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Democratic ad misleadingly attacks Susan Collins on the Paycheck Protection Program

American Politics

Democratic ad misleadingly attacks Susan Collins on the Paycheck Protection Program

Sara Gideon is the Maine House speaker and presumed front-runner for the Democratic nomination to challenge U.S. Sen. Susan Collins (R).Collins played a key role in crafting the bipartisan Paycheck Protection Program, designed to keep small businesses afloat during the coronavirus pandemic. Under the program, roughly 75 percent of the money received had to be…

Democratic ad misleadingly attacks Susan Collins on the Paycheck Protection Program

Sara Gideon is the Maine Home speaker and assumed front-runner for the Democratic election to challenge U.S. Sen. Susan Collins (R).

Collins played a key role in crafting the bipartisan Paycheck Defense Program, created to keep small companies afloat during the coronavirus pandemic. Under the program, roughly 75 percent of the cash got needed to be directed to keeping employees getting paychecks. In a tough ad, Gideon recommends Collins crafted the costs to benefit campaign factors while leaving small services adrift. “Susan Collins,” the ad concludes. “She’s not for you any longer.”

This is a fine example of how a narrative can be crafted to leave a misconception.

The Truths

Maeve Coyle, a spokeswoman for the Gideon campaign, insisted that every declaration in the ad is documented. “The point is that Senator Collins has close ties to the special interests that hurt Mainers through her design of a program that enabled special interests to gain access to funds intended for small companies,” Coyle said.

At concern are donations totaling $12,500 that Collins received in February.

  • International Franchise Association Franchising Political Action Committee, $1,000
  • International Franchise Association Franchising Political Action Committee, $1,500
  • Hilton Worldwide Political Action Committee, $2,500
  • American Hotel and Lodging Association Political Action Committee (HOTELPAC), $2,500
  • HOTELPAC, $5,000

Collins’s quarterly filing indicates she raised more than $2 million in the first quarter of 2020– and more than $12 million for her reelection race. So this $12,000 is just a small part of that pie.

Note that the advertisement states “as the coronavirus spread” she got the donations. Definitely, the coronavirus was spreading out in February. But since the Trump administration stopped working to ramp up screening, it was spreading out silently. Even toward completion of February, President Trump was declaring there were only 15 validated cases in the United States and little need for much cash from Congress to handle the problem.

So it seems a stretch to argue that the contributions were offered with an eye towards influencing coronavirus legislation that was crafted in mid-March. (One caution: The global hotel industry was distinctively positioned to see the impact the coronavirus would have on its organisation. Hilton has hotels in Wuhan, China, with one home near the seafood market believed to be the source of the infection.)

The advertisement highlights the headline of an article in the Daily Beast– “How Susan Collins’ Small Company Expense Helped Bail Out Big Ones”– however even that short article states: “Those contributions– a portion of the cash she’s raised is this cycle– came before the PPP [Paycheck Protection Program] bill was under factor to consider, as the financial damage the infection would inflict ended up being clear in March.”

The ad then declares “Collins wrote an unique loophole into her expense permitting big, out-of-state hotels to get millions.” The implication is that in exchange for the campaign cash, Collins did the bidding of her donors.

The addition of the provision was obvious at the time. The Income Defense Program, which will allow companies to look for loan forgiveness if they keep paying employees, is focused on little companies with fewer than 500 employees. Big hotel chains, undoubtedly, would not qualify, however a modification in the language enabled individual hotels to seek PPP loans.

” Representatives from the American Hotel & Accommodations Association connected to Republicans and Democrats to push them to place the language, arguing that it would allow the federal assistance to cover an additional 33,000 hotels, with an overall of about one million employees,” the New York Times reported “The large corporations that own the big brand names– like Marriott or Hilton– would not be qualified. But any specific hotel, including from among these brand names, that has less than 500 staff members would be. Numerous hotels are owned by franchisees.”

Notice the reference of Hilton. That was one of Collins’s donors. So Hilton’s home office would not qualify. But a Hilton franchise in Maine would qualify, if the hotel had less than 500 staff members.

Hilton hotels are mainly owned by franchises or the business handles hotels for third-party owners. Since Dec. 31, 2018, Hilton’s handled and franchised properties “included 689 managed hotels and 4,874 franchised hotels consisting of 882,873 total rooms,” the business told the Securities and Exchange Commission in a recent filing. Hilton itself owned only “71 homes totaling 21,720 rooms.”

