PPP funds are given to deburred companies

Scattered among industrial brick buildings in St. Joseph, Missouri – once the starting point for the Pony Express – lies a government epidemic spending story. Some of the nearly half-dozen collapsing structures posted with signs warning of conditions that “may present an imminent and substantial threat to human health or the environment” remind HPI Products Inc. that local The pesticide company still has not cleaned the dirt made a decade ago.

St. Joseph’s completed 25 years of HPI workers discharging industrial wastewater into the city’s sewer systems. In 2007, the US Environmental Protection Agency ordered HPI to illegally stop storing hazardous waste in hazardous drums and leaking it into its warehouse. In 2009, the Justice Department entered a guilty plea from HPI owner William Garvey in federal court for violating the Clean Water Act and hazardous waste storage laws. Garvey was sent to prison. The following year, the EPA obtained a consent decree against the company to pay cleaning costs. Following EPA violations, HPI Products Inc. was terminated – meaning it could not seek federal contracts or financial support from the federal government – on 1 January 2010.

Despite a long history of mismanagement and eventual deviations, HPI was approved this spring for a $ 441,580 loan through the U.S. Small Business Administration’s paycheck protection program, largely due to the federal government, according to NBC News review The epidemic was part of the economic relief package.

As per the requirements of the PPP program, controversial companies by the federal government should not obtain these low-interest federally backed loans. But the House Select Subcommittee on the Coronovirus Crisis reported in September that it had received more than 600 loans totaling more than $ 96 million, which were excluded from doing business with the government. Subsequently, on 11 January, the Inspector General of the SBA reported that the number of loans to lending firms appears to be over 950. But neither of those companies were named.

NBC News, which obtained loan data under the Freedom of Information Act following a federal court ruling, was able to identify at least 60 debit businesses worth $ 32.4 million that were approved for PPP loans. NBC News was one of a dozen news organizations that sued the SBA for releasing information under the FOIA. House staff were able to find more companies because they were given additional identification information not provided by the SBA to news organizations.

The latest report from the inspector general of the SBA states that the PPP program has “serious concerns about improper payments”, including going to funding companies. It said that there is still not enough done by the SBA to prevent these companies from obtaining loans and to waive their loans.

US Representative James E. Clyb, DS.C., chairman of the House Select Subcommittee, said in a statement to NBC News, “The disturbing findings by the SBA office of the Director General are unfortunately in line with the selection committee report in September that the SBA approved those hundreds of PPP loans. Grant, which disqualified borrowers were released or suspended from federal contracts. “

“The Treasury and the SBA should immediately improve oversight and accountability to ensure that taxpayer dollars are not eliminated,” he said. “I hope that the incoming administration will implement timely measures for oversight reform.”

Dodging requirements

Since the introduction of the PPP program, companies have been requiring companies seeking loans to ensure that they are not debited. A SBA spokesperson said that the burden is on the companies to give the correct information and not on the banks or the agency to verify that information.

The agency may consider federal criminal or civil prosecution for misrepresentation on government loan application forms, such as not disclosing debarment. But no such cases have yet been shown in the Department of Justice records, and the SBA was unable to indicate any action that has cited the nomenclature as a cause of legal action.

But the SBA said it is investigating loan waiver applications and it would reject requests from any company’s debit. A SBA spokesman said, “Demonetisation is one of the things that disqualifies a borrower” and they will need to repay the debt.

With the latest round of PPP loans, approved on December 27 as part of a $ 900 billion economic package, SBA officials say they are trying to root out the fraud. This time, the SBA is running computerized checks of every company seeking loans. Applications will be screened by the agency through the Treasury Department’s data system to confirm the identity of businesses. According to an agency representative, these computerized checks will involve verifying tax identification numbers and other information that takes less than a day.

After releasing the Inspector General’s report this week, the SBA said better track fraud attempts included working with the Treasury Department’s Do Not Pay team. While the inspector general said those steps had not yet been fully implemented, an SBA representative disagreed and said “the railings are in place.”

Deviation trigger

Many of the companies that NBC News identified were dismissed by the EPA for violations of the Clean Air or Clean Water Act. Others were lent by the Department of Homeland Security, the Department of Labor and the General Services Administration.

In Missouri, HPI continues to have a number of violations for the small town of St. Joseph. According to a lawsuit filed by the city on November 30, 2020, separate from the EPA’s actions, HPI has not come into compliance with the city code and continues to mix and store pesticides in “increasingly abusive facilities”.

Janet Storts, a local activist, said, “He’s not so successful. Regarding HPI’s PPP loan, he said the company” just got $ 400,000 for not doing it right. “

The EPA confirmed that HPI has been revoked following criminal convictions under the Clean Water Act. In the case of HPI, the displacement is specific to the St. Joseph location where the crime occurred, the same location is listed for the approved PPP loan.

HPI did not respond to requests for comment.

Pollutant problem

Among other companies NBC News identifies as receiving PPP loans and being infamous for violating the EPA is Nupuro Industries Corporation, an oil and lubricant manufacturer in Philadelphia whose use of nutsuit oil products, such as basin mitts and horse riding saddles Is taken care of. It was approved for a $ 300,000 PPP loan, even though it had been debarred since 2012.

The company is required to test and test pollutants such as pH and ethylbenzene to monitor pollutants in its industrial wastewater, which can cause respiratory problems and pose an acute risk. According to EPA records, from 2006 to 2007, Nupro kept its test samples down in compliance with pollutant limits. Nupro was criminally prosecuted and convicted and paid a $ 200,000 fine.

Au Berg, director of operations at Natsro’s subsidiary, Neatsfoot Oil Refineries Corporation, told NBC News that the problem has been resolved. But he did not clarify on which issue and which questions were not answered.

Constant headache

Meanwhile, the city of St. Joseph is still struggling to clean up the mess that HPI has left. Garvey still owns at least 11 buildings in St. Joseph. The third building of the previously owned company was dilapidated, and the city spent two years trying to repair the roof to no avail. After a storm in 2017, the building facade collapsed.

HPI did not pay for the demolition of the building and instead the city spent $ 390,000 in its own fund. Funds were drawn from three funds, including the state’s Casino Gaming Initiative, which leads to Save Our Heritage grants. These grants help owners of historic buildings in the city make structural and exterior repairs.

But the city expects some justice. Lawyer Amy Davenport, who represented St. Joseph in her current lawsuit against HPI, said the city is asking for past damages and charges associated with the city’s compliance violations.

“It is an economic loss, a public safety issue, and an environmental issue. All this, ”Davenport said. “We are trying to bring them into compliance for the protection of all as soon as possible.”


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