60 Days Later: Who Has the CARES Act Actually Helped?
WASHINGTON, D.C. – Today marks the two-month anniversary of President Trump signing the CARES Act, the $2 trillion relief package addressing the COVID-19 health and economic crisis, government watchdog Accountable.US released a new report on how large Texas businesses walked away with $42 million in federal aid that was supposed to help struggling mom and pop small businesses.
A number of publicly traded companies secured millions of dollars in forgivable loans despite paying their executives seven figures. Meanwhile, beloved local establishments were left with no choice but to shutter.
“As small businesses continue to fail, their workers join the millions already unemployed during this pandemic, yet all the while, big Texas companies continue to grab cash meant to support mom and pop operations,” said Accountable.US President Kyle Herrig. “The Trump administration wrote the rules for this program, and now they’re hoping no one will notice that this money is benefiting the wealthy and well-connected above all others. It’s a Main Street tragedy playing out in real-time.”
As part of the CARES Act, the Small Business Administration (SBA) set up the Paycheck Protection Program (PPP), claiming it would “bring immediate economic relief and eight weeks of financial certainty to millions of small businesses and their employees.” Small businesses typically feature fewer than 500 employers. In Texas though, PPP funds went to large businesses including a company currently under SEC investigation; a real estate investment trust that made $24 million last year; a political mobile app and data firm employed by the Trump campaign; a precious metal and natural resource investment firm; and a petrochemical products company which had significant Saudi Arabian operations.
Meanwhile, many small business owners and landmark restaurants across Texas have faced hardship, and in some cases, permanent closure. “Dallas mainstay” Highland Park Cafeteria had no choice but to close their doors following business slowdowns from COVID 19; “iconic” Threadgill’s in Austin, a restaurant and concert venue, was forced to close after 40 years of operations, with the owner calling the pandemic a “kick in the gut;” the beloved Magnolia Café in Austin chose to close down following the “huge hit” and “incredible uncertainty” created by COVID 19. In San Antonio, both the 42-year old Spaghetti Warehouse and brand-new Tea Crate were forced to close in the wake of COVID 19.
It didn’t have to be this way. But the Trump administration designed the relief program that worked through banks, which were incentivized to help their larger clients. As Congress considers whether to approve more assistance for struggling Americans, the story told by the paycheck protection program is one that underscores how the character of our communities is truly at stake.
BACKGROUND: The Trump SBA’s Paycheck Protection Program has been bungled since day one, offering red tape and rejection to struggling small business owners while rolling out the red carpet for large publicly-traded companies that have resources average shops do not. A shocking recent report estimates over 100,000 small businesses have permanently closed since the pandemic took off in March. And a recent survey found only 12 percent of Black and Latino small business owners got the PPP loans they asked for, and nearly half say they expect to close for good in the next six months. Meanwhile, well over 600 publicly-traded firms or conflicted companies – some worth more than $100 million – have walked away with over a billion and a half dollars in taxpayer money. It’s no wonder the Trump administration has shied away from transparency in this process.