REGION — Rep. Mike Levin (D-San Juan Capistrano), North County’s Democratic congressman, celebrated his support of federal stimulus for small businesses, though official stats raise questions about the program’s overall effectiveness and oversight.
“Congressman Levin helped sustain 20,456 small businesses in California’s 49th Congressional district, which supported 241,446 employees,” Levin’s office said in a July 8 press release. The 49th district includes North San Diego County, Camp Pendleton and South Orange County. “Under the PPP [Paycheck Protection Program] relief package, small businesses in the 49th received more than $613 million in federal stimulus funding.”
The PPP has doled out about 5 million forgivable low-interest loans worth more than $500 billion to small- and medium-sized businesses nationwide, in order to help them stay afloat during the economic crunch due to COVID-19. The PPP loan application period, originally expired on June 30, was recently extended through Aug. 8.
Levin’s figures for the 49th district come from federal data released last week. The feds put out two data sets: one tabulating small loans ($150,000 or less), including exact loan amounts, but not recipients’ identifying information; the second tabulating larger loans ($150,000 to $10 million), identifying recipients, but not specific loan amounts.
Levin’s count of 241,446 stimulus-supported employees combines “jobs retained” numbers reported in both data sets. His count of $613 million in stimulus to small businesses totals only what’s reported in the former. Including estimates from the latter, that dollar amount is actually 3 to 6 times as large.
“Our understanding is that [job retention] numbers are reported by the business when they apply for PPP,” Eric Mee, Levin’s spokesman, said in an email.
About one-eighth of recipients tallied in Levin’s district, taking loans totaling at least $171 million, is reported in the federal data as retaining zero jobs.
Of these, about one-third are classified as “self-employed individuals” or “sole proprietorships,” which Mee says are likeliest to have reported not retaining any jobs — that is, beyond the applicant’s job. Most of the remaining two-thirds are corporations or limited liability companies (LLCs).
The Coast News recommends readers interpret these figures with caution. While any large data set invariably contains erroneous entries, we’ve found a variety of inaccuracies in the feds’ data. These include myriad typos — such as 13 variant misspellings of Carlsbad — and several loan recipients listed as falling within the Levin’s district who in fact don’t.
Moreover, two loan recipients of the handful we reached out to disputed that they hadn’t used the money to support jobs.
The feds say Sandel Avionics in Vista received a loan for $1-2 million on April 13 and retained zero jobs. But Sandel CEO Steve Jackson told The Coast News: “We furloughed approximately 10% of our workforce but then brought them back once we received PPP funds. We also hired one additional employee, for a total of 48 employees retained.”
The feds say the Aviara Residence Club Owner’s Association — an HOA managed by the Four Seasons in Carlsbad — received a loan for $2-5 million on May 6 and retained zero jobs.
But Sales Manager Michelle Oh told The Coast News: “[The HOA] was approved for a $2,007,900 loan but only borrowed $75,000 while retaining approximately 96 percent of its workforce. … The money was used to assist employees with their portion of medical premium expenses during the time they were on a mandated leave of absence.”
“While I am pleased that so many [49th district] businesses were assisted with this critical funding, I know we must continue pushing for transparency and improved oversight of this program so that we can continue bringing this aid only to the businesses that truly need it,” Levin said in his press release.
The PPP doesn’t require any special verification of loan applicants’ need for stimulus due to COVID-19.
“[Levin] supports many provisions in the Heroes Act that prioritize the nation’s smallest businesses,” Mee said. “He continues to call on Senate Majority Leader Mitch McConnell [a Kentucky Republican] to vote on that legislation.”
The Heroes Act, which passed in the House of Representatives May 15, would reform PPP by, among other things, setting aside one-quarter of funds specifically for businesses with 10 or fewer employees.
Levin also voted for the Truth Act, which aims to improve PPP reporting, and co-sponsored the Restaurants Act, which would provide $120 billion in aid to food and beverage establishments, Mee said.
