Protect paychecks under closer inspection

JACKSON, Mississippi (WLBT) – A 3-month investigation from On Your Side finds that more than $ 17 million in federal paycheck protection program loans have been disbursed to organizations and businesses associated with 64 lawmakers in State over the past eighteen months, a handful of which also provided false information to the US government when requesting money.

The scan, which found no evidence of fraud or illegal activity, relied on files from the Mississippi Secretary of State, disclosure documents filed with the state’s ethics committee and Small Business Administration public lending data provided by ProPublica.

This year alone, nearly 100,000 Mississippians received $ 2.3 billion in P3 loans from the CARES Act, which provided much-needed financial assistance to business owners.

“The CARES law was a framework law that distributed tons of money. And in every part of this act, people are trying to see if they can get the money, ”Acting US Attorney Darren J. LaMarca said. “We have seen issues in our office now, involving people who have never had a business and who have applied for a P3. People who once had a business, but it was no longer a problem, who applied. And then you have the ones who have a business, but then exaggerate the number of employees.

Most of these cases – say investigators – are however legitimate.

Representative Nick Bain (R-Corinth) runs a law firm in northern Mississippi that has secured more than $ 37,000 in P3 loans.

“It was beneficial; this ensured that we could pay our employees and make sure they had food on their tables during the months they needed it, ”Bain said. “I don’t regret taking this because it helped my employees. “

3 On Your Side researched every member of the House and Senate – 174 in total – and found that more than a third had either received a P3 loan directly or had a connection to a company that had done so.

In addition, a statewide elected official, Secretary of State Michael Watson, also received PPP money.

Our analysis revealed that the ten highest amounts paid to these people or businesses associated with them amounted to almost $ 14 million alone.

Companies linked to Representative Charles Busby (R-Pascagoula) got more than anyone else: $ 4.6 million.

Big M Transportation – a company that Representative Steve Massengill (R-Hickory Flat) works for and owns his family – has raised more than $ 3.7 million.

Four companies linked to Representative Willie Bailey (D-Greenville) have secured $ 2.8 million.

How did we determine if lawmakers had connections to businesses or organizations?

If they or their spouse owned, partnered, or had an interest in a business, such as a shareholder, it would count as a tie.

Lawmakers listed as registered agents, directors and other high-level positions in an organization’s documents filed with the Mississippi Secretary of State’s office would also be considered.

Lawmakers who were simply employed in a business with no other connection to the business or the owner did not.

3 On Your Side also found loans linked to five lawmakers that might warrant further scrutiny – two with false information.

Republican Senator John A. Polk’s company, Polk’s Meat Products in Magee, received more than $ 750,000 in P3s.

The Secretary of State’s website shows that Polk’s Meat Products has been registered as a company since 1975, but the person who applied for the loan listed it as a “sole proprietorship,” according to SBA records.

Although a corporation is a separate legal entity from the business owner, sole proprietorship means the owner operates the business and would not apply to entities with shareholders.

It is not known why Polk’s company chose this option.

Polk did not respond to multiple requests for comment.

Representative Earle Banks (D-Jackson) is a shareholder of Peoples Funeral Home, according to his declaration of economic interest.

This company has secured over $ 17,000 in P3 funds, but its loan information indicated the type of industry as “other management consulting” instead of what it is: a funeral home.

Banks did not respond to requests for comment.

It is important to note here that nothing uncovered in this investigation was found to be illegal or fraudulent, but in a few cases the information provided to the federal government by elected officials was false.

“I don’t think that means what they did was fraud. There could very well be many legitimate reasons, perhaps negligence. Maybe that’s a reason to learn more, ”said LaMarca.

Neither LaMarca nor FBI Special Agent Jackson Jermicha Fomby would address the details we found.

Click on here to see the full list of politicians and the P3 loans they have received.

“If there is anything that we feel is in violation of this, you know, the law that leads to the fraud, then we investigate,” Fomby said. “And then those facts are passed on to the US attorney’s office, and the US attorney’s office will make a decision on whether to prosecute.”

It may seem strange that some lawmakers – elected officials from across the state – have secured loans for their businesses.

Being a member of the Mississippi House or Senate is a part-time job, which means most, if not all, lawmakers work elsewhere, and many have their own businesses.

At the same time, lawmakers like Bain expect more attention to be paid to the money they borrow.

“We’re kinda in a fish bowl and people are looking at us. We are certainly held to a higher level. And I think it’s imperative that we treat each other this way, ”Bain said.

3 On Your Side found nothing irregular about Bain’s loans.

Our analysis found that the vast majority of that distributed PPP money – 80% – went to Republican lawmakers, many of whom also publicly criticized federal aid as “handouts.”

Watson disputed this in a statement he posted to 3 On Your Side.

“The PPP program was designed and implemented as an emergency measure to stabilize our economy. As a small business trying to help customers whose businesses have been criticized by government interference, it was the responsible thing to do, ”Watson said.

Last month, Sen. Chris McDaniel (R-Ellisville) said on social media that “welfare programs will never solve problems more effectively than local churches, charities and volunteers.”

Months earlier, his law firm took more than $ 415,000 in P3 money to help them out, according to SBA records.

McDaniel did not respond to requests for comment.

Bain believes that each situation varies depending on the company involved, and said law firms have been particularly affected.

“When you’re not able to go to work and you’re in a law firm, like ours, or any business where you deal with the public coming through the door, when in fact they are physically unable to do it, it’s a little different, ”Bain said.

House Speaker Philip Gunn declined to comment on the specific findings that 3 On Your Side shared with his office, but acknowledged the importance for its members to obey the law.

“All of our members are required to obey the law and should be held accountable by the proper authorities if it turns out that they are not doing so,” Gunn said in the statement.

Copyright 2021 WLBT. All rights reserved.

About Christopher Easley

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