Loans given to admin-connected firms were forgiven and at a much higher rate than across PPP program
June 14, 2022
(Washington, DC) – Today, the Functional Government Initiative is announcing the release of a report covering our investigation into Paycheck Protection Program (PPP) loans given – and largely forgiven – to entities with special connections to high-ranking appointees in the Biden Administration.
Among the key findings:
• $272 Million was loaned to the former employers of high-ranking Biden Administration appointees.
• Former employers and clients of nearly one third (31 percent) of the most senior appointees analyzed received loans.
• 95 percent of the loans to these special interests were forgiven compared to PPP’s overall forgiveness rate of 80 percent.
• Eight members of Biden’s Cabinet worked at or with an entity that received PPP loans. 75 percent of the loans given to these entities were partially or fully forgiven.
While the COVID relief program has come under scrutiny by members of Congress and the federal watchdog in charge pandemic oversight, far less attention has been spent on the special connections that benefited from the massive loan program. FGI’s report is the first to dig into the organizations best positioned to influence the highest echelons of the federal government. In addition to more than a quarter billion in taxpayer loans and more than $220 million forgiven, many of these loans received forgiveness in excess of the loaned amount, totaling $1.8 million likely paid to preferred banks and lenders.
If the trend holds across all current presidential appointees, the total amount of COVID relief funds transferred to entities connected to high-ranking officials is set to skyrocket. These revelations raise additional questions:
1) Given the fungible nature of the loans into large non-profit organizations and public affairs firms, were any COVID funds used to lobby the government or fund the efforts of political campaigns during the 2020 election?
2) Did organizations that received loans but saw no decrease in their annual contributions still seek to have loans forgiven?
3) Were national organizations with state or local chapters that individually received loans in violation of the statutory parameters restricting eligibility to the program?
FGI will continue to investigate and provide the public with more insight on how their tax dollars were spent during the COVID-19 pandemic.
Peter McGinnis, spokesman for FGI, issued the following statement:
“As staggering as the numbers are, these findings may expose just a fraction of the PPP funds doled out to high-ranking political appointees’ former employers and clients during the pandemic. If politically connected organizations received loan forgiveness unavailable to the local restaurant that was forced to shut its doors for months due to lockdowns and may never have been able to reopen, that would demonstrate tremendous government dysfunction. FGI will continue to dig deeper into the PPP program so that the American people can discover where their money went.”