WASHINGTON, DC — After much stalling and handwringing, the Trump administration this week finally released limited information on recipients of the Paycheck Protection Program (PPP). While the released data only represents 14% of the federal relief fund recipients and 75 percent of the money doled out, the trends are clear: this program was poorly designed, allowing big corporations with ties to the Trump administration, through donors or K-Street lobbyists, to exploit it while many actual small businesses got shut out.
Here’s some of what we’ve learned since Monday:
CORPORATIONS WITH TRUMP-TIED LOBBYISTS AND DONORS
Large corporations and their K-Street lobbyists, many connected to the Trump administration or the President’s donors, raked in billions in federal small business aid.
“Forty lobbyists with ties to President Donald Trump helped clients secure more than $10 billion in federal coronavirus aid, among them five former administration officials whose work potentially violates Trump’s own ethics policy” [AP, 7/6/20]
“Lobbying firm Van Scoyoc Associates received at least $1 million in loans and has made more than $3.7 million so far in 2020 from 151 clients… Law and lobbying firm Van Ness Feldman received at least $2 million in loans. It has made over $1 million in lobbying so far in 2020 and has 41 clients.” [The Hill, 7/6/20]
“Lindblad Expeditions and Laundrylux Distribution, two companies that hired Trump-linked lobbyists Jeff Miller and Brian Ballard, received millions of dollars in small business relief loans… Kasowitz Benson Torres, co-founded by longtime Trump attorney Marc Kasowitz, received a loan worth between $5 million and $10 million.” [CNBC, 7/6/20]
“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.” [AP, 7/7/20]
“G.H. Palmer Associates, a real estate firm run by longtime Trump backer Geoffrey Palmer, was approved for a loan. The company is listed as “G.H. Palmer Inc.” on the list of loans that were distributed, but the address of the company matches that of Palmer’s real estate firm in Beverly Hills, California. The company was approved for a loan worth $350,000 to $1 million.” [CNBC, 7/7/20]
“Dezer Development, a real estate company founded by Michael Dezer, says on its website that it has the same address as Trump International Beach Resort in Miami, Florida. The Dezer website says that its “branded real estate portfolio includes six-Trump branded towers.” Dezer got between $350,000 and $1 million from PPP.” [CNBC, 7/7/20]
“The Riviera Country Club, located in a posh enclave of Los Angeles, received $2 million to $5 million in assistance through the Paycheck Protection Program—a multibillion-dollar initiative intended to carry small businesses and their employees through the COVID-19 pandemic. Mnuchin, whose Department of the Treasury has assisted in the operation of the program, disclosed his membership in the elite institution to the U.S. Senate during his confirmation process in 2017.” [Daily Beast, 7/8/20]
ANTI-GOVERNMENT SPENDING ORGANIZATIONS
Organizations that have previously railed against government spending were more than happy to accept hundreds of thousands in federal relief money.
“Americans for Tax Reform Foundation, led by firebrand anti-tax advocate Grover Norquist, took a loan between $150,000 and $350,000 from the Paycheck Protection Program. The Ayn Rand Institute and Citizens against Government Waste likewise accepted loans funded by the program.” [Washington Post, 7/8/20]
THE RICH & FAMOUS
Because of the program’s faulty design, some of America’s richest celebrities took millions in Paycheck Protection Program loans meant for mom-and-pop firms.
“It [PPP] wasn’t designed to [consider] if your owner has a certain amount of assets or is a well-known person … Simply because you have a wealthy owner doesn’t mean you aren’t eligible…It’s unclear banks could have considered a business owner’s personal wealth as part of the application, even if they’d wanted to, Nataraj said.” [CNN Business, 7/9/20]
“In spite of the GOAT inking a two-year contract worth $50 million with the Buccaneers… Tom Brady’s business venture, TB12 Inc., … received up to $1 million in federal funding” [New York Post, 7/8/20]
“The major private jet companies, including Wheels Up and OneSky Flight, received more than $200 million in government funding under the government’s payroll support program, according to recent filings.” [CNBC, 7/6/20]
“Soho House, the exclusive membership club controlled by billionaire Ron Burkle, received loans totaling $9 million to $23 million by applying for seven loans through its New York, Miami Beach, Chicago and West Hollywood locations.” [CNBC, 7/7/20]
“Dozens of publicly funded charter schools and elite private schools across the Washington region received millions of dollars in federal aid… while major funding streams — tuition dollars at private schools and per-student government funding at charters — have not stopped flowing.” [Washington Post, 7/6/20]
“Scientology branches in New York, Washington, D.C., and Belleair, Florida, received small business loans of $150,000 to $300,000… Jeffrey Augustine, the spouse of a former Scientologist, estimates annual revenue to be about $200 million.” [Daily Beast, 7/8/20]
‘The Nueva School along the Peninsula is one example. The institution describes its “modest endowment” is valued at $9 million, yet was able to qualify to receive at least $2 million in federal funding. The private school that has campuses in both Hillsborough and San Mateo charges $37,000 for kindergarten tuition and $53,000 for high school tuition. According to sources close to ABC7 the school is continuing virtual classes, but did not waive tuition amid the pandemic.” [ABC 7 News, 7/8/20]
BORROWERS WITH ALLEGATIONS OF FRAUD & CORRUPTION
“A company accused of helping launder millions of dollars from Ukraine a decade ago is among the apparent recipients of U.S. virus relief funds, according to federal disclosures. The company, Optima 777, received at least $2 million in loans from the Paycheck Protection Program…” [Bloomberg, 7/6/20]
“The red-light camera company entangled in a federal corruption investigation and an airport janitorial contractor in Chicago are among the clout-heavy companies getting large amounts of federal funding to weather the coronavirus pandemic, according to documents released this week by Trump administration officials.” [NPR, 7/8/20]
“The U.S. Justice Department wants to shut down Atlanta-based EcoVest Capital for an alleged “abusive tax scheme” involving land preservation deals and overvalued appraisals. At the same time it is suing the company, the federal government just handed it hundreds of thousands of dollars in coronavirus relief funds to help it stay in business through the pandemic.” [Atlanta Journal Constitution, 7/8/20]
MEANWHILE, BANKS SET TO RECEIVE UP TO $24 BILLION IN FEES Business Insider: US banks could gain up to $24.6 billion in processing fees for PPP loans
“More than 4,000 lending institutions that process loans through the Paycheck Protection Program (PPP) are in position to split between $14.3 billion and $24.6 billion in processing fees for those loans, per analysis of SBA data cited by The Wall Street Journal. That includes a total of between $1.5 billion and $2.6 billion that the two largest US banks and the program’s biggest lenders, JPMorgan Chase and Bank of America (BofA), are set to split.” [Business Insider, 7/9/20]
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