WASHINGTON — The Los Angeles Lakers are not what most people think of as a small business. Yet the basketball franchise is the latest example of a large company that managed to qualify for small-business loans from a hastily devised government program intended to help barbershops, restaurants, dry cleaners and other mom-and-pop shops.
Congress created the Paycheck Protection Program as part of last month’s $2 trillion economic relief package, intending it as a lifeline for small shops so they could keep paying workers even if they had no customers. The money, which ultimately grew to $660 billion, came with strings attached, requiring businesses to keep their workers on the payroll for eight weeks if they wanted the loans forgiven, but the eligibility requirements were vague.
On April 2, Mnuchin encouraged “all small businesses that have 500 or fewer people, please contact your lenders,” saying they could get a loan in a single day. More than 100 companies have disclosed loans of more than $2 million, yet most have chosen to keep the money. So far, only 22 private and public companies have disclosed returning their funds, including the Los Angeles Lakers. Most of the companies returning money insist they qualified under the Treasury Department’s initial terms, but opted to return the loans once it changed its guidance to avoid bad publicity.
Other companies have made clear they have no intention of returning the money. Hotels, luxury resorts and management companies that funnel money back to Ashford Inc., an asset management firm based in Dallas, have received about $53 million in federal virus aid. Ashford said in a statement that it was keeping the money to “protect jobs, as the legislation intended.” Fiesta Restaurant Group, which has received $15 million, said in a regulatory filing that it was reviewing the new guidance.
“The problem for businesses applying for PPP loans was there was no specific guidance on how exactly the loan applicant should determine — and certify — that a loan was ‘necessary.’ ” said Peter S. Hyun, a lawyer at Wiley who represents companies facing government enforcement actions. Megan Jeschke, a defense lawyer at Holland & Knight, said it was not clear that large companies or the banks were at fault for applying for loans.
Sen. Marco Rubio, R-Fla., the chairman of the Senate Committee on Small Business and Entrepreneurship, said last week that he would use subpoena power to oversee the program and determine if companies made false certifications to the federal government to receive loans.
The Treasury can't handle its own job now it wants to do fraud investigations on itself. Maybe Jared can do that too.
they should not have gotten it in the first place! where is the damn oversight ?