Clothing lines Kanye West and Reese Witherspoon, artist Jeff Koons, singer Tim McGraw – all got PPP loans
WASHINGTON – The government’s small business loan program has benefited millions of businesses, with the aim of minimizing the number of layoffs Americans have suffered in the face of the coronavirus pandemic. Yet, recipients include many recipients that you probably didn’t expect.
Kanye West and Reese Witherspoon clothing lines. Sculptor Jeff Koons. High monetary value law firms and hedge funds. The Girl Scouts. Left and right political groups.
In total, the Treasury Department’s Paycheck Protection Program cleared $ 520 billion for nearly $ 5 million, mostly from small businesses and nonprofits. On Monday, the government released the names and 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 outlets are suing the government for the names of the other recipients.
Economists generally blame the program for keeping the labor market slump this spring from getting worse. More than 22 million jobs were lost in March and April. But about a third of them were recovered in May and June – a faster rebound than many analysts had 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 difficult start, marked by confusion and difficulties 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 nine unlikely beneficiaries of PPP loans:
Koons, a modernist sculptor, is best known for his work with large metallic balloon-like animals. His sculpture “Rabbit” sold for $ 91 million at auction last year.
Koons’ studio has been approved for $ 1 million to $ 2 million, according to government data. (The data only shows ranges for loan amounts approved.) His studio said it employed 53 people before the pandemic. P3 loans can be canceled if employers use most of the money to keep their workers on the 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 severely affected 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 order of the government. Also, of course, investment managers and private equity employees tend to be extremely high paying professions.
According to the data, these 583 companies reported supporting around 14,800 jobs collectively with program money. That’s an average of 25 employees per company.
Another notable financial firm that has borrowed from the program: Rosenblatt Securities, which has 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, KHLOE KARDASHIAN, REESE WITHERSPOON
Kanye West’s clothing and sneakers brand Yeezy has received a loan of $ 2-5 million, according to data released by the Treasury. The company employed 106 people in mid-February before the pandemic struck.
Yeezy, best known for his $ 250 sneakers, just announced a major deal with Gap that will allow the rap superstar to design hoodies and t-shirts that will be sold in the chain’s 1,100 stores in worldwide. (A representative for Yeezy did not immediately respond to a request for comment.)
Last weekend, West, a notorious fan of President Donald Trump, tweeted that he was presidential candidate.
Good American, the jeans and sportswear line of Khloe Kardashian and her business partner Emma Grede, secured a $ 2 million to $ 2 million loan and kept 57 jobs during the coronavirus crisis.
And Reese Witherspoon’s Southern-themed clothing brand, Draper James, has received between $ 350,000 and $ 1 million under the fund, helping it keep 44 people working.
TIM MCGRAW AND FAITH HILL
A Nashville company called “Road Dog Touring, Inc.” was approved for a small business loan of $ 2-5 million. The company owns country singer Tim McGraw’s official website, timmccgraw.com, and a joint official website with his wife, Faith Hill, timandfaith.com. A message inquiring about the relationship between Road Dog and the two stars was not returned. The company said the loan will support 37 jobs, according to data released by the Treasury.
The Americans for Tax Reform Foundation, the nonprofit arm of the anti-tax lobby 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 he was not opposed to the PPP. He described the program “as compensation for a government that took during the shutdown.”
The Center for Law and Social Policy, a research and advocacy group focused on policies supporting low-income Americans, has been 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. Girl Scouts in Montana and Wyoming have been approved for between $ 350,000 and $ 1 million.
BILLIONARY GOVERNOR JIM JUSTICE
The family businesses of West Virginia Governor Jim Justice received at least $ 6.3 million from the program.
Justice, a Republican, is considered West Virginia’s richest person due to his ownership of dozens of coal and farm businesses, many of which have been sued for unpaid debts. At least six family-owned Justice 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, admitted 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 the emails seeking comment.
TGI Fridays and PF Chang’s China Bistro were among the major 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 from 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 has also been approved for loan.
Although the PPP program was designed to help small businesses, large hotel and restaurant chains were also allowed to apply. A message requesting comment has been left for TGI Fridays.
PF Chang’s China Bistro said a PPP loan had helped it keep 12,000 employees and move its restaurants to take-out only during the coronavirus pandemic. PF Chang’s, based in Scottsdale, Ariz., Which has more than 210 restaurants across the country, has been approved for between $ 5 million and $ 10 million under the PPP program, according to government data.
RICH DAD, POOR DAD
Also on the treasury list is “Rich Dad Operating Co.,” which is affiliated with Robert Kiyosaki, the best-selling author of the Rich Dad personal finance book and game series, Poor Dad. The company has been approved for a loan between $ 350,000 and $ 1 million, the government said. The company said the loan will support 11 jobs. A phone call and email requesting comment were not returned.
Kiyosaki, who co-wrote two books with Donald Trump has sharply criticized some of the government’s rescue efforts since the pandemic intensified. On June 17, he tweeted, “Goldman Sachs has noticed that thousands of moms and dads are using government PPP money to trade stocks. The most popular stock is Hertz, which is in bankruptcy. Seems like mom and pop don’t know that stock investors are the first losers in bankruptcy. Get smart. Don’t be a first loser.