CARES Act 6 Months Later: Watchdog Coronavirus Economic Stimulus Relief Package Report Spotlights Worst Failures of Trump Administration’s PPP Program That Marginalized Communities of Color, Prioritized the Wealthy
WASHINGTON, D.C. – Government watchdog Accountable.US released its in-depth report on the failures of the Trump administration’s Paycheck Protection Program (PPP) ahead of the six-month anniversary program’s establishment in the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act.
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As Congress continues to negotiate over the next coronavirus relief package, Accountable.US delivered the report along with a letter to congressional leaders outlining the program’s flaws and imploring that any additional aid for small businesses include strengthened oversight and accountability measures, for the sake of the struggling small businesses that are still left and the workers and families they support.
“Six months later, Trump’s Paycheck Protection Program should be judged by how it was sold — as a supposed lifeline for struggling mom-and-pops to survive the pandemic and keep their employees on payroll. Instead, aid was consistently sent to the wealthy and well-connected, including private jet companies, casinos, Jared Kushner’s associates, and even the L.A. Lakers. Meanwhile thousands of small businesses could not access even a single dollar of relief — especially in communities of color,” said Kyle Herrig, president of Accountable.US, which has been monitoring CARES Act spending since day one as part of its COVIDBailoutTracker.com project. “By any objective measure, the PPP was a tragic failure of the Trump administration’s own making. For the economy to truly recover, Congress must learn from these mistakes and make damn sure the next relief package actually targets small businesses and communities most in need.”
Congress Must Not Repeat The Same Mistakes Again
Accountable.US’s report outlines the grave deficiencies of the PPP — how it failed workers, small businesses, and taxpayers —and what Congress must do to ensure the same mistakes are not repeated:
- POOR DESIGN AND IMPLEMENTATION: The PPP’s scattershot implementation, mismanagement, and lack of transparency left the program vulnerable to fraud and misuse. From confusion over who qualified for the loans at the opening of the program to continued questions over forgiveness provisions to a quickly depleted supply of funds, small businesses were not given the immediate, substantial relief they needed.
- BENEFITTED THOSE AT THE TOP: Although the PPP was intended as a lifeline for small businesses, it inordinately benefitted the wealthy and well-connected. From the outset, chain restaurants like Potbelly’s, upscale real estate firms, publicly traded companies which were still dishing payouts to shareholders, and companies with ties to the Trump administration were dipping into the aid meant for small businesses.
- LARGE COMPANIES PUSHED OUT SMALL BUSINESS: Over 900 publicly-traded firms received at least $1.5 billion in PPP funds — including shell companies, multiple loans across subsidiaries, companies facing SEC complaints, and foreign-owned corporations.
- FAILED THOSE NEEDING HELP THE MOST: The PPP failed to help the most vulnerable businesses and communities, as businesses owned by Black women received very little aid, businesses in Black communities received disproportionately less aid than those in white communities, and 40% of businesses owned by people of color across the county said they expect to shutter operations due to the lack of aid they received during the pandemic.
- CONCERNS CONTINUE: Despite warnings, the PPP is proving now to be rife with fraud — a situation the administration could have kept in check with adequate vetting and accountability measures at the front end, but is only dealing with now after funds have been distributed.
WHAT NOW: To create a more equitable and effective program helping small businesses in the future, the next Coronavirus economic stimulus relief package Congress passes must include relief for the businesses that need it most, stronger transparency measures on loans distributed, and additional clarity on loans already given out.