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Lawmaker 'Scrutinizing' Recipients As PPP Loan Data Released



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WASHINGTON, DC — US Senator Richard Blumenthal (D-Conn) pledged to carefully review the massive roster of recipients for suspicious allocations this week after the Trump administration released long-awaited data regarding the Paycheck Protection Program (PPP).

“This data — long-overdue — raises increasingly serious questions about possible misallocation of PPP funds,” Blumenthal said in a statement July 6.

“I’ll be closely scrutinizing the list and seeking investigation of any misguided decisions, favoritism, or wrongdoing,” he added. “Small businesses in desperate need of funding simply had less access than larger companies. I’ll be asking for more information from US Treasury officials to answer tough questions and assure all Connecticut businesses, especially smaller ones, are treated fairly. We must learn from the mistakes.”

The government on Monday identified roughly 650,000 mostly small businesses and nonprofits that received taxpayer money through a federal program that was designed to soften job losses from the coronavirus but also benefited wealthy, well-connected companies and some celebrity-owned firms.

The Treasury Department’s Payroll Protection Program approved applicants from a broad swath of industries. Some that were less directly impacted by the pandemic, such as manufacturing and construction, received a greater proportion of the loans than the hard-hit restaurant and hotel industries.

Many law firms and private equity companies also obtained loans.

The US Small Business Administration, in consultation with the Treasury Department, announced it was releasing detailed loan-level data regarding each of the 4.9 million PPP loans that have been made. A partial list has been released to date.

“The PPP is providing much-needed relief to millions of American small businesses, supporting more than 51 million jobs, and over 80 percent of all small business employees, who are the drivers of economic growth in our country,” said Treasury Secretary Steven T. Mnuchin. “We are particularly pleased that 27 percent of the program’s reach in low and moderate income communities which is in proportion to percentage of population in these areas [sic].

The average loan size is approximately $100,000, demonstrating that the program is serving the smallest of businesses,” he continued. “Today’s release of loan data strikes the appropriate balance of providing the American people with transparency, while protecting sensitive payroll and personal income information of small businesses, sole proprietors, and independent contractors.”

State Companies On List

Although most Connecticut companies approved for the PPP, including The Newtown Bee borrowed far less money, 50 in Connecticut — including large real estate, manufacturing, and law firms — applied for the maximum of between $5 and $10 million.

According to the SBA, the Connecticut law offices of Shipman & Goodwin, which represents the Newtown Board of Education and school district, and Robinson+Cole, which is bond counsel to Newtown received Paycheck Protection Program loans of between $5 and $10 million.

So did MES, Municipal Emergency Services Inc, a Sandy Hook-based fire protection equipment supplier; The Kennedy Center of Trumbull, which serves and employs a number of Newtown residents; and manufacturers including Ulbrich Stainless Steels & Special Metals, Danbury’s Fuelcell Energy, Inc, and the Berlin Steel Construction Company, CTMirror reported.

The program has provided loans to about 60,000 Connecticut companies, including the Connecticut News Project, publisher of the Connecticut Mirror. The total loan amount to Connecticut companies and non-profits is between $5 billion and about $9 billion.

The information released Monday by the SBA was a compilation of data about loan applications that had been approved by local SBA-backed banks.

“However, the lender’s approval does not reflect a determination by SBA that the borrower is eligible for a PPP loan or entitled to loan forgiveness,” the SBA said. “Because a borrower is listed in the data as having a PPP loan does not mean that SBA has determined that the borrower complied with program rules or is eligible to receive a PPP loan and loan forgiveness.”

And not all the information the SBA released may be completely up to date.

For instance, Elm Hill Manor, an assisted living home in Vernon, was listed among the companies approved for a $5 million to $10 million loan. It was, but Elm Hill manager Lisa Cortese said her bank had made a mistake: Elm Hill had sought only $50,000 and was eventually approved for a PPP loan of that much smaller amount.

“We obviously redid the paperwork,” Cortese said. She also said her company was in dire need of the federal help, especially when it was forced to fight for personal protective equipment for its staff.

“We did what we had to do,” Cortese said.

