Florida Democratic Party leaders say they will forgive Federal loan of $ 780,000 after facing internal critic for asking for relief from a federal program created to help small businesses keep their employees on the payroll during the coronavirus recession.
The party explained the decision in a statement emailed at 12:12 am Thursday. A spokeswoman accused the Small Business Administration of granting the loan, one of thousands disbursed under the Paycheck Protection Program, or PPP, as part of the coronavirus relief program of the CARES law of approximately $ 2 trillion.
“Congress passed the Paycheck Protection Plan to support employers and their efforts to provide funds to keep people working – and like many employers during the shutdown, FDP was keen to stick to payroll and keep our staff employed, so we applied, ”party spokeswoman Luisana Pérez Fernández wrote in the statement. “The bank, the loan processor and the officers of the Small Business Association have approved the funding. Now it looks like they made a mistake in approving the funding, so we volunteered to return it.
Calls for the party to return the money began after the federal government published information this week detailing grants worth $ 150,000 or more. The list showed that the Florida Democratic Party Building Fund, Inc. had accepted between $ 350,000 and $ 1 million. The money, approved in mid-April, saved 100 jobs, according to the SBA. The lender was listed as Newtek Small Business Finance.
State records show that the party formed the non-profit corporation in April last year as an entity to build, own or operate “the headquarters of the state executive committee of the Democratic Party of Florida and related political organizations ”. Information released by the Small Business Administration classified the loan under a code used for public relations agencies.
In documents recently released to the Federal Election Commission, the Florida Democratic Executive Committee’s political committee listed five contributions from “CARES,” using the Small Business Administration’s headquarters address, between April 24 and April 28. , with a combined value of $ 815,641.57.
Pérez Fernández stated that the value of the loan to be repaid is $ 780,000. She said the party had not requested or received small loans that were not disclosed this week by the Small Business Administration. She could not say what jobs were held by employees whose paychecks were subsidized by P3 funds, and would not explain why the party thinks the SBA made a “mistake”.
Several Democratic lawmakers began criticizing the state party on Wednesday and called on it to return the PPP money, fearing that tapping into a fund meant to help small businesses would leave the party and its members open to criticism as campaigns for state and federal offices are approaching election dates. .
The party works closely in Florida with Democratic candidates, including alleged Democratic presidential candidate Joe Biden. Florida Democratic executive director Juan Peñalosa, among the construction fund company directors listed as the loan recipient, was announced this week as senior campaign advisor to Biden in Florida, a key state in the field of battle.
Florida Senator Jason Pizzo, D-North Miami Beach, noted that the party had “ways to raise money that a small business doesn’t.” He tweeted: “While legal and / or ethical concerns should give thought to seeking / accepting a PPP, they should quickly return the $$ and refrain from any partisan slurs that only serve to implicate the integrity of his party. #afewFLDems. “
“Okay,” said State Representative Ana Eskamani, a Democrat from the Orlando area. “PPP was created for small businesses and nonprofits who are in desperate need of support during COVID19, not for political parties. “
The program was established at the start of the pandemic by Republican Florida Senator Marco Rubio, and was designed with fewer requirements for businesses to receive money so loans can be distributed as quickly as possible. Businesses with fewer than 500 employees or hotels and restaurants with fewer than 500 employees per location were eligible. PPP loans that are used to keep workers on payroll and pay other essential expenses like rent do not have to be repaid, essentially turning the money into a subsidy.
Data released by the SBA on Monday credited the program – which has billions of funds remaining and will run until early August – with saving 3.2 million jobs in Florida.
At the start of the program, many business owners reported issues with getting their loans processed. In April and May, the Florida Democratic Party criticized the program – although it was approved for loan on April 15.
“Trump’s failure to implement the Paycheck Protection Program (PPP) has left millions of small businesses still waiting for a lifeline they desperately need,” the party said in a May 21 press release. “Almost a month after the start of the PPP, only 7 percent small businesses had received funding, and nearly half of black and Latino small business owners say they plan to shut down permanently within six months.
Some Democrats have questioned whether the party is legally allowed to receive PPP funding because traditional SBA loans are not available to political parties. On Thursday, State Senator Joe Gruters, Chairman of the Florida Republican Party, said that “the language of PPP eligibility is very clear – that political organizations are not eligible for PPP loans.”
“It’s embarrassing that after all of their hypocritical bashing in the paycheck protection program, they got their hands caught in the cookie jar,” said Emma Vaughn, spokesperson for Trump Victory.
Paycheque Protection Program rules published April 15 on the Federal Register Online, indicates that businesses identified by the Small Business Administration as generally ineligible for agency loans would also be considered ineligible for PPP loans. Some of these regulations have been challenged or amended. But SBA regulations that prohibit companies primarily engaged in political or lobbying activities “from receiving loans through the agency have been confirmed April 21 by a federal judge in Washington, DC, after the American Association of Political Consultants filed a lawsuit to overturn restrictions under federal rule.
Yet the Florida Democratic Party is not the only political entity to have received a PPP loan. The Florida Black Republican Caucus received between $ 150,000 and $ 350,000, as did the Ohio Democratic Party. Companies linked to politicians, including car dealers owned by US Republican Vern Buchanan and a publicly traded company that employs the husband from US Democratic Representative Debbie Mucarsel-Powell, also received loans. (Mucarsel-Powell criticized the company and Fiesta said it would refund the money.)
Pérez Fernández said in his statement that the party is looking forward to the next elections after deciding to return the PPP money.
“As the Democratic Party, we are entering this election stronger than ever, with a growing staff and a commitment to elect a president who will tackle this crisis, rebuild our economy and heal the nation,” said Pérez Fernández in his statement. “This president is Joe Biden.”
This story was originally published July 9, 2020 9:03 am.