Billionaire real estate developer Joe Farrell, a leading Republican fundraiser, received up to $ 1 million in coronavirus relief funds for taxpayers, according to federal data released Monday.
Other players in the celebrity world and influence who leveraged Paycheck Protection Program (PPP) loans to help small businesses affected by the coronavirus shutdown included the clothing and sneakers company of $ 3 billion from Kanye West, billionaire pop artist Jeff Koons and the Church of Scientology, which is reportedly worth at least $ 1 billion.
“PPP was sold to the American people as a program to help mom and dad shops keep their lights on during the pandemic,” Kyle Herrig, president of Accountable.US, a government watchdog group, said by email. “The reality is that the Trump administration created a program that helped the well-connected cut to the front of the line to get these loans.”
Farrell, developer of the exclusive Hamptons beachfront community in New York, hosted fundraising parties for President Donald Trump. His loan was to retain 41 jobs, according to data released by the Small Business Administration, which guarantees the loans.
Farrell this year rented his $ 40 million, 17,000-square-foot property in the East End, Sandcastle, for about $ 2 million to a wealthy Manhattan family trying to escape the coronavirus for six months.
To legally qualify for taxpayer-funded relief, companies must self-certify in good faith that “current economic uncertainty makes this loan application necessary to support the applicant’s ongoing operations,” according to the borrower’s application form. . Applicants must also check a box that says the loan will be used to retain workers, maintain payroll, and make mortgage, lease, and utility payments.
The emergency payroll relief effort reached more than 80 percent of all small business employees and 27 percent of low and moderate income communities, according to the SBA.
In April, after the initial round of funding quickly ran out, fierce battles erupted over which companies received the loans and whether they deserved it, either because of the letter or the spirit of the CARES Act, which created the program.
Hundreds of public companies and an unknown number of private companies ended up paying off their loans and returning the money. But others held out, including some operating in high net worth orbits.
“Even if they could technically argue that they met the criteria, taking the money clearly violates the spirit of the law and just seems greedy and wrong. This is one of the reasons why transparency is so important, why the government fought against her difficult and why full recipient accounting and details are so important, “said Neil Barofsky, former special inspector general for the Troubled Asset Relief Program, who oversaw some of the relief of corporate funds during the financial crisis from 2008.
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Yeezy LLC, the clothing brand owned by West, the music producer and designer, took a loan of up to $ 5 million. The loan supported the retention of 106 jobs. West owns a 100 percent stake in his company, which was recently estimated to be worth $ 3 billion, according to Bloomberg.
Koons’ fine arts studio, known for sculpting animals with metal balloons reaching tens of millions of dollars at auction, got a loan of up to $ 2 million, supporting 53 jobs.
The Church of Scientology, whose founder, L. Ron Hubbard, set himself the goal of recruiting celebrities and which claims that several renowned actors among its members, caused several entities to take PPP loans.
According to SBA data, the Church of Scientology of New York; Belleair’s mission in Largo, Florida; and the Founding Church of Scientology in Washington, DC, each took loans of up to $ 350,000, supporting a total of 137 jobs. Almost 100 of them were in New York, while almost 40 were at the Belleair facility. The DC organization reported that zero jobs were retained.
Companies are not required to report how many jobs they hold to take out loans, but must do so within 24 weeks to qualify for the loan to become a free grant. Almost 50,000 other companies had zero jobs held in the dataset.
“PPP was created to retain jobs,” SBA spokesman Jim Billimoria said in an email. “I can’t speculate on what the borrowers used the funds for.”
None of the entities had immediate comments.
