No system is perfect. Some in the government have acknowledged that everything surrounding COVID-19 is new for everyone and that prior decisions are learning opportunities. If they had waited until all possible effects were known before passing monetary assistance legislation, people would have experienced more dire suffering than they have to date.

I believe this government assistance is not charity. Rather, it is humane. In future, there will be more stringently defined criteria for various situations. This may allay some of the valid concerns about how money can and cannot be used. This is wisdom steeped in experience.

Ruth Chris is also giving their $20 million back.

@Shop-et-al wrote:

No system is perfect. Some in the government have acknowledged that everything surrounding COVID-19 is new for everyone and that prior decisions are learning opportunities. If they had waited until all possible effects were known before passing monetary assistance legislation, people would have experienced more dire suffering than they have to date.

I believe this government assistance is not charity. Rather, it is humane. In future, there will be more stringently defined criteria for various situations. This may allay some of the valid concerns about how money can and cannot be used. This is wisdom steeped in experience.

How to you enforce fiduciary practices on any parties involved? What this feels like is a lottery, as opposed to a first-come, first-serve type of basis, as apparent with the SBA's outsourced banks OBVIOUSLY giving unfair advantages to their existing clientele first, as opposed to businesses without existing relationship with them?

No one had to apply. Some were big enough to have a whole herd of lawyers on staff who could have foreseen the likely perceptions and how these might affect any salvageable business. They could have considered what clever posters have been complaining about in this thread and stayed out of the situation. Was everyone in the fear-of-covid haze then and unable to think through the consequences?

But all I was saying is that now, some in the government are looking more closely at each facet of the proposed future forms of assistance. This is a good thing. It means they learned something, and they [I surmise with some encouragement from vocal constituents!] are taking a little different approach to how the government will dole out assistance.

@Shop-et-al wrote:

No one had to apply. Some were big enough to have a whole herd of lawyers on staff who could have foreseen the likely perceptions and how these might affect any salvageable business. They could have considered what clever posters have been complaining about in this thread and stayed out of the situation. Was everyone in the fear-of-covid haze then and unable to think through the consequences?

But all I was saying is that now, some in the government are looking more closely at each facet of the proposed future forms of assistance. This is a good thing. It means they learned something, and they [I surmise with some encouragement from vocal constituents!] are taking a little different approach to how the government will dole out assistance.

This is still not addressing another large issue that I've been preaching along with these big businesses taking advantage. It is a known fact that these banks are catering to their existing clients applying for the loan first, as opposed to help those that are slipped in-queue by the SBA and/or the outsourced banks are not fairly placing them in-queue even though they may have applied for the PPP loan first, before an existing client that applied later than them.

And of course 'preferential treatment' is hard to prove since the bank can claim that not all "I"s were dotted and "t" crossed. Immediately when the funds were running out Valley bank was indicating that they HAD to process their existing customers first because of banking requirements that you "Know your customer."

And, this is not going to be so easy or possible in future. A few in the government have wised up and are not going to make the same mistake again.

@Niner wrote:

Ruth Chris is also giving their $20 million back.

Are they returning it because they are no longer confused about their "small business" status, or because they found a pot of gold, or because they realized that the bad PR would be far worse than not taking the money?

I'm sorry to sound so frustrated and cynical.

Ruth’s Chris Steak House — which had more than $441 million in revenue in 2019 — was able to secure $20 million in forgivable loans, while appearing to furlough much of its workforce. The $1.6 billion Shake Shack burger empire had received a maximum $10 million loan. PotBelly also grabbed a forgivable loan. Taco Cabana also was able to get the maximum $10 million in loans despite employing thousands of workers. Lindblad Expeditions Holdings, a cruise ship and travel company with 650 workers and a branding deal with National Geographic, got a $6.6 million loan. even though at the end of March the company reported $137 million in cash on its balance sheet. They all used loopholes in the quickly-written and loosely-defined terms to grab the money because THEY COULD. Several senators have released statements that Congress should ask them to return the money and if they do not, it should be taken back. Not sure exactly how they would take it back, but .......

Shake Shack was apparently the first to voluntarily say they would give the money back. I've heard now that two more restaurants, Kura Sushi and Sweetgreen, have announced they will give the money back. While I don't think they deserve kudos for manipulating data to qualify for loans meant for small businesses, I do think they deserve kudos for announcing they will return it without the government making a demand. There are many companies who are just ignoring the public outrage and keeping the money. I'd like to think karma will bite those companies - like maybe US consumers will boycott them and Congress will demand the return of the money - but I'm a realist. I think most will keep it. And I think the US public will be outraged for a little while but will forget fast. Soon it'll be ancient history. Sad. Who knows how many small companies that might have been saved by the money will die while the big guys feather their nests on the taxpayer's dime.

