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Lobbyists, Law Firms and Trade Groups Took Small-Business Loans
The Trump administration began releasing details of which businesses received Paycheck Protection Program aid.
By Jeanna Smialek, Jim Tankersley and
WASHINGTON — The Trump administration, under pressure to reveal which companies received loans from a $660 billion program intended to keep small businesses afloat, on Monday released data showing that restaurants, medical offices and car dealerships ranked high among the top loan recipients.
The detailed information from the Paycheck Protection Program was confined to companies that received loans of more than $150,000. The administration said 86.5 percent of the loans were for less than that amount, so the snapshot captured only one sliver of businesses that tapped funds. So far, banks have made about 4.9 million loans through the program, with an average size of $107,000.
Nearly 5,000 businesses received individual loans between $5 million and $10 million, according to the data. The administration included ranges for the amounts, not specific figures.
And the figures did not include details on the roughly $30 billion in loans that were returned as companies realized that they were not eligible for the program, worried that they couldn’t meet program requirements or reacted to a public outcry about big firms getting funds.
Restaurants, medical offices and car dealerships were the top recipients of large loans from the program. More than 40,000 full- or limited-service restaurants received loans worth as much as $32 billion, according to the ranges provided by the government.
Sprinkled among the beneficiaries were businesses that are likely to attract scrutiny, including a fancy sushi restaurant at the Trump International Hotel in Washington; Kanye West’s company, Yeezy; and President Trump’s longtime personal lawyer.
Washington lobbying shops, high-priced law firms and special-interest groups also received big loans, according to the administration, the latest indication of how the government’s centerpiece effort to shore up mom-and-pop shops set off a race by organizations far afield from Main Street to secure federal money. The disclosure could further fuel outrage toward the program, which has been complicated by revelations that large, publicly traded companies were taking big loans and concerns that it might leave borrowers saddled with debt.
“My 1,000-foot takeaway is that the government was handing out free money and the line went around the corner,” said Aaron Klein, a fellow in economic studies at the Brookings Institution in Washington. “This is not your mom-and-pop shop on Main Street.”
The administration said the Paycheck Protection Program had helped to support more than 50 million jobs. The share of overall small-business payroll supported per state ranged from 72 percent in Virginia to 96 percent in Florida, according to the Treasury Department.
The program provides forgivable loans to companies that have 500 or fewer employees and meet certain requirements, such as using the bulk of the money to keep workers on the payroll. Lenders are responsible for reviewing recipients’ forgiveness applications to verify that they complied with the program’s rules.
More than 100 law firms received loans ranging from $1 million to $10 million, the data showed. The list included well-known names like Boies Schiller Flexner, the high-priced law firm run by David Boies, which received between $5 million and $10 million. “We don’t comment on our financials,” the firm said.
Kasowitz Benson Torres, founded and run by Mr. Trump’s longtime personal lawyer, Marc E. Kasowitz, received a loan for between $5 million and $10 million. The firm represented Mr. Trump for over a decade before he was elected president, both in his business dealings and in other matters, such as helping him keep divorce records sealed. Mr. Kasowitz and the firm also represented Mr. Trump during Robert S. Mueller III’s investigation into Russian interference in the 2016 presidential election.
Mr. Trump later diminished the role of Mr. Kasowitz in his dealings with Mr. Mueller’s investigators. A spokeswoman for Kasowitz Benson Torres said the loan, along with cost-cutting, “enabled us to preserve the jobs of our hundreds of employees at full salary and benefits without interruption.”
The president also appears to have benefited from government support, at least indirectly. While the Trump Organization did not apply for loans under the program, the data showed that dozens of tenants at buildings owned by Mr. Trump or managed by his companies received funds.
One reported recipient was a hair salon in the president’s hotel in Chicago. More than 20 businesses listed at 40 Wall Street, an office building near the New York Stock Exchange that Mr. Trump has owned since the mid-1990s, also reportedly received government loans totaling at least $20 million. Among the recipients were law offices, financial service firms and nonprofit organizations.
Sushi Nakazawa, a restaurant at the Trump International Hotel in Washington, received a loan of between $150,000 and $350,000. The company did not respond to a request for comment about how it planned to use the funds.
Some loan recipients are connected to the president’s son-in-law and senior adviser, Jared Kushner. The data show that a loan of between $350,000 and $1 million was made to Esplanade Livingston, a Kushner family entity that owns the land in Livingston, N.J., where the family’s Westminster Hotel is. In 2018, Mr. Kushner divested his stake in the entity, from which he once derived income generated by that hotel.
Princeton Forrestal, a real estate entity owned by various members of the Kushner family not including Mr. Kushner, received a loan of between $1 million and $2 million.
“Several of our hotels have applied for federal loans, in accordance with all guidelines, with a vast majority of funds going to furloughed employees,” said Pete Febo, Kushner Companies’ chief operating officer.
The Paycheck Protection Program, which was included in the $2 trillion stimulus bill passed by lawmakers in March, also benefited several members of Congress.
Car dealerships connected to Representative Mike Kelly, Republican of Pennsylvania, received three loans, each between $150,000 and $350,000. Mr. Kelly, a multimillionaire, owns Mike Kelly Automotive Group, Mike Kelly Automotive L.P.; and Mike Kelly Hyundai, all of which accepted loans.
