PPP Data Get Murky on Wrong Congress District for 226,000 Loans

At least a quarter-million coronavirus relief loans may be listed in the wrong U.S. congressional district in data the Trump administration released for the Paycheck Protection Program, hampering efforts to determine how effective the initiative to help small businesses is.

Bloomberg News checked the roughly 4.9 million PPP loans against a Department of Housing and Urban Development database that tracks changes in ZIP codes and congressional districts quarterly. The analysis found 226,000 loans where the districts didn’t match HUD data.

Of those, 86% were from two states: Pennsylvania and North Carolina, which redrew district maps in recent years. The findings raise questions about congressional districts for more than a million other loans that are impossible to verify because addresses were redacted for amounts of less than $150,000, which account for about 87% of the total number. Every state has loans where the listed district is questionable, according to the analysis.

The Small Business Administration, which is running the program with the Treasury Department, declined to comment. The topic of data accuracy is expected to be raised on Friday when Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza are scheduled to appear before the House Small Business Committee.

Lawmakers are reporting loans that are either incorrectly listed in their district or missing from it. The office of Republican Representative Brian Fitzpatrick of Pennsylvania said that the SBA may have used outdated district boundaries. The office for Representative Anthony Gonzales, an Ohio Republican, said an initial review found $95 million in loans in his district when the amount should have been at least $617 million.

“We alerted the SBA to these errors and hope to receive updated data soon,” said Emily Carlin, spokeswoman for Gonzales.

Getting congressional districts right matters because it allows proper oversight to determine whether approvals were influenced by political or partisan considerations, said Norman Ornstein, a congressional scholar at the American Enterprise Institute. The PPP, the centerpiece of a $2.2 trillion stimulus package, is already facing a backlash for doling out money to big-name law firms, Wall Street managers and companies with ties to President Donald Trump and other politicians.

The district of Democratic Representative Andy Levin of Michigan is another example where the SBA lists loans that the HUD data indicate should be in a different district. There are almost 8,000 such loans in Levin’s district.

“SBA joins so many other agencies that are overwhelmed with unprecedented need in this pandemic,” Levin said in a statement. “Orchestrating transparent and accountable relief programs requires a coherent response to the pandemic. Sadly, we’ve had nothing of the sort from the current administration.”

The SBA data for loans over $150,000 show ranges rather than actual amounts for each recipient. In aggregate, the loans that don’t match their districts have a value of $20 billion to $39 billion. That’s as much as 7.5% of the $521 billion in aid approved by June 30.

An earlier analysis found that the dataset is also riddled with mistakes in the loan amounts and numbers of jobs retained by the program, which was designed to help owners keep workers on payroll during shutdowns.

While mistakes are understandable with such an unprecedented program launched in a matter of days, it’s also a reflection on how the program was run, Ornstein said.

“You can look at this as a way of showing corruption or dirty dealing, but it’s also a measure of whether there is efficiency or ineptitude in the delivery of the program,” he said. “If they can’t get the congressional districts right, what else are they screwing up?”

Have a tip about how virus relief funds are used or misused? Write us at ppptips@bloomberg.net, or follow instructions to submit an anonymous tip at https://www.bloomberg.com/tips/

©2020 Bloomberg L.P.

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