$41BN Harvard says it will KEEP $8.6M bailout 'to help students'
Trump demands Harvard return $8.6M grant from $2.3 trillion stimulus but Ivy League college vows to KEEP it, as Steve Mnuchin warns big business to give bailout cash back now
- President Trump said Tuesday that Harvard University would be paying back the $8.6 million in taxpayer fund the school planned to take from the bailout fund
- The university said it received the grant through the educational relief program that was part of the $2.3 trillion stimulus passed at the end of March
- ‘They shouldn’t be taking it,’ Trump had said at the White House, pointing to the Ivy League school’s enormous endowment
- But Harvard hit back, saying it plans to keep an $8.6 million grant it received
- Trump followed up, tweeting late Tuesday evening: ‘Harvard should give back the money now. Their whole “endowment” system should be looked at!’
- Treasury Secretary Steve Mnuchin applauded Shake Shack for giving back funds that were supposed to go to small businesses
- ‘The intent of this money was not for big public companies that have access to capital,’ Mnuchin said of the Paycheck Protection Program
- Learn more about how to help people impacted by COVID
Donald Trump late on Tuesday demanded Harvard University give back an $8.6 million grant it received as part of a stimulus package amid coronavirus.
The stand off came amid outrage that well off institutions and companies were taking advantage of the government’s $2.3 trillion stimulus, passed at the end of March, despite having reserves of their own.
The president tweeted after the Ivy League school defied his earlier order, saying it plans to keep an $8.6 million grant it received as part of an educational relief program – despite having an eye-watering $40.9 billion endowment
It has also emerged that businesses employing thousands of workers have been awarded grants under the Paycheck Protection Program, was supposed to infuse small businesses with $349 billion in emergency loans.
Large restaurants chains like Potbelly, Ruth’s Chris Steak House and Taco Cabana were able to qualify despite employing thousands of workers, getting the maximum $10 million in loans.
Treasury Secretary Steven Mnuchin has demanded the cash is returned.
President Trump said Tuesday that Harvard University would not be getting taxpayer money, citing the Ivy League school’s enormous endowment
Speaking at a press briefing on Tuesday, the president demanded the Ivy League school give taxpayer funds back, citing their massive endowment.
‘Harvard is going to pay back the money and they shouldn’t be taking it,’ Trump said, adding that Harvard has one of the largest endowments ‘in the country, maybe in the world.’
But in a statement issued moments after the briefing ended Harvard said it planned ‘to direct 100 per cent of the funds to financial assistance to students, and will not be using any of the funds to cover institutional costs.’
The university said it received the grant through the educational relief program that was part of the $2.3 trillion stimulus passed at the end of March, which also included a much larger fund aimed at helping small businesses.
Trump then tweeted late on Tuesday, pledging to look at their endowment system. He wrote: ‘Harvard should give back the money now. Their whole “endowment” system should be looked at!’
The president said during the daily press briefing: ‘They shouldn’t be taking it. They have one of the largest endowments anywhere in the history of the country, maybe the world I guess. They’re going to pay back that money.’
Donald Trump late on Tuesday demanded Harvard University give back an $8.6 million grant it received as part of a stimulus package amid coronavirus
Harvard, which easily out-guns the other schools with its eye-watering $40.9billion endowment was planning to take $8.6million
Harvard, which planned to utilize $8.6 million of taxpayer funds doled out as part of the CARES Act, is among a number of elite American universities taking advantage of $14 billion allocated to higher education institutions to weather the economic downturn associated with the coronavirus pandemic.
The Ivy League: Government COVID-19 funding vs 2019 endowment figures
Treasury Secretary Mnuchin, who was speaking from the podium when Trump inserted that he would request the money back, said that other big businesses would be asked to give money back too.
‘The intent of this money was not for big public companies that have access to capital,’ Mnuchin said.
He praised the restaurant chain Shake Shack for giving money from the Paycheck Protection Program back.
College and universities are facing financial hardship because students have been sent home, and while they may be taking classes remotely, the schools risk not bringing in the totality of tuition fees.
A spokesman for Harvard clarified that the university did not apply for PPP funds, the pot of money Mnuchin was referring to when Trump jumped in and brought up Harvard.
‘Harvard did not apply for, nor has it received any funds through the U.S. Small Business Administration’s Paycheck Protection Program for small businesses. Reports saying otherwise are inaccurate,’ a spokesmans said. ‘President Trump is right that it would not have been appropriate for our institution to receive funds that were designated for struggling small businesses.’
‘Like most colleges and universities, Harvard has been allocated funds as part of the CARES Act Higher Education Emergency Relief Fund. Harvard has committed that 100% of these emergency higher education funds will be used to provide direct assistance to students facing urgent financial needs due to the COVID-19 pandemic,’ the spokesman added.
Of the top private schools, Cornell and Columbia will receive the most at $12.8million each.
