by Becca Shaw Glaser May 3, 2022, The Free Press
Bean Maine Lobster, Inc., Belfast Area Chamber of Commerce, Bella Point, Camden Law, Eldercare Network of Lincoln County, Farley, Inc., Island Institute, Knox County Homeless Coalition, Lincolnville General Store, Lord Camden Inn, Maine Sport, Maritime Energy, Mathews Brothers, Moody’s Restaurant, Moose Crossing, O’Hara Corporation, Primo, Rockland Main Street, Inc., the Ashwood Waldorf School, the Belfast Coop, The Farnsworth Art Museum, the Good Tern Coop, the Rising Tide Co-op, The Samoset, Yachting Solutions. Midcoast real estate agents, fishermen, restaurants, schooners, sole proprietorships. Religious institutions such as Rockland’s Littlefield Memorial Baptist Church, the Harbor Light Church of God, the Roman Catholic Bishop of Portland’s Camden location, Adas Yoshuron Synagogue, The Anchor Church in Rockport. Media entities such as The Free Press, Courier Publications, and their parent companies, MTM Acquisition and EA Acquisition; Down East, Maine Boats, Homes & Harbors magazine.
These and hundreds of other businesses and organizations in our midcoast communities received significant public help from the Paycheck Protection Program, the pandemic program that was rushed out in early 2020 with the stated goal that it would help businesses keep their employees on the payroll.
I don’t name these names to call out anyone in particular, but to show how deeply the PPP underpinned the area’s survival during the pandemic, and to note how no one who got the money seems to be chattering about it. Have any of our local business owners, sole proprietors and organizations been hollering from the rooftops about how grateful they are that this major social welfare program, paid for by the public, gave them free money and kept them afloat? Most of these were not, in the end, loans. In fact, nationwide, nearly all of the $800 billion in PPP funds have become grants, “forgiven in full.” Looking over the local PPP data I’m struck by the extent to which this program was used locally, the ways in which it — along with other pandemic programs — undeniably functioned in positive ways by helping to keep food in people’s stomachs and roofs over their heads. But, while it had merit as a crisis intervention, ultimately the program reinforced the status quo of extreme economic inequality nationwide, often lining business owners’ pockets far more than it benefited those on the payroll.
Sorting Through the PPP Data
The PPP data is challenging to work with. The Small Business Administration, which administered the program, has an enormous data set you can download, but I was unable to open it without crashing apps. Sites such as ProPublica.org and FederalPay.org have taken the SBA’s PPP data — which ProPublica and other news organizations had to sue to get — and created more accessible, searchable databases. I cross-referenced, because each has different search functions and varying details.
A January 2022 analysis by the National Bureau of Economic Research found that only about 25% of the $800 billion in PPP funds went to workers in jobs that would have otherwise been lost — that is, to those whom the program was ostensibly intended to support. The study found that the majority of PPP money went to business owners, shareholders, creditors and suppliers of PPP-receiving firms. It concludes, “Program incidence was highly regressive, with about three-quarters of PPP funds accruing to the top quintile of households [those with an annual average household income of about $255,000].” Got it? Another government program that primarily benefited the wealthy.
The problem isn’t that there was an enormous effort to try to help one another; the problem is that in the end many of the hastily designed pandemic programs perpetuated the extreme inequalities we already had. The PPP was deeply flawed in requiring so little of applicants and of the banks who handled PPP loans, and in its shocking lack of oversight. It’s estimated that at least $80 billion — 10% of PPP funds — were basically stolen, through methods such as companies inflating their numbers of employees (because they got money for each reported employee), or creating fake businesses. An overseer of COVID relief spending, Justice Department Inspector General Michael Horowitz, recently told NBC that the SBA “basically said to people, ‘Apply and sign and tell us that you’re really entitled to the money.… What didn’t happen was even minimal checks to make sure that the money was getting to the right people at the right time.” And, making white collar PPP crime even more likely, Congress ordered the SBA to absolve PPP-lending banks of any responsibility for determining whether the PPP-seeker gave fraudulent data.
The PPP did not require PPP-recipients to meet standards such as paying a living wage, offering paid time off, sick leave, or maternity leave. And the program wasn’t interested in the amount of assets a business owner or firm already had. Business owners who had stockpiles often got to add to their stockpile, and we the people funded the frequently paltry wages that keep workers living dangerously paycheck to paycheck (some of whom would have done better had they been eligible for the temporarily humane $600-extraper-week pandemic unemployment bonus).
