Unions Collected Millions in Federal COVID Relief They Weren’t Eligible for While Cheerleading Lockdowns – Opinion

The opinions in guest opinion op-eds represent only the viewpoints of the writer. They do not necessarily reflect those of RedState.com.)

Programs designed by the government rarely function as planned. Even if they’re not plagued by waste and bureaucracy, they often produce unintended consequences and tend to get exploited by — or are designed for — special interests.

When Congress in March 2020 created a new massive stimulus program as part of the CARES Act there was bound to be some problems.

Paycheck Protection Program (PPP), was created to offer forgivable loans small businesses that were struggling to live under the COVID-19 lockdowns. As long as the recipient used the funds for their intended purpose —generally, keeping employees on payroll — loans could later be forgiven. So far, so good.

But subsequent research estimated that, while the $800 billion PPP likely saved 2-3 million jobs, it was poorly targeted, with as little as a quarter of the funds reaching “workers who would otherwise have lost jobs.” Other research determined that “PPP payments mostly benefited those least in need.” Wasteful and inefficient? Check.

Further, as even President Biden has admitted, the federal government’s COVID-19 stimulus spending, of which the PPP was a part, has played a big role in the inflation currently dominating headlines. Unintended consequences? Check.

A Freedom Foundation report reveals that 226 loans were made to workers unions to repay forgivable debts totalling $36.7 million. This is in addition to the fact that these organizations were not eligible for funds.

In the beginning, all business entities and 501(c(3) charity nonprofits were eligible for PPP funds. However, from March 2020 to March 2021 — when the newly-Democrat Congress passed President Biden’s American Rescue Plan — most other kinds of tax-exempt organizations, including labor unions, were not eligible for PPP funds.

Some of the more noteworthy recipients during this period included a dozen teachers’ unions and advocacy organizations, who unabashedly worked to exploit the pandemic for their own benefit wherever possible and resisted a return to normalcy in American public schools as long as they could.

PPP funds were also awarded to nearly a dozen unions that represented other employees of the government at both the municipal and state levels. They are not eligible for these funds.

And five AFL-CIO entities — the AFL-CIO is essentially a trade association for unions — received nearly a half-million dollars in loans between them.

Each of these groups is active in electoral campaigns and it is possible that PPP loans have freed up funds for political activity.

From a policy standpoint, it’s tough to argue unions needed the funds. Out of the PPP funds that private employers used to pay their payrolls, hundreds of billions were also given by the federal government to states and local governments. Most of these dollars went to maintaining employment and, if applicable, dues payment.

So far, unions haven’t been too eager to talk about their receipt of PPP loans.

A spokesman for the American Federation of State, County and Municipal Employees (AFSCME), one of the country’s largest government unions, “deflected questions about the wrongdoing” when asked by the Epoch TimesConcerning AFSCME affiliates being paid for funds they weren’t eligible. The Ohio Retired Teachers Association’s head also spoke out. Daily Signal simply that, “We applied, and they gave it to us, and we were happy for it.”

This isn’t surprising. This shouldn’t surprise. If done intentionally, such misrepresentations could involve significant — even criminal — penalties.

However, the government also shares some of the blame for failing to stop the inappropriate loans.

The PPP was administered by the Small Business Administration (SBA). However, the SBA contracted with thousands of financial institutions to process loan applications. There were many that didn’t thoroughly review the applications for union membership.

In one particularly egregious case, the Bank of Labor — owned by the Boilermakers Union — approved a quarter-million-dollar loan to a Boilermakers affiliate.

The Freedom of Information Act records reveal that SBA officers were alerted in July 2020 by White House staff to the fact that PPP loans had been being offered to certain unions. But, no action has been taken to correct the problem. Unions continued to receive loans they weren’t eligible for, and some even received second loans. SBA data shows that at least $24.2million of the Freedom Foundation’s problematic loans have been forgiven so far.

But it’s not too late to undo some of the damage. The Freedom Foundation submitted its findings to the SBA’s Inspector General, who has previously identified other flaws in the SBA’s handling of the PPP, and to the Department of Justice’s National Center for Disaster Fraud.

If federal authorities do the right thing — which is admittedly a lot to ask for these days, especially from an administration so enthralled with unions — they’ll at least try to recover the funds on behalf of American taxpayers.

Maxford Nelsen serves as Director of Labor Policy at Freedom Foundation. Download the full SBA loan recipient spreadsheet at www.FreedomFoundation.com.