Several Democratic Senate challengers in key races who criticized the distribution and transparency of government Paycheck Protection Program loans indirectly benefited from the funds.
Last month, Cal Cunningham in North Carolina, Mark Kelly in Arizona, and Sara Gideon in Maine all took swipes at the program, which was created as part of the emergency coronavirus relief CARES Act and intended to help small businesses through the pandemic-related economic downturn. The program did not adequately distribute funds to the most in-need businesses or communities, they argued.
But the candidates appear to be fine with loans going to companies they are connected to, which were not widely known until the Small Business Administration disclosed all the companies that received loans on Monday.
The candidates are among the most highly-touted Democratic challengers to help their party win a Senate majority in November. Republicans now control the chamber 53-47.
There is no legal or ethical rule preventing candidates or sitting lawmakers from benefiting from the PPP loans. Many sitting lawmakers benefited from the loans. Recipients that were unknown before the disclosure from the SBA include Oklahoma Rep. Markwayne Mullin’s plumbing business, Oklahoma Rep. Kevin Hern’s McDonald’s franchises, and Pennsylvania Rep. Mike Kelly’s car dealerships, all who are Republicans.
Still, Democratic Senate candidates Cunningham and Mark Kelly have financial stakes in environmental and space businesses that received the loans, and Gideon’s husband’s personal injury law firm received a loan.
The candidates were not completely against the loan program. Cunningham, a former North Carolina state senator and an Army Reserve lieutenant colonel who is challenging Republican Sen. Thom Tillis, said last month that he is a “strong proponent” of the program.
The criticism, though, was clear and was used as a campaign tactic.
Last month, an ad from Gideon, who is Maine’s house speaker, attacked Republican Sen. Susan Collins by suggesting that some campaign contributions prompted the incumbent to write a “loophole” into the bill to benefit out-of-state hotels. The Washington Post fact-checker dinged the ad, giving it three out of four “Pinocchios.”
In a June 2 virtual town hall, Gideon said that “loopholes were put into” the PPP legislation “that allowed large corporations to jump in front of the line and to get ahead some of the small businesses.”
The Associated Press reported Monday that the personal injury law firm where Gideon’s husband is a partner received a loan of between $1 million and $2 million on April 6. Gideon’s financial disclosure filed in October shows that her husband has a stake in a limited partnership in the firm, Berman & Simmons, valued between $250,001 and $500,000.
Gideon’s spokeswoman Maeve Coyle said more than 400 law firms received PPP loans and noted that the candidate supported the goal of the assistance.
“From when this crisis began, Sara has been clear that this is a time when Washington needs to put politics aside and do what’s best for workers and small businesses, not large corporations and the special interests,” Coyle said.
Cunningham also talked about corruption and distribution issues. “We’ve seen that money end up in some of the wrong hands,” he said in a Spectrum News interview.
“For PPP loans to have ‘generally missed the industries and areas most heavily impacted by COVID-19’ is unacceptable. Leaving behind small businesses — and disproportionately those that are Black- and Latino-owned — harms communities.” Cunningham wrote in a June 17 tweet that quoted an Axios report.
WasteZero, an environmental trash reduction company, received a PPP loan of $1 million to $2 million on May 3. Cunningham became a vice president for government affairs and general counsel for the company in 2013, and his federal candidate financial disclosure filed in October 2019 showed that he has between $15,001 to $50,000 in a convertible note tied to the company.
Cunningham left his full-time position with WasteZero in March in order to focus on his campaign, so he did not directly benefit from the payroll loan, but he remains available to work for the company on an hourly basis.
Cunningham’s spokeswoman Rachel Petri pushed back on Republican critics, who juxtaposed Cunningham’s criticism and WasteZero receiving the loan.
“Tillis and his allies know they are distorting the facts,” Petri said in a statement to the Washington Examiner. “Cal supports the loan program and has called for fixes to strengthen it for the truly small businesses across North Carolina that need help the most, and this is a pathetic attempt to mislead voters and distract from the fact that Senator Tillis went on a two-week summer break without passing additional COVID relief for communities in crisis and facing budget shortfalls.”
Similarly, Mark Kelly, a former astronaut who is challenging Republican Sen. Martha McSally in Arizona, said in a June 9 tweet that “too many small business owners were left with no relief, especially those in tribal communities.”
Mark Kelly co-founded a space company called World View Enterprises, which received a PPP loan between $1 million and $2 million on April 28. His financial disclosure filed last year shows that he has between $100,001 and $250,000 in securities and between $15,001 and $50,000 in stock options connected to the company.
Mark Kelly’s campaign did not respond to a request for comment.
