$648M in PPP Loans Given to Likely Ineligible Nonprofits

October 17, 2022

$684 million of taxpayer money went to 179 non-profit organizations who likely were not eligible for Paycheck Protection Program refundable loans.

The Small Business Administration oversaw the more than $800 billion in PPP funds given to small businesses during the Covid-19 pandemic. Its Office of Inspector General issued a report last month that revealed 179 large nonprofits took loans intended only for those with fewer than 500 employees, Fox Business reported.

Of the more than $800 billion in PPP loans granted to employees to pay their staff during the pandemic, 95 percent have been forgiven. Of the $35 billion given specifically to nonprofits, 98 percent has been forgiven.

The OIG recommended the SBA review the loans to ensure eligibility requirements were met, and if not, to seek repayment of the loans.

One such potentially unqualified nonprofit was the YMCA of the Rockies, which received a $3.5 million loan. Goodwill of Southwestern Pennsylvania received over $6 million. While it wasn’t eligible when it applied, updated guidance later made it eligible, according to the report.

The American Rescue Plan Act updated the limit of fewer than 500 employees to fewer than 500 people at each location.

Although the Inspector General asked the SBA to review all 179 organizations in question, the SBA agreed to review only 27, leaving the matter unresolved. The OIG report concluded, “we will attempt to reach agreement with management on this unresolved recommendation.”

Reflecting the confusion at that time the PPP loans were extended to nonprofits in 2021, more than two dozen charities sent a letter to SBA officials, asking for clarification on how to count employees, and if nonprofits would be eligible if they had 500 employees, per physical location, or in total at all locations. 

While these nonprofits weren’t accused of outright fraud, many others have been.

As much as 10 percent of the total funds — $80 billion — were lost to fraud, NBC News reported.

Conceding that much of the PPP funding was “wasted and stolen,” Sen. Dick Durbin (D-Ill) said a loan for $140,000 was falsely issued under his son’s name to a non-existent Durbin Construction Co. using his son’s stolen identity.

 

 

Mayor Adams, NYC Schools Chief Hire Each Other’s Girlfriends

October 18, 2022

It pays to have friends in high places.

Shortly after NYC Mayor Eric Adams hired NYC Schools Chancellor David Banks’ longtime girlfriend, Sheena Wright, as a deputy mayor, Banks quietly promoted Adams’ longtime girlfriend, Tracey Collins, to a top post at the Department of Education, The New York Post reported.

As the DOE’s senior advisor to the deputy chancellor of school leadership, Collins received a hefty pay bump to $221,597 in July. She had been a school administrator with the DOE since 2008, making $173,710 in 2020, The Post reported.

Wright, now deputy mayor for strategic initiatives, is one of five women deputy mayors hired by Adams. It’s unclear what Wright makes since taking office in early 2022, but in 2021, deputy mayors pulled in $251,982.

Wright had been president and CEO of United Way of New York City, a nonprofit that helps low-income New Yorkers. The two women now receive a collective pay of $473,579.

The hirings have raised eyebrows.

David Bloomfield, a Brooklyn College and CUNY Grad Center education professor, told The Post, “It’s not only a bad look, smacking of favoritism and cronyism. It displays a degree of insularity and groupthink that’s adverse to organizational effectiveness.”

NYC law explicitly prohibits nepotism.  In a city that cries out for innovative solutions to vexing problems – credit where credit is due. Adams, and Banks, a long-time confidant, creatively sidestepped the matter, since neither hired their own girlfriend. 

Fabien Levy, Adams spokesman, said the city’s Conflicts of Interest Board gave the OK for Adams and Collins both working for the city simultaneously, since Adams, as mayor, is her boss.

 

 

CA Giving Residents Another $1.4B for Utility Bills

October 19, 2022

Sometimes $1.4 billion just isn’t enough. Just ask California Gov. Gavin Newsom.

During the pandemic, Newsom and the state legislature gave $1.4 billion to more than 2.2 million households struggling to pay their overdue pandemic-era utility bills.

The governor “doubled down” earlier this month, ordering an additional $1.4 billion from the state budget before the end of the year to cover more overdue utility bills, “for those who are still struggling amid rising costs,” Newsom said in a press release.

