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Millions in CARES Act funds went to organizations that were ineligible, had engaged in misconduct, or didn’t use the funding as Congress intended.
We compiled what congressional committees, watchdogs, and journalists have reported on CARES Act funds. https://www.americanoversight.org/where-did-the-money-go-a-summary-of-findings-from-cares-act-investigations
We compiled what congressional committees, watchdogs, and journalists have reported on CARES Act funds. https://www.americanoversight.org/where-did-the-money-go-a-summary-of-findings-from-cares-act-investigations
A few highlights: There have been multiple reports of ineligible companies having exploited loopholes in the Paycheck Protection Program to receive millions of dollars, or of large corporations reaping benefits designed to help struggling small firms.
@propublica found in July 2020 that at least 15 large companies that did not qualify as small businesses collectively received more than half a billion dollars by applying for loans through smaller companies they owned. https://www.propublica.org/article/different-names-same-address-how-big-businesses-got-government-loans-meant-for-small-businesses?utm_medium=social&utm_source=twitter
In December, nine months after the PPP began, the SBA Inspector General announced that approximately $3.6 billion in PPP loans had been sent to potentially ineligible beneficiaries.
https://www.oversight.gov/sites/default/files/oig-reports/SBA/SBA-OIG-Report-21-06.pdf
https://www.oversight.gov/sites/default/files/oig-reports/SBA/SBA-OIG-Report-21-06.pdf
According to data obtained by the Washington Post, thousands of franchises of major chains—including McDonald’s—received billions of dollars in PPP loans despite their affiliation with large corporations. https://www.washingtonpost.com/business/2021/01/28/ppp-loans-mcdonalds-subway-franchises/
Despite receiving millions, many CARES Act beneficiaries still laid off workers and engaged in questionable spending. In a December 2020 nationwide analysis, @GoodJobsFirst found that 1,900 PPP beneficiaries laid off more than 190,000 American workers.
https://www.goodjobsfirst.org/sites/default/files/docs/pdf/Workplace%20Warning-%20The%20need%20for%20a%20new%20and%20improved%20PPP.pdf
https://www.goodjobsfirst.org/sites/default/files/docs/pdf/Workplace%20Warning-%20The%20need%20for%20a%20new%20and%20improved%20PPP.pdf
@POGOBlog and the @acdatacollectiv found that large political donations flowed from more than 100 PPP loan recipients, suggesting those companies might not have been struggling to prioritize paying their employees. https://www.pogo.org/investigation/2020/11/large-political-donations-came-after-paycheck-protection-program-loans/
Data analyzed by the Associated Press showed that many minority small-business owners did not receive a PPP loan until the initial program’s last weeks in July and August 2020. https://apnews.com/article/technology-small-business-new-york-coronavirus-pandemic-7613e946275f085367b5fc8c9a496aea
In a study released in September 2020, the Brookings Institution found that small businesses in majority-white neighborhoods received PPP loans more quickly than those in majority-Black and majority-Latino neighborhoods. https://www.brookings.edu/research/new-data-shows-small-businesses-in-communities-of-color-had-unequal-access-to-federal-covid-19-relief/
We’ve filed a number of FOIA requests for more information about PPP and CARES Act relief funds, and will continue investigating the program’s effects. For more information about oversight of pandemic relief spending, visit our Oversight Tracker. https://www.americanoversight.org/oversight-tracker?fwp_oversight_topic=relief-funds-and-loans
