Did Some WA State, Local Unions ‘Illegally’ get COVID Relief Funds?

The Freedom Foundation has issued information showing some 226 labor unions and other entities across the US obtained Federal Paycheck Protection Plan (PPP) COVID relief despite not being eligible, and now Congressional House Reps are calling for an investigation.

 The report says unions, including two in Pasco, received funding despite not being eligible.

The Freedom Foundation Reporty was first prepared and released in February. The report says between 2020 and 2021, these 226 labor unions and other "related non-profit entities" were able to apply for and receive PPP forgivable loans. The total between these entities is $36 million dollars.

The PPP was part of the CARES Act passed due to COVID.

These also include some teacher's unions.

Many small businesses with 500 or fewer workers qualified for these funds, to help continue to pay their workers during COVID shutdowns,  but labor unions were not. According to the FF Report:

"As labor unions are generally registered with the Internal Revenue Service (IRS) under 26 U.S.C. § 501(c)(5), most were not initially eligible for PPP loans."

 The report goes on to say: 

"The Freedom Foundation’s review of the SBA’s database of PPP loan recipients identified as many as 223 loans totaling $36.1 million that went to labor unions and affiliated organizations that were ineligible for the funds at the time their loans were approved."

Congressional House Reps Virginia Fox (R-NC), Blaine Luetkemeyer (R-MO) Rick Allen (R-GA), and Beth Van Dyne (R-TX) are calling on the Small Business Administration to investigate why these loans were made despite the unions clearly not being eligible.

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Three entities in WA state are on this list, they include two labor unions based out of Pasco, WA:

Plumbers and Steamfillers Local 598 1328 Road 28 in Pasco, whose loan was permitted on January 30, 2021, for $325.907.

LU 598 Plumbing and Pipefiitting JATC, 1328 Road 28 in Pasco, whose loan was approved on February 12, 2021, for $187.270.

Both are listed as 501 (c) 5 tax status

The other union was in Everett, WA. The PDF data chart shows the local Pasco funds have been distributed, with a -0- balance remaining on the loans to be given out. Both loans are listed as having Exemption 4 status, which according to the PPP program and the Department of Justice:.

"Exemption 4 of the FOIA protects "trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential." (FOIA is Freedom of Information Act-often used by journalists and others to obtain sensitive information). 

These loans are considered forgivable, meaning under certain terms and conditions they do not have to be paid back.

 The PDF shows both Pasco union loans have forgiveness dates of July 21st., 2021. 

We do not have hard data showing if the loans were forgiven or repaid.

The American Rescue Plan expanded the loan programs to include entities registered as 501 (c) 5 and others, but it was not signed into law until March 21st, 2021. One Pasco loan was approved in January, the other in February 2021 well before the eligibility was expanded.

We will continue to update as more information becomes available.