Joint Statement on Unions Illegally Receiving PPP Funding
WASHINGTON, D.C. – Today, Ranking Member on the House Committee on Small Business Blaine Luetkemeyer (R-MO), Ranking Member on the House Education and Labor Committee Virginia Foxx (R-NC), House Small Business Subcommittee on Oversight, Investigations, and Regulations Ranking Member Beth Van Duyne (R-TX), and House Education and Labor Subcommittee on Health, Employment, Labor, and Pensions Ranking Member Rick Allen (R-GA) issued the following joint statement on the discovery of unions illegally receiving Paycheck Protection Program (PPP) funds:
“It is concerning that PPP funds were distributed to entities other than small businesses and designated non-profit organizations. The illegal entry of at least 226 labor, teachers, and government unions into the Paycheck Protection Program demands an investigation. Ensuring American tax dollars are used responsibly and correctly is essential in our duty to the American people and our small businesses. We hope the SBA will be able to shed some light on this important issue.”
Read the full letter here.
Read key excerpts of the letter below:
“We have recently been made aware of a report from the Freedom Foundation highlighting that PPP loans were made to labor unions.[1] Using data obtained through the Freedom of Information Act, the Freedom Foundation determined that 226 labor, teachers, and government sector unions received $36.7 million in forgivable loans.[2] We understand these loans were made despite the CARES Act’s language specifically targeting PPP loans to small businesses and non-profit organizations—as defined under Section 501(c)(3) and 501(c)(19) of the Federal tax code, respectively.[3] Additionally, 501(c)(12) entities were made eligible for the PPP through administrative action on May 19, 2020.[4] PPP loan eligibility was not extended to unions—Section 501(c)(5) entities—until the law was amended nearly a year later.[5] This information suggests that 501(c)(5) entities entered the program illegally and put money in the hands of affiliates of large organizations—including the AFL-CIO and the International Brotherhood of Teamsters—which netted more than $3.8 million.[6]
“Given the wide utilization of the program, it is critical to understand if ineligible entities received assistance and how the SBA conducted PPP loan forgiveness reviews for entities classified under Section 501(c)(5) of the Federal tax code (hereinafter referred to as “501(c)(5)-classified entities”).”
Background:
Representative Blaine Luetkemeyer (R-MO) is the Ranking Member of the House Committee on Small Business.
Representative Virginia Foxx (R-NC) is the Ranking Member of the House Committee on Education and Labor.
Representative Beth Van Duyne (R-TX) is the Ranking Member of the House Small Business Subcommittee on Oversight, Investigations, and Regulations.
Representative Rick Allen (R-GA) is the Ranking Member of the House Education and Labor Subcommittee on Health, Employment, Labor, and Pensions.
Reprinted with permission from – House Small Business Committee Republicans – By House Small Business Committee Republicans
