More than $ 60 million in federal grants virtually disappeared from the Restaurant Revitalization Fund nationwide between June and August, a Team 12 Investigation find.
The taxpayer-funded $ 28.6 billion federal subsidy program is part of President Joe Biden’s US bailout. The program aims to help companies recover from losses linked to the pandemic whose income depends largely on catering: bars, restaurants, inns.
The money in the fund, called RRF, is different from the PPP program. RRF money is issued in the form of grants, rather than loans to be repaid.
We asked Beth Goldberg, New York District Director for the US Small Business Administration, where the money could have gone.
“Do you have any idea where this money went? “
“I do not.”
Team 12 investigates asked if the missing funds were perhaps the result of an internal audit. Sources told News 12 that the SBA tasked auditors to examine grant recipients once the money is allocated, to make sure the companies involved were legitimate.
At this point in our interview, our conversation was interrupted by an SBA communications manager.
The problem persists nationwide. In neighboring New Jersey and Connecticut, we counted nearly $ 1.5 million missing in the same time frame.
News 12 met two companies that never received a grant from the RRF, but for different reasons.
Lorraine Soto, owner of the Brava Cafe in the Bronx, saw all of her grant funds allocated to tax debt – without her consent.
Another claimant, Rawlston Williams, owns The Food Sermon in Brooklyn. His restaurant in the Brooklyn Navy Yard has been temporarily closed for weeks because staying closed costs less than being open.
He asked for money from the RRF, which was originally intended to prioritize businesses owned by minorities, women, veterans and people with low median incomes. Williams’ business fit the profile – but before he could see any funds, the SBA said the money was depleted.
The SBA told News 12 that the large number of applicants nationwide has exhausted the fund. Waiting for, Team 12 investigates also learned that a lawsuit by two white-owned companies – which accused the US government of favoring disadvantaged business owners under the Constitution’s equal opportunity clause – forced the SBA to revoke the grants already approved from nearly 3,000 small businesses across the country. A Texas federal court issued the injunction.
Team 12 investigates We wanted to know which companies in the tri-state region were affected by this decision. So we submitted an Access to Information Request (FIOA) to the SBA for a list of family businesses whose funds have been revoked.
Team 12 investigates cross-examined the lists – and noticed that there are 701 companies that disappeared from the August list, which were present on the June list.
Total June winners: 101,005
Total amount awarded: $ 28,574,979,471.70
Total winners for the month of August: 100 651
Total amount awarded: 28 514 410 $ 163.70
Lack of national currency: $ 60,569,308.00
The SBA says the money is returned to the fund, but their data shows none has been redistributed.
Team 12 Surveys dug in all the places in New York State that disappeared from the June list. Using satellite images, we found that almost a third of them appear to be private homes.
We have tried to call many “ghost businesses”. Many of them couldn’t get in touch, some said they never asked for money, and others said they never received anything.
We visited another one – which was closed. This company never responded to our calls or messages.
Congress introduced legislation in June to replenish the fund and pay companies that never received the money in the first place.
Senate Majority Leader Chuck Schumer said News 12, “We’re trying to do it. We need bipartisan support.
The new legislation was not put to a vote. Currently, the bill has 222 co-sponsors.