The Small Business Administration has released detailed information about millions of recipients of Paycheck Protection Program loans that it had stalled to make publicly available amid rising concerns about fraud in the program.
On Tuesday, after a judge ordered the agency to release information it hadn’t previously provided, the SBA disclosed the names, addresses and precise loan amounts for each borrower and made the information available to the public online, the Wall Street Journal writes.
The PPP was launched as part of the Coronavirus Aid, Relief, and Economic Security Act signed into law in March and was aimed at helping small businesses pay their employees in the wake of the Covid-19 crisis. In all, about 5.2 million borrowers collectively obtained around $525 billion in forgivable loans through the program by the time it ended in August.
In July, the SBA released some information on loan recipients in response to Freedom of Information Act requests from about a dozen national news organizations concerned about abuses of the program. That included the names of borrowers whose PPP loans were more than $150,000, but only provided ranges for the loan amounts. The agency also refused to identify any recipients for loans smaller than $150,000, citing FOIA’s exemptions for confidential and private information. Meanwhile, 87% of the PPP loans were $150,000 or smaller, according to the New York Times, which cites the SBA. The news organizations filed for a summary judgment.
The extent of the fraud in the PPP became more evident in September, when the Department of Justice charged 57 firms with scamming the program. Then, in October, the SBA’s inspector general said it counted “tens of thousands” of PPP loan recipients who weren’t actually eligible for such loans, including companies that were launched after the start of the pandemic, according to the Journal.Early in November, District Judge James Boasberg for the U.S. District Court for the District of Columbia ordered the agency to release the names, addresses and precise loan amounts of all the recipients of the PPP loans, as well for recipients of loans under the separate Economic Injury Disaster Loans program, by November 19. The SBA was able to push back that date, getting Judge Boasberg to grant it a temporary stay. But last week, Judge Boasberg rejected SBA’s request for a stay and ordered it to release the information by December 1, the Journal writes.
The data in the SBA’s disclosure suggests that the loans weren’t distributed evenly, according to the Times: about 1% of the PPP borrowers received more than a quarter of the funds, for example, the newspaper writes. And while the program was aimed at small business owners, the SBA gave out around 600 loans with a maximum amount of $10 million — including to firms such as the operator of New York’s biggest horse tracks and restaurant chains such as TGI Fridays, the Times writes. And close to 100 businesses listing an address at 40 Wall Street, which is one of President Donald Trump’s properties, received loans totaling more than $34 million, according to the newspaper.
NBC News found that more than 25 PPP loans worth more than $3.65 million went to firms with addresses owned by the Trump Organization and the Kushner Companies, owned by the family of Jared Kushner, Trump’s son-in-law and senior adviser. The news network says it found other “troubling patterns,” such two tenants at Trump Tower receiving more than $100,000 and only holding on to three jobs. And more than 100 loans went to companies that have no business name listed in the disclosure, according to NBC News.
Most PPP borrowers have until the middle of 2021 or later to file for loan forgiveness, the Times writes. Around 11% of the borrowers have already applied for loan forgiveness with the SBA as of November 22, according to the newspaper.
In August, FA-IQ found at least 1,000 firms offering financial advice among the recipients of loans under $150,000. And FA-IQ sister publication FundFire found earlier that several of the wealth management firms that received millions of dollars in PPP loans had disciplinary histories.
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