The Trump administration has frequently touted the Paycheck Protection Program as a supposed success of their Coronavirus response framework. The program was established to provide hundreds of billions of dollars in loans to small businesses around the country that are struggling amidst the Coronavirus-induced social distancing demands, but now, CBS reports that a big data company whose main client in 2019 was the Trump campaign got millions in loan money while many other, smaller companies were shut out. The company, which is called Phunware, “specializes in the mass collection of smartphone location data” via means like apps, the outlet reports, and it got a staggering $2.85 million from the supposedly small business-oriented loan program.
The average size of Paycheck Protection Program loans that have already gotten doled out is $206,000, making Phunware’s total support well above the norm. Their connection to the Trump campaign is big — in 2019, the Trump campaign paid them nearly $3 million, which was around 15 percent of the company’s total sales income for the year. They’ve worked for right-wing interests for awhile; in 2018, a full two-thirds of its $31 million in income came from Fox Networks.
The company’s dubious connections don’t actually end with its Trump campaign tie that could spark allegations of favoritism. The chairperson of Phunware’s board of directors, Blythe Masters, worked at JPMorgan Chase until 2014 — and that’s the bank that, within just a couple days of Phunware’s initial application, issued them the loan that they requested. Masters, the former JPMorgan Chase official, got elevated to Phunware’s corporate board’s chairpersonship literally the day after the loan program in question was passed by Congress. According to CBS, a “spokesperson for JPMorgan declined to answer if Masters had any role in helping Phunware navigate JPMorgan’s PPP loan process,” but shunning questioning doesn’t exactly inspire confidence in the integrity of the process.
Lou Rabon, who serves as the CEO of the New York-based Cyber Defense Group, is actually suing JPMorgan Chase for the apparent favoritism that the bank showed to particular applications like Phunware’s.
His company applied for a loan days before Phunware, but he’s yet to have any support issued. He noted:
‘It was supposed to be first come, first serve… My opinion of Chase is not very high right now.’
And the lawsuit on which he’s the lead plaintiff adds:
‘Data provided by the U.S. Small Business Administration reveals that… Chase prioritized and front-loaded applications with higher loan amounts.’
This case is not the first in which concerned observers have questioned the prioritization of larger companies over smaller ones in the distribution of the small business loan funds in question. CBS reports that “151 publicly traded companies… had disclosed they had received nearly $540 million in PPP loans” as of Wednesday. At least two of those companies — Ruth’s Chris Steak House and Shake Shack — have said that they’re giving their loan money back after scrutiny.
Just in recent days, Congress passed additional funds for the small business loan program. Throughout the entire process, Democrats have been advocating for strict oversight of the process, which Trump has repeatedly resisted.