Political Solutions, LLC, has reached a settlement to pay a hefty sum for alleged misuse of the Paycheck Protection Program (PPP). According to a statement by Acting U.S. Attorney Kimberly A. Sanchez obtained by justice.gov, the California-based lobbying firm has agreed to cough up $556,924 to resolve claims of fraud. These allegations center on the firm improperly accessing emergency COVID-19 relief funds meant to aid struggling small businesses during the height of the pandemic.
The PPP, part of the Coronavirus Aid, Relief, and Economic Security Act, was designed to quickly get financial aid to small businesses grappling with the economic impact of COVID-19. Political Solutions, which found itself ineligible due to its primary engagement in political and lobbying activities, landed a loan of $216,000 in April 2020. It was later revealed, the firm applied for and secured loan forgiveness in January 2021, stoking the fires of controversy that led to the recent settlement.
In the course of the ensuing investigation, the firm was accused of knowingly falsifying statements to claim they were eligible for the PPP loan. Justice.gov reports that under the terms of settlement, Political Solutions will pay $456,924 in damages under the False Claims Act (FCA), along with $100,000 in civil penalties under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).
"The Paycheck Protection Program was a vital resource for struggling small businesses during the COVID-19 pandemic," Sanchez stated in a release. "This Office will continue to investigate businesses who took advantage of these funds at the expense of the public." The settlement is indeed outlined to serve as a deterrent, and as SBA General Counsel Wendell Davis told justice.gov, it reflects "enhanced efforts by federal agencies, such as the Small Business Administration working in conjunction with the U.S. Attorney's Office, to pursue a fair recovery of pandemic relief funds."
The case was managed by Assistant U.S. Attorney Robert A. Fuentes. While the settlement resolves the allegations laid out against Political Solutions, it is important to note that no determination of liability has been made, as the claims resolved by this settlement are, at this point, still only allegations.
