Celebrities who received these loans include Jared Kushner, who has a net worth of $800 million. He received a $3,001,119 loan that was forgiven, The Daily Mail said. Khloe Kardashian, whose net worth is $60 million, got the $1,245,405 loan for her business Good American LLC forgiven, while Reese Witherspoon’s $975,472 will not have to be paid back. The actress is worth $400 million, according to the Daily Mail. Yeezy, Kanye West’s company, received $2.3 million, although whether that will be forgiven is unknown, the Daily Mail said.
Carol Roth, author of The War on Small Business, said at the same time that West was taking out PP loans, Forbes reported he was “officially” a billionaire.
“It just goes to show you that there are winners and losers,” Roth said. “The wealthy and the well-connected are taken care of at the expense of those who are not.”
The Paycheck Protection Program, meant to help small businesses struggling during the COVID-19 pandemic, cost $953 billion.
A PPP loan will be forgiven, including the 1% interest, if the money was spent on payroll costs, and is based on how many employees the company maintained during the COVID-19 pandemic, and what hours and wages they had.
“The folks in Congress who wrote the bill to establish PPP and send the money out to businesses — the main goal was just to send people money to keep them employed,” Derek Willis, who compiled information for a database on every PPP loan given out for ProPublica, said.
One study by the University of Texas at Austin suggests 15% of PPP claims, or $76 billion, were fraudulent. Researchers examined four main indicators when identifying potentially fraudulent loan applications: “non-registered businesses, multiple loans at a residential address, abnormally high implied compensation relative to industry and geographic norms, and large inconsistencies between jobs reported by a borrower on its PPP applications and another contemporaneous government program application,” per the Houston Business Journal.
In his March State of the Union speech, President Joe Biden vowed, “We’re going to go after the criminals who stole billions of relief money meant for small businesses and millions of Americans.”
Earlier this month, Biden signed a bill giving the Justice Department more latitude to investigate people accused of fraudulently collecting these loans.
This won’t pertain to any of the wealthy celebrities mentioned earlier who got the PPP loans, as it was legal for them to obtain that money because of the way the program works.
“The structuring on PPP was really flawed from the start — even if you were wealthy, because that was the way that it was structured by the government. You got a free pass,” Roth said.