Three car dealerships owned by U.S. Rep. Vern Buchanan received as much as $7 million from a federal program intended to help small businesses keep people on their payroll during the coronavirus pandemic.
The disclosures about Buchanan’s businesses came Monday from the Small Business Administration, which for the first time released detailed information about the $521 billion loaned out under the Paycheck Protection Program. In a statement, Buchanan, a Sarasota Republican, declined to address particulars of the loans but suggested anyone was free to take advantage of this temporary federal assistance.
“I would hope that any eligible small business in our area would use the program to make sure their workers continued to get paid during this difficult period,” Buchanan said in a statement provided to the Tampa Bay Times. “The program is designed to keep employees on the payroll, instead of being laid off.”
Buchanan is one of several members of Congress who appear to have benefited from a program they created on the fly as the economy collapsed over coronavirus fears. Congress passed the Paycheck Protection Program as part of its economic stimulus package unanimously in March with most of the U.S. Capitol empty. It was signed by President Donald Trump and was recently extended until August.
The Trump administration exempted lawmakers from long-standing rules for avoiding conflicts of interest that could have otherwise prevented them from seeking coronavirus relief for themselves, the Washington Post reported last month.
Treasury Secretary Steve Mnuchin was reluctant to make the list of loan recipients public, calling it “proprietary information.” In May, a House vote to force the Treasury to release the information failed. Buchanan was absent that day and didn’t record a vote. His office wouldn’t say why.
Buchanan is one of the wealthiest members of Congress with a net worth estimated at $74 million in a 2019 USA Today analysis. In addition to a sizable bond portfolio, he also owns rental properties along the west coast of Florida and real estate investments in Aspen, Colo. Car dealerships are Buchanan’s most valuable assets.
Like many businesses, the automobile industry took a massive hit during the past few months. Though considered an essential business, the pandemic nevertheless caused many car lots to temporarily shut down and the market for new buyers dried up as millions of people became unemployed almost overnight.
It was under these circumstances that Sarasota 500 LLC, which operates Sarasota Ford, applied for a loan from the federal government. Its application was approved on April 8 and it was awarded between $2 million and $5 million.
Companies applying for loans through the Paycheck Protection Program had to disclose how many jobs could be saved with the financial assistance. Sarasota 500 LLC reported the money would save “0″ jobs, according to a U.S. Treasury database.
In his statement, Buchanan said he can’t discuss the loan to Sarasota Ford because, “I haven’t managed the business for 14 years.” Buchanan owns a stake in Sarasota 500 LLC worth more than $50 million and is a “partner” in the business, according to his most recent financial disclosure report. The president of the company is his son, Matthew Buchanan.
“I would hope that small businesses in our area would apply to avoid laying off workers,” Buchanan said of the loan to Sarasota Ford.
Sarasota Ford chief financial officer Toni Tripi said in an email that the loan was a “lifeline” to the company’s 184 employees. She did not explain why the dealership’s application said the loan would not protect any jobs.
“Sales and traffic at dealerships across the country have been severely impacted by coronavirus,” Tripi said. “Thanks to the PPP, we were able to pay workers who otherwise would have been laid off or furloughed.”
Another of Buchanan’s companies, a Honda dealership on the Space Coast, said it would be able to keep 81 people employed if it received between $350,000 and $1 million. A third dealership in North Carolina owned by Buchanan also asked for up to $1 million and promised to retain 35 people. Combined, Buchanan’s stakes in those businesses are worth as much as $75 million.
The average size of the loan through the Paycheck Protection Program was $107,000, the Treasury reported.
Congress intended for the program to incentivize employers to keep people on staff with the hope that the economic pain from the pandemic would be temporary. Companies applying for the loans certified that the money was “necessary to support the ongoing operations.” If certain conditions are met, the loans can be forgiven and turned into grants.
In previous years, Buchanan has been accused of using his congressional office to his benefit. A 2018 report by Capital & Main and MapLight, which tracks the nexus of money and politics, found that Buchanan’s multimillion-dollar yacht was financed with loans from a foreign bank looking to influence a tax bill that Buchanan helped author as head of the House Ways and Means tax policy subcommittee. Buchanan denied any wrongdoing.
The bank in question, BMO Harris Bank, helped secure two of the three Paycheck Protection Program loans that went to Buchanan’s car dealerships.
Buchanan was first elected in 2006 and represents a district that covers parts of Manatee, Sarasota and southern Hillsborough County. He is facing a November challenge from Democratic state Rep. Margaret Good.