Watchdog Report Shows Just How Badly the Program Failed to Help Businesses in Need of Relief
WASHINGTON, D.C. – In an interview on CNBC this morning, National Economic Council Director and top White House Economic Advisor Larry Kudlow called Trump’s Paycheck Protection Program a “stroke of genius” for small businesses. In practice, the program overwhelmingly favored wealthy and well-connected companies, largely failing to get aid into the hands of those who needed it most: actual small businesses and their employees — especially those in communities of color.
After Trump’s poorly designed and poorly implemented Paycheck Protection Program failed to keep thousands of small businesses afloat and employees on payroll, Larry Kudlow is attempting to talk up its success. Sure, the PPP may seem like a ‘stroke of genius’ to wealthy corporate executives and administration officials whose wives cashed in on aid. But for actual small business owners and workers, it’s clear how badly this program missed the mark.”
Kyle Herrig, president of Accountable.US
A recent 200+ page report by government watchdog Accountable.US shows just how badly the Paycheck Protection Program failed to help American workers and struggling small businesses since its inception six months ago. Here’s what a “stroke of genius” according to Kudlow looks like:
- UNEQUAL DISTRIBUTION OF FUNDS: Up to 90-percent of businesses owned by people of color or women estimated to have been shut out of receiving aid due to the program’s poor structure.
- The nation’s least affluent congressional districts received $13 billion less in PPP funds than the nation’s wealthiest districts.
- The ten congressional districts with the highest percentage of Black residents got nearly $13 billion less in PPP funding than the ten districts with the fewest Black residents — a difference of over 64,000 fewer loans.
- RAMPANT FRAUD: The U.S. Department of Justice has already charged 60 companies with fraud — and with the agency reportedly investigating “several hundred” cases of PPP fraud, that appears to be just the tip of the iceberg.
- Over $1 billion in taxpayer-funded relief money was awarded to companies that “double dipped” in multiple programs, violating the PPP’s rules.
- With only loans of more than $2 million facing automatic audits through the historically non-transparent program, it’s possible that billions of dollars in relief money may not be investigated for fraud at all.
- SMALL BUSINESSES STILL STRUGGLING: A new report in Fortune this week shows that a devastating 100,000 businesses that temporarily closed up shop amid the COVID-19 crisis are now out of business.
- An estimated 40% of Black-owned businesses are expected not to survive the pandemic.
- A Yelp report found that a whopping 60% of the 160,000 businesses listed in its directory will remain closed after the crisis.
Last week, Accountable.US sent a letter to congressional leaders asking for additional clarity on the PPP and calling on Congress to prioritize new aid to keep small businesses going. Read the letter here.