The Federal Aid Went Where?

Terry Schwadron
4 min readApr 21, 2020


Terry H. Schwadron

April 21, 2020

Surprise, those federal aid checks ballyhooed by everyone in Washington elbowing each other to be seen as savior of the pandemic have being going to people who are not eactly those targeted as the most in need.

First, we had to hear of checks by the millions never getting to individuals, despite all the promises, and despite whatever time it took for the computer paint to dry on Donald Trump’s signature. That didn’t even take into account people without direct deposit bank accounts, or immigrants trying to keep their heads down or, God forbid, the homeless.

Then came to light that checks meant for individuals were being grabbed along the way by banks and debt-collectors looking to stay whole by stiffing the individuals who might have outstanding debt.

What followed were whispers-turned-flood of small businesses turned away by banks who did not have pre-existing business loans with them, as the $349 billion was used up, and Republicans were so invested in wanting more guaranteed business loans that they forgot that hospitals and states were going belly-up too. Small businesses found they faced a maze of forms and turn-downs from banks who were supposed to enable the lending, and ended up on waiting lists that, naturally, pay neither outstanding rent and utilities nor employees displaced by the stay-at-home orders. The banks, in turn, threw up their hands and said there had been no usable guidance from the federal government, and what did anyone expect would happen, anyway?

Now, of course, we learn that thousands of traditional small businesses were unable to get funds because most of it went to big national hotel and restaurant chains. The upscale Ruth Chris Steak Houses, worth $250 million, took $20 million. Potbelly Restaurants with 400 locations got $10 million. Shake Shack got — and returned $10 million — once those owners understood that the program had badly missed its mark and publicly acknowledged that they could not accept it under these conditions.

The banks, in turn, have thrown up their corporate hands, saying that they were never given the rules, and so turned to their best clients first.


Once again, we are rewarding our bigger corporations that pass as small business rather than the corner bakery, dry cleaners or sandwich shop. It is unclear whether even these companies actually are re-hiring employees let go, since hotels are saying that re-starting will be slow since there are no customers or reliable visitor travel in place.

Even Treasury Secretary Steven Mnuchin, normally a pretty cold fish when it comes to any measurement of empathy, has had to acknowledge that there have been flaws in the program, and that perhaps a bit better language is needed in hastily drawn and heavily partisan negotiated legislation.

Now, in case it slipped anyone’s memory, this is the same Donald Trump who fired the inspector general who was supposed to be looking over the federal government’s shoulder to watch how the money got spent. Trump was going to do that job himself, in between his alternations between supporting stay-at-home measures to control disease spread and supporting lunatic protesters opposing any rules just because they wear MAGA hats and wave Confederate flags that seem to have nothing to do with germs, viruses and contagion.

So, here we are, that money to individuals, once received, went to back payments for rent or medicine or food, and the small business funds went up in a poof of corporate generosity. In all, more than 70 publicly traded companies have reported receiving money from the program, says the Security and Exchange Commission. Republican senators like Marco Rubio and Rick Scott, both of Florida, has been among those to rise in criticism, noting that the program is helping companies not harmed at all by the crisis by using the various loopholes.

JPMorgan Chase said it is “proud to have secured more funding for small businesses than anyone else in the industry” and that 80 percent of its loans have been for businesses with less than $5 million in revenue and that it, like other banks, has been overwhelmed by applications for loans.


The small business program was intended to benefit workers at businesses and nonprofit employers with fewer than 500 employees that are unable to obtain credit elsewhere, according to the Small Business Act, which formed the basis for the program. The Washington Post noted that after intensive lobbying by the restaurant and hotel industries, Congress allowed separate subsidiaries and locations to apply as businesses, even if they were part of a national or international chain. So, the many Ruth’s Chris locations could apply under separate entities even though the parent company employed about 5,740 last year, according to public filings.

Also seeking loans was Philadelphia’s Hersha Hospitality Trust and Condor Hospitality Trust, a Maryland-based owner of 15 hotels in eight states, reported last week that they had applied for loans. Mnuchin has called the PPP a success, provided funding to more than 1.6 million small businesses in all 50 states.

The legislation does not require the Small Business Administration to disclose the recipients, even though the agency typically discloses the name, address and executives for loans received.

As the president is fond of saying, we’ll have to wait and see what the new deal to add $450 billion in aid actually does for small business. Who knows, they may stumble and do the right thing.




Terry Schwadron

Journalist, musician, community volunteer