Rep. Ben McAdams, D-Utah, is upset that many Utah small businesses still are unable even to file for federal emergency loans, while news reports show some well-heeled firms received them, including the Los Angeles Lakers, Ruth Chris Steak House and Shake Shack.
So he called Wednesday for the Trump administration to release data on exactly who is receiving such money to help survive the coronavirus downturn — and who is not. He also called for the government to fix its overwhelmed loan application system.
“If Utah lenders are unable to upload and process loan applications and Utah small businesses are still being left out in the cold, which financial institutions are getting through and which businesses are benefiting?” McAdams asked in a letter to Treasury Secretary Steve Mnuchin and Small Business Administration chief Jovita Carranza.
He called a news conference on Midvale’s historic Main Street to say small Main Street businesses deserve the help — and called on the Trump administration to release a full list of loan recipients to show if some big corporations are gaming the system.
“For every $4 million dollar loan that goes to a business that doesn’t really need it, that’s 20 small businesses that didn’t get the $200,000 dollars that they need to keep their doors open and to survive,” he said.
“A lot of businesses that don’t need it got in line first and were able to grab the money," he said. “When Congress approved spending millions of dollars to help small businesses and their employees survive this public health crisis, it wasn’t for giant corporations with deep pockets.”
McAdams spoke after Congress last week provided $310 billion more for the Paycheck Protection Plan for small businesses, but the system was overwhelmed when loan applications could be submitted on Monday. He said many Utah lenders and businesses still report they have been unable to file applications.
That additional money was approved after money from an initial $349 billion was distributed in less than two weeks.
News reports showed that the money sometimes went to powerful or wealthy companies. Some like the Los Angeles Lakers, Ruth Chris Steak House and Shake Shack chains vowed to return loans.
The New York Times this week found many corporations publicly reported they had received emergency loans after earlier announcing they had obtained large lines of credit they had said would allow them to survive. Some also took over other companies or paid executives big bonuses amid taking such loans. Some received loans after run-ins with the law.
McAdams complained that according to Treasury Department’s fact sheets, borrowers must certify in good faith that their loan is necessary to sustain their business — and that it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith.
“It’s not right and it isn’t fair to thousands of hardworking Utah families,” McAdams said. “Taxpayer dollars must be spent in the way taxpayers intended. These agencies must release the list and provide a full accounting for how the money was distributed.”
Meanwhile, the campaign of President Donald Trump took a shot at McAdams for his stand.
It released a statement saying McAdams “was nowhere to be found when his party boss, Nancy ‘let them eat ice cream’ Pelosi, was blocking aid meant to help Utahns through the global crisis and killing jobs in the process,” referring to delays as Congress debated and negotiated an additional emergency package.
Samantha Zager, regional communications director for the Trump campaign, said, “Ben McAdams can pretend he cares about small businesses, but the fact of the matter is he allowed Nancy Pelosi to delay critical Paycheck Protection Program funding that Utah small businesses needed for 12 days while thousands of Utahns filed for unemployment.”
McAdams responded that when the money lapsed from the first round, “I immediately called for reauthorization of that funding and did work hard to get it reauthorized.”
He added, “This isn’t about pointing fingers. This is about making sure that the money gets to where it needs to be.”