House Democrats support trade group bailout under new Paycheck Protection Program

The bill, with 54 Democratic co-sponsor, would change the eligibility standards allowing lobbying forces, with 300 or fewer employees, a piece of the next round government of stimulus.


Corporate lobbying firms could soon receive federal assistance from the next round of government stimulus legislation. House Speaker Nancy Pelosi supports a bill that would allow lobbying firms organized under Section 501(c)(6) of the tax code as trade groups to be eligible for small business loans under the Paycheck Protection Program.

The bill, which was introduced with 70 co-sponsor (54 Democrats) last week, would change the eligibility standards allowing lobbying forces, with 300 or fewer employees, a piece of the next round of government stimulus, which will be voted on at the end of the month.

While Rep. Chris Pappas (D. NH), the lead sponsor of the bill, said the bipartisan legislation would help chambers of commerce help small businesses “weather the storm,” the Democratic Policy Center, an organization uncovering corporate influence, found the bill would apply to almost all trade groups in America.

“It’s unbelievable that Congress is working to bail out big lobbying groups right now, under the guise of coronavirus relief, instead of helping the millions of people who can’t pay rent,” Andrew Perez, co-founder of the Democratic Policy Center, said. “We won’t let them sell this lobbying group cash grab as support for small businesses.”

Lobbyists recently started a campaign in an effort to widen eligibility for the Paycheck Protection Program (PPP or P3), which they were excluded from in the CARES Act—the first round of government stimulus legislation. The campaign is calling for federal assistance from PPP because “their members now, more than ever, rely on associations for critical support during these unprecedented times,” the American Society of Association Executives (ASAE), stated in a letter.

“These organizations are already relied upon to help coordinate federal resources to combat the coronavirus pandemic, and they require staff to fulfill this duty,” ASAE said.

The letter was signed by influential Beltway lobby groups including the American Fuel & Petrochemical Manufacturers Association, which represents oil refineries such as Exxon Mobil and Koch Industries to name a few, The National Retail Federation representing Walmart and Macy’s, and the National Restaurant Association that represents McDonald’s and Darden Restaurants.

But many warn that reforms to the PPP program, which was intended to be the “centerpiece of the small business rescue program,” will represent “a dramatic flow of government money to business lobbying groups,” The Intercept_ reported.

“The program should be exclusively targeting small enterprises of fewer than 500 employees,” Craig Holman, from Public Citizen a political watchdog group, said. “As such, it is perfectly reasonable to exclude trade associations from eligibility. Small businesses that are members of these trade associations are already eligible for the loans, even though their lobbying associations 501(c)(6)s are not.”

But Pelosi plans to “accommodate the demand and change the eligibility standard so that small business bailout money can flow to business advocacy groups,” with many Democrats on board, The Intercept_ reported.

“Right now, the way it is being implemented, it’s not necessarily helping everybody it was intended to,” Rep. Stephanie Murphy, (D-Fla.) who supports the bill, said. “The 501(c)(6) issue is clearly an example of that.”

Experts said that the new legislation would allow for “double-dipping” since the corporations the lobbying groups represent already benefited from the PPP money.

“Allowing corporate lobbying organizations and dark money groups to grab this money is akin to feudal lords gorging themselves at a lavish banquet, and then also raiding the last basket of bread that starving peasants are relying on to survive outside the palace walls,” David Sirota, writer and a senior adviser and speechwriter on Bernie Sanders’s 2020 presidential campaign, said.


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