The Small Business Administration is demanding at least one Planned Parenthood affiliate return a Paycheck Protection Program loan, alleging the affiliate wrongfully received funding because the overall organization is too large to qualify for the program.
In a letter to Planned Parenthood of Delaware dated Tuesday and obtained by CNN, SBA wrote that because Planned Parenthood of Delaware “is a local affiliate of Planned Parenthood Federation of America … we have preliminarily concluded, therefore, that PPD is ineligible for a Paycheck Protection Program loan under the applicable affiliation rules and size standards, consistent with Congressional intent, and that the loan you have received should be returned.”
The letter notes that the $496,225 loan that the Delaware affiliate applied for and received “is one of 38 loans that PPFA local affiliates have applied for through through the Paycheck Protection Program. In total, PPFA local affiliates have applied for more than $80 million in Paycheck Protection Program loans.”
It’s unclear if the Small Business Administration is asking those affiliates to return the loans they received.
The SBA “will conduct an investigation” should Planned Parenthood of Delaware dispute the findings “to assess PPD’s eligibility for a Paycheck Protection Program loan and the basis for PPD’s eligibility certification,” according to the letter. The agency requested documents certifying certification within 10 days of receiving the letter, noting that SBA may refer borrowers found to have knowingly made false certifications “for appropriate civil and criminal penalties.”
Jacqueline Ayers, Planned Parenthood Federation of America’s vice president of government relations and public policy, confirmed in a statement Wednesday that “some independent Planned Parenthood 501(c)(3) organizations applied for and were awarded loans under the eligibility rules established by the CARES Act and the Small Business Administration (SBA), which they met.”
A source at Planned Parenthood said that Planned Parenthood of Delaware and other affiliates had received such letters by mail on Thursday, but that they were unsure how many affiliates had received them due to varying mailing times and people working remotely.
When contacted about the letters, SBA press director Carol Wilkerson said that the agency had no comment.
The letter to Planned Parenthood of Delaware cited SBA rules stating that businesses must have 500 employees or fewer and identify their affiliates, including those that have managerial control over them, in order to qualify for PPP funding. According to the groups’ records from 2018, Planned Parenthood of Delaware employed 45 people and Planned Parenthood Federation of America employed 676 people.
“PPFA is known to have and to exercise control over its local affiliates,” SBA wrote, pointing to Planned Parenthood Federation of America mandates and certifications for its affiliates. “Yet PPD did not identify PPFA or any of PPFA’s other local offices as affiliates.”
The source at Planned Parenthood pushed back on SBA’s assertion that Planned Parenthood Federation of America has managerial control over its affiliates as false. The source said that Planned Parenthood Federation of America does not share management with its affiliates or control their internal operations in the examples referenced by the SBA, noting that they have different boards of directors and management teams. Planned Parenthood Federation of America itself did not apply for a PPP loan, the source added.
Republican senators slammed Planned Parenthood for applying for the SBA loans and demanded answers as to how the affiliates received them.
Arkansas Sen. Tom Cotton led 26 colleagues in a letter to Attorney General William Barr asking that the Justice Department investigate whether the affiliates knowingly applied for loans for which they were ineligible.
“It seems clear that Planned Parenthood knew that it was ineligible for the small business loans under the CARES Act long before its affiliates fraudulently self-certified that they were eligible,” they wrote.
Senate Small Business and Entrepreneurship Committee Chairman Marco Rubio demanded that the affiliates return the money, adding that there was “no ambiguity in the legislation that passed or public record around its passage” that Planned Parenthood was ineligible. He also called for SBA to open an investigation into the loans , adding that if “Planned Parenthood, the banks, or staff at the SBA knowingly violated the law all appropriate legal options should be pursued.”
Sen. Josh Hawley of Missouri called for SBA to identify which Planned Parenthood affiliates applied for and received PPP funding and explain the agency’s lender instructions and flagging mechanisms for preventing loans deemed unacceptable.
Planned Parenthood Federation of America’s Ayers called the focus on the affiliates’ loans “a clear political attack on Planned Parenthood health centers and access to reproductive health care.”
“It has nothing to do with Planned Parenthood health care organizations’ eligibility for Covid-19 relief efforts,” she added, “and everything to do with the Trump administration using a public health crisis to advance a political agenda and distract from their own failures in protecting the American public from the spread of Covid-19.”
CNN’s Veronica Stracqualursi contributed to this report.