According to ABC7 data analysis, California Gov. Gavin Newsom’s more than eight partially-owned companies received millions of US dollars from the Paycheck Protection Program (PPP).
A newly released data by the Small Business Administration (SBA) show PlumpJack businesses, including bars, wineries, and restaurants, collectively received about $3 million.
In 2018, the California governor placed ownership interest in the PlumpJack Group in a blind trust. This indicated that Newsom would neither have a role nor knowledge of its business deals and decisions during his term in office.
The ABC7 I-Team revealed discrepancies between the company’s SBA data and public records. The inconsistencies appear to raise questions on how much money companies received under the PPP.
The analysis found that at least nine PlumpJack Group-affiliated companies received the program loans. One of them is Villa Encinal Partners Limited Partnership, where San Francisco billionaire Gordon Getty is listed as an investor.
SBA data reveals $918,720 was given to the company as a loan on April 14, 2020;
SBA requires that more than 60 percent be used for wages. Records show Villa Encinal Partners LP retained 14 employees; each would’ve hypothetically received about $40,000 each for their payroll in three months. Per employee would have an annual salary of about $160,000.
“It’s unexpected for a 14-employee organization to get nearly $1 million,” commented Sean Moulton, Project on Government Oversight (POGO) senior policy analyst who specialing in tracking PPP loans.
“The purpose behind this program was to save entry-level jobs, people going in and working on that paycheck. That was what we put this out there for, to stop unemployment.”
California companies with 14 employees have an average business loan of roughly $128,000. Yet, Villa Encinal Partners LP received more than seven times of that amount.
Millbrae Pancake House, with 53 employees, received a $431,400 loan.
“That seems unfair because there are small family businesses like ours that need that money,” said Erin Burke, owner of the restaurant.
After operating for 60 years, Burke was forced to close her family-owned business on November 29th.
“We’re just trying to do the best that we can and survive,” Burke added. “That money wasn’t enough.”
Balboa Cafe Partners LP, another company affiliated with PlumpJack Group, received a loan on April 29, 2020, amounting to $506,799. SBA data records Balboa retained 55 employees, yet a June estimate by a commercial data firm shows it employed only seven personnel.
Newsom’s 2019 Statement of Economic Interest shows the governor has an ownership interest in the eight companies that received PPP loans.
According to ABC7, a statement was given by PlumpJack after a second-time request of payroll records on Villa Encinal Partners.
“Plumpjack Management Group is operating within the federal guidelines created for COVID-19 SBA loan recipients. These funds have been critical in keeping our staff employed and continuing our operations. Any implication that we have done anything outside of the guidelines (or that we have filed for forgiveness on loan) is irresponsible,” stated PlumpJack Management Group spokesperson Jeff Nead.
The company would have two to five years to apply for forgiveness for the loan. This indicates that the company may not have to return the borrowed amount.
However, any company that asks for forgiveness has to certify that they retained their employees during the application, said SBA Region 9 Communications Director Miryam Barajas.
Certifications include documentation filings, payroll records, and other proof that the businesses paid the employees. Should the companies opt not to seek the loan’s forgiveness, they need to pay it back but would still benefit from the borrowed amount.
“They were able to benefit from this extremely low-interest-rate the government was providing,” said Executive Director of Project on Government Oversight Danielle Brian.
“These are one percent loans, and essentially free money for them.”
Meanwhile, Gov. Newsom has yet to respond to ABC7 for his comments.
View original Post