Politicians, Entertainers Participated

Businesses owned by politicians also borrowed from the program, including a minor league baseball team owned by the family of the governor of Ohio. A large franchisee of Wendy’s, Taco Bell, and Pizza Hut restaurants, whose CEO is a major donor to President Donald Trump, received loans totaling $15 to $30 million.

Other recipients included Kanye West’s clothing and sneaker brand Yeezy, Ice Cube’s professional basketball league, Planned Parenthood clinics in more than two dozen states, the nonprofit arm of the anti-tax group headed by Grover Norquist, Americans for Tax Reform, as well as Rosenblatt Securities, one of the biggest names on the floor of the New York Stock Exchange.

“The PPP is an indisputable success for small businesses, especially to the communities in which these employers serve as the main job creators,” said Administrator Jovita Carranza. “In three months, this Administration was able to act quickly to get funding into the hands of those who faced enormous obstacles as a result of the pandemic. Today’s data shows that small businesses of all types and across all industries benefited from this unprecedented program. The jobs numbers released last week reinforce that PPP is working by keeping employees on payroll and sustaining millions of small businesses through this time.”

Economists generally credit the program with helping prevent the job market meltdown from being much worse. Employers added 7.5 million jobs in May and June, a solid increase that was probably driven in part by the PPP. The economy still has nearly 15 million fewer jobs than before the pandemic.

Research by the Federal Reserve found that companies with fewer than 50 workers before the pandemic saw their hiring rise 12 percent in May, while jobs grew just five percent in larger firms, suggesting PPP helped fuel rehiring.

A survey by the National Federation of Independent Business found that as of mid-June, 14 percent of small businesses that borrowed from the PPP expected they would have to lay off some workers when their loan ran out.

The release includes loan-level data, including business names, addresses, NAICS codes, zip codes, business type, demographic data, nonprofit information, name of lender, jobs supported, and loan amount ranges from $150,000 to $10 million. These categories account for nearly 75 percent of the loan dollars approved.

For loans below $150,000, SBA is releasing all of the above information except for business names and addresses. The average loan amount for the entire program was $107,000, the Treasury Department said in a broad summary of the program.

The loans can be forgiven if businesses mostly use the money to continue paying workers. The program initially was set to expire June 30 but was extended last week to Aug. 8, with $132 billion still available.

The data release also includes overall statistics regarding dollars lent per state, loan amounts, top lenders, and distribution by industry. The loans have reached diverse communities proportionally, across all income levels and demographics.

In addition, the data provides information regarding the sizes of participating lenders and participation by community development financial institutions, minority depository institutions, Farm Credit System institutions, fintechs and other nonbanks, and other types of lenders.

It further contains data showing the reach of the program in underserved communities, rural communities, historically underutilized business zones, and participation by religious, grantmaking, civil, professional, and other similar organizations.

AP Suing For Details

The public may never know the identity of more than 80 percent of the nearly five million beneficiaries to date because the administration has refused to release details on loans under $150,000. That secrecy spurred a lawsuit by news organizations including the Associated Press.

The Treasury Department has released only dollar ranges for the loan amounts, rather than exact figures.

High-profile evangelical megachurches, including several with pastors who have backed Trump, also received loans after religious entities were permitted to seek aid even if they performed only faith-based functions.

Among the Trump-linked churches that received PPP loans was First Baptist Dallas, the Texas megachurch where senior pastor and White House ally Robert Jeffress hosted Vice President Mike Pence for a pre-July 4 service. Jeffress’ church reported retaining nearly 300 jobs with its loan of between $2 million and $5 million.

Some major supporters of Trump also benefited. Muy Brands Inc, a San Antonio, Texas-based franchisee with more than 750 Wendy’s, Taco Bell, and Pizza Hut restaurants, received between $15 million and $30 million among three entities.

Muy Brands CEO James Bodenstedt is a major donor to the president. He has given $300,000 to the Trump Victory PAC since the start of this year, according to federal campaign finance records.

Media companies, including Newsday and American Media, former owner of the National Enquirer, got loans of up to $5 million.

The data can be found by CLICKING HERE

CTMirror content by Ana Radelat and Kasturi Pnanjady, and Associated Press content is used in this report.

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