Billions of taxpayer dollars went to an undisclosed list of companies
Of the $ 20 billion in P3 funding that poured into Pennsylvania, more than $ 1.8 billion in taxpayer dollars went to an undisclosed list of companies.
HARRISBURG, Pa .– The Paycheck Protection Program has distributed more than $ 518 billion in loans to U.S. employers with fewer than 500 employees. This month, the US Small Business Administration named all of its major loan recipients.
It does not publish the names of companies that received less than $ 150,000, which represents over 85% of all P3 loans. FOX43 reveals how the federal government is keeping people in the dark about Pennsylvania companies that have received nearly $ 2 billion in taxpayer dollars.
“They did it in secret. They did it inexplicably. They did it without paying attention to conflicts of interest, ”said Josh Gotbaum, visiting scholar in the economics studies program at the Brookings Institution.
Gotbaum previously worked in the Bureau of Economic Policy at the US Treasury Department. He said the disbursement of taxpayer-funded PPP loans was shrouded in secrecy.
“We’re going to find out that some people who got this money shouldn’t have got this money,” Gotbaum said.
Over $ 20 billion in PPP loans have poured into Pennsylvania. Nearly $ 2 billion of that funding went to an undisclosed list of companies, raising issues of transparency and accountability.
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“If you create a threshold and say, ‘We will only disclose payments made above a certain level,’ then the risk is that companies, or anyone trying to defraud the government, could start companies. and phantom or fictitious entities. to receive funds below that certain threshold, ”said Cary Coglianese, Edward B. Shils professor of law at the University of Pennsylvania Law School and director of the Penn Program on Regulation.
Banks and lenders are the custodians of PPP loans. They issue the funds and their client list is private. The US Small Business Administration (SBA) has said details of loans under $ 150,000 are proprietary and confidential.
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“Here is the reason why we did not want to disclose the names of the companies for the small loans. These contain a lot of sensitive payroll information, especially for small businesses, ”said Steve Bulger, Regional Administrator for SBA Regions II and III. “We felt that this would violate many of their rules relating to personally identifiable information.”
Good government groups argue that hidden government spending creates an opportunity for embezzlement. They say taxpayers have the right to know where their money is being spent.
“I would say if you look to the federal government for help, I think the cost you pay is that you have to let your neighbors know that they are helping you get out of the woods,” he said. said Susan Schwartz, president. of the Pennsylvania Freedom of Information Coalition.
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There is another point of contention. Sixty percent of the PPP loan must go to the payroll. Of the Pennsylvania anonymous companies that received the loans, FOX43 reveals that 1,793 companies said they did not retain any employees.
RACHEL YONKUNAS: How is it going? Would that not undermine this program?
STEVE BULGER: What happened in just about all of these cases was that there were three columns where you could list the number of employees on your request. Some small businesses have entered this number of employees in the wrong column.
Despite legitimate criticism, the Paycheck Protection Program has successfully helped millions of businesses and their workers survive an economic shutdown. The program also allowed workers to keep their health care benefits, in addition to their paychecks.
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The program still has over $ 100 billion in the pot and the deadline for applying for a P3 loan has been extended to August 8. This week we might learn what the next gen bill might look like.
Congress is negotiating the next round of coronavirus aid and future bailouts may need further consideration.
“They are looking at more structural changes, which you really have to be able to show you need the money this time around, instead of saying ‘Yes, I need the money.’ Well, we’ve got to see some numbers this time around, ”Bulger said.
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