Scientology, Kanye West, and Politically-Connected Profited from Coronavirus Loans
“PPP was sold to the American people as a program to help Mom-and-Pop shops keep their lights on during the pandemic. The reality is that the Trump administration created a program that helped the well connected cut to the front of the line to get these loans.”
Although the Paycheck Protection Program (PPP) was designed to keep small businesses afloat, billionaires and the politically-connected profited from coronavirus loans. Data released Monday by the Small Business Association (SBA) revealed the names of businesses that were granted access to the stimulus program. Although exact dollar amounts weren’t made public, the SBA provided a range to determine the minimum and maximum amounts that could have been received, NBC News reported.
Billionaires Qualified for Paycheck Loans
Among companies that received loans, Kanye West’s Yeezy LLC apparel company and the Church of Scientology pocketed millions that was intended to shield American workers from unemployment. Yeezy is valued at $3 billion while the church has an estimated worth of $1 billion.
Republican donors, politicians on both sides, and those associated with them were also among those who profited from coronavirus loans. Transportation Secretary Elaine Chao’s family received between $350,000 and $1 million for New York-based Foremost Group, Newsweek reported. Chao is the wife of Senate Majority Leader Mitch McConnell, D–Ky.
Joe Farrell, a billionaire property developer, claimed as much as $1 million, which he reported went toward saving 41 jobs. Farrell fundraises for Trump and recently rented out one of his properties on a six-month lease for $2 million, NBC News reported.
The Joseph Kushner Hebrew Academy in New Jersey, named for Trump’s son-in-law-turned-advisor Jared Kushner’s grandfather, received between $1 to $2 million. Marc Kasowitz, a personal attorney for the president, also received between $5 to $10 million for the law firm of Kasowitz Benson Torres.
Keeping Names Hidden
In total, more than 100 companies with ties to President Donald Trump also received aid under the PPP, The Associated Press found in its review of the data trove. Although the news outlet found no evidence of unethical favoritism toward Trump donors, it noted the secrecy behind the loan program. As it was designed, Treasury Secretary Steve Mnuchin has the ability to keep the names of beneficiaries anonymous, a measure he argued was intended to prevent public backlash.
The entities named by the SBA account for only 20% of the businesses that received loans because it refused to name beneficiaries of loans under $150,000, The Associated Press reported. Despite incomplete information, which will possibly never be completely made public, the revelations by the SBA stirred emotions in watchdog groups such as Accountable.US.
“PPP was sold to the American people as a program to help Mom-and-Pop shops keep their lights on during the pandemic,” Kyle Herrig, president of Accountable.US. “The reality is that the Trump administration created a program that helped the well connected cut to the front of the line to get these loans.”
Elected Officials Rake in Money for Their Connected Businesses
Elected officials in West Virginia, Texas, and California also profited from coronavirus loans. West Virginia Gov. Jim Justice’s enterprises received a minimum of $11.1 million and possibly as much as $24.35 million, Washington-based Fox 5 reported.
Justice admitted to receiving loans, but said he did not know the exact amount received. According to the governor, “around $2 billion” has flowed into the state from the stimulus bills and he “encouraged all business” in West Virginia to apply for aid.
In Texas, Lt. Gov. Dan Patrick’s broadcast company received $179,0000, Spectrum News reported. Patrick is chairman of the Texas arm of Trump’s campaign. California Gov. Devin Newsom, his Lt. Gov Eleni Kounalakis, and two state representatives all profited from coronavirus loans as well, Press Democrat reported.
Democrats and Hollywood A-listers also made the list. A restaurant chain co-founded by Robert De Niro received up to $27.7 million, The Hill reported. A company that lists Speaker of the House Nancy Pelosi’s husband as an investor also received between $350,000 and $1 million, Detroit News reported. Pelosi said her husband, Paul, “was not aware the loan was applied for” and only has a passive role as an investor.
Some Companies Only Received $1
The entities and their payout amounts have prompted discussion about the fairness of the PPP, according to Jake Johnson writing for Common Dreams.
“Serious questions remain about whether PPP funds were equitably distributed to minority-owned businesses, and there is an alarming rate of small-dollar loans,” said John Arensmeyer, founder and CEO of advocacy group Small Business Majority. “Nationally, a total of more than 21,800 small businesses, many with multiple employees, received a loan for under $1,000.”
Many companies revived less than $100 and some only received $1, highlighting the severity of the problem, Arensemeyer said. The PPP still has $130 billion left to allocate, a fact that gave observers more reasons to scrutinize the distribution amounts.