U.S. pandemic aid program saved 51.1 million jobs, but
wealthy and connected also benefited
Send a link to a friend
[July 07, 2020] By
Michelle Price, David Lawder and Lawrence Delevingne
WASHINGTON (Reuters) - A high-profile
pandemic aid program protected about 51.1 million American jobs, the
Trump administration said on Monday, as it revealed how $521.4 billion
in taxpayer cash was injected into small businesses but also into the
pockets of the rich and famous.
The data on the small business Paycheck Protection Program (PPP) seemed
to confirm worries among Democrats and watchdog groups that in addition
to mom-and-pop shops, the funds went to well-heeled and
politically-connected companies, some of which were approved for between
$5 million and $10 million.
Those include several firms that lobby on public policy, such as Wiley
Rein LLP and APCO Worldwide, as well as prominent law firms like
Kasowitz Benson Torres LLP, which has represented President Donald
Trump, and Boies Schiller Flexner LLP.
Kasowitz Benson Torres said the funding helped the law firm preserve
hundreds of jobs at full salary at a time when federal courts and its
offices were shut down.
The gallery of well-connected names extended deeply into the world of
America's privileged and super famous.
Sidwell Friends School, an exclusive private school which educated
former President Barack Obama's daughters, was approved for between $5
million and $10 million, as was Saint Annís School in Brooklyn, which -
with tuition exceeding $50,000 per year - is attended by the children of
hedge fund managers and celebrities.
Newsmax Media Inc, the media company run by Trump donor Christopher
Ruddy, got the nod for between $2 million and $5 million. So did
billionaire rapper Kanye West's Yeezy LLC clothing company. Newsmax said
in a statement it was eligible for the program and did receive a loan,
but declined to elaborate.
Aside from Kasowitz Benson Torres and Newsmax, the other companies and
schools did not immediately respond to a request for comment.
"The initial data is revealing many recipients that are appropriately
raising eyebrows, which was one of the many reasons we wanted it
public," said Danielle Brian, executive director of the Project on
The colossal data set released by the U.S. Treasury Department and Small
Business Administration (SBA), after initial resistance, gives Americans
their first full look at who got cash from the first-come-first-served
PPP that has been dogged by technology, paperwork and fairness issues.
To date, the SBA has released geographical distribution figures but the
new data paints a much more detailed picture of which communities and
sub-sectors received support. Senior administration officials hailed the
program as a "wild success," with the data showing it supported about
84% of all small business employees.
The data includes information on 660,000 loans of $150,000 or more,
including recipient name, address, lender, business type, jobs retained,
and some demographic information. That accounts for roughly 73% of the
dollars granted, but only 14% of the 4.9 million loans, according to a
summary of data the agencies released on Monday.
While the data does not say exactly how much money each borrower
received, they are placed in one of five bands: $150,000-350,000;
$350,000-1 million; $1-2 million; $2-5 million; and $5-10 million. More
than 4,800 loans were issued in the top band, while the overall average
loan size was $107,000, the data shows.
Among those in the mix: the Americans for Tax Reform Foundation, whose
stated mission is to curb government spending. It was approved for a
loan of between $150,000 and $350,000.
[to top of second column]
A woman runs past the Charging Bull sculpture in the Financial
District as streets remain less busy due to the continuing outbreak
of the coronavirus disease (COVID-19) in the Manhattan borough of
New York U.S., May 5, 2020 at 6:42PM. REUTERS/Lucas Jackson
Despite some eyebrow-raising recipients, the funds reached a wide swath of
businesses - more than $67 billion for the healthcare and social assistance
sector, $64 billion-plus for construction businesses, $54 billion for
manufacturing and, at the smaller end, more than $7 billion for religious
organizations, the data showed.
Treasury Secretary Steven Mnuchin had initially refused to name any recipients,
saying it could expose borrowers' proprietary business information. But under
pressure from lawmakers, he agreed to shine a light on large borrowers.
Launched in April, the unprecedented program - which has been extended until
Aug. 8 - allows small businesses hurt by the pandemic to apply for a forgivable
government-backed loan from a lender.
More than 5,000 U.S. lenders participated in the program, with JPMorgan
accounting for $29 billion in loans. JPMorgan, Bank of America, Truist Bank, PNC
Bank and Wells Fargo originated 17% of total PPP loans, according to the data.
In the scramble to distribute funds, the program was beset by technology
glitches, documentation snags and revelations that some lenders prioritized
their most profitable clients.
Some investment firms, for example, were also on the list.
That included Advent Capital Management LLC, a New York-based debt investor with
$9 billion in assets; Metacapital Management LP, a New York-based fixed income
investor with more than $1 billion in assets; and Semper Capital Management LP,
which invests nearly $4 billion in mortgage-backed securities.
Deepak Narula, the head of Metacapital, said his company decided it did not want
the money and returned it "pretty quickly." A spokesperson for Advent said the
company explored but never completed an application and did not receive any
funds. Semper did not respond to a request for comment.
Monday's data is likely to raise further questions over whether the most needy
benefited from the program and whether more companies should have returned the
Roughly $30 billion in loans have already been returned or canceled, a senior
administration official said. Those include loans taken by large or publicly
listed companies which attracted fierce criticism for breaching the spirit of
the rules, as well as loans issued to companies that decided they did not want
or need the money after all.
The data shows loans that have been approved, but it does not say how much was
disbursed, nor which loans have been forgiven so far. The loans were largely
dished out on a good-faith basis, with borrowers certifying to their eligibility
and the accuracy of the data they provided, meaning the figures on how many jobs
were retained have not been thoroughly vetted.
Loans that appear to breach the letter or spirit of the rules may not be
forgiven, and the Treasury plans to conduct a full review of loans of more than
The Department of Justice has already brought charges against several PPP
borrowers for fraudulently seeking loans, while several federal and state
regulators are also probing misuse of the funds.
(Reporting by Michelle Price; David Lawder and Lawrence Delevingne; Additional
reporting by Andy Sullivan, Michelle Conlin, Chris Prentice, Gui Qing Koh,
Caroline Spiezo, Michelle Conlin and Helen Coster; Editing by Tom Lasseter,
Andrea Ricci and Tom Brown)
[© 2020 Thomson Reuters. All rights
Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.