We really do need a public documentation of where the money went. I would suggest a format of:

'small business' recipient name; Y/N is this a publicly traded company; owner of record; amount of loan; money returned; date of return; date 'forgiven'; amount 'forgiven; number of W-2 employees 1/1/2020; number of W-2 employees 6/1/2020; processing bank; date of beginning relationship with the processing bank

I suspect this would be an appropriate report for the SBA to produce.

It would be very nice to have transparency on this issue. I had read about another large company who had gotten a loan and kept it all giving none to the franchisees. Cannot remember which one. Because the larger company got money the franchises could not apply separately. I suspect there are many more large companies getting loans. I agree with Roflwofl that Shack Shack should be looked at differently having voluntarily given money back. The same thing happened in Los Angeles when they had funds for drought resistant lawns. Although it was meant for mainly residential they allowed thousands of square feet so many large hotels applied for their landscaping and used up 95% of the funds.
However, I may be too cynical but I think it is in many of our natures to take advantage of whatever loopholes there are. I heard of many college students getting scholarships to college when their parents had businesses making a lot of money but wrote a lot off or put it in the business and paid themselves a smallish salary so that they could qualify. I also see some questioning if they should keep getting unemployment when the time comes that work will be available again since their unemployment checks are so nice now and will continue to July if they do not claim work. And there are those who still have a job and are choosing not to pay rent or utilities because they can.And then there are those who "cheat" as much as they can get away with on their taxes. What about people getting paid under the table or not reporting tips. I do not know the numbers of people who feel this way but in my mind those who take funds from the government even if they do not qualify based on ethics and where those the funds are supposed to go are in the same boat as the large companies. The scale is different of course but it all adds up.

*wonders how many of the returns are due to public shaming?*

I recall Mark Cuban blasting Shake Shack for taking the loans (before they announced returning them). He said it would damage their brand for years and has been very vocal about saying consumers would hold companies accountable for how they behaved during COVID-19 for many, many years.

Regardless of the reason, it's good that what amount to small cap companies (with access to the capital markets and all sorts of other big financing options) aren't taking these loans meant for the little guy.

There are a handful of others who are now saying they will be returning the funds including Ruth Chris and Harvard. It sounds like the reason is public backlash. That will allow many truly small businesses to have a chance receiving funds.

@shoptastic wrote:

*wonders how many of the returns are due to public shaming?*

Is there any evidence of that not being 100%?

This is the point I have been making about MSC's as well. Social media shaming has changed the rules of accountability in this era.

Most announced they would give it back after Stephen Mnuchin, Secretary of the Treasury, announced on Tuesday 4/21 that the intent of Congress was not for big, public companies to have access to the money. On Thursday 4/23, the Treasury Department said that it was asking approximately 150 publicly traded firms to repay nearly $600 million in loans they received from the federal program designed to help small businesses cover expenses and payroll amid the coronavirus pandemic. Mnuchin has said that any who do not return the money will be investigated by the Treasury Department. It sounds like if they don't give it up, there will be more media coverage and public backlash, and an investigation may be unpleasant. I've heard a few names of companies and seen partial lists, but I'd actually like to see a list of the 150 companies.

@roflwofl wrote:

I'd actually like to see a list of the 150 companies.

I agree! Thank you for your detailed post.

Me three. It's easy to get outraged over Shake Shack and Ruth's Chris because they are such well-known brands. It'd be interesting to hear about lesser-known but equally solvent large companies that also got loans.

Here is a location most of us do not know about who got a whopping loan.

[www.aol.com]

Sickening! They have no shame.

My husband's best friend has a sister who owns a house on Fisher Island. Yeah, they don't need the $2M.

In all honesty, it would be difficult to write legislation that did exactly what taxpayers would agree was valid due to the variety of ownership forms in the US.

And what business would we agree was 'deserving' of help? Think of a sole ownership business employing 5 full time employees. They are not an 'essential' business so have been closed by act of government. Are they more, less or equally deserving as the same business if they are considered 'essential' and allowed to stay open? If the five full time employees are all family members, are they more, less or equally deserving as the same business with unrelated employees? If they pay more than minimum wage are they more, less or equally deserving than if they only offer minimum wage work? If the business is a year old or less are they as deserving as a small business that has been established more than five years? Is a business that is growing more deserving than one that was already declining?

It would be wonderful to be able to micromanage and 'play God' to make certain the distribution was done with 99.9% fairness, but the need--if there truly is one--is immediate. The amount of 'corruption' of the distribution does seem outrageous. I fail to see a business with 500 employees as a 'small business'. My sense is 50 people or less, but I am provincial so maybe . . .

