Stimulus Turns Political as SBA Tries to Claw Back Funding from Planned Parenthood

Summary

News article headed Stimulus turns political as SBA tries to claw back funding from Planned Parenthood, reporting a political fight over $80 million in subsidized Small Business Administration loans awarded to Planned Parenthood nonprofits. It says 127 Republican lawmakers called for a federal investigation and 41 Democratic senators defended the loans, and that the SBA sent letters ordering affiliates to give back the money because it considered them too closely affiliated with the national organization. Planned Parenthood is quoted rejecting that description, and Sen. Marco Rubio is quoted demanding an investigation. The article quotes Stephanie Fraim of Planned Parenthood of Southwest Central Florida on a roughly $2 million loan. No date, byline or outlet name is printed in the text.

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Stimulus turns political as SBA tries to claw
back funding from Planned Parenthood

Vehicles drive past a Planned Parenthood office in Peoria, Ill. (Daniel Acker/Bloomberg)

A political fight over $80 million in subsidized Small Business Administration loans that were
awarded to Planned Parenthood nonprofits is escalating, with 127 Republican lawmakers on Friday
calling for a federal investigation of the loans and 41 Democratic senators on Saturday defending
them.

Each of Planned Parenthood’s state and local affiliates is a separate nonprofit, with its own leadership
and funding organization. The Small Business Administration, a federal agency distributing $669
billion in subsidized loan funding to address the economic crisis caused by the coronavirus pandemic,
sent letters to dozens of Planned Parenthood affiliates last week ordering them to give back the money.

The SBA said the local chapters are too closely affiliated with Planned Parenthood’s national
organization to be considered independent entities. The loans received by Planned Parenthood
organizations total about $80 million, according to a letter from congressional Republicans.
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Planned Parenthood has been a lightning rod for years among conservatives, who say the organization,
which provides a wide range of women’s health services, including abortions, should be barred from
receiving federal funding. In February, the Trump administration issued a rule barring groups that
provide abortions or abortion referrals from participating in a $286 million federal family planning
program. The move was aimed primarily at Planned Parenthood.

The group’s receipt of money under the SBA’s Paycheck Protection Program further enraged
congressional Republicans.

“Leave aside all the other issues, they do not qualify,” Sen. Marco Rubio (R-Fla.) told Fox News last
week. The senator has long opposed federal funding for organizations that perform abortions. Rubio,
who helped write the Cares Act that created the small business loan program and has been a vocal
advocate for it, demanded an investigation.

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“They need to return the money, and if they did this knowingly they need to be held accountable,”
Rubio said. “And whoever helped them do this knowingly needs to be held accountable. That includes,
potentially, people on staff at the SBA, the banks and anybody else.”

In their letter Saturday, 41 Democratic senators asked SBA Administrator Jovita Carranza and
Treasury Secretary Steven Mnuchin to stop what they called “ideologically-driven action” against
Planned Parenthood organizations.

“The SBA must administer the PPP program in a manner that is uniform and does not target any entity
or subset of entities for exclusion, especially if doing so is based on a political ideology, the services
provided by that entity, or any other factor unrelated to the criteria established by law in the Cares
Act,” the senators wrote.
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The controversy over Planned Parenthood funding is the latest to emerge from the Paycheck Protection
Program, which offers low-interest loans to small businesses and nonprofits to keep employees on the
payroll. The loan program is a critical component of the Trump administration’s attempt to contain the
economic damage caused by the coronavirus.

In the loan program’s initial $349 billion round of funding, numerous well-known national brands
received funding through their local affiliates — the AutoNation car dealerships, Shake Shack and
Ruth’s Chris Steak House, to name a few.

The Cares Act did not forbid such organizations from receiving loan money, providing the franchises
appear on a list of SBA-approved franchises. But anger over the loans grew when the initial tranche of
funding ran out, and the SBA clarified its rules, requesting that publicly traded companies return the
money by May 18. Many did, but others refused, saying they qualified under the original terms of the
loan program.

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In demanding money back from the Planned Parenthood affiliates, the SBA said the local
organizations are little more than tendrils of a powerful national organization.

The Planned Parenthood Federation of America “is known to have and to exercise control over its
local affiliates,” the SBA wrote in a letter to a local affiliate, which was subsequently posted online by
NPR.

Citing a publicly available version of the national organization’s bylaws, the SBA noted that Planned
Parenthood’s local organizations must submit to rigorous accreditation reviews every three years and
can be stripped of their affiliation if they don’t maintain certain standards.

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Planned Parenthood rejected that description of its organization, noting that the bylaws themselves
have to be approved by the local chapters. In a memo distributed to reporters, it noted that the national
organization “has its own Board of Directors and management team, which is different from the
Boards and management teams of the member organizations.” It said that neither the text of the Cares
Act that set up the PPP nor any of the regulations or informational materials published by the SBA
would exclude an affiliate with fewer than 500 employees from receiving a loan.

“This is a clear political attack on Planned Parenthood health centers and access to reproductive health
care,” the organization wrote. “Jt has nothing to do with Planned Parenthood health care organizations’
eligibility for COVID-19 relief efforts, and everything to do with the Trump administration using a
public health crisis to advance a political agenda and distract from their own failures in protecting the
American public from the spread of COVID-19.”

Representatives of local Planned Parenthood organizations argue that they are just as worthy of an
economic lifeline as other organizations.
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“When we looked at the Cares Act it was very clear that we were eligible,” said Stephanie Fraim,
president and chief executive of Planned Parenthood of Southwest Central Florida, which received
roughly $2 million under the Paycheck Protection Program. “We were facing tough choices about
whether to keep staff on or not.”

Fraim says her organization already has started spending the loan money, with about 85 percent of it

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going to payroll. So tar, the group has been able to avoid laying Olt any OT its 18/ employees. It’s Kept
all 10 of its clinics open for procedures it deemed essential, including treatment for urinary tract
infections, cancer treatment, hormone replacement therapy and abortions,

But the organization has seen fewer patients than usual since Florida’s social distancing restrictions
began in March, and it canceled two fundraising galas, in Orlando and Tampa, that would have brought
in several hundred thousand dollars in a normal year, Fraim said.

Fraim says her organization received the SBA letter demanding it return the money on Friday. She said
no decision has been reached on how to respond.

“None of us right now knows what the future is going to hold,” she said. “If we can keep 100 percent
of our staff, it will be one of the proudest thing’s we’ve done in our career.”

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