While U.S. House Democrats were in April of this year lobbying to have labor unions officially listed as entities qualifying for funds from the federal Paycheck Protection Program (PPP) intended to provide financial aid to businesses pushed to the brink by COVID-19 pandemic lockdowns, the managers of at least one 49th state union found a workaround.
The Alaska State Employees Association (ASEA) – the union for state government workers – simply applied for one of the loans as an unspecified “non-profit organization.”
The union has since received a loan reported to be worth slightly more than $500,000. The loans are expected to be forgiven, making for free money.
The ASEA’s application for PPP funds was submitted only two days before the House Democrats complained unions were prohibited from accepting such funds.
More than 100 members of the House, according to a media release at the time, “sent a letter to House Democratic and Republican leadership urging that labor unions be made eligible to access to recovery funds made possible under the CARES Act, including the Paycheck Protection Program. The letter notes that while faith-based nonprofit institutions and other 501(c)(3) nonprofits are able to benefit from the PPP, 501(c)(5) organizations, like labor unions, were excluded.
“The exclusion of labor unions is a serious impediment to achieving the main goal of the CARES Act – to help workers weather the economic effects of the crisis.”
The ASEA was facing no economic crisis when it applied for the loan and still isn’t. State employees remain at work, and their dues continue to flow to the union. Congress never added unions to the list of qualifying businesses.
Despite all of this, ASEA minutes reflect that its executive board on May 13 voted 6-to-4 to accept the loan and use the money.
PPP loan recipient data lists the union as the beneficiary of somewhere between $350,000 and $1 million. The paperwork identifies the union as a “non-profit organization.”
At least one member of the ASEA board was reported to have resigned after that action. Most board members ignored requests for on-the-record comments about the PPP loan, but John White, the former treasurer, admitted when contacted that he quit the board.
He wouldn’t, however, say much more. He said only that taking the loan violated his personal moral beliefs and that he couldn’t in good conscience approve the union accepting the money when others in Alaska had greater needs.
Tens of thousands of Alaskans have been put out of the work by the pandemic in the 49th state, and many businesses – especially in service industries – are facing possible bankruptcy.
ASEA executive director Jake Metcalfe directed board members not to talk about the organization’s vote on taking the PPP money. Metcalfe later emailed a statement on the subject. It said this in its entirety:
“The federal government created a program for which we were eligible. Due to the economic uncertainty, the ASEA applied for the program. We were approved and accepted the funds so that we can keep our staffing members.
“At the time, the impact and breadth of the pandemic was unknown and is still unknown. There are companies in this state (Alaska Airlines, Providence, Wells Fargo) laying off staff. We want to maintain staff levels to support our members and provide services that are necessary for the safety and well being of our members.”
Whether the ASEA was eligible for the program is unclear. When the loans were offered, the SBA said, “The following entities affected by Coronavirus (COVID-19) may be eligible:
- “Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
- “Sole proprietors, independent contractors, and self-employed persons
- “Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
- “Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of 500 employees, or that meets the SBA industry size standard if more than 500.”
A member of the American Federation of State, County and Municipal Employees (AFSCME), the ASEA is classified as a 501(c)(5) by the Internal Revenue Service; 501(c)5s are not on the list.
Lack of oversight of the distribution of $650 billion in federal PPP spending has become a national issue.
“The PPP, which passed with broad bipartisan support in March and was bolstered by an infusion of $320 billion in April, is likely to receive renewed scrutiny following a series of negative headlines,” The Hill reported last month.
“Recently released government data shows that lobbying and law firms and special interest groups in Washington received the small-business loans. Americans for Tax Reform, a special interest group that promotes smaller government, received between $150,000 and $350,000, while APCO WorldWide, a lobbying firm, received more than $5 million.”
Metcalfe, according to a message to board members a copy of which was obtained by this website, told the ASEA executive board not to talk about the ethics of the union taking this money because “Medred is associated with Suzanne Downing, an extremist, anti-union blogger.”
The claim is fraudulent.
Downing is the publisher and editor of Must Read Alaska. There is no association between Must Read and craigmedred.news although that website has shared stories published here as have other websites across the country.