I’m not going to try to determine how much PPP fraud there might have been locally, nor to figure out which wealthy business owners and sole proprietors excessively benefited from the program, despite already having an abundance of assets. Many community members, in the early days of the pandemic, when it truly felt like the whole world might be ending, took the PPP, and I imagine that most genuinely needed the help. However, one can assume there was some misuse locally. The local PPP recipient list includes some entities that, at the
first whiff of trouble from the pandemic, immediately laid everyone off. Seeing those businesses in the list, I wonder whether they used the PPP money to hire those workers back as rapidly as they laid them off.
I also wonder about those locally who didn’t apply for PPP but would have been eligible. Personally, I didn’t know that sole proprietors (like me) were eligible for PPP, and I imagine many others didn’t know either. Maybe some felt too “proud.” And there may be those who came too late to knowing that the program could
help them, since the funds dried up fast. Nationally this largely worked to the benefit of the wealthier entities, which had more resources to research and apply for PPP quickly. And of course, the program greatly benefited banks, which received interest of up to 5% on these “loans” (the interest was also funded by the public, when forgiven), and later, to incentivize the banks in supporting smaller loans (less than $50,000), giving the bank up to 50% of the loan’s value — up to $2,500 per loan.
The Best Profits of Their Lives
Soon after we the public bailed them out, businesses in many sectors went on to have the highest profits of their lives. Midcoast landscaping supply companies, construction-related businesses, real estate agents, grocery stores and many other local shops started snatching record-breaking profits. Some of these businesses that received the first round of PPP grants went back for the second round, despite having already bounced back so well. Let’s hope that the business owners who benefited from free PPP money, followed by soaring profits, passed that good fortune on to those who needed it more. Higher wages? Paid days off? Construction companies choosing to build accessible, affordable housing rather than yet more boutique hotels or Airbnb conversions? Giving to Meals on Wheels, food pantries, Knox County Homeless Coalition — and not just for the tax write-off? Perhaps most important of all, did they put energy and effort into demanding
policies and programs that will completely, permanently eradicate poverty?
What About Business Owners Who Happily Took PPP Money but Oppose the Expansion of Social Welfare Programs?
Among the local recipients of PPP, I notice quite a few names of people (or the businesses they own) who typically oppose expanded social safety net programs. Or perhaps they don’t oppose expanded funds for housing, food, heat, substance use recovery, emotional health support, harm reduction, child care, unemployment benefits, direct income, and health care, but they think there should be more obstacles in the way of accessing those programs, such as urine tests, work requirements and absolute, gutter-level poverty. Meanwhile, the PPP that they benefited from had few obstacles and nominal oversight.
I urge those who found themselves perfectly happy to access the social safety net for themselves and their businesses to look at their beliefs. Does everyone, no matter what, without question, deserve the basic necessities of life?
Midcoast Maine Political Candidates Who Made Use of the PPP Grants
I searched the names of those who are running for local political office in Knox County, and a bit farther out. Although the PPP was undeniably a government welfare program, it was considered a “business-friendly” type, which some Republicans (and others) who might otherwise excoriate people seeking government help to “just get a first, second, or third job” seem to have felt comfortable using. However, the PPP turned out to be a welfare program that is massively unaccountable, non-transparent, and inviting of fraud. I found very few politician-hopefuls who accessed the PPP money; they did so in their business capacities, not as political candidates. Jason Joyce of Swan’s Island, running for the newly redistricted House District 15 as a Republican, had two relatively small one-person PPP applications approved, and David Levesque’s Damariscotta law office received $26,235 for four reported workers. Levesque is running in the Democratic primary for Senate District 13, a spot now held by Chloe Maxmin.
Looking up Scott Rocknak of Camden, the Republican candidate running for Senate District 12, the seat now held by term-limited Dave Miramant, four
local one-person PPP grants come up. With two PPP grants under Rocknak’s personal name ($7,800 each) and two under the business name Rocknak Yacht Sales, Inc. ($12,900 each), I reached out to ask him about it. Rocknak told me that he manages Rocknak Yacht Sales and said it is his father’s business (in the company’s most recent filing with the Maine Secretary of State, Scott Rocknak is listed as Secretary and as one of two shareholders, along with his father), and that the PPP funds for Rocknak Yacht Sales were not for him.