It’s unclear what the governor’s office constitutes as “struggling” and who is eligible to have their overdue utilities covered.

The governor’s announcement said $1.2 billion will pay for residential electric bills through the Department of Community Services and Development, and $200 million will go to residential water and wastewater bills – on top of the $116 million in federal funding for water and wastewater debts. 

This spending is part Newsom’s financial relief package to help support Californians who are dealing with higher costs.

The new spending comes after last year’s “Golden State Stimulus,” which gave $9 billion to millions of California families, and billions more that went to help pay rent, cover overdue utility bills, and support small businesses, the governor’s office said.

The first round of $1.4 billion utility relief included $989 million to help pay electric and gas utility bills for more than 1.4 million households and commercial customers, and another $435 million for unpaid water bills for more than 800,000 residential and commercial customers.

 

 

Throwback Thursday: EPA Study Finds That Manure Pollutes Water

October 20, 2022

Throwback Thursday! 

In 1978, the Environmental Protection Agency spent $38,174 — $173,405 in 2022 dollars — on a two-year study “to find out that runoff from open stacks of cow manure on Vermont farms causes the pollution of the water in nearby small streams and ponds.”

The use of taxpayer funds to study what every farmer already knows, earned the EPA a Golden Fleece Award in October 1978.

Sen. William Proxmire, a Democrat from Wisconsin, gave awards to wasteful and nonsensical spending, eventually handing out 168 Golden Fleece Awards between 1975 and 1988.

“In this case, the award is for redundancy,” Proxmire said then in giving out the award. “There is not a dairy farmer in all of Wisconsin or Vermont who didn’t know the results and findings of this study before it was made.”

The study, “Alternate Methods of Manure Handling” was split between two sites: what was then called the University of Vermont Animal Sciences Research Center and a local dairy farm.

The publicly-funded university contributed $29,040 toward the research, bringing the total cost to $67,214.

The unsurprising findings from the study included that “the concentrations and amounts of nutrients in runoff from the manure storage facility were high enough to cause deterioration of water quality in small streams and ponds.”

The report recommended that “the manure stack should be covered to eliminate the large volume of contaminated runoff. Covering for the facility should probably be a permanent roof rather than a thin plastic sheet placed directly on the pile. The latter is cumbersome and not very efficient.”

The research “strongly suggested” that if the manure storage area isn’t covered, then the runoff should be contained in a lagoon and used to irrigate crops.

“This is one case where there was too much bull and not enough common sense,” Proxmire said. “There was not only a deterioration in water quality but in the thinking of those who authorized this study.”

 

 

Amtrak Execs Get $2.4M in Bonuses

October 21, 2022

Even as Amtrak ridership and revenue dropped in 2021, the 10 highest paid executives at the national railroad company collected a total of $2.4 million in bonuses on top of their regular pay.

The execs — CEO, CFO, president, deputy general counsel, and six executive vice presidents — each were paid between $203,656 and $300,981 in additional pay, The New York Post reported.

That’s after each collected between $376,620 and $475,000 as “base” salary.

Amtrak, which runs through all contiguous U.S. states except South Dakota and Wyoming, is funded by a mix of rider revenue and tax dollars from local, state and federal governments.

The for-profit, quasi-public corporation had $598 million in revenue in 2021 — down from $2.35 billion in 2019 and $1.24 billion in 2020  — Reuters reported.

Regardless of the drop in ridership and revenue from the Covid-19 pandemic, Amtrak gets billions in government grants every year.

As the well-heeled execs took home between $584,072 and $759,205, the Transportation Workers Union, representing more than 1,000 Amtrak employees, noted that the American taxpayer is partly footing the bill.

“It is outrageous that while Amtrak’s workforce put their lives on the line to see this carrier through its most trying time yet, bosses who got to work from the comfort of their homes — and who are so wealthy they can decline regular paychecks — walked away with millions in bonuses,” TWU International President John Samuelsen said in a statement, The Post reported.

“This isn’t just an affront to Amtrak workers — every tax paying American should be livid.”  

The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.