COVID-19

Who got those PPP loans? The government doesn’t want to tell.

Kristin Schwab Jun 15, 2020
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Treasury Secretary Steven Mnuchin speaks at a Senate Small Business and Entrepreneurship Committee hearing. Al Drago Pool/Getty Images
COVID-19

Who got those PPP loans? The government doesn’t want to tell.

Kristin Schwab Jun 15, 2020
Treasury Secretary Steven Mnuchin speaks at a Senate Small Business and Entrepreneurship Committee hearing. Al Drago Pool/Getty Images
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Who got the more than $500 billion in Paycheck Protection Program loans that the CARES Act gave to businesses to ease the pain of the pandemic? We may never know.

Treasury Secretary Steven Mnuchin and National Economic Council Director Larry Kudlow say the information should not be released.

The Treasury Department is funding the CARES Act with taxpayer money. When the government shells out your taxpayer money, it usually tells you where it’s going.

“The accountability for who gets it, how much they receive and whether they’re entitled to it. That is a trust factor,” said Emma Coleman Jordan, professor of business law at Georgetown University.

The Trump administration said what we should care about is that the loans comply with the CARES Act. But who received them? The treasury secretary told Congress last week that it’s “proprietary information.”

Mehrsa Baradaran, a law professor at the University of California, Irvine, thinks there are a couple of other things at play.

“Part of this bill is they left it a lot up to banks. And it’s possible that they just don’t know where the funds went,” Baradaran said. “It’s possible that they do know, and they don’t want us to know.”

We do know where some of the money went — to big names like Shake Shack and Potbelly, which pledged to return the loans. But we only know that because they’re publicly traded companies.

“PPP was sold to the American public as loans to small business workers,” said Aaron Klein, a fellow at the Brookings Institution. “They’ve become grants to big business creditors.”

Grants, not loans, because businesses don’t have to repay them if they fulfill certain requirements, like rehiring staff. Klein said that makes transparency crucial.

“Failing to disclose who got this money undermines this response and future responses,” he said. Klein doesn’t just mean future bailouts. He means like tomorrow. Because there’s still about $130 billion left in the PPP pot.

COVID-19 Economy FAQs

What’s the latest on the extra COVID-19 unemployment benefits?

As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.

With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?

The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.

Which businesses got Paycheck Protection Program loans?

The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.

Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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