RALEIGH — North Carolina Republican U.S. Rep. Virginia Foxx (NC-05) has joined other lawmakers in a letter demanding answers about unions having illegally received COVID-19 Paycheck Protection Program (PPP) funds.
In the April 6 letter, Foxx, the Republican leader of the Education and Labor Committee, made a joint statement on the issue with various congressional committee leaders in sending a letter to Isabel Guzman, administrator of the U.S. Small Business Administration.
The joint statement included Small Business Committee Republican Leader Blaine Luetkemeyer (R-MO), Health, Employment, Labor, and Pensions Subcommittee Republican Leader Rick Allen (R-GA), and Oversight, Investigations, and Regulations Subcommittee Republican Leader Beth Van Duyne (R-TX).
“It is concerning that PPP funds were distributed to entities other than small businesses and designated non-profit organizations. The illegal entry of at least 226 labor, teachers, and government unions into the Paycheck Protection Program demands an investigation,” the lawmakers said in the statement. “Ensuring American tax dollars are used responsibly and correctly is essential in our duty to the American people and our small businesses. We hope the SBA will be able to shed some light on this important issue.”
The letter to Guzman refers to a report from the Freedom Foundation indicating PPP loans were made to labor unions.
“Using data obtained through the Freedom of Information Act, the Freedom Foundation determined that 226 labor, teachers, and government sector unions received $36.7 million in forgivable loans,” the letter reads. “We understand these loans were made despite the CARES Act’s language specifically targeting PPP loans to small businesses and non-profit organizations—as defined under Section 501(c)(3) and 501(c)(19) of the Federal tax code, respectively.”
The letter also states that “PPP loan eligibility was not extended to unions—Section 501(c)(5) entities—until the law was amended nearly a year later.”
“This information suggests that 501(c)(5) entities entered the program illegally and put money in the hands of affiliates of large organizations—including the AFL-CIO and the International Brotherhood of Teamsters—which netted more than $3.8 million,” the lawmaker’s letter says.
Foxx and her colleagues also requested a “full written response” by April 20 to a list of questions related to PPP payments made prior to Mar. 11, 2021.