It would definitely remain in the interest of Hilton management to not let its franchised homes fail as vacation and service travel vaporized overnight. But this particular provision was not particularly controversial. “There was bipartisan assistance for including operators of several franchises who, though they fly the flag of a corporate brand– Marriott, for example– and get marketing support, are essentially independent small companies,” Bloomberg News reported

Sen. Christopher A. Coons (D-Del.) told Bloomberg that the step was “designed to put a floor under the dining establishment and travel and hotel industries that are truly having a hard time, and the little organisations that so numerous people recognize with.”

Debate emerged in the early days of the PPP program when some big chains confessed in public filings that they benefited from careless phrasing in the arrangement to declare PPP funds. Many companies, under pressure from lawmakers and Trump, returned the cash. The ad highlights another headline– “Dallas hotelier gets $587 million in small company funds”– but the business run by Dallas hotelier Monty Bennett said they returned the cash.

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The $650 billion program lacked the first $349 billion allotment in just 13 days, however more than $130 billion remains untapped in the 2nd round of funding. Treasury Secretary Steven Mnuchin told Congress on June 10 that $12 billion has been returned by business that were not supposed to get it. So, in the end, less than 2 percent appears to have originally gone to business that were not deserving of the money.

The advertisement depends on the general public understanding that payouts to big business assisted drain the PPP fund, claiming that “just one in 10 Maine little companies were getting the aid they required.” The advertisement flashes a headline from an April 16 short article in the Bangor Daily News: “1 in 10 Maine Small Organisations Got Loans.”

That was clearly in the early days of the PPP program, however Coyle stated the post is still pertinent and associates that statistic to Collins’s office. Press Reporter Jessica Piper, who composed the post, stated: “I can validate the 1 in 10 figure did not come from Collins’ workplace.”

Since May 30, 25,721 little businesses had actually gotten loans. However whether that’s a little or a lot depends on how one counts the variety of small companies in Maine. The Gideon campaign says there are 147,270 small companies, according to Small Company Administration, or so 17.5 percent have received cash. However the Collins campaign argues that the majority of those are self-employed individuals or shell business, and the very same SBA data reveal only 32,797 firms in Maine with 1 to 499 workers. That would imply 78.4 percent got loans.

” That [147,270] number consists of ‘companies’ or shell corporations that do not have employees,” stated Kevin Kelley, a Collins project spokesman. “The PPP, by style, is intended to keep workers getting an income.”

Separately, a weekly non-random study by the Census Bureau has found in current weeks that 66 to 73 percent of the firms surveyed in Maine stated they had gotten PPP funds. The Washington Post, in an extensive report on June 10, stated that after a rocky start, the “federal government’s small-business Paycheck Protection Program is unexpectedly appearing like a measured success.”

The Trump administration has declined to expose which business took PPP cash, and Hilton did not react to inquiries about which Maine franchises requested PPP aid. In a June 6 report, the Treasury stated that about 8 percent of the money, $41 billion, went to companies included in “ accommodation and food services

Coyle decreased to react to repeated concerns about whether the advertisement suggests Collins taken part in a quid pro quo with her donors.

” The PPP program was intended for little businesses. Small companies throughout the nation, consisting of in Maine, should not have experienced the difficulty they did– and some still are– in getting the support required to keep them in service,” Coyle said. “One significant reason they experience that trouble is the loophole that Senator Collins inserted when designing the program. It enabled big corporations access to money that was not planned for them at the cost of Maine small companies.”

The Pinocchio Test

Gideon’s advertisement takes numerous discrete elements– relatively minor campaign contributions to Collins, a bipartisan effort to allow franchises in hotel chains to obtain PPP cash, and early numbers on PPP recipients in Maine– to sketch a deceptive narrative. Without quite stating so, the ad indicates that Collins dealt with behalf of her corporate donors and left little businesses in Maine high and dry.

There were definitely problems with PPP at the start, and the modification in concern could have been prepared more securely. However after public pressure, lots of business that should not have actually acquired funds, such as the one highlighted in the ad, returned funds. In the end, a fairly little portion of the money appears to have actually gone to undeserving receivers before it was offered back.

Meanwhile, individually owned hotels under a corporate brand had the ability to keep paying their workers, a key goal of the PPP. The numbers are a little fuzzy, however it appears that a large portion of businesses in Maine with less than 500 staff members obtained PPP cash. Undoubtedly, whereas PPP funds ran out at initially, now there is a surplus.

In general, this ad is extremely misleading and deserving of Three Pinocchios.

3 Pinocchios

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