Andrew Eisenberger, spokesman for Mr. Kelly, said that the congressman had properly followed the rules of the disaster aid program and that the money would be used “to sustain the income of workers who would otherwise have been without pay or employment at no fault of their own during the coronavirus pandemic.”
Businesses associated with other members of Congress or their relatives, both Democrats and Republicans, received similar disaster aid. They included a farm and other businesses owned by Representative Vicky Harzler, Republican of Missouri, and her husband. Ms. Harzler cited the need “to ensure the continued ability to maintain the employment of all team members during this time.”
A New York shipping business owned by the family of Transportation Secretary Elaine Chao, the wife of the Senate majority leader, Mitch McConnell, received at least $350,000, according to the data. A person familiar with the company, Foremost Group, said that the loan was for less than $500,000 and that no employees had been laid off during the pandemic. Ms. Chao has no formal affiliation or stake in the business, but she and Mr. McConnell have received millions of dollars in gifts from her father, James, who ran the company until 2018.
Many of the biggest and most influential lobbying and political consulting firms received money — despite prohibitions intended to restrict access — most likely qualifying by highlighting lines of business that fell outside the restrictions.
Wiley Rein, which has a large lobbying practice focusing on trade issues, received between $5 million and $10 million, according to the data. Van Ness Feldman and Beveridge & Diamond, two law firms that focus on helping energy industry clients push their agendas in Washington, received loans between $2 million and $5 million, according to the administration.
A firm that raises money for Mr. Trump’s re-election campaign and the Republican National Committee received a loan of more than $1 million, according to the data set, while a company that produces Mr. Trump’s political advertisements received between $350,000 and $1 million. So did a consulting firm started by President Barack Obama’s former campaign manager Jim Messina and one that Hillary Clinton’s 2008 campaign paid for communications consulting.
Several firms that advise companies on how to deal with the government, but are not officially registered to lobby, were also said to have received loans. They include companies run by former Secretary of State Madeleine Albright, who served in the Clinton administration.
The administration listed loans worth between $350,000 and $1 million to a consulting firm started by former Senator William S. Cohen, a Maine Republican who also served in the Clinton administration as the secretary of defense, and one run by a homeland security secretary in the Bush administration, Michael Chertoff. And DCI Group AZ, a prominent political and corporate consulting firm, collected as much as $5 million.
An affiliate of Americans for Tax Reform, the influential conservative group that has been a vocal critic of government spending, received between $150,000 and $350,000, according to the government’s data. In a statement, the group said the foundation “was badly hurt by the government shutdown” and “does not engage in lobbying.”
A number of prominent private schools were listed as loan recipients, despite the controversy over whether such institutions should take the money.
In New York City, St. Ann’s School took a loan valued between $5 million and $10 million. Kent Place School, a private school in New Jersey, was reported to have received a loan worth between $1 million and $2 million.
Schools with political ties in the Washington area also received loans. Sidwell Friends, which has educated the children of presidents, received a loan worth between $5 million and $10 million, based on the data. Georgetown Preparatory School, which the Supreme Court justices Brett Kavanaugh and Neil Gorsuch attended, received a loan worth between $2 million and $5 million.
Georgetown Preparatory’s president, the Rev. James R. Van Dyke, said, “We remain committed to doing all that we can to retain our immensely talented faculty and staff,” adding that many of them accept salaries and wages “lower than what they might earn in the for-profit sector or the public school system.”
St. Andrew’s Episcopal School, where Mr. Trump’s youngest son is a student, also received a loan.
Touring companies for rock bands also turned to the government for help as concert venues around the country went dark to prevent the spread of the virus.
A limited liability company called Eagles Touring Company II Foreign received a loan between $350,000 and $1 million. Documents filed in California show that the entity shares an agent with a similarly named company whose president is Don Henley, a founding member of the Eagles, the rock band that had to postpone its tour this spring.
Lil’ Jon Touring and Nickelback Touring 2, among other acts, received loans between $150,000 and $350,000. Lil Jon’s publicist, Tamar Juda, said that the artist had canceled over 75 shows since the beginning of the pandemic and that the funds allowed his core touring staff to remain employed.
Yeezy, which California business filings show is a holding company registered to Mr. West, received between $2 million and $5 million to support 106 jobs, based on the disclosures. The holding company appears to be linked to Mr. West’s apparel brand, having recently filed to trademark the phrase “West Day Ever” for use on clothing. Public relations firms that have worked for Yeezy did not respond to emailed requests for comment.
There was no apparent link between the amount of economic damage suffered by states and how successful the small businesses in them were at getting the loans from the program.
North Dakota, South Dakota, Nebraska and Kansas all saw loan approvals of at least 90 percent of their eligible small-business payroll, even though they rank among the least-affected states in terms of unemployment claims during the crisis. Two of the hardest-hit states for claims, New York and California, saw loan approvals equal to about three-quarters of their eligible payrolls; by that measure, California companies would have received billions more from the program if they had seen approvals at the same rate as the Plains states.
Reporting was contributed by Kenneth P. Vogel, Eric Lipton, David McCabe, Steve Eder, Ben Protess, Stacy Cowley and Noam Scheiber.
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