Ohio Gov. DeWine’s small business among 650K receiving govt loans
WASHINGTON (AP) — The Treasury Department today released the names of more than 650,000 small businesses that received funds from a government program intended to support the economy as states shut down in April to contain the viral outbreak.
Businesses owned by several politicians were listed among the recipients, including Ohio Gov. Mike DeWine, a Republican.
Treasury identified just a fraction of the total borrowers, naming only those companies that got more than $150,000. Those firms made up less than 15 percent of the nearly 5 million small companies that received loans.
The average loan amount for the entire program was $107,000, the Treasury Department said in a broad summary of the program. The government handed out $521 billion through the Paycheck Protection Program, a crucial piece of the government’s $2 trillion rescue package. The loans can be forgiven if the businesses mostly use the money to continue paying their workers. The program initially was set to expire June 30 but was extended last week to Aug. 8.
The recipients employed 51 million people before the pandemic began, Treasury Secretary Steven Mnuchin said, or about 85 percent of all workers at companies with fewer than 500 employees. Not all of those jobs were saved. The government won’t know how many were until companies apply to have the loans forgiven, a process that is just beginning.
The public may never know the identity of more than 80 percent of the nearly 5 million beneficiaries to date because the administration has refused to release details on loans under $150,000. That secrecy spurred a lawsuit by news organizations including The Associated Press.
Treasury has released only dollar ranges for the loan amounts, rather than exact figures.
DeWine Seeds-Silver Dollar Baseball received a loan in a range of $150,000 to $350,000, the government said. The company owns the Asheville Tourists, a minor league baseball team in North Carolina, which was purchased by the governor’s family in 2010. DeWine’s son, Brian DeWine, currently serves as president of the baseball team.
The data gave few details about loans to minority-owned businesses. Companies were not required to supply demographic data on their applications, and many entries about race and gender contained “unanswered.”
However, many minority-owned businesses don’t have employees, and so their loan amounts likely were under $150,000 and therefore not part of the data release. Senior administration officials who briefed reporters before the release said they hoped to get more information when owners submit applications for loan forgiveness over the next few months.
Treasury still was able to determine that 27 percent of the loan money went to low- and moderate-income areas, the officials said.
The PPP was up and running just days after being approved by Congress in late March. It provided loans of up to $10 million for small businesses to help them recover from the government-ordered shutdowns and revenue losses caused by the virus outbreak. The ability to convert the loans to grants made the program particularly appealing.
Once opened April 3, the PPP sparked a flood of applications from desperate small business owners. The SBA approved more than 1.6 million loans worth $349 million in less than two weeks, exhausting the initial funding. Millions of other businesses had to wait nearly two more weeks for Congress to approve an additional $310 million. Nearly 3.2 million loans worth $172 billion were approved in the second round as of June 30, leaving around $132 billion unclaimed. Congress approved an extension of the program this week until Aug. 8.
Economists generally credit the program with helping prevent the job market meltdown from being much worse. Employers added 7.5 million jobs in May and June, a solid increase though it left the economy with nearly 15 million fewer jobs than before the pandemic. Many economists credit the PPP with driving some of that gain.
Yet other analyses, such as one conducted by economists at Standard & Poors, found that businesses in states with fewer job losses received more loans than those in harder-hit states.
HERE ARE PROFILES OF SOME OF THE BUSINESSES RECEIVING LOANS:
West Virginia Gov. Jim Justice’s family companies received at least $6.3 million from a federal rescue package meant to help small businesses hold off on layoffs during the coronavirus pandemic.
Justice, a Republican, is considered to be West Virginia’s richest man through ownership of dozens of coal and agricultural businesses, many of which have been sued for unpaid debts. At least six Justice family businesses received the Paycheck Protection Program loans, including The Greenbrier Sporting Club, an exclusive members-only club attached to a lavish resort Justice owns called The Greenbrier.
The aid package is the centerpiece of the federal government’s plan to rescue an economy devastated by shutdowns and uncertainty. The data released by the Treasury Department presents the fullest accounting of the program thus far.
Justice, a billionaire, acknowledged last week that his private companies received money from the program but said he did not know specific dollar amounts. A representative for the governor’s family companies did not immediately return emails seeking comment.
Muy Brands Inc., a San Antonio, Texas, franchisee with more than 750 Wendy’s, Taco Bell and Pizza Hut restaurants, received between $15 million and $30 million through the Paycheck Protection Program.
The program was put into place to preserve jobs at smaller businesses.
CEO James Bodenstedt is also a major donor to President Trump. He has given $300,000 to the Trump Victory PAC since the start of this year, according to federal campaign finance records. A message seeking comment was left with Muy Brands.
Roughly 120 payday lenders and auto title lenders took loans from the Paycheck Protection Program. Most took out smaller loans, typically less than $350,000. These types of businesses typically lend money to poor and disaffected individuals in desperate need for cash, often at high interest rates.
Online lenders which often offer to consolidate loans in return for high fees also took government loans. Avant, Prosper Marketplace and Upstart were among them.
Creditcorp, a high interest-rate lender and debt collector, took out a loan of between $5 million and $10 million loan.
Nearly 600 portfolio management companies and private equity firms took money from the PPP program.
Private equity firms and portfolio managers were not an industry heavily impacted by the coronavirus pandemic. Their employees were largely able to keep working, and they were not industries that had to be shut down by state or local government orders. Investment managers and private equity firms also tend to be extremely well paid positions.
According to the data, those 583 companies reported saving roughly 14,800 jobs collectively with the funds from the program. That’a an average of 25 employees per company.
Rosenblatt Securites, one of the biggest names on the floor of the NYSE, took out a $1-$2 million loan.
Some familiar political names are showing up in data revealing who received funding for businesses during the outbreak.
Waterville Valley Holdings, an investment group led by the family of New Hampshire Gov. Chris Sununu, got a loan of between $350,000 and $1 million. The company is the principal investor in the Waterville Valley Resort, a ski area where Sununu, a Republican, served as CEO until just before he took office in 2017.
Robin J. Vos Enterprises, a popcorn manufacturing company run by Wisconsin Assembly Speaker Robin Vos received between $150,000 and $350,000. Vos is a Republican.
Vos’ spokeswoman, Kit Beyer, didn’t immediately respond to a message inquiring about why the company was seeking the money and how it’s been used.