The accusation leveled by Metcalfe is part of a tactic that has come to be used all too often these days by those wishing to avoid legitimate questions of public policy in a media world increasingly split along partisan political lines.
Ethics and morality are increasingly being determined by tribal associations rather than by standards of what is right or wrong. In this case, there appears to be a legitimate question as to whether White and ASEA board members who voted not to take the money had a legitimate reason to believe the union didn’t need it or wasn’t legally entitled to ask for it.
And that raises a significant ethical question of whether it is OK to take government money you don’t need just because you’ve figured out a way to tap a particular financial pipeline.
“The Anchorage Daily News received between $1 million and $2 million, according to the list.”
Now we can say for sure that ADN is a government funded propaganda machine…propped up just in time to carry out the current six month “Covid is the new plague” propaganda campaign.
America is moving closer and closer to state run (and state funded) media outlets.
Steve stine , great information! Thanks!
Hmm, corruption tied to money or money tied to corruption? Now think of the trillions of dollars and corruption tied to Covid 1984. DISGUSTING.. Sadly there are 3 patriots out of all this – a couple out of MO and a 17yo in Kenosha, WI. May last night be the “shot heard around the world”.
Are you really that stupid,or just ignorant
Dave Mc, 17yo Rittenhouse handled those Democrat terrorists like a boss. Impressive actually for such a young man. He actually deserves a medal for doing what should have been done months ago. A shame he is only one man. Sadly he will have to put up with being an “example” for Democrats in the months ahead, but he should come out of this a rich man.
You are a saw, sad and sick person
The SBA is run by a Trump-appointed cabinet official. Ultimately, approving this loan is his responsibility. Is this what he meant by “draining the swamp”? https://www.sba.gov/person/jovita-carranza/
Sierra, where have you been the last 4yrs? ESPECIALLY the last 8 months.
This reveals a major issue with Alaska’s Public Employment Relations Act; Alaska “unions” that represent only public employees are not unions as that word has meaning under the Federal Labor-Management Relations Act that governs most unions in the private sector. Private sector unions have to report their financial activities to and are theoretically regulated by the US Department of Labor. In reality, the regulation is largely a fiction in Democrat administrations but the laws are on the books if anybody wants to use them.
Under Alaska’s PERA, there is no regulatory structure other than a largely ignored requirement that “unions” have an office in Alaska and register with the Alaska Department of Labor. Alaska’s public employee only unions are not unions as that term has legal meaning in the private sector but rather are state-chartered non-profit corporations subject only to the minimal regulation imposed on non-profits by the Alaska Department of Commerce and the Federal IRS. Fundamentally, an organization like ASEA can do pretty much anything the executive director/business manager can get a majority of his/her executive board to authorize. Having been an officer and E-Board member of a union for some years, I assure you that as long as they get to fly first class to conferences and conventions in warm stylish places the majority of the E-Board will authorize anything the BM wants. I remember John White from my days with the State and I thank him for having the courage to resist this.
I was engaged by the Legislature to amend the PERA to bring it into alignment with the federal LMRA that governs the private sector. We had a veto-proof Republican majority in ’97 and I couldn’t get the amendments to pass the HOR. Public employee unions are the Democrat ATM. Clarkson’s demise may cause the State to have an effective response to the USSC’s Janus decision and maybe throttle that ATM, but the unions will ,move Heaven and Earth to prevent that.
Awesome Art !
I really like this article! It raises so many questions! Brings understanding to what’s going on in the world . The last question was a great one . I have a great Freind I respect immensely who runs a fairly large company. He chose not to take the free government money even though he and his company arguably could benefit from it . In his words “ i choose not to be part of the problem of dollar devaluation and government budget shortfalls ” he stood on high moral ground only to be undermined by a competing company who took 700,000$ in ppp that they didn’t need then turned around and used that as financial leverage to underbid my Alaska Freind on potentially his largest project of the year a 12 million dollar project. My Freind bid the lowest financially functional bid possible only to have his unethical competition bid 700 k lower which was the amount taken in ppp loans . The unethical use of these loans has been a travesty. The question is should the loans be taken when our government is eroding the value of the dollar by printing so much paper money that is arguably not secured or backed by hard assets or even a tax base . If you take the “loan” is it in effect ,off setting the penalty that the government inflicted on each one of us and upon our currency? Should the loans be taken if you have no intent to repay ? Should the loans be taken if they are unnecessary for immediate direct survival? Keep after em Medred ! Sleezy buggers ! Looks like they weren’t eligible because they didn’t fit the company profile for eligibility.
