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Published — November 13, 2020

We sued for PPP info. We might get more details next week

(Stock.adobe.com)

Introduction

The Small Business Administration has until Nov. 19 to release detailed information on more than $700 billion it loaned to small businesses affected by the COVID-19 pandemic — data that will provide more insight into who received loans, if the loans worked as planned and how the agency managed the program. 

A federal judge last week ordered the SBA to release the information in response to a lawsuit filed in June by the Center for Public Integrity, The Washington Post and other news outlets. The SBA could still appeal the decision.

Part of the information is from the Paycheck Protection Program (PPP), which Congress authorized in April to help businesses struggling to survive because of the spread of the coronavirus. It includes names of businesses, their addresses, and the amount of money they received from the SBA, among other data. The SBA, which loaned $525 billion under the PPP program, had released some of that information for businesses receiving loans of more than $150,000 but withheld it for businesses borrowing less than that amount. (Public Integrity, which has fewer than 50 employees, applied for and received $658,000 under the PPP program. Full disclosure here.)

Included in the release of information will be loans issued under the SBA’s Economic Injury Disaster Loan Program, also aimed at supporting small businesses. Millions of EIDL loans were issued totaling $211 billion. 

The majority of the PPP loans were for less than $150,000, with the average loan about $101,000. The SBA has released general information about the loans, such as providing the city and ZIP code where the business is based, and whether it is a partnership, corporation or the owner is self-employed. For the larger loans, the agency identified the businesses by name, but only gave ranges for how much money they received. 

The soon-to-be released information will allow Public Integrity to analyze in more detail who received loans, where most of the money went, if the program worked as designed and possibly how much fraud occurred. 



The Government Accountability Office reported in May that the program was susceptible to fraud because SBA issued loans rapidly. The Justice Department so far has announced charges in more than 50 PPP fraud-related cases. The SBA inspector general also issued a report that found the agency hadn’t priotitized underserved markets — likely communities with large populations of people of color — and rural areas. The SBA attempted to address that concern in a second round of loans that ended Aug. 8.

In his order for SBA to release the information, District Judge James Boasberg noted the disclosure may shed light on possible inequities in who received PPP loans and on potential fraud by borrowers.

He rejected the SBA’s arguments that the information was “proprietary,” “confidential” and an invasion of the borrowers’ privacy. Boasberg recognized borrowers have a “narrow” and “limited” privacy interest at stake, but he wrote that “the weighty public interest in disclosure easily overcomes the far narrower privacy interest of borrowers who collectively received billions of taxpayer dollars in loans.” 

Public Integrity plans to use the data to build on its previous reporting on the PPP. We used information that is available to report on a Las Vegas telemarketer who received a loan, despite owning companies that were investigated by the Federal Trade Commission for possible “unfair or deceptive acts.” The telemarketer was the subject of a Public Integrity investigation last year. The center also reported on a mining company that received a loan even though it had longstanding financial problems unrelated to the coronavirus, and on business people with political ties to President Donald Trump who secured loans.

Public Integrity’s lawsuit was consolidated with a separate action brought by The Washington Post and 10 other news media organizations, seeking the same information from the SBA. Boasberg issued an opinion that jointly decided both cases.

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