In a significant development, six non-profit organizations have come to a costly agreement with federal authorities regarding alleged misuse of funds from the Paycheck Protection Program (PPP). In settlements totaling over $3 million, these organizations have been accused of falsely claiming eligibility to receive forgivable loans intended to aid small businesses during the COVID-19 pandemic's economic stranglehold. U.S. Attorney Jeanine Ferris Pirro's office in the District of Columbia announced the agreements on Tuesday, according to a report by the Department of Justice.
As detailed by the U.S. Attorney's office, the CARES Act which gave rise to the PPP, was designed with specific restrictions. It stated that nonprofit organizations could indeed benefit from the program but drew a clear line at Section 501(c)(4) organizations, particularly those engaged in political or lobbying activities, from qualifying for such support. Despite the restrictions, the non-profits involved reportedly moved forward with their applications. "You don't steal money from the federal government, especially when that money should be going to more deserving individuals," U.S. Attorney Pirro stated, as her office worked in concert with the Small Business Administration's Office of General Counsel and other federal law enforcement to bring about the settlements.
Among those entities ensnared in this legal net, the Armenian National Committee of America Inc. has agreed to repay twice the amount it originally borrowed, totaling $184,681.82, after applying for a loan they were ineligible for. Similarly, the Center for Immigration Studies and Diplomatic and Consular Officers Retired, Inc., find themselves parting with $401,299.15 and $355,306, respectively, to settle the claims against them.
Other organizations, such as the National Organization for Women (NOW) and the National Women’s Political Caucus Inc. (NWPC), will be making restitution in the amounts of $180,678 and $34,954, respectively. The largest settlement comes from the think tank Third Way, which will return $1,949,542 after receiving close to a million in PPP funds. The announcement notes efforts led by Assistant U.S. Attorney Sean M. Tepe and Auditor Timothy C. Hurley, with U.S. Small Business Administration's Office of the General Counsel's Attorney Caitlin J. Kelly being commended for her role in the investigations, according to the same press release.
The settlements, which do not include admissions of liability, require that funds be redirected in accordance with the law. Officials said the action highlights the importance of thoroughly vetting applicants for government support, particularly in response to large-scale crises. Nonprofit organizations that received pandemic-related funds are now facing increased scrutiny as part of ongoing accountability measures.
