Despite criticizing federal spending, some GOP Senate candidates accepted PPP loans
Mike Gibbons speaking in Hilliard at the opening of a new campaign office. Photo by Nick Evans, OCJ.
The field of Republican Senate candidates is crowded, and the elbows are sharp. Candidates lash out at one another for not being Trump-y enough, for being part of the “establishment” or for being willing to compromise. But their favorite punching bag, unsurprisingly, is the Biden administration.
With inflation at record levels and the price of consumer goods like food and gas climbing, it’s not hard for Republicans to make a familiar economic case: government “handouts” backed by Democrats are flooding the market with money, and that glut of cash is raising prices for ordinary Americans.
“We have to get our spending under control, and you can see the fact that our spending isn’t under control in the inflation that we’re seeing right now,” Mike Gibbons said at a recent campaign event in Bellefontaine. “It is clear and simple. The definition of inflation is too many dollars chasing too few goods. Well, that’s what we have.”
But when funding was made available during the pandemic, Gibbons’ investment banking firm didn’t shy away. Brown, Gibbons, Lang & Co. received a Paycheck Protection Program loan in April of 2020 for just north of $1.5 million, according to data compiled by Project on Government Oversight, or POGO. That funding helped support a total of 72 employees.
Speaking in Hilliard Wednesday at the opening of a new campaign office, Gibbons defended the decision, arguing PPP didn’t cause inflation.
“I don’t have any problem with that. If everybody’s getting it, we’re gonna get it too,” Gibbons said. “You know, I wasn’t particularly active in trying to get it, but I have partners that said, you know, we should line up just like everybody else is and get whatever PPP loan we can because we aren’t sure what the future is going to bring.”
Each candidate in the Republican field has criticized government spending during the Biden administration, and drawn direct links to its impact on broader economic trends like inflation or gas prices, but none have directly criticized PPP. Still, that program, created as part of the CARES Act signed into law during the Trump administration, is one of the most recognizable examples of widespread, potentially no-strings-attached government assistance in recent memory.
According to data from the Pandemic Oversight Accountability Committee, direct payments to individuals — pandemic assistance checks — totaled $803 billion. The three federal unemployment enhancements, another stalking horse for the GOP, cost $653 billion combined. PPP slots in right between them, paying out $794 billion in loans, $664 billion of which have been forgiven.
As for how Gibbons distinguishes PPP spending from policies that have led to inflation, he contends inflation could’ve been transitory as the pandemic ebbed, but spending on measures like the bipartisan infrastructure package fueled rising prices.
And Gibbons wasn’t alone in taking assistance.
POGO data shows Sen. Matt Dolan’s law firm received almost $616,000 to support a staff of 33. Dolan has been happy to leave inflation and gas prices at White House’s doorstep, but his criticism tends toward energy policy and the occasional but vague “out of control spending.”
He takes a far more pragmatic view on the infrastructure law, for instance, arguing in a press release that it would “bring jobs to our state, enhance economic growth, boost regional competitiveness, and improve public safety for every Ohioan.”
Former state treasurer Josh Mandel has a tangential connection with PPP funding as well. The payday loan company Schear Financial Services received a little more than $122,000 to support its corporate staff of eight. On his financial disclosure, Mandel lists himself as an advisor to the firm, making $68,000.
WESTLAKE, OH — Melissa here crisscrossing First Watch working so hard and spreading positive vibes. Backbone of America.
Meanwhile, Biden is using Melissa’s tax dollars to pay people to stay home, eat cheetos and play Call of Duty. pic.twitter.com/tAlGkTQL23
— Josh Mandel (@JoshMandelOhio) January 25, 2022
Mandel’s criticism of the Biden administration has been full-throated and continual. In January, he posted a photo with a café waitress deriding the president for enhanced unemployment benefits.
“Biden is using Melissa’s tax dollars to pay people to stay home, eat Cheetos and play Call of Duty,” Mandel said.
Those benefits expired nationwide more than four months prior, and Gov. Mike DeWine opted out of the program even earlier, cutting off supplementary benefits for Ohioans almost six months earlier. In other tweets, Mandel has tied the president to empty store shelves, more expensive super bowl parties and even the supply of Chick-fil-A sauces.
Ohio Capital Journal reached out to Dolan and Mandel’s campaigns for comment. Neither offered a response.
But arguably the biggest recipient of federal largesse is no longer in the race. Despite cutting ads criticizing handouts from “Team Woke,” and arguing Biden “paid people to sit at home and watch Netflix,” Bernie Moreno took more than $800,000 in PPP loans to prop up a car dealership in Florida. In addition, the former candidate borrowed $5.3 million under the low interest Main Street Business Loan program.
(UPDATE) After publication, Moreno reached out to dispute this story. Like Gibbons, he argues that spending under the CARES Act including PPP didn’t lead to inflation, but that follow-up relief measures did.
Moreno also argued he was restrained in his use of the PPP program, noting that while he accepted money for a car dealership, he didn’t apply for a funding to support his tech company because they were able to continue working without serious interruption.
The former candidate also pushed back on referencing his use of a Main Street Business Loan—it was not ‘largesse’ because it had to be paid back with interest. This is true, but the program was established with the treasury operating as a backstop to encourage banks to lend to more businesses. Meanwhile the top line terms were favorable for borrowers — rates were relatively low with interest payments deferred for a year and principal payments for two.
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