Governmental Advocates Inc., a political consulting firm based in Sacramento, has resolved civil claims related to a Paycheck Protection Program (PPP) loan. The firm voluntarily disclosed its ineligibility for the loan and paid over $200,000 to settle the claims, according to Acting U.S. Attorney Michele Beckwith.
The PPP was established in March 2020 under the Coronavirus Aid, Relief, and Economic Security Act to support small businesses facing economic challenges during the COVID-19 pandemic. However, businesses primarily involved in political or lobbying activities were not eligible for these loans.
In September 2024, Governmental Advocates informed the United States that it was not eligible for the PPP loan due to its primary lobbying activities. The firm had initially applied for the loan in April 2020 and subsequently sought loan forgiveness. The Small Business Administration approved this application, forgiving $183,688 in principal and $2,289.81 in interest.
As part of today's settlement announcement, Governmental Advocates agreed to pay a total of $239,954.87 to cover the repaid loan principal, forgiven interest, bank fees paid by the SBA, and settlement interest.
“We are pleased that Governmental Advocates chose to voluntarily disclose this conduct and make full repayment,” said Acting U.S. Attorney Beckwith. “We encourage any company that may have received federal program funds in error to consider self-disclosure and cooperation.”
SBA’s General Counsel Wendell Davis remarked on the settlement: “The favorable settlement in this case is the product of enhanced efforts by federal agencies, such as the Small Business Administration working in conjunction with the U.S. Attorney’s Office, to pursue a fair recovery of pandemic relief funds.”
Assistant U.S. Attorney Tara Amin handled this matter.
It is important to note that the claims resolved by this settlement are allegations only; no liability determination has been made.
For those with information about potential fraud involving COVID-19 relief funds, reports can be made via phone at 866-720-5721 or through an online form provided by the Department of Justice’s National Center for Disaster Fraud.