Letter to Jovita Carranza, Administrator of the Small Business Administration - Senator Hawley Asks SBA to Explain Planned Parenthood Loans Scandal

Letter

Dear Administrator Carranza:
I am extremely concerned about the reports of Planned Parenthood affiliates
receiving $80 million in Paycheck Protection Program loans from the Small Business
Administration. Planned Parenthood is plainly ineligible for the program, and it is critical
to identify how and why this was able to happen.
From the very beginning, Planned Parenthood's exclusion from the Paycheck
Protection Program has been well known and the subject of much discussion. That is
because the CARES Act that Congress passed into law in March expressly stated that
organizations like Planned Parenthood are ineligible for the program. Section 1102 of that
law says that nonprofits are eligible for the program only if they and their affiliate
organizations have no more than 500 employees. As the White House correctly said last
month,1 Planned Parenthood, at about 16,000 employees nationally, fails to meet this
requirement.
Despite this text and public understanding, 37 Planned Parenthood offices still
applied for and received funds from the program. But even Planned Parenthood admits that
every one of its offices--regional and national--are affiliated, making each office
ineligible for the Paycheck Protection Program. Planned Parenthood's most recent
financial statement describes the organization as one national branch, 55 "Planned
Parenthood Affiliates," and 110 "ancillary entities" that are "control[led]" by those
"Planned Parenthood Affiliates." Planned Parenthood further stresses that "The [national]
Organization, PP Affiliates and the ancillary organizations together comprise Planned
Parenthood."2
In the light of the clear text of the CARES Act and Planned Parenthood's own
admission that every one of its offices are affiliated with each other, it is hard to conclude
anything other than that Planned Parenthood committed fraud. The SBA application form
required each of the 37 Planned Parenthood affiliates to certify that Planned Parenthood,as a whole, employs no more than 500 employees. The application form further required
Planned Parenthood to certify that it "underst[oo]d that knowingly making a false statement
to obtain a guaranteed loan from SBA is punishable under the law."3 Yet even though
Planned Parenthood employs 16,000 people, and even though Planned Parenthood itself
admits that all its offices are affiliated, Planned Parenthood falsely certified 37 times that
it employs no more than 500 employees.
Planned Parenthood is not a small business. It is a multi-billion-dollar company. In
the fiscal year ending last June, Planned Parenthood had $2.3 billion in assets and nearly
$2 billion in revenue. The year before, Planned Parenthood paid its CEO more than $1
million. And now, Planned Parenthood has diverted $80 million from actual small
businesses during a global pandemic even though Planned Parenthood knew it was
ineligible for this program.
The question is how this could happen. Why, when 37 Planned Parenthood offices
applied under the program, did your system not flag these applications? Did you not
appropriately instruct lending organizations? The ease with which Planned Parenthood was
able to unlawfully divert $80 million should concern everyone. Promptly respond to the
following requests:
1. Identify each Planned Parenthood affiliate that improperly applied for funds, and
provide copies of their applications.
2. Identify each Planned Parenthood affiliate that improperly received funds.
3. Identify each lending institution through which these Planned Parenthood affiliates
applied.
4. Identify each regional SBA official who was responsible for funds that went to
Planned Parenthood.
5. Explain what methods you took to instruct lending organizations not to lend funds
to ineligible organizations.
6. Explain why your processes did not automatically flag applications from Planned
Parenthood and freeze those funds.
7. Identify the steps you are taking to ensure that Planned Parenthood returns these
improperly diverted funds, with interest.
8. Identify all criminal referrals you have made for fraud and lying on government
forms.

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