Gas station secured bailouts for small businesses and then paid for Trump billboards


The small company that funded the big billboards had received a huge cash injection just months earlier, backed by the same government that is now being celebrated, public records show.

Jones 1 Inc. was approved for a loan of between $ 150,000 and $ 350,000 in late April through the federal government’s Paycheck Protection Program (PPP), which was set up to help small businesses save jobs during the pandemic.

The company, which owns a small Shell gas station and travel center in Needles, California, subsequently leased “six beautiful Trump billboards” near the California-Arizona border, which a local group of Lake Havasu Republicans announced – and thanked them, ” a generous “Trump supporter.”

Six political billboards could cost anywhere from about $ 10,000 for four weeks to nearly $ 30,000, depending on their location, according to average price estimates from Lamar Advertising, which leased the space to Jones 1 Inc. It refused to price the specific billboards. But if they stay on top during the election, what the local Republican group that inspired the posters said is the plan, the cost could be anywhere from about $ 30,000 to about $ 120,000.

Joseph Jones, the company’s owner, told CNN that the PPP money was used for payroll, not the billboards. His loan application reported that the company employed 32 workers, according to the Small Business Administration. Jones declined to quote the total cost of the billboards, but said he didn’t spend nearly $ 120,000. “I just wanted to support my president, that’s all.”

Whether or not the money Jones 1 Inc. received through the Small Business Administration loan program was used directly to pay for the Trump billboards, business ethics professors and legal experts said non-essential spending like this was in the spirit of the The program violated what was meant by small businesses in dire need of the support to pay their workers. More importantly, they said, these expenses highlight the errors in implementing the program and the confusion about which companies would be eligible for the money. It also underscores the need for increased oversight – especially when the government decides which loans to make direct.

“If you have enough capital to spend on billboards, maybe you shouldn’t have been one of the companies to get this loan,” said Liz Hempowicz, public policy director for Project On Government Oversight (POGO), a nonprofit watchdog group . “The real responsibility was with the SBA and the government to make sure they were spending this taxpayers money as Congress intended.”

Linda Ferrell, professor of business ethics at Auburn University, said companies that receive taxpayer-subsidized funding should have a “social responsibility” to using the money to protect their employees and customers. But like Hempowicz, she said she held the government more accountable than any individual business owner, especially given the uncertainty at the start of the pandemic, which may have led some business owners to apply in good faith for the loans before ending up in better financial shape than expected.

Various versions of the billboards sponsored by Jones 1 Inc. appear on Arizona State Route 95 and Interstate 40.

Gianna Kraft, founder of the Lake Havasu Republicans Facebook group, said that its members came up with the idea for the billboards and that Jones was the one to stand up for it. “I get pictures every day, people take selfies to show their support, people drive by and say they are great and what a great impact they are,” she said. “Where are Biden’s billboards?” Kraft said these recently installed Trump advertisements were an indication of how much greater excitement there is for the president than for his opponent, particularly in the Lake Havasu area, which will host a boat parade in Trump’s honor over Labor Day weekend .

She said she doesn’t know if Jones used PPP funds to fund the billboards or how much they cost. “I don’t know anyone’s financial affairs.”

The PPP program was the subject of considerable controversy in its early stages following revelations large public companies like Shake shack and the operator of Ruth’s Chris Steakhouse had received millions of dollars in PPP loans – which they eventually returned. Around the same time, the SBA and the Treasury Department issued guidelines affirming that all borrowers must “in good faith” self-certify that the loan is necessary for the loan to exist.
For many small businesses, the federal loan money has already been used up

Under the rules of the SBA, companies that have falsely certified that the loan was necessary to keep the business going and have not returned the funds may face civil and criminal penalties.

PPP funds were lent at 1% interest rate, which is far lower than traditional corporate corporate loans in the private sector and is fully granted when companies can demonstrate that they used the money on “labor, mortgage, rent and utilities” and ” At least 60% of the waived amount must have been used for payroll, “says the SBA website.

“I don’t know if it matters, whether it was the PPP loan money or other money that was released through the PPP loan,” said POGO’s Hempowicz of the funds used to pay for the billboards. Even though Jones 1 Inc. does not file a petition for forgiveness, Jones 1 Inc. said the company “still benefits from an incredibly low interest rate that is not necessarily designed to allow small business owners to purchase a range of billboards”.

Jones did not want to elaborate on the circumstances that led him to apply for the loan. Nor did he want to say whether his company’s financial position has improved since applying for the loan, or whether he intends to return the money or apply for the loan.

To date, more than $ 525 billion in loans have been approved through the federal loan program established by Congress in the early days of the pandemic. But many small businesses affected by mandatory Covid-19 shutdowns complained about it early on can not secure a loan.
The owner of the business that funded the billboards told CNN that the PPP money was used for payroll, not the signs.

The local bank that provided Jones with the SBA-backed loan declined to comment on the customer information. The SBA also said it couldn’t comment on certain borrowers when asked by CNN whether companies that can afford large non-business expenses like buying billboards should have been eligible for a PPP loan.

The agency has broadly said that having a bank approve a PPP loan does not mean that the SBA has determined the company is eligible for the loan and that although only loans greater than $ 2 million are automatic Be checked, all PPP loan SBA verification anytime.

Both public and private companies are often involved in politics – often they donate money to political groups known as Super PACs that campaign for specific candidates. There is no limit to independent spending that is not made in coordination with political campaigns. However, there are disclosure rules for this type of “independent expense,” and expenses in excess of $ 1,000 must be reported to the Federal Election Commission (FEC) within 24 hours. While the billboards state that they were paid for by Jones 1 Inc., they do not include the required disclaimer that they were not authorized by a political candidate. FEC records also show that Jones 1 Inc. did not report the spending, and Jones did not comment on it.

Mann spent $ 318,497 in PPP money on hotels, jewelry and Lamborghini, authorities say

The FEC did not comment directly on Jones 1 Inc.’s political billboard spending, but did confirm to CNN that it was not reported.

Firms that are primarily involved in political activities are not allowed to obtain SBA business loans under federal law, but that rule would not apply to a small business like a gas station that also has political spending.

Initially, the Trump administration struggled to keep information secret on who benefited from the massive government bailout program, but limited data was released in July after lawmakers put pressure on the agency and media outlets, including CNN, sued disclosure to a federal court.

Michael Santoro, a professor of business ethics at Santa Clara University, said there was an inherent conflict of interest as the recipient of a PPP loan was campaigning for the re-election of the same government that oversaw the disbursement of the money.

He said the real question was whether the SBA would investigate and take action if it found unreasonable spending. “Obviously something looks really, really wrong,” he said, “so that’s the SBA’s job to check this out.”

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