Cornell, based in Ithaca in upstate New York, has an endowment of $7.3billion, while New York City-based Columbia boasts $10.9billion.
The University of Pennsylvania, which is Trump’s alma mater, will receive $9.9million despite having a $14.7billion endowment.
Sen. Ted Cruz, a Republican from Texas, also blasted Harvard for taking the money, pointing to the school’s mammoth money bin.
The one-time Republican presidential contender tweeted: ‘This is ridiculous. Taxpayer relief funds should go to those in real need.
‘Harvard University has a $41bn endowment—the largest in the world. Put another way, Harvard’s endowment is $13mm per student, or $171mm per faculty member.’
Treasury Secretary Steve Mnuchin applauded Shake Shack for giving back funds that were supposed to be for small businesses
‘The intent of this money was not for big public companies that have access to capital,’ Treasury Secretary Steve Mnuchin said to reporters Tuesday
The university insisted it was using federal funding for ‘financial assistance for students to meet their urgent needs in the face of this pandemic’.
Harvard, which is one of the top universities in the world and boasts eight presidents among its alumni, spelled out how it would spend its bailout.
A spokesman for the Massachusetts-based school said: ‘Financial assistance will be on top of the significant support the University has already provided to students – including assistance with travel, providing direct aid for living expenses to those with need, and supporting students’ transition to online education.’
Yale, the second largest Ivy Leave school, will receive $6.8million and has an endowment of $30.3billion.
Texas senator Ted Cruz has blasted the university for taking the money, pointing to its mammoth endowment chest
Brown university, which has $4.2billion endowment, is being bolstered by $4.8 million.
A bailout of $3.4million is being directed towards Dartmouth College, which has an endowment of $5.7billion.
The smallest bailout for Ivy League schools is being sent to $26billion-endowed Princeton, which will receive $2.4million.
The $2trillion Coronavirus Aid Relief and Economic Security Act (CARES) injected $14billion into the Higher Education Emergency Relief Fund.
Institutions were granted these funds based on a formula which combines the number students receiving federal financial aid and the overall number of students enrolled.
At least half of the funding is mandated to be used as financial grants for students, with the remainder to be put towards compensating university losses.
Joel Malina, Vice President for University Relations, at Cornell, said: ‘Cornell will use 100 per cent of these CARES Act funds to support students, going beyond the federal requirement that half of the funds be put towards emergency financial assistance to our students.
‘We know that many of our students will have increased need as a result of the pandemic.
‘Even as our Ithaca campus faces an anticipated Covid-related budget shortfall of over $100 million for the coming fiscal year, we aim to guarantee that every single one, currently enrolled or newly admitted, has the financial resources to complete their Cornell education.’
MailOnline has contacted each Ivy League school for comment.
Greed and gluttony: Huge restaurant chains including Potbelly, Ruth’s Chris Steakhouse and Taco Cabana pocket $300MILLION in federal relief loans meant to help struggling small businesses
By Keith Griffith For Dailymail.com
Companies with thousands of employees, past penalties from government investigations and risks of financial failure even before the coronavirus walloped the economy were among those receiving millions of dollars from a relief fund that Congress created to help small businesses through the crisis, according to a new analysis.
The Paycheck Protection Program was supposed to infuse small businesses with $349 billion in emergency loans that could help keep workers on the job and bills paid on time. But at least 75 companies that received the aid were publicly traded, the AP found, and some had market values well over $100 million.
The program was designed for companies with less than 500 employees, but restaurants and hotels were exempt from that limit if they had less than 500 employees per location.
The owners behind large restaurants chains like Potbelly, Ruth’s Chris Steak House and Taco Cabana were able to qualify despite employing thousands of workers and get the maximum $10 million in loans.
Shake Shack, after revealing it had been granted a $10 million loan in a regulatory filing on Friday, announced Sunday that it would return the money after facing public backlash.
Huge companies with thousands of employees are among those receiving millions of dollars from a relief fund
A Potbelly Sandwich Shop is seen in Detroit’s airport in a file photo. The company received the maximum $10 million federal loan under the Paycheck Protection Program
Funding for the PPP ran out last week, but on Tuesday Democrats and Republicans in Congress reportedly reached a deal to add $310 billion in small-business loans.
Senate Minority Leader Chuck Schumer claimed that of that funding, $125 billion will be sent ‘exclusively to the unbanked, to the minorities, to the rural areas, and to all of those little mom and pop stores that don’t have a good banking connection and need the help.’
Overall, 25 percent of the public companies identified in the AP analysis as receiving PPP funds had warned investors months ago – while the economy was humming along – that their ability to remain viable was in question.
By combing through thousands of regulatory filings, the analysis identified the 75 companies as recipients of a combined $300 million in low-interest, taxpayer-backed loans.
Eight companies, or their subsidiaries, received the maximum $10 million.
