Kanye West, Girl Scouts; All got PPP loans
WASHINGTON — The government’s small business loan program has benefited millions of businesses, in an effort to minimize the number of layoffs Americans face in the face of the coronavirus pandemic. However, among the recipients, there are many that you probably did not expect.
Kanye West’s clothing line. Sculptor Jeff Koons. Law firms and hedge funds with high added value. The Girl Scouts. Left and right political groups.
In total, the Treasury Department’s Paycheck Protection Program authorized $520 billion for nearly $5 million, mostly small businesses and nonprofits. On Monday, the government released the names and some other details of recipients who have been approved for $150,000 or more.
This represented less than 15% of all borrowers. The Associated Press and other news organizations are suing the government for the names of the other recipients.
Economists generally credit the program with preventing the collapse of the labor market this spring from getting worse. More than 22 million jobs were lost in March and April. But around a third of them were recovered in May and June – a faster rebound than many analysts expected.
The government acted quickly in early April, with the Treasury lending the first $349 billion in just two weeks. The program got off to a rocky start, marked by confusion and hardship for many businesses that applied for loans.
“The process was complicated and they couldn’t target it that much,” Diane Swonk, chief economist at accounting firm Grant Thornton, said of the Treasury.
Here are seven unlikely recipients of PPP loans:
Koons, a modernist sculptor, is best known for his work with large metallic balloon-like animals. His “Rabbit” sculpture fetched $91 million at auction last year.
Koons’ studio has been approved for $1-2 million, according to government data. (Data only shows ranges for approved loan amounts.) His studio said it employed 53 people before the pandemic. PPP loans can be forgiven if employers use most of the money to keep their employees on payroll.
WALL STREET AND PRIVATE EQUITY
Nearly 600 asset management companies and private equity firms have been approved for PPP money, according to government data.
Financial firms have generally not been hit hard by the coronavirus pandemic. Their employees were largely able to continue working and they were not among the industries that had to be shut down by government orders. Plus, of course, investment managers and private equity employees tend to be extremely well-paid professions.
According to the data, these 583 companies said they collectively supported about 14,800 jobs with program money. This represents an average of 25 employees per company.
Another notable financial firm that has borrowed from the program: Rosenblatt Securities, which controls one of the largest physical presences on the floor of the New York Stock Exchange. Rosenblatt borrowed between $1 million and $2 million.
KANYE WEST’S CLOTHING LINE:
Kanye West’s clothing and sneaker brand, Yeezy, received a loan of between $2 million and $5 million, according to data released by the Treasury. The company employed 106 people in mid-February before the pandemic hit.
Yeezy, best known for its $250 sneakers, has just announced a major deal with Gap that will see the rap superstar design hoodies and t-shirts to be sold at the chain’s 1,100 stores in worldwide. (A Yeezy representative did not immediately respond to a request for comment.)
Last weekend, West, a notable fan of President Donald Trump, tweeted that he was running for president.
Some other well-known fashion and retail names whose businesses have been hit by store closures have also been approved for loans. The list included high-end designers Oscar de la Renta and Vera Wang and costume maker Hickey Freeman. All of their loans were in the range of $2 million to $5 million.
The Americans for Tax Reform Foundation, the nonprofit arm of anti-tax lobbying group Americans for Tax Reform, has been approved for a loan of up to $350,000. ATR, led by anti-tax activist Grover Norquist, who has long supported a smaller federal government, said it does not oppose PPP. He described the program “as compensation for a government taking over during the shutdown.”
The Center for Law and Social Policy, a research and advocacy group focused on policies to support low-income Americans, was authorized to provide a loan of up to $1 million, according to government data.
More than 30 Girl Scout chapters across the country have received PPP loans, the Treasury said. The Montana and Wyoming Girl Scouts have been approved for between $350,000 and $1 million.
JIM JUSTICE, BILLIONAIRE GOVERNOR
West Virginia Gov. Jim Justice’s family businesses received at least $6.3 million from the program.
Justice, a Republican, is considered the wealthiest person in West Virginia thanks to his ownership of dozens of coal and agricultural businesses, many of which have been sued for unpaid debts. At least six Justice family businesses have been approved for loans, including the Greenbrier Sporting Club, an exclusive club attached to a lavish resort Justice owns called The Greenbrier.
Justice, a billionaire, acknowledged last week that his private companies had received money from the program, but said he did not know the dollar amounts. A representative of the Governor’s Family Businesses did not immediately return emails seeking comment.
TGI Fridays and PF Chang’s China Bistro were among the top restaurant chains that were approved for loans.
Dallas-based TGI Fridays, which has about 500 restaurants nationwide, has secured between $5 million and $10 million in loans under the program. In 2014, TGI Fridays was acquired by New York-based private equity firm TriArtisan Capital Advisors. This company also owns PF Chang’s China Bistro, which also got a loan.
Although the PPP program was designed to help small businesses, large hotel and restaurant chains were also allowed to apply. A message seeking comment was left at TGI Fridays.
PF Chang’s China Bistro says a PPP loan has helped it keep 12,000 workers employed and switch its restaurants to take-out only during the coronavirus pandemic. Scottsdale, Ariz.-based PF Chang’s, which has more than 210 restaurants across the country, received between $5 million and $10 million from the PPP program, according to government data.