@SteveSoCal wrote:

@shoptastic wrote:

*wonders how many of the returns are due to public shaming?*

Is there any evidence of that not being 100%?

This is the point I have been making about MSC's as well. Social media shaming has changed the rules of accountability in this era.

Yeah, the MSC conversation could deserve its own chat/thread. I have too many conflicting thoughts to really say anything I'd feel comfortable with in a short space. But for the PPP loan situation and social media, it's definitely made a difference I think.

Back in the 2008 recession, Facebook had just started getting very popular. I think MySpace may have been used equally (can't remember exactly). So, FB hadn't taken over yet. Now, of course, social media has consolidated around Facebook, Instagram, and Twitter largely. There's definitely a sense of community and power from it. A viral post/video with millions of viewers within days can have a big impact.

I respect Mark Cuban a lot (big fan of Shark Tank - even though I think he's sometimes too cocky and overpowering of others on the show) for being willing to hold brands accountable. This isn't the first time he's done this (re: Shake Shack, COVID-19, and PPP loans), but has been outspoken about this sort of thing with other companies and "scandals" or issues as well. And, he's said on Shark Tank that the millennial generation is very much a brand activist sort of generation - willing to boycott those that do or say something that they are strongly against. I respect Mark for speaking out against powerful people/organizations, because often there can be a price for doing so. A "smaller" guy within the company may get fired. Or, a smaller group with less social or financial clout may get ignored. When someone like him speaks, people pay attention and it draws attention to these issues.

@MsJudi wrote:

Well I do think we've become a nation of enablers though. What I'm truly disappointed in is that schools are expected to provide free meals for children..breakfast, lunch and in some cases dinner. My dear lord, if you can't afford to feed your children..don't have 'em. Since when has it become the school's (taxpayers) responsibility to feed as well as educate? So now that schools have closed, parents can pick up or have delivered free meals courtesy of the public school system..huh???? I don't live in a town of poverty but it's being done here and my tax rate is probably higher than anyone on this forum, so yes, I resent this. I highly doubt that the folks getting the free meals can't afford to make a peanut butter and jelly sandwich or chicken dinner for their family.

That's all well and good, however, for the last 20 years, wage increases have been less than the actual increase in the cost of living. So...you're saying that only wealthy are allowed to have children? You also realize that each of us are just one medical crisis away from becoming "one of those". And, do you really want to have the next generation too small (you realize that your Social Security not to mention those that will provide your medical care, staff that assisted living home,etc. will be much fewer than now) to meet your needs or not educated enough to provide your medical care, etc. because they were too hungry to learn? None of those kids asked to be born, the least we can do is to take care of them when they come into this world. After all, those kids are the future, literally! And those food programs that you decry? Food assistance programs deliver far more to the economy than they take. (at least $1.40 per dollar spent), so they benefit the economy, not only in terms of having kids be able to learn but also in actual economic benefits to us all. You do realize that most of those who are receiving food assistance are working, usually multiple jobs (and the rest cannot work for very valid reasons), many in service jobs (such as staffing nursing homes, working as CNAs, cleaning health care facilities, taking care of those in communal living situations, the military, you know, the jobs that many folks are too proud to take)? And "since when did it become the taxpayers responsibility to feed as well as educate?" when you decided to live in a society! Those meals aren't free, they are a cost of having a society that benefits us all. Wow! Maybe you should take the energy that you are expending judging those who don't have it as good as you in advocating for a society in which no one goes hungry, real wages at the very least keep up with inflation, and those that are essential to us all are valued, not just with a round of applause at 7 PM, but by being paid a living wage and not expected to work (sometimes multiple jobs) in unsafe conditions.

Edited 1 time(s). Last edit at 04/27/2020 05:56AM by KarenMSW.

@Shop-et-al wrote:

One of the little details in the inadequate parenting issue is that some parents believe that schools should do everything for their children. They just... hand 'em over and that's it. Even though some schools are engaging parents in the learning process, this is not the same as parents offering a place where their kids can think, and dream, and ponder, and muse, and try things (safe things that are supervised!), and ask questions that are not brushed aside...

This has always been the case - the difference, if they are rich, often those parents just spread their cash around to "take care of things", if they aren't rich then others judge them as not being good enough parents. And, if you are being forced to work 2 or 3 jobs just to survive? Maybe all you can do is to send your kid to school and hope for the best!

