Major Pennsylvania lobbying and political firms have swept up millions of dollars in federal paycheck protection loans during the coronavirus pandemic — despite the fact that those loans explicitly bar money from going to organizations primarily engaged in lobbying. The recipients who do lobbying say it’s all above board, since they mostly earn their money from other types of business.
Data newly released this month by the U.S. Treasury and Small Business Administration shows that in Pennsylvania, more than 26,000 small businesses and organizations have each received $150,000 or more since April.
Recipients range from restaurants to medical offices to the Pittsburgh Symphony. They also include 19 entities registered to lobby Pennsylvania politicians and shape state policy.
Is this legal?
Pennsylvania was far from the only place that saw lobbying groups rake in PPP money.
These businesses and organizations were likely permitted to receive federal aid because, although many of them are known mainly for their lobbying activities, they reported that it accounts for less than half of their revenue.
An SBA rule prevents any business that gets “over 50% of its gross annual revenue from political or lobbying activities” from getting federal dollars through the administration.
The federal government doesn’t make PPP loans directly — it guarantees them after the borrower applies for the loan through their bank. A spokeswoman for the SBA noted that means the loans are approved based on the borrower making a “good faith certification” to their lender that they’re eligible and in need.
Michael Pollack, a Philadelphia-based rabbi and activist with the group March on Harrisburg, which advocates for lobbying reform, said he thinks these relatively loose restrictions on lobbyists getting federal dollars speaks to a broader political culture issue — both in Harrisburg and beyond.
Lobbyists, he said, are “incredibly smart in how they do these things, but the main goal at the end of the day is to get as much public funding into private hands as possible. That’s the job of corporate lobbyists.”
Lobbyists and political consultants, however, saw the PPP restrictions as much too harsh.
The SBA’s 50% rule has been around for decades, but when the agency formally applied it to the PPP in April, the Washington, D.C.-based American Association of Political Consultantssued in hopes of being more broadly included in the relief program.
A federal judge ultimately ruled against them, noting the SBA’s long-standing rule preventing federal money from subsidizing political speech. The group is appealing.
It wasn’t a foregone conclusion that organizations that make money lobbying would have been eligible for PPP loans to the degree that they currently are.
U.S. House Democrats, for instance, are pushing for stronger restrictions. Their $3 trillion coronavirus relief bill would have prevented any business with a lobbyist on payroll from including that position in its estimated expenses, and would have prevented any loan money from going toward that position.
The GOP-controlled Senate, however, has indicated it has no intention of taking up that bill.
