As usual, something that is needed for the American people and something that sounds like a good idea turns out not to be as advertised. 

Legislation is written by legislators (mostly attorneys), their staff and lobbyists. Legislation is usually not written to actually benefit the American people. Hard working Americans and small business owners are last on the list of beneficiaries to anything even though it’s our tax money that is used for political bribery programs to win votes. 

The Paycheck Protection Program, established by the CARES Act, was supposed to help small businesses stay afloat during a time when their governors are shutting down their businesses. Money was being made available to pay for payroll and other expenses like mortgages, insurance premiums, rent and utilities through the end of June. 

The loans wouldn’t have to be paid back if 75% of the money went toward keeping workers employed at their regular pay. The money received was to be equal to 2.5 times the businesses’ average monthly payroll costs. 

As it turns out, there was only enough money to be disbursed from April 3rd until the 16th and now we know why. 

An AP investigation turned up all kinds of fraud going on. But then again, is it really called “fraud” when the legislators are the ones who wrote the bad legislation that allows a scam to happen? 

A scam, as defined in the online Merriam-Webster dictionary, says “a fraudulent or deceptive act or operation” and that’s what we got from the Paycheck Protection Program. It was a bi-partisan joke advertised as help for small businesses when they wrote the bill to be anything but that. 

A small business does’t have 500 people. When we heard about the program, we were excited because we thought that our local mom-and-pop stores might actually have a shot at staying open during the months when their governors shut them down. 

But the AP investigation shows that companies with thousands of employees and past penalties from government investigations got loans. Millions of dollars was handed out to publicly traded companies and franchises, including restaurants and hotels. Congress made exceptions for hotels and restaurants to be considered for the loans if they were separate companies, even if they were controlled by the same owner. 

There were eight companies who received the maximum of $10 million each, one being a software company that was involved in a Securities and Exchange Commission investigation last year. 

The SBA released information last week that showed 4,400 of the loans exceeded $5 million. SAY WHAT??! 

The investigation also found loans to foreign owned companies and some businesses who had been taken off the United States stock exchange because of poor stock performance even before the pandemic hit. 

A pharmaceutical company called Wave Life Sciences USA inc. who has no products on the market and none expected for many years got a $7.2 million loan. Their parent company, based in 

Singapore, disclosed losses of hundreds of millions of dollars in the last three years so it certainly wasn’t the COVID-19 pandemic that was the issue causing them problems. 

The public started getting a small “taste” of what was going on with the loan program when they found out about the $1.6 billion Shake Shack burger empire getting a $10 million loan last Friday. The public was outraged and the company returned the loan after the backlash. 

Oh, and did I happen to mention that the banks are receiving millions in processing fees? So I’m sure that has a lot to do with who was getting loans too. The banks want to make the most money they can and some were apparently working on larger loans instead of on a first-come-first serve basis as this lawsuit in California alleges. 

The initial Paycheck Protection Program “was flawed from top to bottom,” said Florida small business owners Duncan and Rita MacDonald-Korth. “The program has done very little to help genuine small businesses and instead has benefited large companies who have used subsidiary entities to benefit disproportionately and unfairly.” 

Treasury Secretary Steve Mnuchin, in Tuesday’s Coronavirus Task Force press briefing, was questioned about some of the problems with the program and said that over 1 million loans were given to businesses with 10 or less employees. That’s out of 1,661,367. That’s not nearly enough. It should have been a rolling program with those businesses getting the first shot at the money and working up from there as opposed to allow the big companies to drain the fund. Here’s a list of some of of the large companies who took millions out of the fund. 

Mnuchin said, “The intent of this money was not for big public companies that have access to capital.” Well, that’s how it was written, Steve. 

President Donald Trump was asked recently whether the criteria for who can receive loans should change and said “we’ll look at individual things and some people will have to return it if we think it’s inappropriate.” 

The Paycheck Protection Program as written seems to be FUBAR in its attempt to help the small businesses who really need the money. It’ll be interesting to get the final numbers and we see exactly what percentage of loans went out to actual small businesses who have fewer than 50 employees. 

The Republicans and Democrats seem to have negotiated a new $450 billion coronavirus bill which adds more funding to the Paycheck Protection Program but the way things are going, we’re going to end up left with big box stores and nothing else. 

Who are they going to loan money to with the next round of loans (which aren’t really loans)? Burger King? BP? Amazon?