Senators Urge DOJ to Investigate Planned Parenthood PPP Loans

By Janita Kan
Janita Kan
Janita Kan
Janita Kan is a reporter based in New York covering the Justice Department, courts, and First Amendment.
May 21, 2020Updated: May 21, 2020

A group of senators is urging Attorney General William Barr to investigate the activities of dozens of Planned Parenthood affiliates for alleged misconduct after they received Paycheck Protection Program (PPP) loans they were apparently not eligible for.

Sen. Tom Cotton (R-Ark.) and 26 senators wrote to the Justice Department on Thursday expressing concern about reports that found Planned Parenthood affiliates had received millions of dollars in PPP loans aimed at small businesses and non-profits during the CCP virus pandemic.

The lawmakers say the statutory text of the CARES Act, which established the program, explicitly prohibits affiliates like the ones under Planned Parenthood from receiving the funding. The program requires small businesses or non-profits to have 500 or fewer employees.

Entities that are affiliated with a larger organization are subject to Small Business Administration (SBA) affiliation rules, which take into consideration the employee count of affiliates together with the main national organization. Planned Parenthood Federation of America, the national body, employed 676 individuals in the 2017 calendar year, according to its tax filing (pdf).

On Tuesday, Fox News reported that 37 Planned Parenthood affiliates received a total of $80 million in loans from the program. The report states that the SBA has reached out to each of the affiliates to inform them that they are ineligible.

Following the reports, many Republican lawmakers, including Marco Rubio (R-Fla.), who chairs the Senate Committee on Small Business and Entrepreneurship, voiced disapproval over the revelation while calling for the affiliates to return the taxpayer-funded loans.

“There is no ambiguity in the legislation that passed or public record around its passage that organizations such as Planned Parenthood, whose parent organization has close to half a billion dollars in assets, is not eligible for the Paycheck Protection Program,” Rubio said in a statement on Tuesday.

“Those funds must be returned immediately. Furthermore, the SBA should open an investigation into how these loans were made in clear violation of the applicable affiliation rules and if Planned Parenthood, the banks, or staff at the SBA knowingly violated the law all appropriate legal options should be pursued.”

Planned Parenthood has pushed back on the accusations calling the opposition a “political attack on Planned Parenthood health centers and access to reproductive health care.”

“Like many other local nonprofits and health care providers, some independent Planned Parenthood 501(c)(3) organizations applied for and were awarded loans under the eligibility rules established by the CARES Act and the Small Business Administration (SBA), which they met,” Jacqueline Ayers, vice president of government relations and public policy of Planned Parenthood Federation of America, said in a statement.

“Planned Parenthood health centers play a core role in the social safety net, and there is no more critical time for the care they provide than during a public health crisis.”

The 27 senators raised concerns that the affiliates may have submitted fraudulent loan applications as there were indications that Planned Parenthood was aware that it was ineligible for the PPP loan.

“The Paycheck Protection Program established by the CARES Act was designed by Congress to help struggling small businesses and nonprofit organizations by giving them access to low-cost loans for expenses like keeping their employees on payroll during this pandemic,” the senators wrote. “It was not designed to give government funds to politicized, partisan abortion providers like Planned Parenthood.”

“Planned Parenthood fraudulently taking tens of millions of dollars that were intended to help keep those small businesses and nonprofit organizations afloat cannot stand and must be addressed,” they wrote.

Since its introduction the PPP has received an overwhelming response from small businesses. Following backlash over reports that some larger businesses were receiving funds intended for small businesses, Treasury Secretary Steven Mnuchin said borrowers could face criminal liability for making false claims.

“I want to be very clear—it’s the borrowers who have criminal liability if they made this certification and it’s not true,” he said, according to CBS.