Several congressmen are demanding answers from the Florida Democratic Party following shocking revelations that it applied for and accepted a large sum from a federal aid program designed to assist small businesses and workers hammered by the coronavirus pandemic and which explicitly excluded political entities.
The Florida Democratic Party (FDP) appears to have exploited the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act’s Paycheck Protection Program (PPP), the party managed to receive an ill-gotten loan of $780,000.
“I am having a hard time explaining to my constituents how money I voted for to help workers seems to have ended up in the hands of political party operatives who were specifically excluded from eligibility,” said Rep. Bill Posey (R-FL).
“[You] have to wonder how many small businesses and employees didn’t get the funding they deserved because the money ran out. I hope this gets properly investigated soon,” Posey added.
Posey is not alone in his frustration over the matter.
“I voted for a program to help struggling businesses, not a bunch of politicians looking to fatten their war chest in an election year,” congressman Neil Dunn (R-FL).
Signed into law by President Donald Trump in late March, the $670-billion Paycheck Protection Program (PPP) is a provision of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) stimulus package intended to blunt the impact of an economic downturn due to the global coronavirus pandemic.
Implemented by the U.S. Small Business Administration (SBA), the PPP offers forgivable low-interest loans to retain workers and cover other existing overhead costs of small businesses facing uncertainty during the current pandemic.
The CARES Act strictly excluded political organizations from receiving aid from the taxpayer-funded program.
Demanding that the FDP disclose their PPP application, Rep. Michael Waltz (R-FL) hopes to expose those responsible for the likely fraudulent move.
“You don’t accidentally take a $780,000 loan and you sure as hell don’t accidentally take $780,000 from taxpayers,” Waltz said in a statement as he noted that Congress had explicitly excluded political parties. “The Florida Democrat Party should disclose their PPP Loan application. Floridians deserve to know who is responsible for swindling a program meant to keep workers employed.”
Shortly after Congress first passed the PPP bill in March, Florida Democrats applied for and received a whopping $780,000 loan under the “Florida Democratic Party Building Fund,” a separate legal entity it controls (which aims to renovate a historic building in Tallahassee to create a new headquarters), whereby the money was purportedly transferred to its political party.
On July 7, Politico broke the story, and a week later, the loan was allegedly returned, with the party’s own lawmakers deeming the acceptance of the loan as questionable, suspicious, and unethical, if not outright illegal.
In a stern conversation with FDP chairwoman Terrie Rizzo following the public disclosure, Rep. Donna Shalala (D-FL) had demanded that the party return the money while Democratic state senators Jason Pizzo and Annette Taddeo assailed the party’s original decision to accept the loan.
Telling Politico she was “extraordinarily disturbed that any political party, my party, would even think it is OK to apply for government funding meant for small businesses,” Taddeo had sought to investigate further into the matter.
“Returning the money is an obvious first step, but we must get to the bottom of how this could possibly have happened less than four months before the most important election in our history,” she said.
Furious and at a loss as to how “the party found it reasonable to even apply for funds, while condemning others, and depleting finite resources from struggling families,” Pizzo lashed out at the party.
“I spent 44 days in Tallahassee to go face to face with the [Department of Economic Opportunity] while people can’t get their unemployment benefits,” Pizzo said. “And the Florida Democratic Party is in their f—— office collecting PPP money.”
Pizzo, an attorney, believed it was illegal for a statewide political party to receive money through an SBA loan as businesses “primarily engaged in political or lobbying activities” are ineligible for such loans, but felt it was an unconscionable move regardless.
“Forget the legality for just a second and consider what should have been a huge ethical dilemma,” Pizzo said. “They are taking financial resources from someone who might have food or housing insecurity in the middle of a pandemic. I don’t know who possibly thought that was a good idea.”
Pizzo added that he even alerted Democratic nominee Joe Biden’s daughter Ashley to the problem.
The revelation of the FDP decision came the same week that Biden announced his Florida team, including senior adviser Juan Penalosa, who is the party’s executive director and is listed as the director of the building fund that applied for the PPP loan.
The party was in the process of underwriting the salaries of campaign staff throughout Florida, including those working to elect Biden, the party’s presidential nominee, in the nation’s biggest battleground state.
In response to Pizzo’s tweets, State Rep. Anna Eskamani, an Orlando Democrat, replied, “PPP was created for small businesses and nonprofits desperate for support during COVID-19, not for political parties.”
The FDP’s use of the program was later called out by the Republican Party, which highlighted a May statement by FDP Chair Terrie Rizzo criticizing President Trump and labeling the PPP a “disaster,” while failing to disclose that her own party had applied for a considerable loan.
“In May, Florida Democrats chastised President Trump’s Paycheck Protection Program. Today, we find out that Terrie Rizzo and her corrupt Florida Democrats gladly accepted money from the program, taking anywhere from $350,000 to $1,000,000 away from deserving Florida small businesses,” read a Republican press release in July.
After the revelations and outrage from politicians, the FDP was pressured to return the loan and stated its intention to “volunteer” to do so.
On August 5, a month after the initial report, the FDP issued a statement acknowledging the “mistake.”
“[L]ike many employers during the shutdown, FDP was concerned about meeting payroll and keeping our staff employed, so we applied,” the statement read. “It now seems they [the bank, loan processor and SBA agents] made a mistake in approving the funding.”
Writing on behalf of the Patricia Sigman Campaign, Tallahassee-based election law attorney Mark Herron stated that the FDP “did erroneously accept CARES Act funding.”
Herron is also listed as the registered agent for the Florida Democratic Party Building Fund and, in the past, has described the opportunities available to dodge consequences for large-scale problematic spending.
Though originally intended to remain private, under the Freedom of Information Act, the SBA eventually released the names of those who received funds in early July.
According to the SBA database, the Florida Democratic Party Building Fund received between $350,000 and $1 million intended to protect 100 jobs.
Republican Party of Florida Executive Director Helen Aguirre Ferré has accused the FDP of intentionally defrauding the PPP while calling for a release of the loan application.
Read the full statement:
“The Florida Democrat Party should absolutely release a copy of their loan application.
“Furthermore, the Republican Party of Florida believes they need to prove to the public that they returned all the funds. It is mind boggling that they thought they were even qualified in the first place – the PPP eligibility language is very clear –political organizations are not eligible for PPP loans. The program was intended to help private sector businesses save and protect jobs, keeping workers paid and employed.
“We don’t believe for one second that this was a mistake. The FDP knew what they were doing from the onset— but the one thing they never contemplated was that the data about who applied and received funds would be made public, shining a light on their actions.
“Like the rest of the public, we will be waiting for answers.”
Without the release of the original application, it is impossible to know whether there was an unlikely error on the bank’s part or whether there were intentional falsifications intended to exploit undeserved funds.