Unions Wrongly Obtained $36.7 Million In PPP Federal Covid Support

By Adam Andrzejewski for RealClearPolicy

One of the important Covid-19 aid applications that Congress handed was the Paycheck Safety Program, which was meant to encourage small companies to maintain their employees employed, in addition to assist with hire, utilities and different bills.

Nonetheless, in response to a report by the Freedom Basis, lecturers’ unions, authorities workers’ unions, and AFL-CIO advocacy organizations obtained 226 loans totaling $36.7 million—though they had been allegedly ineligible.

Because the Freedom Basis explains, “nonprofit eligibility was primarily restricted to tax exempt organizations working below 26 USC § 501(c)(3), which covers most conventional charitable nonprofits. As labor unions are typically registered with the Inner Income Service (IRS) below 26 USC § 501(c)(5), most weren’t initially eligible for PPP loans.”

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In December 2020, eligibility was expanded to incorporate some labor unions, however the $36.7 million in loans occurred earlier than this growth.

Utilizing the time period “mortgage” to outline this program is an obfuscation. Whereas these technically had been loans initially, it was made clear that as long as the recipients did not lay off any employees, the mortgage could be forgiven. Primarily, it was a grant program.

The irony of public sector unions receiving funds is that unions are funded by taking a share of its members’ pay, so so long as the members stored their jobs, the unions wouldn’t see a change in income. In fact, the federal government did not lay anybody off due to the pandemic, so this was free cash for them.

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The most important recipient was the Michigan Schooling Affiliation, which obtained $6.4 million in forgivable PPP loans.

Unions took cash that might have been used to maintain neighborhood eating places open and used it to pad their financial institution accounts.

Syndicated with permission from Actual Clear Wire.

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