(Subsidy )should have been paired with leverage in my comment
What’s your take on the personal tax credit/refund/stimulus check? I’ve had numerous conversations with many people and I’ve heard more than a few takes on it.
Personally I am of the belief that I am over taxed and so when I am allowed to keep more of my own money that is a good thing. I also see it as a way to offset the deflation of our dollar due to all the printing we are doing. When Federal Reserve Chairman Powell said “there’s really no limit to what we can do with these lending programs that we have” that is a wake up call, or it should be.
A better quote than Powell provided is this one from Neel Kashkari, president of the Federal Reserve Bank of Minneapolis “there is an infinite amount of cash in the Federal Reserve. We will do whatever we need to do to make sure there’s enough cash in the banking system.” That is scary.
Steve o , im pretty sure i am in line with your thinking on the subject . Im not sure I should be though as its sort of over simplification. ( the fed sort of backs the dollar through bond sales and such ) The fed has kept our dollar at near top dog ( even with the horrible inflation that perspective says isn’t as bad as other countries but you arnt supposed to judge something off how bad someone else performs it’s supposed to be judged off your own potential performance ) im not sure I should complain and say stimulus checks are penalties to our currencies. ( even though thats how it appears) yet something that keeps our economy happy helps our dollar long run which benefits my pocket so im frankly unsure. Though I think the dollar would have fared better if left on gold standard per all available studies and graphs . They should have just pegged gold at a correct valuation instead of arbitrarily to low if they need more paper or just made more hay pennies. I think my buisness Freind is ethically correct that a person shouldn’t participate in the wrong path but idealism often leads to death per the story of the race to the pole . Norwegians threw ethics to the wind and the British died . There must be a balance. I suspect that since we use the feds dollars its ok ethically to play by their rules which means its ok to take tax credits, refunds and stimulus checks but it makes me feel dirty so frankly im unsure and jealous of my Freinds clarity on the subject. I guess if I thought my tax money was spent judiciously and morally and our dollars didnt become worthless just sitting in the bank then my Freind would be right . Since thats not the case my mind says you are right. Learn to play the game within the rules . Yuck
It’s certainly a twisted web. Obviously certain businesses, including non-profits or “non-profits”, shouldn’t take hundreds of thousands or millions of free dollars just because they can. Should millions of people take the same free money but on an individually smaller scale? I don’t know what’s right here because I understand the differing points of view and they make sense to me, I just know what my gut tells me. I don’t feel bad about having my tax money returned to me. If I ran a business and I was told I could get hundreds of thousands of free dollars that I know didn’t need I would fundamentally have a problem with that, but if a competitor took the free money and underbid me using that free money as a reason to afford to underbid me I would also fundamentally have a problem with that.
In a perfect world we would all have the personal responsibility to look out for not only ourselves but in looking out for ourselves we would be looking out for each other. We wouldn’t have the need, or more correctly the want, for government to try and control everything. The wreckage of this global pandemic is largely a pandemic of too much government, it’s entirely possible that less people would be dead if we had less government and that the first world issue of too much government has caused more deaths than would have otherwise resulted from this disease. If only we had a less overbearing centralized system where we must take orders from that same overbearing centralized system to know we should wash our hands and not go to work while sick. Global pandemics happen, history tells us so. When countries print money with no limit as if there is an infinite amount of cash at hand they devalue their currency, history tells us so. We are pretending like this is the first global pandemic and we are printing money like we don’t know history…what could go wrong?
I don’t know Suzanne Downing but I do know Craig and I think it is fair to say their politics are not in exact alignment.