The small company that financed the big billboards had just a few months earlier received a large cash infusion backed by the same administration that is now running, public records show.
The company, which has a small Shell gas station and travel center in Needles, California, went through with “six beautiful Trump billboards” near the California-Arizona border, representing a local group of Lake Havasu Republicans announced – thank you “a generous Trump supporter.”
Six political billboards could cost anywhere from about $ 10,000 for four weeks to nearly $ 30,000 depending on the location, according to average price estimates provided by Lamar Advertising, which leased the space to Jones 1 Inc. It refused to provide the prices of the specific billboards. But if they stay through the election, which the local Republican group that inspired the billboards said is the plan, the costs could range from about $ 30,000 to about $ 120,000.
Joseph Jones, the owner of the company, told CNN that the PPP money was used for payroll, not for billboards. His loan application reported that the company employed 32 employees, according to data from the Small Business Administration. Jones declined to provide the total cost of the billboards, but said he did not spend anywhere near $ 120,000. “I just wanted to support my president, that’s all there is.”
Whether the money that Jones 1 Inc. received through the Small Business Administration loan program was directly used to pay for the Trump billboards, business ethics professors and legal experts said that non-essential expenses such as these are contrary to the spirit of the program, which was intended for small businesses who needed the help to pay workers. More importantly, they said, these expenditures highlight failures in how the program was implemented and the confusion surrounding which companies should be entitled to the money. It also underscores the need for increased supervision – especially when the government decides which loans to repay immediately.
“If you had enough capital to spend on billboards, you might not have been one of the companies to receive this loan,” said Liz Hempowicz, Director of Public Policy at Project On Government Oversight (POGO). , a non-profit watchdog. group. “The responsibility really lay with the SBA and the administration to make sure they spent these taxpayers dollars in a way that Congress intended.”
Linda Ferrell, a professor of business ethics at Auburn University, said companies receiving funds through taxable subsidies should have a “social responsibility” to use the money to protect their employees and customers. But like Hempowicz, she said she holds the government more accountable than one business owner, especially given the uncertainty at the beginning of the pandemic that may have led some business owners to apply for the loans in good faith before ending up in better financial form then expected.
Gianna Kraft, creator of the Lake Havasu Republicans’ Facebook group, said her members came up with the idea for the billboards, and Jones was the one who stepped up to make it happen. “I get daily photos, people take selfies that show their support, people drive by and say they’re great and what a huge impact they have,” she said. “Where are the Biden billboards?” Kraft said, saying these recently installed Trump ads are indicative of how much stronger the enthusiasm for the president is than for his opponent, especially in the Lake Havasu area, that a boat show will be in honor of Trump over the weekend. of Labor Day.
She said she had no knowledge about whether Jones used PPP money to fund the billboards or how much they cost. “I’m not familiar with everyone’s financial affairs.”
Under the rules of the SBA, companies that falsely certified the loan were required to stay in operation and the funds did not return, can receive civil and criminal fines.
PPP funds were borrowed at an interest rate of 1%, which is much lower than traditional private sector corporate loans, and are fully forgiven when companies show that they used the money for “wage costs, interest on mortgages, rent, and utilities” and ” at least 60% of the amount paid should be used for payroll, “according to the SBA website.
“I do not know if it matters if it was the PPP loan money or other money that was released by the PPP loan,” POGO’s Hempowicz said of the funds used to pay for the billboards. Even as Jones 1 Inc. does not apologize, she said, adding that the company “still benefits from a hilariously low interest rate that was not necessarily designed to buy small business owners a bunch of billboards.”
Jones would not provide additional information about the circumstances that led him to apply for the loan. He also declined to say whether the financial situation of his company has improved since applying for the loan, or commenting on whether he has plans to return the money or request that the loan be repaid.
The local bank that provided Jones’ SBA-backed loan declined to comment on customer information. The SBA also said it could not comment on specific lenders when asked by CNN whether companies that could pay large non-business expenses, such as billboard purchases, should be eligible for a PPP loan.
The agency generally said that a bank’s approval of a PPP loan does not mean that the SBA has determined that company is eligible for the loan and that although only those loans of more than $ 2 million are automatically assessed, all PPP loans are automatically assessed. loans are subject to SBA review at any time.
It’s just that companies, both public and private, get involved in politics – often donating money to political groups known as Super PACs who advocate for specific candidates. There is no limit on independent spending that is not carried out in coordination with political campaigns. But there are disclosure rules for this type of “independent spending,” and spending over $ 1,000 must be reported to the Federal Election Commission (FEC) within 24 hours. While the billboards state that they have been paid for by Jones 1 Inc., they do not include the required disclaimer that they are not authorized by a political candidate. FEC records also show that Jones 1 Inc. has not reported the release, and Jones has not commented on it.
The FEC did not immediately respond to the political release of Jones 1 Inc., but confirmed to CNN that it was not reported.
Companies that are primarily engaged in political activities may not receive SBA corporate loans under federal law, but this regulation would not apply to a small business such as a gas station that is also engaged in political spending.
Initially, the Trump administration struggled to keep information about who benefited from the massive government aid program secret, but limited data was released in July after lawmakers put pressure on the bureau and media organizations, including CNN, accused in federal court on disclosure,
Michael Santoro, a professor of business ethics at Santa Clara University, said there was an inherent conflict of interest because the recipient of a PPP loan in this case was advocating for the re-election of the same administration that about the disbursement of the money.
He said the real question is whether the SBA will investigate this and take action if it identifies incorrect spending. “Clearly something looks really, really wrong,” he said, “that’s the SBA’s job to look at.”
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