WASHINGTON (TND) — New data reveals that Americans' tax money may have been misused during the pandemic. Auditors at openthebooks.com found nearly $1.5 billion in forgiven Paycheck Protection Program loans went to the wealthiest law and accounting firms in the U.S.
The National Desk’s Fact check Team has found that the firms aren’t technically wrong.
The program was designed to compensate small businesses for economic losses because of the pandemic so the firms had to apply and qualify for forgiveness and the rules were pretty relaxed — nearly 95% of loans turned into grants.
The report did note that no firms mentioned have been accused of wrongdoing and the organization assumes that all firms honestly represented their circumstances to the Small Business Association. It all comes down to the question of whether these firms truly needed the money the way a mom-and-pop business would.
Back in 2020, when Congress fast-tracked a nearly $800 billion bill to give aid to struggling small businesses during the pandemic but data from the SBA shows that nearly one-fifth of that money went to big law and accounting firms.
In fact, 126 of the top 300 law firms took more than $800 million in forgiven PPP loans. That’s an average of $6.5 million per firm and 236 of the top 300 accounting firms got more than $600 million, which is an average of $2.6 million each. These companies are raking in millions, if not billions of dollars per year in revenue.
The report found that these firms used the funds for things like utilities, office rent, healthcare, mortgages and even payroll balance.
From its creation in 2020 until now, the Paycheck Protection Program has had its fair share of issues.
Financial technology companies helped facilitate PPP fraud and pocketed millions of dollars. These financial technology companies or “fintech firms” did not screen out fraudulent applications for the PPP.
The House Select Subcommittee on the coronavirus crisis released this 130-page report just a few days ago. They’ve been investigating for over a year.
For example, the company BlueAcorn received over $1 billion in taxpayer-funded processing fees $300 million went to owners. They also gave approximately two-thirds of that $1 billion to a marketing firm controlled by members of its senior leadership
The committee also says the BlueAcorn founders arranged loans for themselves, some through their own company and falsified key details on their applications.
The report shows that these fintech companies are blaming the Trump administration for mismanaging the PPP and it’s not clear if taxpayers can get those dollars back.