I was curious to know whether a Republican yachtbroker candidate who accessed the PPP program for himself supports specific government support programs such as Medicaid Expansion, SNAP, expanded child benefits, and direct financial support to low-income people. He didn’t address those specific programs in his replies but said, “Government assistance programs are all well intentioned. As long as the programs are managed effectively and efficiently, with transparency and accountability, and safeguards are in place to actively defer, prevent, and prosecute fraud, the funding of these programs should meet the demands of those people it is intended to assist.”
Should Religious Institutions Have Received PPP?
Religious institutions, who already receive extra perks, such as not paying property taxes, were eligible for the PPP (unlike, say, municipalities) and seem to have made the most of it. Some of these institutions, like other 501(c)(3) organizations who received PPP funds from the public, preach bigotry, actively work to destroy women’s rights, reproductive choices, and the basic right of LGBTQI+ people to just simply live. The hierarchical, secretive nature of religious institutions has also led to their outsized harboring of sexual predators. In February, the Roman Catholic Diocese of Portland, a PPP recipient, announced that it had found complaints credible that two of its priests had sexually abused children decades ago. Of course, religious institutions can also function as places of well-being, of community, of liberation and acceptance, and of helping one another, but as a general rule I feel uneasy about the way in which they often get a free pass by the government as if they are entirely benign and deserving of special privileges. In this case, the PPP went out of its way to grant religious organizations near-complete latitude regarding SBA’s usual “affiliation rules.”
Searching “Baptist” in federalpay.org’s Maine database returns 62 different approved PPP applications for Baptist churches in Maine; “Roman Catholic Bishop of Portland,” leader of the diocese for the state of Maine, the governing body of Maine’s Catholic churches, returns 59, including one location registered in Camden (which received $42,000 in PPP funds). I don’t know what most of the churches in Maine who received PPP preach, but the Anchor Church, near me in Rockport, which got $26,100, states on its website that they believe: “The entire Bible is the infallible Word of God, it is inspired by the Holy Spirit without error, and the authority by which we base our faith, doctrine, and conduct.” Their “Resources” page features a link to the ultra-right, fiercely anti-choice, and anti-LGBTQI+ Focus on the Family, and their sole local “Mission” is Zoe, A Women’s
Center, the anti-choice center in Rockport.
Could O’Hara Corporation, a Rockland-Based Company, Really Be Paying an Average Yearly Salary of $100,000 Per Year?
By far, the highest single PPP grant I tracked down locally, which also turns out to be the 12th-highest bailout in all of Maine, went to O’Hara Corporation, a marina and fishing vessel company based in Rockland. They reported 279 employees and were given $6,200,077 of public money, which they stated would be entirely for
payroll. Given that PPP applications were to be calculated based on a maximum of 2.5 months of an average recent year’s payroll, $6,200,077 would equal a yearly payroll of about $30 million, which puts the salary of absolutely everyone reported by O’Hara at nearly $107,000 each per year. Contrast this with the second highest recipient of PPP in Rockland, Maritime Energy, which reported nearly the same number of employees (263 versus O’Hara’s 279) but applied for a fraction of the aid ($1.9 million versus $6.2 million at O’Hara). Also curious is that the PPP guidelines dictate that employee salary reimbursement cannot be calculated above $100,000 per year (plus health insurance expenses, etc.). I reached out to O’Hara for information about this astonishingly high amount, and, though they had ample time to respond, they did not. It seems unlikely that every single one of the reported 279 O’Hara employees is paid more than $100,000 per year. Deserving of further investigation? Yes.
Poverty Is a Policy Choice
When will we fight for a system that refuses to accept child poverty as a perpetual reality in the wealthiest country in the world? When will we demand a system where the woman who helps our elders go to the bathroom, who cares for children at daycare, who picks the apples we devour, is not dangling by a thread Poverty is a policy choice. During the pandemic, politicians showed that they could quickly muster trillions for various programs, busting out all sorts of programs and money, some of which is still getting distributed. And in Maine, we do have a few exciting programs coming up — two years of free community college/trade school programs for recent high school graduates, and MaineCare now including dental care — giving a small taste of what a kinder social contract can look like. But most of the federal pandemic programs simply reinforced the grotesque inequity we already had. The pandemic should have been the start of an entirely new interconnected relationship with one another, but it wasn’t. The Infrastructure Bill, with a third of its $1.2 trillion going towards highways, roads and bridges, glided through Congress, yet they could not pass a bill to create basic social supports that most other countries have — flamboyantly broadcasting how little the United States, still, values human life.
Becca, in full disclosure, grew up going to Adas Yoshuron synagogue and various midcoast churches here and there. Happy International Workers’ Day and Beltane!