleine Albright, the nonprofit headed by former Trump campaign official David Bossie, and a political strategy firm linked to two alumni of the Obama White House who’ve turned anti-Trump podcasting into a lucrative enterprise.
Businesses tied to the president’s son-in-law as well as members of Congress got taxpayer funds. As did the elite D.C.-area schools where both President Donald Trump and President Barack Obama enrolled their children: St. Andrew’s Episcopal School, where Barron Trump is a student, got between $2 million and $5 million; and Sidwell Friends School, where both Obama children graduated high school, got between $5 million and $10 million.
On Monday, the Treasury Department finally released the name of everyone who received a loan greater than $150,000 through the PPP. The disclosure does not cover loans below that amount, nor does it specify the exact amount that each organization received. In the months before Monday’s loan disclosure, certain companies and entities—sensing the possibility of negative publicity—announced their receipt of loans and, more often than not, that they were returning them. The media company Axios, for example, proactively announced it had applied for and received a PPP loan, and then said it was returning those funds after taking criticism.
Other outlets had no such compunctions. Records show $350,000 to $1 million went to Observer Holdings LLC, the parent entity of Observer Media—the publishing company formerly owned by White House Senior Adviser Jared Kushner. Kushner resigned from the news organization before decamping to Washington, D.C. in 2017, but it has remained in the family: Joseph Meyer, wedded to Kushner’s sister, Nicole, lists it among the holdings of his Observer Capital investment firm. The federal assistance preserved 41 jobs, according to the SBA.
The Observer was not the only Kushner family business to take advantage of the PPP program. Two of the family’s New Jersey hotels also cashed in. The SBA materials show that $1 million to $2 million in assistance went to Princeton Forrestal LLC—revealed in Security and Exchange Commission records to be 40 percent owned by the former developer’s mother, brother, and sister. Esplanade Livingston LLC, which owns the land on which the company’s Westminster Hotel sits, received another $350,000 to $1 million. Mortgage documents filed in Essex County, New Jersey show that Esplanade Livingston LLC is controlled by C.K. Livingston LLC, a company that bears the initials of Jared Kushner’s father Charles—and which the former disclosed in 2017 as a source of personal income from the hotel.
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Meanwhile, the conservative online media outlet founded by Trump confidante and Fox News host Tucker Carlson, the Daily Caller, received as much as $1 million. Carlson sold his stake in the company on June 10. And Newsmax, the conservative TV network and website owned by another presidential confidante, Christopher Ruddy, got a loan worth $2 million to $5 million.
Collectively, the massive data dump makes clear that while smaller businesses around the country may have struggled to navigate the process of obtaining the federal government loans, little such difficulty was found among those in and around the nation’s capital.
[W]ashington is a company town, whose currency may be cash but also connections. To the extent that businesses in the city sought assistance through the program, they were likely to include advocacy groups, lobbying and public affairs shops, and even nonprofits affiliated with lawmakers themselves.
But unlike other regions of the country, businesses in Washington are in a unique position to affect and extract money from programs designed to benefit American business generally since they’re staffed with people close to those in power.
At least nine lawmakers and three congressional caucuses have ties to organizations that took millions of dollars in aid from a small-business loans program that was designed to help companies avert layoffs during the pandemic, according to newly released data from the Small Business Administration.
In total, companies linked to lawmakers and congressional caucuses have received at least $11 million in aid from the federal program that Congress created to help small businesses. Overall, 650,000 businesses and nonprofits received assistance under the $670 billion program.
More than two dozen Washington lobbying, public affairs and consulting firms received loans from the federal government to help them weather the pandemic, according to data released on Monday by the Small Business Administration.
Firms that derive more than 50 percent of their revenue from lobbying or political work are barred from receiving the loans — which can be forgiven if companies meet certain benchmarks — under the agency’s rules. The American Association of Political Consultants unsuccessfully sued to overturn the prohibition earlier this year.
But several lobbying firms secured loans through the Paycheck Protection Program despite the rules…
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The Paycheck Protection Program was created by Congress in March to help businesses with fewer than 500 employees make it through the pandemic — with some exceptions. Strip clubs, payday loan companies and businesses that get most of their revenues from gambling, lobbying or political work were allbarred from receiving the loans under SBA rules.
[B]ut the rules don’t appear to have prevented a number of firms in the influence industry from receiving aid. Many of them are public affairs firms that aim to influence the federal government in ways that don’t require them to register as lobbyists.
As much as $273 million in federal coronavirus aid was awarded to more than 100 companies that are owned or operated by major donors to President Donald Trump’s election efforts, according to an Associated Press analysis of federal data.
Many were among the first to be approved for a loan in early April, when the administration was struggling to launch the lending program. And only eight businesses had to wait until early May before securing the aid, according to the AP’s review of data released Monday.
All told, the Trump supporters who run these companies have contributed at least $11.1 million since May 2015 to Trump’s campaign committees, the Republican National Committee and America First Action, a super PAC that has been endorsed by Trump, the AP review found. Each donor gave at least $20,000.
A Dallas megachurch whose pastor has been a vocal supporter of President Donald Trump was approved for a forgivable loan worth $2 million to $5 million, according to long-awaited government data released on Monday.
Vice President Mike Pence spoke at a rally last month at the First Baptist Church of Dallas, whose pastor, Robert Jeffress, has been on Trump’s evangelical advisory board.
It was among the tens of thousands of religious organizations that received a total of $7.3 billion in pandemic aid from the Small Business Administration.
The list of religious organizations approved for about 88,400 small business loans also included Joyce Meyer Ministries Inc, a Missouri church which in 2007-2011 was investigated by the Senate over its finances. That church was approved for $5 million to $10 million – the largest sum an individual entity could apply for.
The data showed religious organizations accounting for more than 1 million of the 51.1 million jobs protected by the high profile program. The list of named religious organizations was heavily skewed toward Christian denominations, according to a Reuters analysis.
The financial services industry received roughly $27 billion from the Paycheck Protection Program, the coronavirus-relief fund aimed at helping small businesses, according to government data.
The list of borrowers includes a handful of banks, but the money mostly when to securities brokerages, financial advisers and hedge funds.
Real estate investment companies, which are grouped in with other financial services as part of the data, were also a big recipient of funds. And lastly, the payday loan and title loan industry, which revolves its business model around lending money at a high interest rate to distressed consumers, borrowed millions from the government — of which most will be forgiven, or have to be repaid at an interest rate of 2%.
It should be clear by now that the Paycheck Protection Program screams out for a Truman Committee, i.e., the Senate Special Committee to Investigate the National Defense Program during World War II. The Paycheck Protection Program is the largest domestic relief program in the history of the united States, and every well-off, well-connected business with a lobbyist or a Washington insider has sought and received money – some later returned the money to avoid bas publicity – at the expense of genuine “small businesses,” like the family owned restaurant you frequent, that have struggled with the SBAs PPP application process and been frozen out of the relief funds intended for “small businesses” like theirs because the funds were all gone (until Congress replenished the fund).
Donald Trump didn’t “drain the swamp,” he has dramatically expanded it. This is a scandal that demands a congressional investigation. I nominate Congresswoman Katie Porter to chair this committee. I am confident in her ability to root out the “waste, fraud, and abuse of taxpayer dollars” in the Paycheck Protection Program.