Well-connected get their share of pandemic loans
A US program to soften job losses from the COVID-19 pandemic provided taxpayer-funded loans to about 650,000 mostly small businesses and nonprofits, but the wellconnected and well-heeled also benefited.
The US Small Business Administration and the Treasury Department on Monday disclosed the recipients of loans through the Paycheck Protection Program, or PPP.
Though meant to help employees, loans given to companies affiliated with politicians, celebrities or Wall Street traders are not prohibited under the program, which was established as part of the $2 trillion Coronavirus
Aid, Relief and Economic Security Act signed into law in March by US President Donald Trump.
“Originally marketed as a loan to small businesses to keep workers on payroll during a brief pandemic-induced shutdown, the PPP has become a grant program giving billions to small, medium, and large businesses to pay for much more than just workers’ paychecks,” said the Brookings Institution, a Washington-based think tank, in a research report.
“This new law further shifts the program from helping workers survive the crisis to helping businesses stay afloat. The result will be that more workers at small businesses fall through the cracks of this hastily designed safety net.”
Treasury Secretary Steven Mnuchin said the program was intended to help small companies hit hard by the pandemic that could not tap the debt and equity markets or credit lines at major banks.
Initially, Mnuchin said he would not release the information because it was “proprietary” and related to private businesses. But he relented after members of Congress, mostly Democrats, objected.
Elites get benefits
Since March, the PPP has authorized loans totaling approximately $521 billion, or about 75 percent of the total appropriated by Congress, which has extended the application deadline to Aug 8 from June 30.
In applying for the loans, companies said the funds would support about 51 million rank-and-file jobs nationwide. But many of the elite also benefited from PPP loans.
US Transportation Secretary Elaine Chao’s business, Foremost Maritime, received a loan valued at $350,000 to $1 million. Chao is married to Senate Majority Leader Mitch McConnell, a Kentucky Republican.
Perdue, a trucking company co-founded by US Agriculture Secretary Sonny Perdue, received approval for a loan worth $150,000 to $350,000.
EDI Associates, a company connected to investor Paul Pelosi, the husband of House of Representatives Speaker Nancy Pelosi, a California Democrat, received between $350,000 and $1 million.