The size of the typical loan nationally was $206,000, according to U.S. Small Business Administration statistics. If companies meet benchmarks such as keeping employees on payroll for eight weeks, the SBA will forgive the loans.
The public companies identified in the analysis is a fraction of the 1.6 million loans that banks approved before the program was depleted last week, but it is the most complete public accounting to date.
Lawmakers from both political parties are negotiating an additional relief package that in large part would replenish the Paycheck Protection Program.
Representatives of the SBA did not respond to a request for comment late Monday.
Last Friday, Treasury Secretary Steven Mnuchin said in a written statement that 74% of the loans were for less than $150,000, demonstrating ‘the accessibility of this program to even the smallest of small businesses.’
The review also found examples of companies that had foreign owners and that were delisted from U.S. stock exchanges, or threatened with removal, because of their poor performance. Other companies had annual losses for years.
Since launching April 3, the relief package has faced criticism about slow loan processing, unclear rules and limited funding that left many mom-and-pop businesses without help.
By design, the Paycheck Protection Program was meant to get money out quickly to as many small businesses as possible, using a formula based in part on payroll size.
Some other big companies that received loans appeared to have enough cash on hand to survive the economic downturn.
New York City-based Lindblad Expeditions Holdings, for example, a travel company with 650 workers and a branding deal with National Geographic, got a $6.6 million loan. At the end of March, the business reported having about $137 million in cash on its balance sheet.
‘When this crisis hit, we had two business planning cases: 1) substantial layoffs and furloughs or 2) receiving these funds and not impacting our employees,’ spokeswoman Audrey Chang wrote in an email. ‘Lindblad is the very rare travel company that has not imposed any layoffs, furloughs or salary reductions to date.’
A steak is seen at Ruth’s Chris Steakhouse. The chain was among the public companies that received the maximum $10 million loan under the Paycheck Protection Program
Five of the companies AP identified were previously under investigation by financial and other regulators, including firms that paid penalties to resolve allegations.
Quantum Corp., a data storage company based in San Jose, California, that has a workforce of 800, paid a $1 million penalty last December over allegations that accounting errors resulted in overstated revenues. Quantum received a maximum $10 million loan.
What is the small-business relief program?
The Paycheck Protection Program exhausted its $350 billion in funding last week and many small businesses were unable to obtain loans they desperately need to stay afloat.
Congress and the White House say they’re close to an agreement on that would give the program about $300 billion in fresh funds.
The government program, which is overseen by the Treasury and administered by the Small Business Administration, limits loan recipients to businesses with fewer than 500 employees and revenue of less than $2.5 billion.
But it makes an exception for restaurants and other food service businesses that employ fewer than 500 people per location, meaning that restaurant chains are as eligible for the loans as a neighborhood restaurant or bar.
The small business lending program is part of the $2.2 trillion rescue package approved by Congress last month.
Without that loan, ‘we would most certainly be forced to reduce headcount. We owe it to our employees – who’ve stuck with us through a long and difficult turnaround – to do everything we can to save their jobs during this crisis,’ company spokesman Bob Wientzen wrote in an email.
Broadwind Energy, a suburban Chicago maker of wind turbines that employs about 520, agreed to pay a $1 million penalty five years ago after the SEC accused it of failing to inform investors that reduced business from two major customers had caused ‘substantial declines’ in its long-term financial prospects.
Broadwind, which could not be immediately reached, received $9.5 million from the loan program.
Marrone Bio Innovations, a biopesticide company in Davis, California, that has about 50 workers, similarly agreed to pay $1.8 million in 2016 after the SEC alleged its chief operating officer had inflated financial results to hit projections that it would double revenues during its first year as a public company. Marrone received a loan worth $1.7 million.
Pam Marrone, the chief executive, said the company ‘shouldn’t be punished’ for what happened with the SEC because it has had clean audits for years now.
She described the investigation as a ‘body blow’ that cost it investors and drove its stock price under $1. She said it has had to take on $40 million in debt and is still digging itself out of the financial hole.
‘People don’t realize how tough it is to be a small public company like us that’s not yet profitable,’ she said. ‘We can’t just go to investors and say, ‘OK, open up your wallets.’ ‘
The AP analysis found that about 1 in 4 of the companies had warned investors months ago that they or their auditors had significant doubts about their ability to meet financial obligations.
One was Enservco Corp., a Denver-based oil and gas industry firm. In its annual report filed last month, Enservco said it does ‘not generate adequate revenue to fund our current operations.’
Chief executive Ian Dickinson said his company wouldn’t have folded without the $1.9 million loan it received. But, he said, he welcomed the money and would’ve had to let go more employees than he already has without it.
‘Our employees are really no different than the employees of a nonpublic company,’ Dickinson said. ‘These are funds being used to keep folks on payroll and keep food on their tables.’
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