A large group of labor unions, totaling a few hundred unions, were marked at ineligible for the Paycheck Protection Program (PPP), which is a business loan program that cost well over $950 billion, through the federal government that launched back in March of last year, managed to bring in roughly $36.7 million in forgivable loans, as read in a recent report.
As made public by a free-market think tank known as the Freedom Foundation, the report in question seemed to highlight an extreme level of bureaucratic failure. Various non-profits that registered as 501(c)(3) were the only ones, at first, that were eligible for PPP but multiple unions still managed to funnel away resources. A total of over 226 forgivable loans were distributed through this.
“Disconcertingly, the apparently inappropriate PPP loans may have been granted due to fraudulent loan applications or other questionable conduct by applicants or the private lenders operating under the SBA’s delegated authority to approve loan applications,” read the report, which was the first grabbed by The Washington Free Beacon. “Appropriate federal authorities, including at least the SBA and the Department of Justice, should investigate the matter further and take appropriate actions to recover funds improperly paid and prosecute any fraudulent activity committed.”
The Small Business Administration (SBA) has taken steps to wave away over $790 billion in nonprofit PPP and small business loans that were charged with showing how the money would be utilized as a means to keep staff on throughout the COVID-19 pandemic. The penalty for anyone to take steps to submit false documents in order to get an SBA loan is facing a stagging $250,000 fine with up to a five-year stint in prison. Additionally, if said fraudulent loan is dispersed through a federally insured institution, they could be looking down the barrel of an even more staggering $1 million find alongside a 30-year stint in prison.
Upon analyzing the situation, there seems to be some contradiction in the payouts. Unions that took loans were, more often than not, the most vocal in their support in the maintaining of coronavirus lockdowns.
The Michigan Education Association managed to gather well over $6.4 million –the largest PPP loan for any union — and threw their support behind Gretchen Whitmer, the Democrat Governor of Michigan, back in April of 2020 when she put a stop to all k-12 in-person education. In the same vein, the Memphis-Shelby County Education Association hoarded well over $107,000 and took steps to advocate for lockdowns back in March of 2020.
Back in mid-July of 2020, officials with the Trump administration highlighted to the SBA the fact that many labor unions had fraudulently taken funding via the PPP via documents that were gathered through the use of the Freedom of Information Act. In March of 2021, now with Democrat President Joe Biden in office, unions were officially placed on the green-list list for utilizing the relief as part of the American Rescue Plan. In roughly two months, however, the ability to submit applications closed.
Roughly 80% of unions who took PPP loans back in 2020 were officially registered as 501(c)(5). As discovered by the Freedom Foundation by scrutinizing financial records, the other 20% of unions either had no public tax status or were just ineligible for the program, reported the Free Beacon.
“This breakdown in the PPP, administered by the Small Business Administration (SBA), has not been publicly documented previously,” read the report. “The ineligible loans diverted resources away from the purpose of the PPP, namely helping businesses keep employees on payroll.”