SACRAMENTO (Legal Newsline) - A new study found that the California Retired Teachers Association received federal pandemic funds even though the union was ineligible to apply.
Union watchdog Freedom Foundation claims the California Retired Teachers Association was among more than 200 labor unions that received $37 million in Paycheck Protection Program (PPP) funds.
“It wasn't that teachers’ unions were specifically singled out,” said Maxford Nelsen, director of labor policy at the Freedom Foundation.
“It was that nonprofit organizations generally were not eligible for Paycheck Protection Program funds. The exception being 501(3)c organizations, which are charitable organizations, but advocacy groups, chambers of commerce, labor unions, and other types of tax-exempt organizations were generally not eligible for PPP funds for the first year that the program was in effect.”
The California Retired Teachers Association is a 501(4)c organization.
"A 501(4)c organization tends to be very much advocacy-oriented so I would imagine that probably the purpose of California Retired Teacher's Association is mainly political advocacy and lobbying and either the money was used for that purpose, or it freed up other funds to be used for that purpose," Nelsen told Legal Newsline.
The Freedom Foundation’s Profiting from a Pandemic study found that in April 2020, the California Retired Teachers Association was approved by Columbia State Bank in Tacoma, Washington to receive $72,617 for three employees and $73,313 was subsequently forgiven on April 6, 2021.
“I don’t know why any given union in California would go through any particular financial institution but apparently they had some business connection to this particular bank,” Nelsen said. "It's noteworthy to us for several reasons...On the one hand, it was pretty outrageous to see teachers’ unions and government employee unions championing
lockdowns while at the same time applying for and receiving federal funds that really they had no need for in the government space. The federal government allocated hundreds
of billions of dollars to state and local governments and to schools to keep people on the payroll. It's not like there were mass layoffs of public employees that needed to be
counteracted with an infusion of federal funds.”
The study further found that other California recipients included Amalgamated Transit Union Local 1704, San Diego City Firefighters Local 145, and the American Federations
of Musicians Local.
"There's a high likelihood that these unions checked a box on the application indicating they were a type of organization that perhaps they weren't so at some level I'm quite confident that these forms were not properly completed but I cannot make that claim with authority about any particular applicant because I don't actually have the paperwork but that is something that presumably the appropriate federal officials would be able to get their hands on if they were so inclined," Nelsen added.
The Freedom Foundation submitted its findings to the Small Business Administration (SBA) Inspector General, according to Nelsen.
"The federal government certainly has authority to recover funds that have been improperly paid and to investigate potential criminal conduct if there was intentional false information provided to the SBA as part of the application process," he said.