The Fight to Save American Livelihoods

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A look at the good, the bad in the Paycheck Protection Program

The Paycheck Protection Program was intended to be a lifeline for small businesses when it became clear that the COVID-19 pandemic had put jobs and the economy in clear and present danger. Part of the CARES Act coronavirus relief bill, PPP was supposed to help small businesses — those with fewer than 500 employees and relatively few financial resources — keep employees on their payroll. Congress passed the bill in record time, despite lingering questions about whether oversight would be strong enough to ensure that only small businesses get the billions of dollars in aid.

Several big corporations that signed up for the federally backed loans — low cost loans that could be potentially forgiven — returned the money, most notably restaurant chains Shake Shack, Ruth’s Chris Steakhouse, and Potbelly. Investigative journalists with ProPublica found at least 15 large corporations receiving loans through their subsidiaries.

Less attention has been paid to the small businesses that received the loans and how they are fairing. In interviews with local business, Random Lengths News learned about the initial difficulty of the applications and the anxiety of small business owners over whether the other federal government stimulus efforts would sabotage their efforts to bring back laid off workers, particularly those earning more on unemployment than the wages they were previously earning.

President Donald Trump didn’t want to reveal who got the PPP loans, but 11 major American news organizations, including American City Business Journals, forced him to via lawsuit.

After weeks of legal challenges, on July 6 the U.S. Small Business Administration released a redacted slice of Paycheck Protection Program data that identifies major recipients  as well as the jobs supported by the $659 billion program during the country’s initial economic hit from the coronavirus pandemic.

Though the July 6 data release provides the most-detailed data yet about the program, it falls short of the transparency sought by the news media lawsuit, which was initially filed May 12, in the U.S. District Court in Washington, D.C. Rather than identifying specific loan amounts, the data is bracketed in buckets ranging from $150,000 to $350,000; $350,000 to $1 million; $1 million to $2 million; $2 million to $5 million; and $5 million to $10 million.

What was unsurprising was the number and nature of the corporations that applied for the loans that exceeded $1 million in the Los Angeles Harbor Area, where a significant chunk of the applicants are tied to the twin ports goods movement industry. Another sizeable amount went to nonprofit organizations which include a large amount of charter schools.

In San Pedro, 11 companies received more than $1 million. Among them was former Harbor Commission President Nick Tonsich’s company Ocean Terminal Services, which received $5 to $10 million. Random Lengths News has reported that the company is embroiled in a civil suit.

Other businesses or corporations that received PPP loans in the millions include: Catalina Channel Express Inc.; Al Larson Boat Shop; San Pedro Fish Market LLC; Boys & Girls Clubs of the Los Angeles Harbor; Advent Resources Inc.; Port of Los Angeles High School; Jankovich Co.; Westwind Engineering Inc.; So Cal Ship Services Inc.; and Rolling Hills Preparatory School.

In Wilmington, 10 companies received more than $1 million: American Integrated Services Inc.; Patriot Environmental Services Inc.; Harbor Industrial Services Corp.; Tony Demaria Electric, Inc.; Konoike Transport Co. Ltd.; Innovative Terminal Services Inc.; Pac Anchor Transportation Inc.; Gssi Inc., Potential Industries Inc.; and American Soccer Co. Inc.

In Carson, 27 companies received $1 million or more in Paycheck Protection loans.  More than one hundred companies in Long Beach received $1 million.

According to the Los Angeles Economic Development Corp., California’s share of the PPP loans was $68.2 billion or about 13 percent. Researchers with LAEDC noted that regardless of the problems of the PPP, there was no doubt that the loans helped Californians to keep working and maintain their solvency of their households to prop up the economy. But now there is fear about what a renewed shutdown order would do to businesses in Los Angeles.

There has been a gradual increase in COVID-19 positivity rates since the reopening of businesses in Los Angeles County, leading to Gov. Gavin Newsom issuing new shutdown orders for dine-in restaurants, bars, malls, salons and barber shops. While there is discussion in Congress of doling out another round of stimulus checks to tide Americans over, the Trump administration is looking to tie those monies to cuts in payroll taxes, which pays into Social Security. Also, the Republican Senate majority is preferring a stimulus with significantly less benefits. There’s still $120 billion left to make a few more PPP loans and there’s discussion about reopening the application process for that money. After July 31, when the extra $600 in federal weekly unemployment benefits ends, many Angelenos could find themselves under further lockdown orders and economically dark days ahead.

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