Florida Democratic Party ‘did the right thing’ returning PPP loan, DNC chairman says
State Democratic parties in Florida and Ohio sought and accepted federal loans worth hundreds of thousands of dollars this spring from a program created to help small businesses struggling to make payroll amid the coronavirus-driven recession.
One of them — in Florida — did the right thing by returning the money, Democratic National Committee Chairman Tom Perez said Thursday.
“It was the right thing to give that money back,” Perez told reporters on a morning conference call about the coronavirus.
The Florida Democratic Party, which says it consulted with attorneys, lenders and the Small Business Administration before requesting money from the Paycheck Protection Program, has blamed the federal government for making a “mistake” in authorizing a $780,000 loan. A party official said Wednesday that the loan has been repaid in full.
But the Ohio Democratic Party told the Miami Herald it will not repay a $334,000 loan.
“The purpose of the Paycheck Protection Program is to help organizations cover payroll and benefits, and that’s precisely what it has been used for — to ensure our entire team continued to work and earn a paycheck and retain their health coverage during an unprecedented public health crisis,” said Ohio Democratic Party spokeswoman Kirstin Alvanitakis. “Throughout this process, every step we have taken was guided by attorneys, the private financial institution who provided the loan to us and the Small Business Administration, which approved it with full transparency. As the program and its rules and regulations have evolved, we’ve continued to have conversations with our lender to ensure we are in full compliance with the law.”
The two parties — both instrumental to state and federal Democratic campaigns in competitive 2020 states — were criticized this month after the SBA released records detailing thousands of entities that received PPP loans worth more than $150,000. Both parties had publicly knocked the program before it was revealed they’d taken the money.
Asked about the loans Thursday, Perez said he was not informed ahead of time that either organization was requesting loans through the Paycheck Protection Program, created as part of the CARES Act to assist workers and employers. Perez told reporters he would “follow up” on the Ohio Democratic Party’s decision not to return the loan.
“I thought Ohio was [giving back their loan] but I haven’t had the chance to follow up on that in the last few days so I’m not 100 percent certain on that,” Perez said.
Though Florida Democratic Party officials say they returned the money, some Democrats who questioned the legality of the loan have worried that the party may have tainted state and federal campaigns by using the funds to pay for campaign-related activities.
The state party has largely been unwilling to answer questions about details of its application and how or whether it spent the funds. It also remains unclear why the FDP reported contributing $815,000 in loans from the SBA into its federal accounts when officials have said they received only $780,000 from the federal government. The party says it will amend its reports to the FEC to reflect the lower amount.
Nor have party officials explained why the money would have been reported as a loan to its federal account when the SBA reported distributing the money to a Florida corporation set up by the party to pay for its Tallahassee headquarters.
“We have maintained a sufficient positive balance since receiving the loan and are returning the funds,” a spokesperson wrote Tuesday in an email in response to questions about how much of the loan has been spent, whether it was used to pay staff members, and, if so, what jobs those workers perform.
Florida Election Commission documents show that in April and May — the stretch during which the party received its PPP loan — the Florida Democratic Party spent about $300,000 more than what it otherwise raised and had in cash-on-hand at the beginning of April. Among those expenses: $400,000 on payroll, taxes, health insurance and healthcare, $250,000 in transfers to the Arizona and Indiana Democratic parties, and $216,000 on mail, digital advertising and robocalls.
An FDP spokesperson told the Miami Herald this week that none of the PPP funds were spent on former Vice President Joe Biden’s Florida campaign for president, or on any other campaign activities related to other candidates. Members of Florida’s Democratic congressional delegation, including potential Biden running mate U.S. Rep. Val Demings, were adamant that their campaigns did not benefit from the party’s PPP loan.
“The congresswoman pays for her own campaign staff,” said a Demings senior adviser.
Miami Herald staff writer Bianca Padro Ocasio contributed to this report.
This story was originally published July 16, 2020 at 6:48 PM.
