Philly-area congresswoman seeks answers on bogus report of PPP loan to long-closed Buca di Beppo restaurant in Wynnewood
The move comes after the Philadelphia Inquirer reported on errors, mischaracterizations, and omissions in the Trump administration's data on the 659-billion program.
When the Trump administration released the results of its much-touted anti-virus loan program last month, it said a loan of at least $5 million had saved 500 jobs at an Italian restaurant on Lancaster Avenue in Wynnewood. The trouble was, Buca di Beppo had shut down seven years earlier.
Now an area congresswoman is demanding that the Small Business Administration explain the mistake in the data for Payroll Protection Plan loans.
“According to the SBA’s data, a PPP loan saved 500 Buca di Beppo jobs in my district that do not exist,” U.S. Rep. Mary Gay Scanlon, a Democrat, wrote the agency. “It is important that we conduct thorough oversight of the funds that have already been dispersed so that future funds can be fairly and effectively distributed.”
In letters sent Monday, Scanlon called for investigations into how the loan under the PPP came to be linked in government data to the long-shuttered restaurant in her district that’s now the site of a pediatric clinic. She sent the letters to the SBA; to the restaurant chain’s parent, Earl Enterprises of Orlando, Fla.; and to PNC Financial Services Group, the Pittsburgh-based bank that originated the loan.
In fact, the chain has said, money from an award of $5 million to $10 million and from another similar loan — that one listed for an operating restaurant in Columbus, Ohio — had been tapped to pay salaries across its 75 locations nationwide. Its restaurant at 260 E. Lancaster Ave. closed in the first week of 2013.
Scanlon is serving a first full term in the U.S. House in a district that includes all of Delaware County and parts of Montgomery County and South Philadelphia. She wrote the letters after The Inquirer brought the erroneous Buca di Beppo loan information to light in July in its coverage of errors, mischaracterizations, and omissions within data released on the $659 billion PPP program.
The program, which lawmakers passed in haste during the spring to help firms with 500 or fewer workers weather the coronavirus pandemic, absolves recipients from repaying their loans if at least 60% of the money goes to payroll expenses.
Treasury Secretary Steven T. Mnuchin initially rebuffed calls from advocacy groups and lawmakers to disclose who was getting money for months after the program’s authorization, even though such information had been routinely shared about similar loans by past administrations.
When Mnuchin reversed course and the data were finally disclosed, the administration broke with past practice by not fully identifying awardees and by not specifying all loan amounts. The precise amount of Buca Di Beppo’s loan has not been disclosed.
Mnuchin cast the data at the time of its release as showing that the program had supported more than 51 million jobs, with more than a quarter of the funds reaching low- and moderate-income communities.
But assertions about the program’s impact were quickly undermined by complaints from purported loan recipients about the accuracy of the data, while other records were found to be demonstrably false.
In one glitch that affected Philadelphia-area loans with far greater frequency than those in the nation as a whole, thousands of records had blank spaces where numbers of retained jobs are supposed to be or had a zero in those fields, wrongly suggesting the recipients hadn’t used the money to save a single job.
Other errors concerned firms that said they never completed loan applications, but are listed as getting millions of dollars. In still others, recipients including Philadelphia restaurant magnate Michael Schulson said the records misstated their actual loan amounts.
“It was only after repeated bipartisan congressional requests and Freedom of Information Act requests by journalists that the SBA agreed to disclose PPP loan information — only to reveal a litany of concerning discrepancies in the data provided,” Scanlon wrote in her letter to the SBA.
Scanlon requested that the agency “work with Buca Restaurants Inc. and PNC to correct the aforementioned inaccuracy, work with lenders to correct additional inaccuracies, and investigate any instances of loans that list addresses unrelated to the borrowers’ places of business.”
Buca di Beppo spokesperson Amy Sadowsky said the chain was investigating why the defunct Wynnewood location was listed on the loan records and would discuss the issue with Scanlon’s office Monday. PNC spokesperson Jason Beyersdorfer said the bank was also researching the matter.
The SBA did not respond to messages seeking comment.