@roflwofl wrote:

Speaking of furloughs, what does everyone think about the furloughs from the Kennedy Center? Nancy Pelosi sits on the Kennedy Center Board, and, at her insistence, $25 million in federal relief was added to the stimulus package to keep employees from being furloughed. Immediately after accepting the $25 million, the Kennedy Center announced they would furlough 60% of their staff. Many senators and representatives are seeking to cancel that $25 million. Hmmmmmm.......

I, personally, don't have a problem with it. I did, until I listened to a restaurant owner explain why he furloughed his employees (intending to rehire them when things reopen). He intends to use the PPP loan when he reopens because it makes little to no sense to keep them hired at the moment. Instead, he furloughed them to allow them to collect unemployment, will spend his savings to restock the restaurant (estimated it will cost him $350,000 to restock), then will use the PPP loan as intended, to pay their salaries while things ramp up again and, hopefully his business will return and his employees will be back to normal as well. That made perfect sense, to use the PPP loan to bridge that gap. The Kennedy Center, like all arts organizations, will be facing very lean times donations wise. Most arts organizations operate on a shoestring budget, despite their "name recognition". So, furloughing those employees now, particularly since they will likely be brought back once this is over, will allow them to bridge the gap until funding returns to normal. Seriously, does anyone honestly think that this would have been such a kerfuffle were it to be the Wichita center?

The Kennedy Center is important, as are all arts, artists, and venues. Long live the arts!

In this situation, there might have been even the appearance of a conflict of interest or undue pressure from an elected official. Nancy Pelosi should have let the Kennedy Center and all other arts groups beg via their professional organizations or lobbies. Or, she should have begged for all arts equally. Those options might have reduced even the appearance of a conflict of interest.

The Kennedy Center staff's decision to change how their Pelosi-fought handout was used does give the appearance of a bait and switch.

@KarenMSW wrote:

@roflwofl wrote:

Speaking of furloughs, what does everyone think about the furloughs from the Kennedy Center? Nancy Pelosi sits on the Kennedy Center Board, and, at her insistence, $25 million in federal relief was added to the stimulus package to keep employees from being furloughed. Immediately after accepting the $25 million, the Kennedy Center announced they would furlough 60% of their staff. Many senators and representatives are seeking to cancel that $25 million. Hmmmmmm.......

I, personally, don't have a problem with it. I did, until I listened to a restaurant owner explain why he furloughed his employees (intending to rehire them when things reopen). He intends to use the PPP loan when he reopens because it makes little to no sense to keep them hired at the moment. Instead, he furloughed them to allow them to collect unemployment, will spend his savings to restock the restaurant (estimated it will cost him $350,000 to restock), then will use the PPP loan as intended, to pay their salaries while things ramp up again and, hopefully his business will return and his employees will be back to normal as well. That made perfect sense, to use the PPP loan to bridge that gap. The Kennedy Center, like all arts organizations, will be facing very lean times donations wise. Most arts organizations operate on a shoestring budget, despite their "name recognition". So, furloughing those employees now, particularly since they will likely be brought back once this is over, will allow them to bridge the gap until funding returns to normal. Seriously, does anyone honestly think that this would have been such a kerfuffle were it to be the Wichita center?

@Shop-et-al wrote:

The Kennedy Center is important, as are all arts, artists, and venues. Long live the arts!

In this situation, there might have been even the appearance of a conflict of interest or undue pressure from an elected official. Nancy Pelosi should have let the Kennedy Center and all other arts groups beg via their professional organizations or lobbies. Or, she should have begged for all arts equally. Those options might have reduced even the appearance of a conflict of interest.

The Kennedy Center staff's decision to change how their Pelosi-fought handout was used does give the appearance of a bait and switch.

It's not that they have to beg for it to be OK, but the 'small business' should have been defined much better and more important, equal opportunity and fair queuing system on who gets the PPP loans first, not some lottery type of gamble.

No one group should have a member of Congress lobbying for them because this constitutes unequal treatment.

@Shop-et-al wrote:

No one group should have a member of Congress lobbying for them because this constitutes unequal treatment.

I wasn't disagreeing with you. The first wave of PPP loan was basically a lottery.

@Tarantado wrote:

I wasn't disagreeing with you. The first wave of PPP loan was basically a lottery.

I think my issues with the first wave of PPP was that it wasn't a lottery. In a lottery every ticket has an equal chance of winning. In this situation, those with banking relationships with smaller banks, regional banks, local banks were disadvantaged because they did not have the staff or clout to get all the rules clarified as quickly as the big banks so that they could feel comfortable issuing the loans or even processing them or advising truly small businesses how to file for them. With the loans 'first come first served' it was not a lottery but a foot race where those with the biggest legal teams got pushed to the front of the line.