Companies owned by senior adviser Jared Kushner and President Donald Trump got Paycheck Protection Program loans. Last Tuesday, the Small Business Administration (SBA) released the full list of PPP recipients.
The PPP issued over 25 loans worth $3.65 million to businesses in Trump and Kushner properties. The loans were used to pay rent to owners, which are the families of Trump and Kushner. Fifteen of the properties self-reported that they kept at most one job. Some reported zero jobs kept, while some didn’t bother submitting a number.
The Paycheck Protection Program
Introduced in March, the $2.2 trillion CARES Act is a comprehensive coronavirus stimulus program. Included among its program is the Paycheck Protection Program (PPP). The PPP provides forgivable payroll relief to small businesses to keep operations afloat. The initial $349 billion budget quickly ran out, amid a deluge of loan applications. Congress then gave an additional $321 billion.
Soon after, many small businesses began reporting they can’t get loan approvals. Meanwhile, big businesses and equity firms breezed through the process and got loans. The SBA resisted calls for a full listing of loan recipients. However, the SBA’s inspector general admitted that “strong indicators of widespread potential abuse and fraud in the PPP” existed. This includes tens of thousands of ineligible companies that managed to score loans. Eleven news organizations requested full disclosure of the SBA recipient list, citing the Freedom of Information Act. Last month, a federal judge ordered the SBA to disclose all the names, addresses, and loan amounts. The agency complied by releasing the list, which the Washington Post analyzed.
A Broken System
Kyle Herrig, president of watchdog organization Accountable.US, said the program reeks of mismanagement. In a statement, he said that “Many months and broken promises later, the court-ordered release of this crucial data while the Trump administration is one foot out the door is a shameful dereliction of duty and flagrant mismanagement of a program that millions of workers and small businesses needed to get through this pandemic.” He added: “Only now—after its hand has been forced, hundreds of thousands of small businesses have gone under and millions of taxpayer dollars were wasted—has this administration pulled back the curtains to reveal the malpractice going on behind the scenes.”
Samples of the apparent mismanagement including over 100 listings of loans given to companies without business names. Also, entries with “no-name available” or empty data entry errors, littered the report. The PPP forbids any business to get more than $10 million. Still, more than 300 companies managed to do so through subsidiaries.
Only 28% of Loans Went to Small Business
Earlier in August, Treasury Department and SBA officials insisted that the PPP benefited smaller businesses the most. They claimed that 87% of the loans consisted of loans for less than $150,000. However, new data suggests that half of the $522 billion total budget went to around 600 big businesses and national chains. These big businesses accounted for only 5% of the total borrowers. Meanwhile, only 28% actually came in the form of loans costing $150,000 or less.
Liz Hempowicz, Project on Government Oversight director of public policy, said the PPP shows the administration’s real focus. “The data shows that this program primarily benefited the well-banked and well-lawyered at the expense of the small businesses it was supposed to benefit,” Hempowicz said.
Companies of Kushner, Trump Got PPP Loans
According to an NBC news report, four tenants of Kushner-owned 666 5th Avenue, got more than $204,000 in loans. However, they only retained around six jobs. LB City Inc., registered at the Kushners’ New Jersey Bungalow Hotel, received a loan of over $505,500. In fairness, they retained 155 jobs.
Meanwhile, two tenants at Trump Tower in New York received a PPP loan of over $100,000. These businesses managed to retain only three jobs. The Triomphe Restaurant located at the Trump Tower in New York City got a $2,164,543 loan. The business failed to retain any workers and then shut down.
Kushner Co. Denies Benefiting from PPP
The Trump Organization did not issue any comments at the time. However, the Kushner Companies addressed the issue. General counsel Christopher Smith told Business Insider that “The notion that Kushner Companies somehow improperly benefited from CARES Act Paycheck Protection Program (PPP) loans is completely untrue and amounts to nothing more than politically motivated nonsense.”
He added: “Exactly two Kushner Companies’ hotel operations affiliates received PPP loans. Every provision of the PPP program has been comprehensively abided with respect to each of the two loans — and every penny of the funds received from the program was utilized to fund employee payroll and benefits costs to maintain jobs imperiled by the COVID pandemic and associated lockdown measures.”
Watch the CNBC TV news on the PPP loan recipients, where more than 600 companies got the maximum $10M in PPP loans, disadvantaging small businesses:
What do you think about the Paycheck Protection Program? Did it succeed in helping small businesses? Or did it fall victim to gross mismanagement? Let us know what you think about the PPP by writing your opinions in the comment section below.